Decision No 878/2007/EC of the European Parliament and of the Council of 23 July 2007 amending and extending Decision No 804/2004/EC establishing a Community action programme to promote activities in the field of the protection of the Community's financial interests (Hercule II programme)
Date: 2007-07-23
Institutions: Council of the European Union, European Parliament
Subjects: EU financing, EU programme, European Anti-fraud Office, financial control, fraud, fraud against the EU

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Official Journal of the European Union

25.7.2007

DECISIONS ADOPTED JOINTLY BY THE EUROPEAN PARLIAMENT AND THE
COUNCIL

DECISION No 878/2007/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 23 July 2007

amending and extending Decision No 804/2004/EC establishing a Community action programme to
promote activities in the field of the protection of the Community's financial interests (Hercule II
programme)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

interests, and to achieve the objectives of the Hercule
programme for the period 2004 to 2006.

Having regard to the Treaty
Community, and in particular Article 280 thereof,

establishing the European

(4)

Having regard to the proposal from the Commission,

Having regard to the opinion of the Court of Auditors (1),

Acting in accordance with the procedure laid down in Article
251 of the Treaty (2),

Whereas:

(1)

(2)

(3)

The Community and the Member States have set them-
selves the objective of countering fraud and any other
financial
illegal activities affecting the Community's
interests,
including cigarette smuggling and counter-
feiting. All available means must be deployed to attain
that objective, whilst maintaining the current distribution
and balance of responsibilities between the national and
Community levels.

Activities with the purpose of providing better infor-
mation, carrying out studies and providing training or
technical
to
improving the protection of the Community's financial
interests.

significantly

contribute

assistance

Support for such initiatives in the form of grants has
made it possible in the past to enhance the activities of
the Community and the Member States in terms of coun-
tering fraud and protecting the Community's financial

Article 7(a) of Decision No 804/2004/EC of
the
European Parliament and of the Council (3) requires the
Commission to present to the European Parliament and
the Council a report by the European Anti-Fraud Office
(OLAF)
the Hercule
implementation
programme and the appropriateness of continuing it.
The conclusions of this report state that the objectives
set by the Hercule programme have been achieved. The
report also recommends that the programme be extended
for the period 2007 to 2013.

the

on

of

(5)

(6)

(7)

In order to consolidate the activities of the Community
and the Member States in the field of the protection of
the Community's financial
including the fight
against cigarette smuggling and counterfeiting, the new
programme should cover all operational expenditure
relating to the Commission's (OLAF's) general anti-fraud
activities in a single basic act.

interests,

The awarding of grants and public procurement contracts
to promote and implement
the programme must be
in accordance with the provisions of
carried out
Council Regulation (EC, Euratom) No 1605/2002 of 25
June 2002 on the Financial Regulation applicable to the
general budget of the European Communities (4) and its
implementing rules. It is appropriate to exclude operating
grants from the programme as they have not been used
to support initiatives in the past.

Acceding countries and candidate countries should be
able to participate in the Hercule II programme, on the
basis of a memorandum of understanding to be drawn
framework
up in accordance with the
agreements.

respective

(1) OJ C 302, 12.12.2006, p. 41.
(2) Opinion of the European Parliament of 13 February 2007 (not yet
published in the Official Journal) and Council Decision of 28 June
2007.

(3) OJ L 143, 30.4.2004, p. 9.
(4) OJ L 248, 16.9.2002, p. 1. Regulation as amended by Regulation

(EC, Euratom) No 1995/2006 (OJ L 390, 30.12.2006, p. 1).

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(8)

This Decision lays down, for the entire duration of the
programme, a financial envelope constituting the prime
reference, within the meaning of Point 37 of the Inter-
institutional Agreement of 17 May 2006 between the
European Parliament, the Council and the Commission
on
financial
management (1), for the budgetary authority during the
annual budgetary procedure,

budgetary

discipline

sound

and

HAVE DECIDED AS FOLLOWS:

Article 1

Amendments

Decision No 804/2004/EC is hereby amended as follows:

1. Article 1 shall be replaced by the following:

‘Article 1

Objectives of the programme

This Decision establishes

action
1.
the
programme to promote activities
the Community.
protection of
The programme
II
the Hercule
programme (hereinafter referred to as the programme).

interests of
shall be known as

in the field of

a Community

the financial

understanding — in the activities financed under the
programme;

(e) multiplying and intensifying the measures in the areas
identified as the most sensitive, particularly in the field
of cigarette smuggling and counterfeiting.’

2. The following article shall be inserted:

‘Article 1a

Activities

shall be

The programme
implemented through the
following activities in the field of the protection of the
including in the field of
Community's financial
the prevention of,
cigarette
fight
smuggling and counterfeiting:

interests,
and the

against,

(a)

technical assistance for national authorities through:

(i) providing specific knowledge, equipment and infor-
mation technology (IT) tools facilitating transna-
tional cooperation and cooperation with OLAF;

(ii) support for joint operations;

(iii) enhancing staff exchanges;

2.
The programme shall promote activities according to
the general criteria set out in this Decision. It shall focus on
the following objectives in particular:

(b) training, seminars and conferences aimed at:

(a) enhancing transnational and multidisciplinary coop-
the

authorities,

States'

eration between Member
Commission and OLAF;

(b) building networks

the Member States,
throughout
acceding countries and candidate countries — in
accordance with a memorandum of understanding —
facilitating the exchange of information, experience and
best practices, while
also respecting the distinct
traditions of each Member State;

(c) providing technical and operational support for the law
enforcement authorities of the Member States in their
fight against illegal cross border activities, emphasising
support for customs authorities;

(d) without undermining operational effectiveness, striking
if possible, all
a geographical balance by including,
Member States,
and candidate
acceding countries
countries — in accordance with a memorandum of

(1) OJ C 139, 14.6.2006, p. 1.

(i) fostering better understanding of Community and

national mechanisms;

(ii) exchanging experience between the relevant autho-
rities in the Member States, acceding countries and
candidate countries;

(iii) coordinating the activities of Member States,
acceding countries, candidate countries and third
countries;

(iv) disseminating knowledge, particularly of an oper-

ational nature;

(v) supporting

high-profile

research

activities,

including studies;

(vi) improving cooperation between practitioners and

academics;

(vii) raising the awareness of the judiciary and other
branches of the legal profession for the protection
of the financial interests of the Community;

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Official Journal of the European Union

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(c) support through:

(i) developing and providing specific databases and IT

tools facilitating data access and analysis;

(ii) increasing data exchange;

(iii) developing and providing IT tools

for
gations, monitoring and intelligence work.’

investi-

3. Article 2 shall be replaced by the following:

‘Article 2

Community funding

Community funding may take the following legal
Euratom)
Regulation

pursuant

(EC,

to

1.
forms
No 1605/2002:

(a) grants;

(b) public procurement contracts.

To qualify for a Community grant for an activity
2.
interests,
aimed at protecting the Community's financial
grant beneficiaries must comply with the provisions set
out in this Decision. The activity must conform to the
principles underlying Community activity in the field of
the protection of the Community's financial interests and
take account of the specific criteria laid down in the related
calls for proposals, in accordance with the priorities set out
in the annual grants programme which details the general
criteria set out in this Decision.

Community funding shall

3.
through public
procurement contracts or by the award of grants, the oper-
ational expenditure relating to activities in the field of the
protection of the Community's financial interests.

cover,

4.
The activities carried out by bodies which may receive
Community funding (public procurement contract or grant)
under the programme shall come under the heading of
actions aimed at strengthening Community measures to
interests and shall pursue objectives of
protect financial
general European interest
in this field or an objective
which is part of the European Union's policy in this area.’

4. The following Articles shall be inserted:

(a) all national or regional administrations of a Member
State or a country outside the Community, as defined
in Article 3, which promote the strengthening of
Community
the Community's
financial interests;

action to protect

(b) all research and educational

institutes that have had
legal personality for at least one year, are established
and operating in a Member State or in a country
outside the Community, as defined in Article 3, and
promote the strengthening of Community action to
protect the Community's financial interests;

(c) all non-profit-making bodies

that have had legal
personality for at least one year, are established and
operating in a Member State or in a country outside
the Community, as defined in Article 3, and promote
the strengthening of Community action to protect the
Community's financial interests.

Article 2b

Selection of beneficiaries

Bodies entitled under Article 2a to receive a grant for an
activity shall be selected following a call for proposals, in
accordance with the priorities set out in the annual grants
programme which details the general criteria set out in this
Decision. Grants awarded for an activity covered by the
programme shall meet the general criteria set out in this
Decision.

Article 2c

Criteria for the assessment of applications for grants

Applications for grants for activities shall be assessed in the
light of:

(a)

the consistency of the proposed activity in relation to
the objectives of the programme;

(b) the complementarity of
other assisted activities;

the proposed activity with

(c)

the feasibility of
possibility that
proposed means;

the proposed activity,
it

the real
i.e.
carried out using the

can be

‘Article 2a

Bodies eligible for Community funding

The following bodies shall be eligible for Community
funding under the programme:

(d) the cost-benefit ratio of the proposed activity;

(e)

the added utility of the proposed activity;

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Official Journal of the European Union

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(f)

the size of the public targeted by the proposed activity;

7. Article 5 shall be amended as follows:

(g) the transnational and multidisciplinary aspects of the

proposed activity;

(a) paragraph 1(b) shall be replaced by the following:

(h) the geographic scope of the proposed activity.

Article 2d

Eligible expenditure

Pursuant to Article 2(4), only the expenditure required for
the successful implementation of the activity shall be taken
into account when calculating the grant.

Expenditure in connection with the participation of repre-
sentatives of the Balkan countries forming part of the stabi-
lisation and association process for countries of south-
eastern Europe (*),
the countries
covered by the European Neighbourhood Policy (**), and
has
certain countries with which
concluded an agreement for mutual assistance in customs
matters, shall also be eligible.

the Russian Federation,

the Community

___________
(*) Albania, Bosnia-Herzegovina, Croatia,

former
Yugoslav Republic of Macedonia, Montenegro and
Serbia.

the

(**) Algeria, Armenia, Azerbaijan, Belarus, Egypt, Georgia,
Israel, Jordan, Lebanon, Libya, Moldova, Morocco, the
Palestinian Authority, Syria, Tunisia and Ukraine.’

5. Article 3 shall be amended as follows:

(a) point (a) shall be replaced by the following:

‘(a) acceding countries;’

(b) points (c) and (d) shall be replaced by the following:

‘(c) candidate countries associated with the European
Union on the basis of the conditions stipulated in
their additional
the association agreements or
protocols
Community
in
participation
programmes concluded or to be concluded with
those countries.’

on

6. Article 4 shall be replaced by the following:

‘Article 4

Implementation

Community funding shall be implemented in accordance
with Regulation (EC, Euratom) No 1605/2002.’

‘(b) 80 % of eligible expenditure for training measures,
promoting exchanges of specialised staff and the
holding of
seminars and conferences, provided
that the beneficiaries are those referred to Article
2a(a);’;

(b) paragraph 1(c) shall be replaced by the following:

‘(c) 90 % of eligible expenditure for the holding of
seminars and conferences, etc., provided that the
beneficiaries are those referred to in Article 2a(b)
and (c).’;

(c) paragraph 2 shall be deleted.

8. The following Article shall be inserted:

‘Article 5a

Checks and audits

The beneficiary of a grant shall ensure that, where
1.
applicable, supporting documents in the possession of
partners
the
Commission.

or members

are made

available

to

2.
The Commission may have an audit of the use made
of the Community funding carried out either by its own
staff or by a qualified outside body of its choice. Such
audits may be carried out throughout the lifetime of the
contract or the agreement and for a period of five years
following the last payment. Where appropriate, the audit
findings may
the
Commission.

decisions

recovery

lead

by

to

3.
Commission staff and outside personnel authorised
by the Commission shall have appropriate rights of
access to sites and premises where the action is carried
out and to all the information,
including information in
electronic format, needed in order to conduct the audits
referred to in paragraph 2.

4.
The Court of Auditors and OLAF shall enjoy the same
rights, especially the rights of access, as the persons referred
to in paragraph 3.

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Furthermore,

interests against

in order to protect the Community's
5.
financial
fraud and other irregularities,
the Commission shall carry out on-the-spot checks and
inspections under
this programme in accordance with
Council Regulation (Euratom, EC) No 2185/96 (*). Where
necessary, investigations shall be conducted by OLAF and
governed by Regulation (EC) No 1073/1999 of
the
European Parliament and of the Council (**).

___________
(*) OJ L 292, 15.11.1996, p. 2.
(**) OJ L 136, 31.5.1999, p. 1.’

9. Article 6 shall be amended as follows:

(a) paragraph 1 shall be replaced by the following:

The programme is extended from 1 January 2007

‘1.
and will end on 31 December 2013.’;

(b) paragraph 2 shall be replaced by the following:

‘2.
The financial envelope for the implementation of
the programme for the period 2007 to 2013 shall be
EUR 98 525 000.’

An independent assessment of the implementation of the
programme, including an examination of performance and
the achievement of the objectives of the programme, shall
be carried out by 31 December 2010.

By 31 December 2014,
the Commission (OLAF) shall
present to the European Parliament and to the Council a
report on the achievement of
the
programme.’

the objectives of

11. The following Article shall be inserted:

‘Article 7a

Management of the programme

a

analysis,

form of

cost-effectiveness

the
On the basis of
Commission may employ experts and make use of any
other
technical and administrative assistance
which does not involve public authority tasks outsourced
under ad hoc service contracts. It may also finance studies
and organise meetings of experts to facilitate the implemen-
tation of the programme, and take information, publication
and dissemination measures directly linked to fulfilling the
objectives of the programme.’

12. The Annex shall be deleted.

Article 2

Entry into force

10. Article 7 shall be replaced by the following:

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

‘Article 7

Monitoring and evaluation

Done at Brussels, 23 July 2007.

results of

The Commission (OLAF) shall provide annual information
to the European
the programme
on the
Parliament and to the Council. Information on consistency
and complementarity with other programmes and activities
at European Union level shall be included.

For the European Parliament
The President

H.-G. PÖTTERING

For the Council
The President

L. AMADO