Opinion No 6/2006 on a proposal for a decision by the European Parliament and the Council amending and extending Decision No 804/2004/EC of the European Parliament and of the Council of 21 April 2004 establishing a Community action programme to promote activities in the field of the protection of the Community's financial interests (Hercule II programme)
Date: 2006-10-26
Institutions: European Court of Auditors
Subjects: EU action, EU financing, EU programme, European Anti-fraud Office, fraud against the EU, illicit trade, project evaluation, tobacco

12.12.2006

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Official Journal of the European Union

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OPINION No 6/2006

on a proposal for a decision by the European Parliament and the Council amending and extending
Decision No 804/2004/EC of the European Parliament and of the Council of 21 April 2004
establishing a Community action programme to promote activities in the field of the protection of
the Community’s financial interests (Hercule II programme)

(pursuant to Article 248(4), second subparagraph, EC)

(2006/C 302/02)

THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES

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

Having regard to the proposal for a decision by the European Par-
liament and the Council amending and extending the Commu-
nity action programme to promote activities in the field of the
interest of the Community’s financial interests (1),

Having regard to the Council’s request for an opinion on this pro-
posal, which was received by the Court of Auditors on
14 July 2006,

Having regard to Opinion No 8/2003 of the Court of Auditors of
11 November 2003 on the original Community action
programme,

Whereas the proposed decision is based on Article 280(4) of the
Treaty, which provides that: ‘The Council … after consulting the
Court of Auditors, shall adopt the necessary measures in the fields
of the prevention of and fight against fraud affecting the financial
interests of the Community’,

Whereas the main purpose of the Commission’s proposal is to
extend the Hercule (2) programme for a further period of seven
years (2007 to 2013). The indicative allocation of 98,5 million
euro results in average annual
instalments of approximately
14 million euro. The programme provides OLAF with the finan-
cial resources needed to operate the service platform offered to
the Member States for the purpose of coordinating the fight
against fraud at European Union level (3),

HAS ADOPTED THE FOLLOWING OPINION:

1. The main programme sectors (technical assistance, training
activities and information exchange between legal authori-
ties in the area of the fight against fraud) have not been evalu-
ated according to the terms of Article 27(3) of the Financial
Regulation, which require achievement of the objectives to
be monitored by performance indicators. Instead activities

(1) COM(2006) 339 final of 28 June 2006.
(2) Decision No 804/2004/EC of the European Parliament and of the

Council (OJ L 143, 30.4.2004, p. 9).

(3) Special Report No 1/2005 of the Court of Auditors, paragraphs 50

and 76 (OJ C 202, 18.8.2005).

have been judged rather in terms of level of activity, without
measurable indicators. Therefore the achievement of the
expected results and impact of the programme remain diffi-
cult to determine.

2. Article 7(a) of the proposal provides for a report by OLAF on
the implementation of the programme and the appropriate-
ness of continuing it by 31 December 2010 at the latest.
Article 7(b) postpones the evaluation of the achievement of
the programme until 31 December 2014. The Court consid-
ers that to be too late. Therefore the Court suggests that the
independent evaluation should be delivered by no later than
2010 and should include an intermediate evaluation of the
achievements of the programmes objectives. Furthermore,
information about the actions financed and the results
obtained in the framework of the Hercule II programme
should be presented in the annual report submitted by the
Commission pursuant to Article 280 (5) of the Treaty. In the
annex attached to the proposal the clarity and specificity of
the general criteria established should be improved in order
to facilitate an eventual evaluation of the programme.

3. The public contracts referred to in Title V of the Financial
Regulation offer OLAF the possibility of managing the pro-
gramme. This procedure is to be welcomed as a means of
enabling the Office to have greater control over the imple-
mentation of the programme.

it

this

structure meets

4. The structure of the programme set out in the legislative
financial statement is expressed in operational objectives,
which are themselves broken down into activities. On the
face of
the requirements of
Article 27(3) of the Financial Regulation. However, the struc-
ture in the legislative statement does not correspond to the
programme’s management structure (consisting of three
separate components). The appointment of a programme
coordinator is not likely to clarify the achievement of objec-
tives that are both formal and diverse or of activities which
do not correspond to the practical reality of management. It
would therefore be desirable for the stated objectives to be
reformulated and linked more closely to the aims actually
pursued by the managers. If this is not done performance
indicators are likely to prove very difficult to put in place.

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Official Journal of the European Union

12.12.2006

5.

Following action by OLAF in the fight against cigarette smug-
gling, an agreement was reached on 9 June 2004 between
the Commission, 10 Member States and a major manufac-
turer in the tobacco sector (1). Under this agreement, the
manufacturer agreed to pay the sum of approximately
1 250 million USD over a period of 12 years. This sum,
which the Commission shares with the countries which
signed the agreement, is intended in particular ‘to provide an

additional source of funding for initiatives to combat smug-
gling and counterfeiting’. The annual budget of the Hercule
II programme thus includes a sum of approximately 6 mil-
lion euro by virtue of the agreement. While the provision of
additional funds to combat fraud in the tobacco sector is to
be welcomed, appropriate measures should be taken to
ensure that adequate resources are available for the fight
against fraud in other equally sensitive sectors.

This opinion was adopted by the Court of Auditors in Luxembourg at its meeting of
26 October 2006.

For the Court of Auditors
Hubert WEBER
President

(1) Philip Morris Group (PMI).