WRITTEN QUESTION E-3079/02 by Erik Meijer (GUE/NGL) to the Commission. Winding up of the investigation into international involvement in fraud with subsidies for flax growing in Spain and introduction of measures to avoid a repetition.
Date: 2002-10-28
Institutions: European Parliament, Provisional data
Subjects: European Anti-fraud Office, Spain, administrative transparency, aid policy, aid system, aid to agriculture, flax, fraud against the EU, use of aid

18.9.2003

EN

Official Journal of the European Union

C 222 E/43

The company Elektrometal, which was a sub-contractor to PURAC/WTE, has informed the Commission’s
Delegation several
their outstanding claims vis-a-vis PURAC/WTE. As this concerns a
contractual relationship between Elektrometal and Purac, the European Commission cannot intervene in
this dispute between two private companies.

times about

(2003/C 222 E/048)

WRITTEN QUESTION E-3079/02

by Erik Meijer (GUE/NGL) to the Commission

(28 October 2002)

Subject: Winding up of the investigation into international involvement in fraud with subsidies for flax

growing in Spain and introduction of measures to avoid a repetition

1.
Does the Commission recall that in the fraud involving subsidies for the cultivation of flax in Spain
not only Spanish enterprises were implicated but also firms established in Belgium and Portugal, and that
these firms played an important role in obscuring as far as possible the relationship between production,
transportation, processing, marketing and subsidies?

2.
The report of the European Anti-Fraud Office (OLAF) referred to in the Commission’s answer to my
question E-0243/01 (1) was forwarded to Parliament and the Commission on 19 March 2001; has there
since been a more in-depth investigation of the firms from outside Spain mentioned in paragraph 1 and
their activities?

Has such an investigation now been concluded? If not, when will findings be available to allow

3.
conclusions to be drawn as to how such activities can be prevented from occurring in the future?

4. What lessons can be learnt from this investigation, or what lessons have since been drawn by the
Commission, to prevent a repetition of this kind of fraud in the future?

Is the Commission aware of other cases in which EU subsidies have been obtained by obscuring the
5.
links between firms and organising trade and transportation across the EU’s internal borders in a way that
allows the measures to check whether subsidies have been properly allocated to be evaded in practice?

6. What further measures is the Commission taking, if appropriate, to prevent complex and obscure
situations of this kind, which can lead to subsidies from the EU’s financial resources being granted
unlawfully, from arising again?

(1) OJ C 187 E, 3.7.2001, p. 205.

Answer given by Ms Schreyer on behalf of the Commission

(7 January 2003)

1. to 3. According
to information supplied by the European Anti-fraud Office (OLAF), firms established
in a number of Member States are indeed referred to in OLAF’s final report on its investigation in Spain.
OLAF carried out a separate but related investigation into the arrangements applied to flax in Portugal, the
final report on which was sent to Portugal and the Commission on 26 March 2002. The authorities
involved in the two Member States have started a judicial investigation into the points raised. The OLAF
investigation established that no subsidies were paid in Belgium.

With regard to the administrative and financial aspects of the arrangements for the flax industry in Spain,
the Commission wrote to the Spanish authorities informing them that
there would be a financial
correction. It asked the Portuguese authorities to inform it of the measures taken to counteract the cases of
fraud detected by OLAF. The reply from Portugal is under review.

C 222 E/44

Official Journal of the European Union

EN

18.9.2003

In response to the problems in the industry, the Commission sent the Council a proposal for the
4.
reform of the common organisation of the market in flax and hemp, which was adopted in July 2000.
The new arrangements came into force for the 2001/2002 marketing year and the situation of the
industry has improved accordingly.

5.
The Commission, in partnership with the other Community institutions and the Member States,
is keen to ensure permanent, efficient and effective control over the wide range of Community subsidies.

Where cases or situations such as they are described by the Honourable Member arise, the appropriate
machinery is in place to draw the competent authorities’ attention to them and ensure monitoring by the
Member State or the Community (or both).

In the common agricultural policy context, Regulation (EEC) No 4045/89 (1), recently amended,
6.
reinforced the provisions in cases where Member States carry out common measures involving mutual
assistance between them.

All the rules and regulations relating to the clearance of EAGGF Guarantee Section accounts enable the
Commission, where possible, to detect and prevent the situations described by the Honourable Member.

in its policy of protecting the Community’s financial

Moreover,
the
Commission endeavours to make up for any inadequacy, improve the regulatory framework and adapt it
to changing circumstances. In order to fraud-proof new legislation, intervention by OLAF at an early stage
in he drafting of legislative proposals is planned. Lastly, the Commission also strives to help Member States
to detect and correct irregularities.

interests and combating fraud,

(1) Council Regulation (EEC) No 4045/89 of 21 December 1989 on scrutiny by Member States of transactions forming
part of the system of financing by the Guarantee Section of the European Agricultural Guidance and Guarantee
Fund and repealing Directive 77/435/EEC (cid:1) OJ L 388, 30.12.1989.

(2003/C 222 E/049)

WRITTEN QUESTION E-3097/02

by Joaquim Miranda (GUE/NGL) to the Commission

(28 October 2002)

Subject: (Possible) complaint by the Commission against Portugal concerning the construction of a paper

recycling plant in Mourão

The Portuguese government, in Decree-Law No 364/99 of 17 September 1999, laid down the conditions
for the privatisation of the undertaking Gescartão SGPS, which incorporates the Portucel Recicla enterprise
in Mourão. This enterprise has, in the meantime, been closed down because it was located in the path of
the new Alqueva Dam. The same decree-law authorised the construction of a new plant to replace it, in
the same municipality, by the purchaser, and a timetable was laid down. However,
the purchaser
(a consortium formed by the Sonae group and Europac) has failed to meet any of its legal obligations
within the agreed deadlines.

Meanwhile, the same group has stated that it intends to construct another plant, but in a different place
and in a different branch of activity. This plan was endorsed by the previous Portuguese government.

Recently, the present Portuguese government, when asked about developments, in anticipation, and indeed
justification, of the non-construction of the proposed plant in Mourão, has claimed that the Commission
lodged a complaint against Portugal for having authorised such a plant in a protected and environmentally
sensitive area.

In view of the above and, in particular, the deep concern which the inhabitants of the municipality of
Mourão and the surrounding area quite justifiably feel on this issue, can the Commission confirm whether
it has lodged such a complaint, and, if so, explain its reasons and specify the date? Should the complaint
have been lodged, can the Commission also indicate what information it possessed on the whole subject at
the time of lodging the complaint?