Proposal for a Regulation of the European Parliament and of the Council on mutual administrative assistance for the protection of the financial interests of the Community against fraud and any other illegal activities
Date: 2004-07-20
Institutions: European Commission
Subjects: VAT, VAT resource, administrative cooperation, exchange of information, fraud, fraud against the EU

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.7.2004 
COM(2004) 509 final 

2004/0172 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on mutual administrative assistance for the protection of the financial interests of the 
Community against fraud and any other illegal activities 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM 

1. 

PURPOSE 

The  European  Community’s  financial  interests,  which  are  closely  intertwined  with  those  of 
the  Member  States,  are  exposed  to  various  forms  of  fraud  and  other  illegal  activities  which 
damage  the  Community’s  budget  income  and  expenditure1.  The  fight  against  fraud  is  a 
common  concern  and  a  common  challenge  both  for  the  Member  States  and  for  the 
Commission. It is more than ever an important element on the Commission’s political agenda. 

EC  fraud  often  relies  on  organised  and  transnational  structures  making  skilful  use  of  the 
financial  system  to  launder  and  conceal  the  proceeds  of  EC  fraud.  Organised  crime,  taking 
advantage  of  the  market  freedoms  provided  by  European  integration,  often  spreads  its 
activities  over  several  Member  States.  This  is  particularly  the  case  in  the  fields  of 
transnational VAT fraud, laundering of the proceeds of EC fraud and structural funds fraud. 

Where Member States’ authorities are confronted with complex fraud schemes that are linked 
to  two  or  more  Member  States,  swift  and  multilateral  administrative  cooperation  in  any 
necessary  investigation  is  essential.  Information  has  to  be  exchanged  between  several 
Member States’ authorities and the connections between all those involved in EC fraud and 
laundering  of  criminal  proceeds  have  to  be  established  in  order  to  provide  for  quick  and 
coordinated action. 

The effectiveness of multilateral operational cooperation depends very much on coordination 
and  support.  Cooperation  in  fraud  matters  in  a  single  market  now  comprising  25  Member 
States will be increasingly difficult without support and coordination at European level. Thus, 
there is a clear added value in giving the Commission a support and coordination role, as it is 
in  the  best  position  to  have  a  general  overview  of  EC  fraud  activities  and  also  treats  all 
Member States’ interests with the same degree of care and attention. This would in turn allow 
for more targeted and streamlined action by the Member States. 

The  existing  legal  framework  for  administrative  cooperation  is,  however,  incomplete  in 
providing  for  an  active  role  for  the  Commission  in  supporting  and  coordinating  Member 
States' activities, which is in particular the case in the field of VAT fraud and information on 
money laundering related to EC fraud. 

2. 

MAIN FEATURES 

The  proposed  Regulation  would  provide  added  value  for  the  Member  States’  competent 
authorities  as  it  would  allow  the  Commission  to  better  fulfil  its  role  as  a  coordinator  of 
Member States’ activities in fighting fraud. It will improve multilateral cooperation between 
the  Member  States  and  with  the  Commission,  for  instance  via  coordination  meetings 
organised by the Commission at European level. 

On  the  one  hand,  the  initiative  builds  on  existing  legislation.  On  the  other  hand,  it  aims  at 
completing the already existing cooperation instruments at the level of the Community as well 

1 

Fraud  and  irregularities  detrimental  to  the  European  Community’s  financial  interests  are  hereafter 
referred to in this explanatory memorandum as “EC fraud”. 

EN 

2 

   EN 

 
                                                 
as  of  the  European  Union  using  their  features  and  developing  them  in  new  areas  of 
cooperation,  thereby  achieving  equivalent  and  efficient  protection  of  the  Community’s 
financial  interests.  To  this  end  it  uses  the  standards  developed  in  those  other  instruments  in 
particular Council Regulation (EC) No 515/972 and Council Regulation (EC) No 1798/20033. 

In  view  of  the  need  to  concentrate  its  support  efforts  on  cases  of  particular  relevance  at 
Community  level,  the  Commission  proposes  to  link  the  application  of  this  Regulation  to 
specific  thresholds,  thereby  targeting  more  precisely  complex  cases  of  serious  fraud  which 
present a need for criminal follow-up. 

This  draft  regulation  is  limited  to  mutual  administrative  assistance.  It  does  not  grant  any 
additional investigative powers to the Commission, including the European Anti-Fraud Office 
(OLAF).  It  reinforces  the  mechanisms  for  cooperation  and  the  exchange  of  information. 
Therefore  it  provides  the  basis  and  tools  for  multidisciplinary  cooperation  between  the 
relevant  competent  authorities  of  different  Member  States  and  between  them  and  the 
Commission. 

If anti-fraud cooperation is to be efficient and effective, the relevant actions performed by all 
partners  must  be  integrated.  Based  on  the  concept  of  Article  280(3)  of  the  EC  Treaty  close 
and  regular  cooperation  applies  on  a  multidisciplinary  basis  to  all  authorities  designated  as 
responsible  by  the  Member  States  for  the  protection  of  the  financial  interests  of  the 
Community. 

According to its coordination role assigned by Article 280 of the EC Treaty the Commission 
and  the  European  Anti-Fraud  Office  (OLAF)  can  support  the  Member  States  in  their  action 
against  EC  fraud.  This  will  be  achieved  by  exchanges  of  information  and  by  using  the 
Commissions  facilities  and  infrastructures  (network,  databases,  administrative  cooperation 
tools, etc.) as well as by assisting subsequently coherent follow-up activities. The latter would 
be  strengthened  as  information  gathered  or  transferred  by  the  Commission  may  be  used  as 
evidence in administrative or judicial proceedings. 

The proposed Regulation would allow the Commission to offer Member States improved and 
reliable intelligence including detailed reports and in particular a clearer picture of new fraud 
trends and vulnerable sectors as a result of its analytical work. It will also contribute to linking 
the information available with the persons behind organised fraud. 

Finally, the protection of the Community’s financial interests also requires effective follow-up 
action after an investigation has taken place. 

3. 

SPECIFIC  RELEVANCE  TO  POLICY  AREAS  OTHER  THAN  CUSTOMS  AND 
AGRICULTURE 

Except  in  the  areas  of  customs  and  agriculture  (Council  Regulation  (EC)  No  515/97), 
Community  legislation  does  not  yet  provide  for  specific  rules  on  mutual  administrative 
cooperation with the Commission. 

2 
3 

OJ L 82, 22.3.1997, p. 1. 
OJ L 264, 15.10.2003, p. 1. 

EN 

3 

   EN 

 
                                                 
3.1 

Money  laundering  legislation  and  the  protection  of  the  Community’s  financial 
interests 

The concept of Article 280 of the EC Treaty concerns "fraud and any other illegal activities 
affecting the financial interests of the Community” including money laundering related to the 
proceeds of illegal activities harmful to the Community’s financial interests. 

In the case of money laundering, generally, information on suspicious financial transactions is 
required  in  order  to  launch  an  investigation  and  identify  the  original  illegal  activity  further 
upstream. At the same time, it is the discovery of the fraud which, at the stage of seeking to 
recover  funds,  allows  laundering  acts  and  circuits  to  be  detected,  hence  administrative 
information-sharing  at  European  level  that  focuses  on  illegal  activities  detrimental  to  the 
Community’s financial interests would bring significant added value. 

3.2 

Mutual  administrative  assistance  in  the  field  of  VAT  fraud  and  Council 
Regulation  (EC)  No  1798/2003  on  administrative  cooperation  between  the 
Member States in the field of VAT fraud 

The  current  VAT  system,  based  on  the  sixth  Directive4  is  vulnerable  to  fraud5.  The 
detrimental effects of VAT fraud to the Member States’ and to the Community’s budget have 
been  estimated  by  some  Member  States  as  being  up  to  10%  and  more  of  their  net  VAT 
receipts. 

As  net  VAT  receipts  contribute  towards  the  calculation  of  VAT  Own  Resources  payable  to 
the Community Budget which are determined from national volumes of transactions subject 
to  VAT  by  applying  a  uniform  rate  of  0.5%,  large-scale  VAT  fraud  may  negatively  impact 
Member  States’  VAT  revenues  and  consequently  their  contributions  to  the  Community 
budget. As this aspect affects the financial interests of the Community, the Commission has a 
strong  interest  and  indeed  an  obligation  to  take  action  in  support  of  Member  States’ 
operational activities aimed at combating serious VAT fraud. 

Administrative  cooperation  between  the  competent  authorities  of  the  Member  States  as 
provided  on  the  basis  of  Council  Regulation  (EC)  No  1798/2003  on  administrative 
cooperation  in  the  field  of  VAT6  –  to  which  this  proposal  is  complementary  –  is  indeed  an 
appropriate  and  sufficient  way  of  exchanging  information  in  order  to  control  the  correct 
application of intra-Community transactions and constitutes an adequate instrument to counter 
the  most  common  cases  of  VAT  infringements7.  But  there  is  also  an  urgent  need  for 
supplementary assistance and coordination at European level to tackle the most complex and 
serious cases of VAT fraud with ramifications in several Member States. 

4 

5 

6 
7 

Sixth Council Directive 77/388/EEC, 17.5.1977 on the harmonization of the laws of the Member States 
relating to turnover taxes - Common system of value added tax: uniform basis of assessment, OJ L 145, 
13.6.1977, p. 1. Directive as last amended by Directive 2004/15/EC (OJ L 52, 21.2.2004, p. 61). 
Cf.  Report  from  the  Commission  to  the  Council  and  the  European  Parliament  on  the  use  of 
administrative cooperation arrangements in the fight against VAT fraud, COM(2004) 260 final. 
OJ L 264, 15.10.2003, p. 1. 
Cf.  Report  from  the  Commission  to  the  Council  and  the  European  Parliament  on  the  use  of 
administrative  cooperation  arrangements  in  the  fight  against  VAT  fraud,  COM(2004)  260  final, 
paragraphs 1, 4.4 and 5.2. 

EN 

4 

   EN 

 
                                                 
3.3 

Mutual  assistance 
expenditure other than agriculture 

instruments  against  fraud 

in  fields  of  Community 

Community  expenditure  can  involve  payments,  subcontractors  and  subsidiaries  in  different 
Member  States  so  that  in  the  case  of  irregularities,  investigations  need  to  be  carried  out  in 
more  than  one  Member  State.  Currently,  there  are  no  appropriate  instruments  providing  for 
rules of horizontal or vertical administrative mutual assistance that allow such fraud schemes 
to be tackled. The same is true for fraud matters in the fields of EC direct expenditure. 

4. 

RELATIONSHIP WITH EXISTING ANTI-FRAUD INSTRUMENTS 

This  legislative  initiative  is  concerned  with  a  very  specific  purpose  of  administrative 
cooperation in relation to combating and preventing EC fraud and related money laundering, 
while being part of a regulatory framework consisting of both administrative and criminal law 
instruments aimed at strengthening the fight against fraud but without interfering with these 
existing  instruments.  It  aims  at  complementing  the  existing  anti-fraud  instruments,  in 
particular  Regulation  (EC)  No  1073/1999  of  the  European  Parliament  and  the  Council8  and 
Council Regulation (EC, Euratom) No 2185/969. 

Exchange of information between the competent authorities at an early stage would contribute 
substantially  towards  deterring  irregularities,  especially  in  the  field  of  money  laundering10. 
The  rules  on  mutual  assistance  laid  down  in  this  proposed  Regulation  are  therefore 
complementary to instruments of criminal law adopted by the Council under the third pillar. 

5. 

OUTLINE OF THE DRAFT REGULATION  

Title I - General provisions: Articles 1 - 4 

Article  1  specifies  the  purpose  and  the  content  of  the  Regulation  providing  rules  on  mutual 
administrative  assistance  between  the  authorities  of  the  Member  States  responsible  for  the 
protection of the Community’s financial interests for those areas of Community cooperation 
which have lacked such provisions until now. 

Article 2 describes the scope of application of this Regulation and clarifies the relation with 
the Community legislation in force by underlining the complementary nature of this proposal. 
The principle of subsidiarity is respected by the limitation to cases of particular relevance at 
Community level. 

Article  3  provides  for  specific  definitions  relevant  for  the  application  of  this  Regulation. 
Corresponding to the “horizontal” scope of this Regulation, its concepts apply to the various 
areas of the EC budget. 

8 
9 

10 

OJ L 136, 31.5.1999, p. 1. 
Council  Regulation  (Euratom,  EC)  No  2185/96  of  11.11.1996  concerning  on-the-spot  checks  and 
inspections  carried  out  by  the  Commission  in  order  to  protect  the  European  Communities'  financial 
interests against fraud and other irregularities, OJ L 292, 15.11.1996, p. 2. 
See the Explanatory Report (OJ C 91, 31.3.1999, p. 8), and in particular the section on Article 7 of the 
Second Protocol. See also footnote 6. 

EN 

5 

   EN 

 
                                                 
The notion of “irregularity” used in this Regulation covers relevant conduct detrimental to the 
Community’s financial interests, including illegal conduct within the meaning of Article 1(2) 
Council Regulation (EC, Euratom) No 2988/95 on of 18 December 1995 on the protection of 
the European Communities financial interests11 but is not limited to this concept, in order that 
it should also cover money laundering and VAT fraud. 

The limitation to cases of “particular relevance at Community level” enables the Commission 
to concentrate on cases where significant added value can be provided to Member States. It 
also  helps  to  prevent  the  Commission  services  from  being  overloaded  with  information  and 
requests relating to cases of minor relevance. Relevant cases need to have ramifications in or 
links with other Member States. For VAT the threshold shall be EUR 500 000 of presumed 
fiscal  damage  in  the  Member  States.  In  the  other  areas  covered  by  this  Regulation  the 
threshold  of  the  supposed  damage  is  EUR  100 000.  The  thresholds  could  be  raised  through 
implementing rules. 

Article  4(1)  specifies  the  “competent  authorities”.  They  comprise  the  competent  Member 
States’ authorities following a comprehensive and multidisciplinary approach, as well as the 
Commission,  which  takes  part  in  or  coordinates  mutual  administrative  assistance  and  the 
exchange of information between Member States. 

Article  4(2)  refers  to  the  internal  status  of  the  competent  authorities  setting  the  rule  that 
cooperation  shall  not  be  impeded  by  reason  of  their  different  status  under  internal  Member 
States’ law. 

Title II - Cooperation Duties: Articles 5 - 14 

Title  II  lays  down  provisions  on  administrative  cooperation  and  exchange  of  information 
between the competent authorities including the Commission. 

Chapter I – Mutual assistance and exchange of information 

Section 1 - Assistance on Request 

Article 5 establishes the possibility of requesting assistance and the obligation to comply with 
such  a  request.  This  article  is  aimed  at  facilitating  cooperation  between  the  competent 
authorities. It sets out how information is to be gathered and exchanged. 

Article 6 follows the example of Article 7 of Council Regulation (EC) No 515/97 providing 
for the carrying out of a special watch. 

Article  7  lays  down  rules  on  the  conduct  of  administrative  enquiries  at  the  request  of 
competent authorities and on the participation of officials from the applicant authority in the 
enquiry. 

Article  8  authorises  the  activity  of  an  official  of  a  competent  authority  in  another  Member 
State concerning access to documents in the requested authority’s offices - following similar 
in  Council 
provisions 
Regulation (EC) No 1798/2003. 

in  Council  Regulation 

(EC)  No 

515/97 

and 

11 

OJ L 312, 23.12.1995, p. 1. 

EN 

6 

   EN 

 
                                                 
Article 11(1) provides for Commission access to Member States’ records on transactions via 
the  VIES  (VAT  information  exchange  system)12.  It  will  add  an  important  element  of 
information to the Commission’s coordination capability. 

Section 2 - Spontaneous Assistance 

Article 12 provides for the supply of information to the Commission about operations which 
constitute  or  appear  to  constitute  an  irregularity,  i.e.  those  cases  where  there  is  a  sound 
suspicion  of  an  irregularity.  The  information  is  pooled  and  analysed  by  the  Commission  in 
order to provide to the Member States enhanced intelligence support and coordination. 

Article 13 provides for rules on the conduct of a special watch without a specific request for 
the purposes of this Regulation and the communication on respective information. 

Article  14  lays  down  rules  on  the  communication  of  general  information  by  the  Member 
States in order to create fraud-proof Community legislation and to allow the implementation 
of an overall, Community-wide anti-fraud policy. 

Chapter II - Use of Information 

in  article  12  of  Council 
rule  as  provided 
Article  15  contains  a  similar 
Regulation (EC) No 515/97 for the use as evidence in administrative or judicial proceedings 
of documents and material obtained under the proposed Regulation, aiming at strengthening 
the follow-up of Member States’ investigation activities.  

for 

Article  16  shall  facilitate  the  exchange  of  information  gathered  by  the  Commission  in  the 
context of multidisciplinary cooperation. 

Article  17  ensures  that  once  irregularities  have  been  object  of  mutual  assistance  under  this 
Regulation, the Member States keep the Commission informed of their follow-up. 

Article 18 provides that information may only be exchanged and used for the purposes of this 
proposed  Regulation  on  a  need-to-know  basis.  The  exchange  of  information  must  be 
organised  in  accordance  with  the  rules  of  confidentiality  and  is  subject  to  professional 
secrecy. 

Article  19  contains  the  obligation  -  under  certain  conditions  -  to  exchange  information 
obtained  under  this  proposed  Regulation  from  a  third  country  in  order  to  afford  effective 
protection of the financial interests of the Community. 

Article 20 provides that the Commission shall have the possibility to make use of its own risk 
analysis capabilities in order to provide the Member States’ authorities with reports and risk-
related information to enhance their effectiveness in fighting fraud. 

Article 21 provides for implementing measures in the execution of this proposed Regulation. 
Implementing rules shall be adopted by the Commission following the regulatory procedure 
as laid down in the comitology Decision 1999/468/EC13. 

12 

13 

VIES = VAT Information Exchange System, established by Council Regulation (EEC) No 218/92 and 
continued by Council Regulation (EC) No 1798/2003. 
OJ L 187, 17.7.1999, p. 23. 

EN 

7 

   EN 

 
                                                 
Article 22 specifies that the Commission will be assisted by a Regulatory Committee for the 
purpose  of  the  adoption  of  the  implementing  measures.  The  Committee  shall  exercise  its 
functions  together  with  the  Committee  under  Council  Regulation  (EC)  No  515/97  without 
prejudice 
the  one  under 
Regulation (EC) No 1798/2003.  The  Committee  shall  coordinate  closely  with  other 
committees. 

the  competencies  of  other  committee 

in  particular 

to 

EN 

8 

   EN 

 
2004/0172 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on mutual administrative assistance for the protection of the financial interests of the 
Community against fraud and any other illegal activities 

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 proposal from the Commission1, 

Having regard to the opinion of the Court of Auditors2, 

Acting in accordance with the procedure laid down in Article 251 of the Treaty3, 

Whereas: 

(1) 

(2) 

(3) 

The  Community  and  the  Member  States  attach  great  importance  to  the  protection  of 
the financial interests of the Community and to the fight against fraud and any other 
illegal activities affecting those interests. 

The  Community  framework  on  mutual  assistance  should  permit  close  and  regular 
cooperation  between  the  competent  authorities  of  the  Member  States  as  well  as 
between the latter and the Commission, in order to protect the Community’s financial 
interests in all areas of Community financial resources and expenditure. 

The  provisions  of  this  Regulation  should  not  affect  the  conduct  of  investigations  by 
the  European  Anti-Fraud  Office  through  the  use  of  investigative  powers  and  in 
compliance with the safeguards provided for in Regulation (EC) No 1073/1999 of the 
European  Parliament  and  of  the  Council  of  25  May  1999  concerning  investigations 
conducted by the European Anti-Fraud Office (OLAF)4. The scope of this Regulation 
should  be  limited  to  certain  forms  of  assistance,  exchange  of  information  and 
coordination  which  may  precede,  follow  or  accompany  OLAF’s  investigative 
activities. 

(4) 

The  introduction  of  new  Community  measures  should  not  be  such  as  to  affect  the 
application  of  national  criminal  law  and  of  rules  on  mutual  assistance  in  criminal 
matters or the national administration of justice. 

1 
2 
3 
4 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ L 136, 31.5.1999, p. 1. 

EN 

9 

   EN 

 
                                                 
(5) 

(6) 

(7) 

(8) 

(9) 

(10) 

The  fight  against  transnational  fraud  and  any  other  illegal  activities  affecting  the 
financial  interests  of  the  Community  demands  enhanced  coordination  at  Community 
level as  well  as  multidisciplinary cooperation with the Member States’ authorities in 
the  field  of  fraud  and  any  other  illegal  activities,  which  are  in  many  cases  related  to 
structures  of  organised  crime  and  are  detrimental  to  the  Community’s  financial 
interests. This Regulation should further permit cooperation between all the competent 
authorities of the Member States, and between the latter and the Commission. 

The  provisions  of  this  Regulation  should  not  affect  Community  legislation  which 
provides  for  more  specific  or  extensive  cooperation  between  the  Member  States  and 
the  latter  and  the  Commission,  such  as  Council  Regulation  (EC)  No  515/97  of 
13 March  1997  on  mutual  assistance  between  the  administrative  authorities  of  the 
Member States and cooperation between the latter and the Commission to ensure the 
correct  application  of  the  law  on  customs  and  agricultural  matters5,  or  Council 
Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the 
field of value added tax and repealing Regulation (EEC) No 218/926. 

The exchange of information is a key element in the fight against fraud and any other 
illegal  activities  affecting  the  financial  interests  of  the  Community.  Information 
provided by the Member States to the Commission should be used by the Commission 
to form a comprehensive view on Europe-wide fraud and other illegal activities and to 
communicate that view to the Member States. 

Fraud  and  any  other  illegal  activities  affecting  the  financial  interests  of  the 
Community,  in  particular  in  transnational  cases  which  often  involve  organised 
international  fraud  schemes  in  two  or  more  Member  States,  can  be  prevented  and 
fought most effectively if information of an operational, statistical or general nature is 
analysed and subjected to risk analysis at Community level, using the intelligence and 
risk-analysis capacity of the Commission in general and OLAF in particular. 

The fight against fraud and any other illegal activities affecting the financial interests 
of  the  Community  also  necessitates  a  coherent  follow-up.  Information  gathered  or 
transferred  by  the  Commission  should  therefore  be  admissible  as  evidence  in 
administrative and judicial proceedings. 

In  the  interest  of  successful  cooperation  between  the  competent  authorities  of  the 
Member States and the Commission, the exchange of information should be organised 
in  accordance  with  the  rules  of  confidentiality  where  information  is  subject  to 
professional secrecy, while ensuring that personal data processed pursuant to the new 
provisions enjoys proper data protection. 

(11)  Due  consideration  should  be  given  to  the  data  protection  rules  applying  to  the 
Community  institutions  set  out  in  Article  286  of  the  Treaty  and  Regulation  (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 

5 

6 

OJ  L  82,  22.3.1997,  p.  1.  Regulation  as  amended  by  Regulation  (EC)  No  807/2003  (OJ  L  122, 
16.5.2003, p. 36). 
OJ  L  264,  15.10.2003,  p.  1.  Regulation  as  amended  by  Regulation  (EC)  No  885/2004  (OJ  L  168, 
1.5.2004, p. 1). 

EN 

10 

   EN 

 
                                                 
Community institutions and bodies and on the free movement of such data7, as well as 
those  applying  to  the  Member  States  on  the  basis  of  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.8 

(12)  The measures necessary for the implementation of this Regulation should be adopted 
in accordance with Council Decision 1999/468/EC of 28 June 1999 laying down the 
procedures for the exercise of implementing powers conferred on the Commission9. 

(13)  Since the objectives of the action to be taken, namely the fight against fraud and any 
other  illegal  activities  affecting  the  financial  interests  of  the  Community  cannot  be 
sufficiently  achieved  by  the  Member  States  and  can  therefore  by  reason  of  the  scale 
and effects of the action, be better achieved at Community level, the Community may 
adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 
of  the  Treaty.  In  accordance  with  the  principle  of  proportionality,  as  set  out  in  that 
Article, this Regulation does not go beyond what is necessary in order to achieve those 
objectives. 

(14)  This Regulation respects the fundamental rights and observes the principles recognised 

in particular by the Charter of Fundamental Rights of the European Union, 

HAVE ADOPTED THIS REGULATION: 

TITLE I 
GENERAL PROVISIONS 

Article 1 
Subject matter 

This  Regulation  establishes  the  legal  framework  for  mutual  administrative  cooperation  and 
exchange  of  information  between  the  competent  authorities  of  the  Member  States  and 
between  those  authorities  and  the  Commission,  in  order  to  ensure  equivalent  and  effective 
protection  of  the  financial  interests  of  the  Community  against  fraud  and  any  other  illegal 
activities.  

Article 2 
Scope 

This Regulation shall apply in cases of fraud and any other illegal activities affecting 
the  financial  interests  of  the  Community  which  are  of  particular  relevance  at 
Community level. 

OJ L 8, 12.1.2001 p. 1. 
OJ L 281, 23.11.1995, p. 31. Directive as amended by Regulation (EC) No 1882/2003 of the European 
Parliament and of the Council (OJ L 284, 31.10.2003, p. 1). 
OJ L 184, 17.7.1999, p. 23. 

1. 

7 
8 

9 

EN 

11 

   EN 

 
                                                 
2. 

3. 

4. 

5 

The competent authorities of the Member States may also exchange information and 
provide assistance pursuant to this Regulation in other situations where they consider 
such exchange of information and assistance at Community level to be necessary in 
countering fraud and any other illegal activities affecting the financial interests of the 
Community. 

The  provisions  of  this  Regulation  shall  not  apply  to  the  extent  that  Community 
legislation  provides  for  more  specific  cooperation  between  the  Member  States  and 
between the latter and the Commission, or provides for broader access to information 
by the Commission. 

In  particular,  this  Regulation  shall  not  affect  the  application  of  Regulation  (EC) 
No 515/97  and  the  cooperation  between  Member  States  under  Regulation  (EC) 
No 1798/2003. 

This Regulation shall not affect the application of Regulation (EC) No 1073/1999. 

This Regulation shall not affect the application of national criminal law or of rules on 
mutual assistance in criminal matters or the national administration of justice. 

The obligation to give assistance provided for in this Regulation shall not cover the 
provision  of  information  or  documents  obtained  by  the  competent  administrative 
authorities acting with the authorisation or at the request of the judicial authority.  

However, in the event of requests for assistance, such information or documents shall 
be provided if the judicial authority which is to be consulted on the matter gives its 
consent. 

Article 3 
Definitions 

For the purposes of this Regulation the following definitions shall apply: 

1. 

“irregularity” means fraud and any other illegal activities with particular relevance at 
Community  level,  affecting  the  financial  interests  of  the  Community,  and  in 
particular: 

(a) 

any  infringement  of  a  provision  of  Community  law  resulting  from  an  act  or 
omission  by  an  economic  operator,  including  breaches  of  contracts  arising 
under  provisions  of  Community  law,  which  has,  or  would  have,  the  effect  of 
prejudicing  the  general  budget  of  the  Community  or  budgets  managed  by  it, 
either  by  reducing  or  losing  revenue  accruing  from  own  resources  collected 
directly on behalf of the Community, or by an unjustified item of expenditure;  

EN 

12 

   EN 

 
(b) 

any infringement of legislation relating to value added tax (VAT) as referred to 
in  Council  Directive  77/388/EEC10,  which  has  or  would  have  the  effect  of 
diminishing  the  Communities’  own  resources  as  referred  to  in  Council 
Regulation (EEC, Euratom) No 1553/8911;  

(c)  money 

laundering,  within 

the  meaning  of  Article  1(c)  of  Council 
Directive 91/308/EEC12,  in  relation  to  the  proceeds  of  an  infringement  as 
referred to in points (a) and (b); 

2. 

“irregularities of particular relevance at Community level” means irregularities: 

(a)  which have or might have ramifications in other Member States, or where there 
are tangible links with operations carried out in other Member States; and 

(b)  which  are  estimated  to  cause  overall  fiscal  damage  in  the  Member  States 
concerned in excess of EUR 500 000 in the area of VAT, or to cause damage to 
the Community’s financial interests of EUR 100 000 or more in the other cases 
covered by this Regulation; in case of money laundering the threshold applies 
to the predicate offence; 

“legislation relating to VAT” means all the Community provisions governing value 
added  tax  and  the  laws  and  regulations  adopted  by  the  Member  States  in  order  to 
comply with these Community provisions; 

“applicant  authority”  means  a  competent  authority  which  makes  a  request  for 
assistance; 

“requested authority” means a competent authority to which a request for assistance 
is made; 

“administrative enquiries” means all controls, checks and other action undertaken by 
the  competent  authorities  in  the  performance  of  their  duties  with  a  view  to 
establishing  whether  irregularities  have  been  committed,  excluding  action  taken  at 
the request of, or under a direct mandate from, a judicial authority; 

“financial information” means information on suspicious transactions received by the 
competent  national  contact  points  pursuant  to  Directive  91/308/EEC  and  other 
information  that  is  appropriate  for  tracing  the  financial  transactions  linked  to 
irregularities covered by this Regulation; 

“competent authorities” means the national or Community authorities referred to in 
Article 4(1).  

3. 

4. 

5. 

6. 

7. 

8. 

10 
11 
12 

OJ L 145, 13.6.1977, p. 1. 
OJ L 155, 7.6.1989, p. 9. 
OJ L 166, 28.6.1991, p. 77. 

EN 

13 

   EN 

 
                                                 
The  thresholds  set  out  in  point  (2)(b)  may  be  increased  in  accordance  with  the  procedure 
referred to in Article 22(2). 

Article 4 
Competent authorities 

1. 

Cooperation under this Regulation shall include the following competent authorities, 
acting within the scope of their respective powers: 

(a) 

the Member States’ authorities which are : 

(i) 

(ii) 

(iii) 

directly  responsible  for  the  management  of  financial  funds  originating 
from  the  Community  budget  and  designated  as  such  by  relevant 
Community law and national law provisions; or 

responsible  under  the  applicable  national  provisions  of  administrative 
law for the prevention of and the fight against fraud and any other illegal 
activities affecting the financial interests of the Community; or  

the  competent  authorities  listed  in  Regulation  (EC)  No  1798/2003,  the 
respective  central  liaison  offices  and  liaison  departments  designated 
pursuant to that Regulation, other tax investigation authorities competent 
to  investigate  VAT  fraud  or  the  competent  authorities  referred  to  in 
Council  Directive  92/12/EEC13  insofar  as  information  gathered  may 
afford evidence of VAT fraud; or 

(iv)  set up as “financial intelligence units” by the Member States pursuant to 
Council  Decision  2000/642/JHA14  to  collect  and  analyse  information 
received under the provisions of Directive 91/308/EEC. 

(b) 

the Commission, including the European Anti-Fraud Office (OLAF). 

2. 

Member  States  shall  take  the  necessary  measures  to  ensure  the  exchange  of 
information  between  their  competent  authorities,  regardless  of  their  competencies 
and internal status, and between the latter and the Commission. 

13 
14 

OJ L 76, 23.3.1992, p. 1. 
OJ L 271, 24.10.2000, p. 4. 

EN 

14 

   EN 

 
                                                 
TITLE II 
COOPERATION DUTIES 

CHAPTER 1 
MUTUAL ADMINISTRATIVE ASSISTANCE AND EXCHANGE OF INFORMATION 

Section 1 
Assistance on request 

Article 5 
Assistance on request 

1. 

2. 

3. 

4. 

5. 

The  competent  authorities  shall  assist  each  other  on  request  to  prevent  and  detect 
irregularities. At the request of the applicant authority, the requested authority shall, 
as  far  as  is  required  to  satisfy  the  purposes  of  the  request  and  in  accordance  with 
objectives  of  this  Regulation,  transmit  to  the  applicant  authority  all  information  of 
relevance  for  the  prevention  and  detection  of  irregularities.  The  information  to  be 
transmitted shall include information on the operations constituting the irregularity as 
well as financial information, both on the underlying operations and on the natural or 
legal persons involved. 

In  order  to  obtain  the  information  sought,  the  requested  authority  or  the 
administrative authority to which it has recourse shall proceed as though acting on its 
own account or at the request of another authority in its own Member State. 

The  requested  authority  shall  make  available  any  information  in  its  possession  or 
obtained  by  it  concerning  operations  or  transactions,  detected  or  planned,  which 
constitute  or  which  appear  to  the  applicant  authority  to  constitute,  irregularities  or, 
where  applicable,  concerning  findings  of  a  special  watch  carried  out  pursuant  to 
Article 6.  

It shall supply the applicant authority with any attestation, document or certified true 
copy of a document in its possession or obtained by it. However, original documents 
and items shall be provided only where this is not contrary to the legislation in force 
in the Member State in which the requested authority is based. 

Requests  for  assistance  and  information  exchange  shall  be  accompanied  by  a  brief 
statement of the facts known by the applicant authority. 

If the applicant authority addresses its request to an authority which is not competent 
for  the  assistance  requested  that  authority  shall  forward  the  request  immediately  to 
the competent authority. 

EN 

15 

   EN 

 
Article 6 
Special watch 

At the request of the applicant authority, the requested authority shall as far as possible keep a 
special watch or arrange for a special watch to be kept within its operational area: 

(a) 

(b) 

(c) 

(d) 

1. 

2. 

3. 

on  persons,  and  more  particularly  their  movements,  where  there  are  reasonable 
grounds for believing that they are committing irregularities; 

on places where goods are stored in a way that gives grounds to suspect that they are 
intended to supply operations which constitute irregularities; 

on the movements of goods indicated as being the object of potential irregularities; 

on means of transport and financial transactions, where there are reasonable grounds 
for believing that they are being used to commit irregularities. 

Article 7 
Administrative enquiries on request 

At  the  request  of  the  applicant  authority  the  requested  authority  shall  carry  out 
administrative  enquiries  concerning  operations  which  constitute  or  which  appear  to 
the  applicant  authority  to  constitute  an  irregularity,  or  shall  arrange  to  have  such 
enquiries carried out. 

The requested authority or the administrative authority to which it has recourse shall 
conduct these administrative enquiries as though acting on its own account or at the 
request  of  another  authority  in  its  own  Member  State.  It  shall  communicate  the 
results of the enquiry to the applicant authority. 

By agreement between the applicant authority and the requested authority, officials 
appointed  by  the  applicant  authority  may  be  present  at  the  administrative  enquiries 
referred to in paragraph 1. The enquiries shall at all times be carried out by officials 
of the requested authority.  

Officials of the applicant authority may not, on their own initiative, assume powers 
of  inspection  conferred  on  officials  of  the  requested  authority;  however,  they  shall 
have  access  to  the  same  premises  and  the  same  documents  as  the  latter,  through 
officials of the requested Member State as intermediaries and for the sole purpose of 
the administrative enquiries being carried out. 

In  so  far  as  national  provisions  on  criminal  proceedings  reserve  certain  acts  for 
officials  specifically  designated  by  national  law,  the  officials  of  the  applicant 
authority shall not take part in such acts. In no circumstances shall they participate in 
searches of premises or the formal questioning of persons under criminal law. 

EN 

16 

   EN 

 
Article 8 
Activity of officials in another Member State or on mission in a Member State 

By agreement between the applicant authority and the requested authority and in accordance 
with  the  arrangements  laid  down  by  the  latter,  officials  duly  authorised  by  the  applicant 
authority may be permitted to obtain information on irregularities, from the offices where the 
administrative  authorities  of  the  Member  State  in  which  the  requested  authority  is  based 
exercise their functions.  

The  information  concerned  must  be  needed  by  the  applicant  authority  and  be  derived  from 
documentation to which the officials of those offices have access.  

The  officials  of  the  applicant  authority  shall  be  authorised  to  take  copies  of  that 
documentation. 

Article 9 
Written authority of officials 

Officials of the applicant authority who are present in another Member State or on mission in 
a Member State in accordance with the Articles 7 and 8 must at all times be able to produce 
written authority stating their identity and their official functions. 

1. 

2. 

3. 

1. 

Article 10 
Time limit for providing assistance and information 

The  requested  authority  shall  provide  the  assistance  and  information  referred  to  in 
Articles 5 and 7 as quickly as possible and not later than six weeks following receipt 
of  the  request.  However,  where  the  requested  authority  is  already  in  possession  of 
that information the time-limit shall be four weeks. 

In  particular  cases,  time  limits  different  from  the  ones  provided  for  in  paragraph  1 
may be agreed between the requested and the applicant authorities. 

Where  the  requested  authority  is  unable  to  respond  to  a  request  by  the  deadline,  it 
shall  inform  the  applicant  authority  forthwith  of  the  reasons  for  its  failure  to  do  so 
and shall state when it will be able to respond. 

Article 11 
Data concerning value added tax 

For  the  purpose  of  providing  operational  and  technical  assistance  and  where 
necessary  to  help  competent  authorities  of  the  Member  States  to  detect  and 
investigate irregularities within the meaning of point (1)(b) of the first paragraph of 
Article 3 of this Regulation, the Commission shall be granted access to the Member 
States’  records  stored  in  national  databases  as  referred  to  in  Article  22  of 
Regulation (EC) No 1798/2003.  

EN 

17 

   EN 

 
The detailed rules concerning this access, including rules on confidentiality and data 
protection  as  well  as  on  the  use  of  information  obtained  from  the  Member  States’ 
records,  shall  be  laid  down  in  accordance  with  the  procedure  referred  to  in 
Article 22(2). 

2. 

Insofar as it may afford evidence of irregularities within the meaning of point (1)(b) 
of the first paragraph of Article 3, Member States’ authorities shall communicate to 
the Commission information gathered on the basis of Directive 92/12/EEC. 

Section 2 
Spontaneous Assistance 

Article 12 
Provision of information concerning operations or transactions 

1. 

2. 

3. 

4. 

The  competent  authorities  of  the  Member  States  shall  provide  the  Commission, 
without  prior  request,  with  any  relevant  information  in  respect  of  operations  or 
transactions which constitute or which appear to constitute irregularities. 

Acting  with  the  help  of  appropriate  technological  support,  the  Commission  shall 
analyse  the  information  provided  and  shall  provide  the  Member  States  with  the 
corresponding analytical results, with a view to technical and operational assistance 
in the detection and investigation of irregularities. Where the Commission considers 
that irregularities have taken place in one or more Member States, it shall inform the 
Member States concerned thereof. 

The  obligation  to  exchange  financial  information  spontaneously  between  the 
Member States and the Commission shall apply regardless of whether the transaction 
is carried out in a single operation or in several operations which seem to be linked. 

Rules on confidentiality and data protection shall be adopted in accordance with the 
procedure referred to in Article 22(2). 

Article 13 
Special watch without request 

Where they consider it useful for the protection of  the financial interests of the  Community 
against irregularities, competent authorities of the Member States shall: 

(a) 

(b) 

keep or arrange for a special watch as referred to in Article 6; 

communicate to the Commission and where appropriate to the competent authorities 
of  the  Member  States  concerned  any  information  in  their  possession,  and  in 
particular  reports  and  other  documents  or  certified  true  copies  or  extracts  thereof 
concerning  operations  which  constitute  or  which  appear  to  them  to  constitute  acts 
affecting the financial interests of the Community. 

EN 

18 

   EN 

 
Article 14 
Communication of general information 

1. 

2. 

The  competent  authorities  of  the  Member  States  shall  communicate  general 
information  to  the  Commission  on  new  ways,  means,  methods  and  practices  of 
committing irregularities as well as on the detection and prevention of irregularities, 
which might contribute to the fraud-proofing of relevant legislation, as soon as such 
information is available to them. 

The  Commission  shall  communicate  to  the  competent  authorities  in  each  Member 
State,  as  soon  as  it  becomes  available,  any  information  that  would  enable  them  to 
prevent irregularities and to enforce relevant legislation. 

CHAPTER 2 
USE OF INFORMATION 

Article 15 
Use as evidence 

Findings,  certificates,  information,  documents,  certified  true  copies  and  any  intelligence 
communicated to a competent authority in the course of assistance provided for in Articles 5, 
6,  7  and  12  shall  constitute  admissible  evidence in administrative or judicial proceedings in 
any Member State, in the same way as if they had been obtained in the Member State where 
the proceedings take place. 

Article 16 
Exchange of information 

Information obtained under this Regulation as well as under other Community provisions may 
be exchanged by the Commission with other competent authorities in accordance with and for 
the purpose of this Regulation, to the extent to which such exchange is compatible with the 
Community provisions under which the information has been obtained. 

Article 17 
Follow-up 

The competent authorities of the Member States shall inform the Commission of any relevant 
update of the information communicated and the administrative enquiries conducted under this 
Regulation, and especially of the administrative or judicial proceedings instituted, insofar as this 
is compatible with national criminal law. 

Article 18 
Confidentiality rules and data protection 

1. 

Information  communicated  or  acquired  in  any  form  under  this  Regulation  shall  be 
covered  by  professional  secrecy  and  protected  in  the  same  way  as  similar 
information is protected by the national legislation of the Member State that received 

EN 

19 

   EN 

 
2. 

1. 

2. 

it and by the corresponding provisions applicable to the Community institutions and 
bodies. 

Such  information  may  not  be  communicated  to  persons  or  authorities  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 
ensure effective protection of the financial interests of the Community. 

The Commission and the Member States shall ensure, when processing personal data 
pursuant  to  this  Regulation,  that  the  Community  and  national  provisions  on  the 
protection  of  data,  in  particular  those  laid  down  by  Directive  95/46/EC  and,  where 
applicable, by Regulation (EC) No 45/2001 are complied with.  

The European Data Protection Supervisor shall be consulted before adoption of the 
implementing  rules  provided  for  in  the  second  subparagraph  of  Article  11(1), 
Article 12(4) and Article 21. 

Article 19 
Relations with third countries 

Information obtained by a Member State or the Commission from a third country and 
falling within the scope of this Regulation shall be communicated to the competent 
authorities  of  a  Member  State  or  to  the  Commission  if  it  might  enable  them  to 
prevent or counter irregularities. 

Provided  that  the  third  country  concerned  has  given  a  legal  undertaking  to  provide 
the  assistance  required  to  gather  proof  of  the  irregular  nature  of  operations  which 
appear to constitute an irregularity, information obtained under this Regulation may 
be  communicated  to  that  third  country  as  part  of  a  concerted  action,  subject  to  the 
agreement  of  the  competent  authorities  supplying  the  information,  in  accordance 
with their national provisions on the protection of personal data, with Articles 25 and 
26  of  Directive  95/46/EC,  and  where  applicable  with  Article  9  of  Regulation  (EC) 
No 45/2001. 

Article 20 
Risk analysis by the Commission 

The Commission may use any information of a general or operational nature communicated 
by  Member  States  under  this  Regulation  to  perform  both  strategic  and  tactical  risk 
assessments,  with  the  use  of  appropriate  information  technology  support,  leading  to  the 
production of intelligence-based reports and alerts in order to raise the awareness of identified 
threats  and  thus  enhance  the  effectiveness  of  appropriate  operational  responses  by  the 
competent  national  authorities  and  the  Commission,  subject  to  the  limits  of  the  latter’s 
competence. 

EN 

20 

   EN 

 
TITLE III 
FINAL PROVISIONS 

Article 21 
Implementing rules 

Detailed  implementing  rules  concerning  the  mutual  assistance  and  exchange  of  information 
provided  for  in  Chapter  1  of  Title  II  shall  be  adopted  in  accordance  with  the  procedure 
referred to in Article 22(2). 

In  addition  to  the  matters  referred  to  in  the  second  subparagraph  of  Article  11(1)  and  in 
Article 12(4) those rules may cover; in particular: 

(a) 

(b) 

(c) 

1. 

2. 

irregularities within the meaning of point (1)(b) of the first paragraph of Article 3; 

irregularities within the meaning of point (1)(c) of the first paragraph of Article 3; 

irregularities in the structural funds sector. 

Article 22 
Committee 

The Commission shall be assisted by the Committee (hereinafter referred to as “the 
Committee”) set up under Article 43 of Regulation (EC) No 515/97. 

reference 

Where 
this  paragraph,  Articles  5  and  7  of 
Decision 1999/468/EC  shall  apply,  having  regard  to  the  provisions  of  Article  8 
thereof. 

is  made 

to 

The  period  referred  to  in  Article  5(6)  of  Decision  1999/468/EC  shall  be  three 
months. 

3. 

The Committee shall adopt its rules of procedure. 

Article 23 
Evaluation report 

Every three years after the date of entry into force of this Regulation, the Commission shall 
report to the European Parliament, the Court of Auditors and the Council on the application of 
this Regulation. 

EN 

21 

   EN 

 
Article 24 
Entry into force 

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

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

Done at Brussels, […] 

For the European Parliament 
The President 
[…] 

For the Council 
The President 
[…] 

EN 

22 

   EN 

 
LEGISLATIVE FINANCIAL STATEMENT 

Policy area(s): Anti-fraud 

Activities: Mutual administrative cooperation and exchange of information 

TITLE OF ACTION: PROPOSAL FOR A REGULATION OF THE EUROPEAN PARLIAMENT 
AND  OF  THE  COUNCIL  ON  MUTUAL  ADMINISTRATIVE  ASSISTANCE  FOR  THE  PROTECTION 
OF THE FINANCIAL INTERESTS OF THE COMMUNITY AGAINST FRAUD AND ANY OTHER ILLEGAL 
ACTIVITIES 

1. 

BUDGET LINE(S) + HEADING(S) 

24.0106 (fight against fraud) 

2. 

OVERALL FIGURES: 

2.1. 

Total allocation for action (Part B): EUR million for commitment: - 

2.2. 

Period of application: From entering into force on. 

2.3. 

Overall multi-annual estimate of expenditure 

(a) 

Schedule  of  commitment  appropriations/payment  appropriations 
intervention) (see point 6.1.1) - (not applicable see point 5.1.1) 

(financial 

EUR million (to three decimal places) 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

Year 
[n] 

[n+5 
and 
subs. 
Years] 

Total 

Commitments 

Payments 

(b) 

Technical and administrative assistance and support expenditure(see point 6.1.2) 

Commitments 

Payments 

Subtotal a+b 

Commitments 

Payments 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(c) 

Overall  financial  impact  of  human  resources  and  other  administrative  expenditure  
(see points 7.2 and 7.3) 

Commitments/ 
payments 

1.851   1.851   1.751 

1.751 

1.751,  1.751 

(The  first  two  years  include  each  an  amount  of  EUR  100 000  for  the  development  of 
information systems for internal use of the Commission, see point 7.3) 

TOTAL a+b+c 

Commitments 

1.851 

1.851 

1.751 

1.751 

1.751 

1.751 

Payments 

1.851 

1.851 

1.751 

1.751 

1.751 

1.751 

2.4. 

Compatibility with financial programming and financial perspective 

[X]  Proposal is compatible with existing financial programming. 

2.5. 

Financial impact on revenue: 

[X]  Proposal  has  no  financial  implications  (involves  technical  aspects  regarding 

implementation of a measure) 

3. 

BUDGET CHARACTERISTICS  

Type of expenditure 

EFTA 
contribution 

Contributions 
from  applicant 
countries 

in 

Heading 
financial 
perspective 

Non-comp 

Non-diff 

NO 

NO 

NO 

5 

4. 

LEGAL BASIS 

Article 280(4) of the EC Treaty. 

5. 

DESCRIPTION AND GROUNDS 

5.1. 

Need for Community intervention  

5.1.1.  Objectives pursued 

The initiative for a regulation on the basis of article 280 of the EC Treaty concerns a 
framework dedicated to administrative mutual assistance necessary to strengthen the 
protection of the financial interests of the Community.  

For  the  purpose  of  the  protection  of  the  financial  interests  of  the  Community  the 
Member States and the Commission shall assist each other and exchange information 
in particular in the field of money laundering of the proceeds of EC fraud, of fraud 

EN 

24 

   EN 

 
 
 
 
 
 
 
 
 
 
 
on  VAT  and  any  other  illegal  activities  detrimental  to  the  Community’s  financial 
interests in particular those in the field of structural funds. 

Background 

framework 

Fraud  and  any  other  illegal  activities  affecting  the  financial  interests  of  the 
Community  warrant  a  more  comprehensive 
for  administrative 
cooperation  between  Member  States  authorities  and  with  the  Commission.  This  is 
reflected by the Commission’s firm commitment to the fight against fraud in order to 
protect  the  Community’s  financial  interests  which  is  clearly  demonstrated  in  its 
Communication, adopted on 28 June 2000, on an overall strategic approach for the 
protection  of  the  Community’s  financial interests  and  the  fight  against  fraud1.  This 
approach  underlines  the  importance  of  an  overall  anti-fraud  legislative  policy  by 
following  a  horizontal  and  cross-pillar  legislative  approach.  This  legislative  policy 
must be given concrete expression with the drawing up of specific rules, in particular 
for information  exchanges, and close  and regular cooperation between the Member 
States and between the latter and the Commission. 

On  the  basis  of  this  legislative  policy  the  Commission  mentions  in  its  working 
programme for 2003 the preparation of a proposal for a regulation of the European 
Parliament  and  of  the  Council  establishing  a  cooperation  mechanism  between  the 
competent authorities of the member States and the Commission in order to ensure 
the  protection  of  the  Community’s  financial  interests  against  illegal  activities 
including  matters  such  as  VAT  fraud,  money  laundering  and  other  financial 
transactions  in  relation  to  the  proceeds  of  EC  fraud  as  well  as  any  other  illegal 
activities detrimental to the Community’s financial interests in particular concerning 
fraud concerning structural funds. 

The  Commission  has  reiterated  in  its  Communication  containing  an  Action  Plan 
for 2001-20032,  the  importance  of  reinforcing  cooperation  to  prevent  money 
laundering of proceeds from fraud and any other illegal activities detrimental to the 
Community’s  financial  interests  and  VAT  fraud  in  order  to  be  able  to  realise  an 
effective  action  against  organised  crime,  particularly  economic  and  financial  crime 
(including fraud and money laundering). To combat this type of crime, the European 
Union should take co-ordinated action and have a strategy of cooperation and mutual 
information  between  all  public  partners  in  addition  to  existing  programmes  as 
Fiscalis in the sector of VAT. 

1 

2 

Communication  from  the  Commission,  Protection  of  the  Communities’  financial  interests,  The  fight 
against fraud - For an overall strategic approach, COM(2000) 358 final. See especially paragraph 1 and 
1.2.2 of this communication. The Council (ECOFIN) adopted this communication on 17 July 2000 and 
the  European  Parliament,  which  approved  the  guidelines.  The  Parliament  approved  the  guidelines 
presented in its Resolution of 13 December 2000. 
Adopted by the Commission on 23 May 2001, COM(2001) 254 final. See especially paragraph 2.2.1. 

EN 

25 

   EN 

 
                                                 
5.1.2.  Measures taken in connection with ex ante evaluation NOT APPLICABLE 

5.1.3.  Measures taken following ex post evaluation NOT APPLICABLE 

5.2. 

Action envisaged and budget intervention arrangements 

NOT APPLICABLE: see point 5.1.1. 

5.3.  Methods of implementation 

NOT APPLICABLE: see point 5.1.1. 

6. 

FINANCIAL IMPACT  

NOT APPLICABLE: SEE POINT 5.1.1. 

6.1. 

Total financial impact on Part B - (over the entire programming period) 

(The  method  of  calculating  the  total  amounts  set  out  in  the  table  below  must  be 
explained by the breakdown in Table 6.2.) 

6.1.1.  Financial intervention 

Commitments (in EUR million to three decimal places) 

Breakdown 

[Year n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5 and 
subs. 
Years] 

Total 

Action 1 

Action 2 

etc. 

TOTAL 

6.1.2.  Technical  and  administrative  assistance,  support  expenditure  and  IT  expenditure 

(commitment appropriations) 

[Year n] 

[n+1] 

[n+2] 

[n+3] 

[n+4] 

[n+5 and 
subs. 
years] 

Total 

1) Technical and 
administrative assistance 

a) Technical assistance  

EN 

26 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
b) Other technical and 
administrative 
assistance: 

- intra muros: 

- extra muros: 

of which for construction and 
maintenance  of  computerised 
management systems 

Subtotal 1 

2) Support expenditure 

a) Studies 

b) Meetings of experts 

Information 

c) 
publications 

and 

Subtotal 2 

TOTAL 

6.2. 

Calculation  of  costs  by  measure  envisaged  in  Part  B  (over  the  entire 
programming period) 

7. 

IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE  

7.1. 

Impact on human resources 

Types of post 

Staff to be assigned to management of the 
action using existing and additional resources 

Total 

Description of tasks deriving from the 
action 

Number of 
permanent posts 

Number of temporary 
posts 

Officials 
temporary staff 

or 

A 

B 

C 

2 (1 already occupied) 

2 (1 already occupied) 

2 (1 already occupied) 

3 (1/2 - 1 already occupied) 

11 

1 

5 

1 

4 END 

4 

10 

15 

Other human resources 

Total 

EN 

Coordination  of 
investigations  and 
intelligence work in the field of fraud in 
particular on VAT and structural funds 
and  money  laundering  of  proceeds  of 
fraud  detrimental  to  the  Community’s 
financial interests. 

Coordination  of  investigations  in  the 
field  of  VAT,  structural  funds  and 
money laundering of proceeds of fraud 
detrimental 
the  Community’s 
financial interests. 

to 

27 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.2. 

Overall financial impact of human resources 

Type of human resources 

Amount (EUR) 

Method of calculation *  

Officials 

Temporary staff 

Other human resources 

1 188 000  11 x EUR 108 000 

173 340  4 (END) x EUR 43 335 

(specify budget line) 

Total 

1 361 340 

The amounts are total expenditure for twelve months. 

7.3. 

Other administrative expenditure deriving from the action 

Amount EUR 

Method of calculation 

Budget line 

(number and heading) 

Overall allocation (Title A7) 

Overall allocation 24.0106 (fight against fraud) 

A3.010211 Other management expenditure (missions)  

A3.0201 Control, studies, analysis and activities specific 
to the European anti-fraud office 

117 000 

13 (operational and intelligence staff) x 
missions  per  year  x  1.500  (average 
costs of Anti-fraud—missions) 

60 000 

2  x  (each  year)  a  meeting  of  the 
Committee (30.000 costs per meeting)3 

208 000 

13 (operational and intelligence staff) x 
investigation 
2 
(average  No.  of 
8,000 
coordination  meetings) 
(average costs of such a meeting) 

x 

Total per year 

385 000 

3 

Where multidisciplinary (e.g. Customs and VAT) issues are discussed by the Committee envisaged by 
this  Regulation,  the  travel  costs  of  two  delegates  per  Member  State  will  be  reimbursed  by  the 
Commission. 

EN 

28 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
A3.0103  Buildings  and  related  expenditure  of  policy 
area 

EUR 100 000  Two  information  systems  have  to  be 
developed:  one  for  VAT  and  one  for 
money laundering. The development of 
each system entails the following costs: 

system specification: EUR 25 000 

development: EUR 35 000 

tests: EUR 10 000 

user manuals and training: EUR 15 000 

installations: EUR 15 000 

total (1): EUR 100 000 

Total:2 systems: EUR 200 000 

cost to be spread over two years 

A3 01 60 Documentation and library expenditure 

5 000 

special 
purchase  of  books,  subscription 
specialised periodicals 

library,  documentation  and 
to 

Total 

1 851 340 

The amounts are total expenditure for twelve months. 

1 Specify the type of committee and the group to which it belongs. 

I. 

Annual total (7.2 + 7.3) 

II. 

Duration of action 

EUR 1 851 340 
(year 1 and 2) 

EUR 1 751 340 
(from year 3) 

does not apply 

III. 

Total cost of action (I x II) 

does not apply 

The  needs  for  human  and  administrative  resources  shall  be  covered  within  the  allocation 
granted to the managing DG in the framework of the annual allocation procedure. 

8. 

FOLLOW-UP AND EVALUATION 

8.1. 

Follow-up arrangements 

The  Committee  shall  adopt  an  implementing  regulation  following  the  comitology 
procedure  in  order  to  determine  the  relevant  implementing  modalities  of  mutual 

EN 

29 

   EN 

 
 
 
 
 
assistance  and  exchange  of  information  in  specific  areas  covered  by  the  proposed 
regulation. 

8.2. 

Arrangements and schedule for the planned evaluation 

Every three years after the date of entry into force of the regulation, the Commission 
shall report to the European Parliament, the Court of Auditors and the Council on the 
application of the measures provided for in the regulation. 

9. 

ANTI-FRAUD MEASURES 

NOT APPLICABLE. 

EN 

30 

   EN