Opinion No 3/2007 on a proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 515/97 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 matters
Date: 2007-03-21
Institutions: European Court of Auditors
Subjects: European Commission, administrative cooperation, common agricultural policy, customs regulations, exchange of information, fraud, information system

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OPINION No 3/2007

on a proposal for a Regulation of the European Parliament and of the Council amending Council
Regulation (EC) No 515/97 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 matters

(pursuant to Article 280(4), EC)

(2007/C 101/02)

TABLE OF CONTENTS

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Specific remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Paragraph

Page

1-2

3-6

7-13

5

5

5

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THE COURT OF AUDITORS OF THE EUROPEAN COMMUNITIES,

The Court has examined the Commission proposal in the

2.
light of the results of its audit work.

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

Having regard to the proposal for a Regulation of the European
Parliament and of the Council amending Council Regulation
(EC) No 515/97 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 matters (1);

Having regard to the request for an opinion submitted to the
Court of Auditors by the Council on 23 February 2007,

HAS ADOPTED THE FOLLOWING OPINION:

INTRODUCTION

1.
The objective pursued by the draft regulation is the sound
application of Community customs and agricultural legislation,
providing the Commission and the Member States’ customs and
other authorities with more effective mechanisms to assist them
in preventing, investigating and prosecuting operations that are in
breach of customs and agricultural legislation. To that end the
proposal:

(a)

(b)

supplements the current case-by-case exchange mechanism
for spontaneous assistance without prior request of the
receiving Member State with an automatic and/or structured
information exchange mechanism;

sets up an European central data directory to help the com-
petent authorities of the Member States detect consignments
of goods, including containers and/or means of transport,
that may be in breach of customs and/or agricultural
legislation;

(c) makes it possible that the CIS (Customs Information System)
be used for purposes of operational and/or strategic analysis
and to include therein information about seized goods and
cash controls;

(d) allows the interoperability between the CIS and the national

risk analysis systems;

(e)

creates a central database, FIDE (Customs Files Identification
System), allowing to identify the investigation files opened in
respect of individual persons or traders in any Member State
along with the responsible case officers; and

(f)

aligns Council Regulation (EC) No 515/97 (2) with data pro-
tection rules.

(1) COM(2006) 866 final of 22 December 2006.
(2) OJ L 82, 22.3.1997, p. 1.

GENERAL REMARKS

The Court considers that the proposal will contribute to
3.
achieving the objective pursued by the regulation provided that
the Commission takes proper action in order to implement with-
out further delay the IT infrastructure, databases and software
applications needed for its practical operation. However, the pro-
posed regulation does not address important issues already high-
lighted by the Court which still remain valid and which are
referred to in paragraphs 4, 5 and 6.

4.
The Court identified a potential overlap between the RIF
(Risk Information Form) and MA (mutual assistance) communi-
cations and recommended that OLAF and DG TAXUD should
streamline both reporting and monitoring and work towards a
more integrated approach (3).

The Court found that in the special case of the mutual
5.
assistance procedure in the customs and agriculture sectors there
is no systematic follow-up by OLAF (4). As at February 2007 the
situation remained unchanged.

6.
The Court draws attention to its recommendation in its
Special Report No 11/2006 on the Community Transit System (5)
that the Commission should take measures to improve the reli-
ability of sources of information on fraud, and should make bet-
ter use of them by developing risk management strategies. As
such, the Commission should strive to improve the completeness
and reliability of MA communications and the CIS.

SPECIFIC REMARKS

7.
The first indent of Article 2(1) of the draft regulation
defines customs legislation including a reference to the body of
Community provisions governing value added tax as regards
imports and exports. The Court welcomes this approach but con-
siders that, for reasons of consistency with the definition of cus-
toms legislation contained in the Naples II Convention (6), this
article should also refer to the body of provisions adopted at
Community level for harmonised excise duties on importation
together with the associated implementing provisions.

(3) See paragraphs 4.12 and 4.27(a) of

the Annual Report 2005

(OJ C 263, 31.10.2006, p. 1).

(4) See paragraphs 32 and 85 of Special Report No 1/2005 (OJ C 202,

18.8.2005).

(5) See paragraph 74 of Special Report No 11/2006 (OJ C 44, 27.2.2007).
(6) Convention drawn up on the basis of Article K.3 of the Treaty on
European Union, on mutual assistance and cooperation between cus-
toms administrations (OJ C 24, 23.1.1998).

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The new paragraph 2 added to Article 15 would require
8.
the inclusion in Article 2(1) of definitions of ‘progressive com-
munication’, ‘communication at regular intervals’, ‘structured for-
mat’ and ‘unstructured format’. Moreover, the option of commu-
nicating at regular intervals is in contradiction with the current
obligation existing in Article 15 to immediately notify to the
other Member States concerned information relating to opera-
tions which constitute, or appear to them to constitute, breaches
of customs and agricultural legislation.

9.
The Court considers that the possibility provided for MA
communications to be used for the purpose of strategic analysis
pursuant to the new paragraph 7 of Article 18 can help reinforce
the effectiveness of OLAF. Nevertheless, the Court considers that
the proposal should have gone further in Article 18a by giving
the Commission full access to the information available in sys-
tems already implemented or foreseen (1) for all kinds of goods
(not only for sensitive goods) for the purpose of operational and
strategic analysis and risk management while ensuring adequate
protection of personal data.

10.
Article 18b does not clearly provide the legal basis for a
permanent infrastructure in order to ensure the coordination of
joint customs operations open to the participation of representa-
tives or liaison officers of competent international or regional
organizations, European Union bodies or agencies and third
countries, as announced in the explanatory memorandum.

The Court considers that Article 23(2) of the draft regu-
11.
lation does not essentially differ from the current article and that
the aim of the CIS should be better explained specifying that the
effectiveness of the cooperation and control procedures of the
competent authorities can now also be increased through opera-
tional and strategic analysis.

The Court

invites the Commission to include in
12.
Articles 41b(2)(b) and 41c(2)(b) the excise duties identification
number (SEED identification number) foreseen in the Regulation
on administrative cooperation in the field of excise duties (2) and
in the Directive 92/12/EEC (3) in order to facilitate investigations
by either the Commission or the competent authorities of a Mem-
ber State.

13.
Although the Commission indicated that the proposal
has no financial impact on revenue, the Court considers that the
proposal should have a positive impact on traditional and VAT
resources through the reduction of fraud, and this impact should
have been estimated in the legislative financial statement of the
proposal in order to allow a more accurate assessment of the
value for money of the project.

This Opinion was adopted by the Court of Auditors in Luxembourg at its meeting of
21 March 2007.

For the Court of Auditors
Hubert WEBER
President

(1) Such as NCTS (New Computerised Transit System), ECS (Export Con-
trol System), AIS (Automated Import System), and EMCS (Excise
Movement and Control System).

(2) Article 22(2)(a) of Council Regulation (EC) No 2073/2004 (OJ L 359,

4.12.2004, p. 1).

(3) Article 15a(2)(a) of Council Directive 92/12/EEC of 25 February 1992
on the general arrangements for products subject to excise duty and
on the holding, movement and monitoring of such products (OJ L 76,
23.3.1992, p. 1), as amended by Council Directive 92/108/EEC of
14 December 1992 (OJ L 390, 31.12.1992, p. 124).