Opinion No 6/2005 on a proposal for a Regulation of the European Parliament and of the Council amending Regulations (EC) No 1073/1999 and (Euratom) No 1074/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)
Date: 2005-06-09
Institutions: European Court of Auditors
Subjects: Community budget, EU control, European Anti-fraud Office, committee of inquiry, drafting of EU law, operation of the Institutions

18.8.2005

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Official Journal of the European Union

C 202/33

OPINION No 6/2005

on a proposal for a Regulation of the European Parliament and of the Council amending
Regulations (EC) No 1073/1999 and (Euratom) No 1074/1999 concerning investigations conducted
by the European Anti-Fraud Office (OLAF)

(pursuant to the second subparagraph of Article 248(4) and to Article 279(2) of the EC Treaty)

(2005/C 202/02)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

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

Having regard to the Treaty establishing the European Atomic
Energy Community, and in particular Article 160c thereof,

Having regard to the proposal for a Regulation of the European
the Council amending Regulations (EC)
Parliament and of
No 1073/1999 and (Euratom) No 1074/1999,

Having regard to the request for an opinion submitted to the
Court of Auditors by the Council on 8 March 2004,

HAS ADOPTED THE FOLLOWING OPINION

The background to the proposal

1.
The proposal is based on the progress report submitted by
the Commission in April 2003 under the terms of Article 15 of
Regulation (EC) No 1073/1999 of the European Parliament and
the Council concerning investigations conducted by OLAF (1). It
is also a follow-up to the undertaking given by the President of
the Commission to the Committee on Budgetary Control on
18 November 2003 during the presentation of the Commission’s
legislative and work programme for 2004. The Commission pro-
posal seeks to strengthen OLAF’s operational efficiency by allow-
ing it to concentrate on its priorities and to speed up its investi-
gations by clarifying certain procedures. However, the President’s
statement went further than the proposal put forward by the
Commission in that, apart from adjustments to the investigation
procedures, it held out the prospect of a reorganisation of the
Office itself.

2.
The President of the Commission had, in fact, stated that
refocusing OLAF’s activities meant that ‘there might be a case for
reassigning to Commission departments certain horizontal tasks
that are unrelated to investigations’, and that the governance of
OLAF needed to be reconsidered (2). Finally, he proposed ‘to
increase the effectiveness of OLAF — as it faces a growing work-
load in an enlarged Union — by increasing its staff resources,
refocusing its tasks on its investigative function and adapting the
Regulation …’. Of the proposals made by the President of the
Commission, only the last one (adaptation of the Regulation) is
concerned by the proposal
to amend Regulation (EC)
No 1073/1999. A refocusing of the Office’s actual tasks would
have necessitated an amendment to the Commission Decision of
28 April 1999 establishing the European Anti-Fraud Office (3).

The preamble shows that the aim of the proposal is to
3.
amend the Regulation in five main areas, without in any way call-
ing into question the powers and responsibilities of the Member
States, whilst respecting the principles of subsidiarity and propor-
tionality. These five areas are as follows:

(a) as regards cases to be pursued actively, the Office should be
free to decide, on the basis of its own priorities, whether or
not to open an investigation (assertion of the principle of dis-
cretion in the opening of investigations);

(b) as regards internal investigations (administrative investiga-
tions within the institutions, bodies, offices and agencies), the
Office should inform the institutions or bodies where inves-
tigations are in progress or where administrative measures
may be required in order to protect the Union’s interests;

(c)

in internal investigations and in cases of fraud in connection
with contracts financed by Community funds (direct expen-
diture being dealt with by external investigations), the Office
should be able to carry out inspections on the premises of
economic operators in the Member States in accordance with
the procedures laid down by Council Regulation (Euratom,
EC) No 2185/96. It should also have unimpeded access
to information held by the Community institutions and bod-
ies when carrying out external investigations;

(2) ‘Governance’ must be understood to mean not only the management
arrangements but also the supervisory arrangements (the Supervisory
Committee).

(3) Decision No 1999/352/EC, ECSC, Euratom of 28 April 1999

(1) COM(2003) 154 final of 2 April 2003.

(OJ L 136, 31.5.1999).

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Official Journal of the European Union

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(d)

for the sake of fairness and legal certainty, the procedural
guarantees relating to the rights of individuals should be
clarified as regards both internal and external investigations;

Extended use of the inspection procedures in Regulation
(Euratom, EC) No 2185/96 (1)

(e)

the role of the Supervisory Committee should be extended to
monitoring the duration of investigations and to protecting
individuals, both in internal and external investigations. It is
therefore proposed to increase the number of Committee
members by two. The Commission also proposes that one
member of the Committee should be responsible for prepar-
ing the work on the Office’s observance of individual rights.

4.
The comments which follow take into account the find-
ings of the audit of the Office, as set out in Special Report
No 1/2005 of the Court of Auditors.

Regulation (Euratom, EC) No 2185/96 provides for ‘on-
8.
the-spot checks and inspections carried out by the Commission
in order to protect the European Communities’ financial interests’
concerning agricultural support, Structural Funds and own
resources.

9.
The proposal provides for the application of this regula-
tion to be extended to direct expenditure (internal policies, exter-
nal aid, etc.). This ought to strengthen the range of intervention
measures available to the Office, in particular as regards coopera-
tion with the national authorities. The Court’s audits have con-
firmed that a weakness in this respect exists. On this point, there-
fore, the Commission’s proposal is to be welcomed.

Application of the principle of discretion in the opening of
investigations

Strengthening of procedural guarantees

5.
The application of the principle of discretion in the open-
ing of investigations can be looked upon as a matter of efficiency,
and the Court welcomes the change. However, the immediate
practical effect will be limited. As is shown in the Special Report,
the number of well-founded denunciations that the Office receives
is not so large that it is obliged to make a choice between inves-
tigations to undertake.

Setting priorities and time-tabling are related mat-
6.
ters. Experience has shown that many of the investigations under-
taken by the Office take longer than a reasonable period (12 to 18
months). That being so, it would be useful to fix deadlines for the
investigations.

Duty to inform

7.
The Court supports the proposal to reinforce the Office’s
duty to inform the institutions or bodies concerned about the
opening of an investigation. The deletion in the present
Article 4(5) of the right to defer such information makes, how-
ever, for a certain ambiguity. The lack of a provision on this point
means that the possibility of withholding information is not
excluded. The Commission’s proposal ought to be modified in
order to ensure that the requirement to notify is not set aside
without justification on the pretext that secrecy is necessary to
guarantee the efficiency of the investigation.

The Commission considers it appropriate for the funda-
10.
mental principles that should govern investigations to be stated
in the regulation. The Court endorses that view.

The role and number of the members of the Supervisory
Committee

11.
Compliance with the legal procedures for investigations
must be ensured. According to Regulation (EC) No 1073/1999
(Article 14), complaints during the course of an investigation
regarding enquiries by OLAF investigators are to be made to the
Director of the Office. This is not a satisfactory solution as it does
not grant the complainant an independent review of the demand.
As an alternative, individuals under investigation have turned to
the Ombudsman when they considered that their fundamental
rights had been infringed. This procedure has proved to be unsat-
isfactory and it has on occasions led to situations where the
Ombudsman has been perceived of as intervening in the course
of investigations. The Commission’s proposal entrusts the Super-
visory Committee with the task of controlling the conduct of the
investigators. This is not a better solution, since it runs counter to
the principle that the Committee should not intervene in investi-
gations in progress.

12.
The review of the legality of investigative actions ought
to be entrusted to a body which is impartial and cannot become
involved in the conduct of investigations because of other aspects
of its mandate.

(1) OJ L 292, 15.11.1996.

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The Commission’s proposal does not clarify the role of
13.
the Supervisory Committee as regards the incompatibility
between the principle of non-intervention in investigations and
the duty to obtain an opinion from the Committee during an
investigation, which arises either where the 12-month period has
been exceeded or where the Committee has to be informed before
a case is forwarded to the judicial authorities. It therefore appears
necessary to state even more clearly the principle that the Super-
visory Committee shall not intervene in ongoing investigations.

The Commission proposes to increase the number of
14.
members of the Supervisory Committee from five to seven. This
is not based on any objective analysis of the Committee’s tasks
and operating procedures. The members’ duties are sporadic and

do not enable them to study the files in depth. In order for them
to be able to work more effectively, it would be preferable for at
least some of them to have earlier experience in Community
affairs, especially in the investigative field.

(EC) No

According

to Regulation

15.
1073/1999
(Article 11(6)), the Supervisory Committee is obliged to hold at
least 10 meetings per year. However, if the Committee is to con-
centrate on safeguarding the independence of OLAF’s investiga-
tive function, it must not be put under an obligation to meet
almost monthly. Furthermore, a review of the Supervisory Com-
mittee’s role and operational procedures should lead to a reduc-
tion in the number of posts in its secretariat.

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of 9 June
2005.

For the Court of Auditors
Hubert WEBER
President