COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE NATIONAL PARLIAMENTS on the review of the proposal for a Council Regulation on the establishment of the European Public Prosecutor's Office with regard to the principle of subsidiarity, in accordance with Protocol No 2
Date: 2013-11-27
Institutions: European Commission
Subjects: EU office or agency, European Anti-fraud Office, financial control, fraud against the EU, operation of the Institutions, principle of subsidiarity, public prosecutor's department













EUR-Lex - 52013DC0851 - EN











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52013DC0851

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE NATIONAL PARLIAMENTS on the review of the proposal for a Council Regulation on the establishment of the European Public Prosecutor's Office with regard to the principle of subsidiarity, in accordance with Protocol No 2 /* COM/2013/0851 final <EMPTY> */









COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT,
THE COUNCIL AND THE NATIONAL PARLIAMENTS
on the review
of the proposal for a Council Regulation on the establishment of the European
Public Prosecutor's Office with regard to the principle of subsidiarity, in
accordance with Protocol No 2

1.                      
Background

1.1.                
Commission
proposal for a Council Regulation on the establishment of the European Public
Prosecutor’s Office
On 17 July 2013, the
Commission adopted a proposal for a Council Regulation on the establishment of
the European Public Prosecutor's Office.[1] The Commission's
proposal is based on Article 86 of the Treaty on the Functioning of the
European Union (TFEU), which empowers the Council to establish that Office in
order to combat crimes affecting the financial interests of the Union.
Article 86(1) TFEU
provides for a special legislative procedure requiring unanimity in the Council
and the consent of the European Parliament.[2] The Treaty also
foresees a specific procedure according to which the proposal can be adopted
through enhanced cooperation in the absence of unanimity in the Council. The
Treaty requires for this procedure the participation of at least nine Member
States and an absence of consensus in the European Council. In such a case the
authorisation to proceed with enhanced cooperation shall be deemed to be
granted without the need of a formal act of the Council.
The Commission's
commitment to fighting fraud and enhancing the protection of taxpayers' money
has been constant over the years, but results in the area of criminal
prosecution remain disappointing. In view of the fact that the Union budget is
chiefly administered at national level, common European solutions are necessary
to make the fight against fraud more effective across the Union. In this
context, President Barroso announced in September 2012 the "intention to
establish a European Public Prosecutor's Office, as foreseen by the Treaties". [3]
The proposal is part of
a package of measures aimed at better protecting the Union's financial
interests.[4]
This objective has great importance in the current economic and fiscal context.
The damage caused by fraud and other offences affecting the Union’s budget is
significant, as confirmed over the years by the Union's annual statistics.[5]
Those offences have a very negative effect on the public and private sectors,
generating important economic and social costs.
1.2.                
Key
features of the Commission proposal 
In accordance with
Article 86 TFEU, the Commission has proposed to establish the European Public
Prosecutor's Office to investigate, prosecute and bring to judgement the
perpetrators of offences affecting the Union's financial interests. The
European Public Prosecutor’s Office will be established as a body of the Union with a decentralised structure which, for most of its activities, would rely on
national investigation and prosecution authorities, and on national law. The
principles of efficiency, independence and accountability lie at
the heart of the model proposed by the Commission. The proposal is based on
respect of the national legal traditions and judicial systems of the Member
States and aims at consistency and speedy action.
The decentralised
structure would consist of a single organisation with two layers: a central
unit which would essentially supervise, coordinate and, where necessary, direct
investigations and prosecutions carried out in the Member States, and the
European Delegated Prosecutors, who would generally carry out such
investigations and prosecutions autonomously. These European Delegated
Prosecutors would be part of both the European Public Prosecutor’s Office and
national prosecution services. The European Public Prosecutor’s Office would
thus be smoothly embedded into national justice systems and could rely on
national procedural rules, national courts and national law enforcement
resources, while pursuing efficiently the common European objective to fight
against fraud to the detriment of the Union budget.
1.3.                
The
subsidiarity control mechanism  
In accordance with
Protocol No 2 to the Treaties on the application of the principles of
subsidiarity and proportionality, from the date of transmission of a draft
legislative act national Parliaments have eight weeks to consider whether it is
compatible or not with the principle of subsidiarity. As regards legislative
proposals submitted on the basis of Article 76 TFEU (Title V, Chapters 4 and
5), the threshold provided for in Article 7(2) of Protocol No 2 is one quarter
of the votes allocated to national Parliaments (as opposed to the normal
threshold of one third of the votes). Where reasoned opinions issued by
national Parliaments for non-compliance with the principle of subsidiarity
reach that threshold, the proposal has to be reviewed by the Commission. On the
basis of that review, the Commission decides whether to maintain, amend or
withdraw the proposal, and it must give reasons for its decision.
Within the deadline laid
down in Article 6 of Protocol No 2, fourteen chambers of national Parliaments[6]
had sent reasoned opinions to the Commission, thus triggering the subsidiarity
control mechanism provided for in Article 7(2) of Protocol No 2. The threshold
of Article 7(3) of Protocol No 2 has not been reached. In addition, it is to be
noted that at the date of adoption of this Communication, four national
Parliaments (RO Senat, DE Bundesrat, PL Senat and PT Assembleia
da República) sent opinions in the framework of the political dialogue which
did not consider the proposal to be incompatible with the principle of
subsidiarity.
The Commission confirmed
the triggering of the subsidiarity control mechanism of Article 7(2) of
Protocol No 2 on 6 November 2013.
2.                      
Subsidiarity concerns raised by the national
Parliaments 
2.1.                
Introductory
remarks 
The Commission has
carefully analysed the reasoned opinions submitted by national Parliaments from
the perspective of the principle of subsidiarity.
That principle is
enshrined as follows in Article 5(2) of the Treaty on European Union (TEU): ‘Under
the principle of subsidiarity, in areas which do not fall within its exclusive
competence, the Union shall act only if and in so far as the objectives of the
proposed action cannot be sufficiently achieved by the Member States, either at
central level or at regional and local level, but can rather, by reason of the
scale or effects of the proposed action, be better achieved at Union level’.
The procedure of Article
7(2) of Protocol No 2 is exclusively focused on the principle of subsidiarity
and in reasoned opinions within the meaning of Article 6 of Protocol No 2 national
Parliaments need to state why they consider that a draft legislative act does
not comply with that principle. As a result, legal or policy arguments not
connected to subsidiarity are not examined in detail in this
Communication. The Commission is however well aware that the limits of the
principle of subsidiarity are not easy to trace and has therefore adopted an
open attitude towards the reasoned opinions, interpreting their arguments,
insofar as possible, in the light of the principle of subsidiarity.
The subsidiarity test
involves two closely interrelated questions: first, whether the proposed action
can or cannot be sufficiently achieved by the Member States acting on their
own; and second, whether the action can be, by reason of its scale or effects,
better achieved at Union level. Both steps are connected, as the insufficiency
of Member State action will often lead to a finding that Union action will
better achieve the proposed policy objective. The text of Article 5(3) TEU
makes the connection clear (‘but can rather’) and the Court of Justice of the
European Union has often carried out one single analysis of the two questions,
implicitly recognising a certain margin of discretion to the Union
institutions.[7]

According to Article 5(3)
TEU, the principle of subsidiarity does not apply to the exclusive competences
of the Union. The competence to establish the European Public Prosecutor's
Office (Article 86 TFEU) is not among the exclusive competences set out in
Article 3 TFEU and is not an exclusive competence by nature (i.e. a competence
that, although it is not listed in Article 3 TFEU, could only be exercised by
the Union and for which the subsidiarity analysis is irrelevant). Therefore,
the principle of subsidiarity applies to Article 86 TFEU.
However, the drafters of
the Treaty have expressly provided for the possibility of establishing the
European Public Prosecutor's Office in Article 86 TFEU, including among its
responsibilities the investigation and prosecution of crimes affecting the
Union's financial interests in the courts of the Member States. This provision
gives a strong indication that the establishment of the European Public
Prosecutor’s Office cannot be considered per se and in the abstract to
be in breach of the principle of subsidiarity (as correctly pointed out by the MT
Kamra tad-Deputati and the SI Državni Zbor). What has to be
examined is whether the insufficiency of Member State action and the
added-value of Union action justify the establishment of the European Public
Prosecutor's Office and that issue has to be judged in light of the different
aspects of the proposal, i.e. the way in which the Office would be established
and the rules and procedural powers that would frame it.
In analysing the
reasoned opinions, the Commission has distinguished between arguments relating
to the principle of subsidiarity, or that could be interpreted as subsidiarity
concerns, and other arguments relating to the principle of proportionality, to
policy choices unrelated to subsidiarity, or to other policy or legal issues.
The arguments concerning the principle of subsidiarity are the following:
·     
The
reasoning concerning subsidiarity (section 2.2);
·     
The
alleged sufficient character of existing mechanisms (section 2.3);
·     
The
added-value of the proposal (section 2.4); 
·     
Issues
relating to the structure of the European Public Prosecutor's Office (section
2.5);
·     
Issues
relating to the nature and scope of its competences (section 2.6).
Other arguments fall
outside the scope of the subsidiarity control mechanism. They will be duly
taken into account in the process of negotiating the Proposal and will be
addressed in the political dialogue, and namely in the individual replies to be
sent to the relevant national Parliaments. These arguments can be summarised as
follows:
·       
The
Regulation is too far-reaching (SE Riksdag, SI Državni Zbor)
·       
The
European Public Prosecutor's Office’s powers are too far-reaching and should be
reserved to national authorities (NL Tweede Kamer, Eerste Kamer);   

·       
The
Regulation goes beyond what is necessary to achieve its objective (SE Riksdag and others);
·       
The
Regulation may violate the protection of fundamental rights guaranteed by the
Czech Constitution and the Charter (CZ Senát and UK House of Lords and House of Commons);
·       
The
Regulation would create disadvantages for Member States in that they lose the
capacity to prioritise prosecution activities within their own criminal justice
systems (UK House of Lords and House of Commons, and NL Tweede
Kamer, Eerste Kamer);  
·       
Article
26 of the proposal contains investigation measures which are not allowed under
national law in all Member States and this may undermine the effective
protection of the rights of suspects (CY Vouli ton Antiprosopon).
The Commission would also
like to emphasise that some of the reasoned opinions expressed support for the
establishment of a European Public Prosecutor's Office, whilst questioning
specific elements of the Commission's proposal. This is the case of the
opinions of MT Kamra tad-Deputati, and of the FR Sénat. In
addition, the CZ Senát considered that the cooperation of European
Delegated Prosecutors as part of one office may be more effective and swifter
than existing mechanisms in transnational cases.
2.2.                
Reasoning
concerning subsidiarity
A number of national
Parliaments (CY Vouli ton Antiprosopon, UK House of Commons, HU Országgyűlés) consider
that the Commission did not sufficiently explain the reasons why its proposal
is compatible with the principle of subsidiarity. In particular, the UK House
of Commons considers that the reasons given by the Commission are
insufficient, because the explanations should be contained in the explanatory
memorandum, not only in the impact assessment, and because they consider that
the Commission has conflated the first and the second steps of the analysis
(insufficiency of Member State action and added-value of Union action).
The Court of Justice has
stated that the obligation under Article 296, second subparagraph, TFEU to give
reasons underpinning legal acts requires that the measures concerned should
contain a statement of the reasons that led the institution to adopt them, so
that the Court can exercise its power of review and so that the Member States
and the nationals concerned may learn of the conditions under which the Union
institutions have applied the Treaty.[8]
In the same judgment, the Court accepted an implicit and rather limited
reasoning as sufficient to justify compliance with the principle of
subsidiarity.
In the present
situation, the explanatory memorandum and the accompanying legislative
financial statement of the Commission sufficiently explain why the action of
the Member States is insufficient with regard to the policy objective and why
Union action would better achieve that objective (e.g. lack of continuity in
enforcement action and lack of an underlying common European prosecution
policy). As stated above, it is obvious that both conclusions are connected in
this case. Even so, and contrary to the allegations of the UK House of Commons,
the Commission has not ‘conflated’ both issues, but explained in detail why it
considers that Member State action is insufficient and that Union action would
better achieve the policy objective. These reasons are supplemented by the
impact assessment, mentioned in a number of reasoned opinions, which is by its
nature much more detailed. The Commission recalls that in the Vodafone
case the Court of Justice referred to an impact assessment of the Commission to
justify respect for the principle of proportionality.[9] The
Commission considers that the impact assessment report is also relevant in the context
of respect for the principle of subsidiarity, supplementing the reasons given
in the explanatory memorandum and in the legislative financial statement.
The Commission therefore
considers that its proposal is sufficiently substantiated with regard to the
principle of subsidiarity.
2.3.                
Member State
action, existing mechanisms or proposed legislation 
A number of national
Parliaments (CY Vouli ton Antiprosopon, CZ Senát, IE Houses of the
Oireachtas, NL Eerste
Kamer and Tweede Kamer, RO Camera Deputaților, SI Državni Zbor, SE Riksdag,
UK House of Commons) express the view that investigation and prosecution
action at Member State level is sufficient and that the coordination and
investigation mechanisms existing at the Union level (Eurojust, Europol and
OLAF) would also be sufficient. SE Riksdag, UK House of Commons
and CY Vouli ton Antiprosopon state that the Commission should have
waited for the adoption of its proposed Directive on the fight against fraud to
the Union's financial interests by means of criminal law[10]
before envisaging new legislation in this field. The UK House of Commons
also considers that the Commission did not sufficiently examine measures to
prevent fraud.
As regards the argument
that Member State investigative and prosecution action would be sufficient, at
least as regards some Member States, and that Union action should rather
concentrate on those Member States where there might be weaknesses (SE Riksdag, SI Državni Zbor), the
Commission points out that the subsidiarity principle requires a comparison
between the efficiency of action at the Union level and action at the Member
State level. The situation in particular Member States is therefore not
decisive in itself, as long as it can be shown that action at the level of the
Member States is generally insufficient, and that Union action would generally
better achieve the policy objective.
From that perspective,
the Commission notes that objective and clear statistical information
shows that the Treaty objective of an effective, deterrent and equivalent level
of protection is not achieved in general.[11] The analysis
of OLAF's annual statistics indicates that national criminal proceedings are
not effective as they last too long. In a period of five years between
2006-2011, the number of actions[12]
in which no judicial decision in the Member States had yet been taken was at
54,3%.[13]
The OLAF statistics further demonstrate that there is a lack of deterrence. In
the same period more than half of actions transferred by OLAF to the judicial
authorities of the Member States were dismissed before trial[14] and the
average conviction rate remained low (42,3%). These data relate to cases in
which OLAF already took the decision that the received information justified
the opening of an investigation and also carried out its preliminary
investigation. Finally, according to the statistical data available to OLAF,
the degree of successful prosecution varies from Member State to Member State therefore, leading to a lack of equivalence of the protection of the Union's financial interests across the Member States. From 2006-2011, conviction rates of
actions transferred by OLAF to Member States' judicial authorities ranged from
19,2% to 91,7% (not including Member States with rates of 0% and 100%).[15]  Therefore,
contrary to the opinions of some national Parliaments (CZ Senát, NL Eerste
Kamer and Tweede Kamer, UK House of Commons), which question
the data provided by the Commission, there is a solid basis of statistical
evidence demonstrating that in general terms the action taken at Member State
level in the specific area of Union fraud is insufficient.
The UK House of Commons further contends that the Commission has not considered the sufficiency
of action "at regional or local level, particularly important where
devolved administrations may have discrete criminal justice systems". The
Commission considers that this argument is not convincing. The division of
powers between a Member State, its regions and its municipalities is a purely
internal matter. When the Commission refers to the insufficiency of Member State action, that statement necessarily encompasses all the possible levels of Member State action, including the regional and the local levels.
Concerning existing
mechanisms at Union level, whilst there is always room for improvement, both at
national and Union level, the Commission remains convinced that in this case
those improvements would at best have marginal effects because of their
inherent limitations. None of the existing mechanisms or bodies at
Union level can address the shortcomings identified in view of their limited
powers.
For years, OLAF has
supported the Member States’ authorities in their tasks in this area. However,
the powers of OLAF are limited to administrative investigations. OLAF thus
cannot carry out criminal investigations sensu stricto, nor access
information on criminal investigations. In addition, the findings of
OLAF set out in its final reports do not lead automatically to the initiation
of criminal proceedings by the competent authorities of the Member States. They
are mere recommendations and national authorities, administrative or judicial,
are free to decide what action to take, if necessary.[16] Recently, a
reform of OLAF entered into force.[17] Whilst the
reform aims at improving the efficiency and transparency of the current
administrative investigations it cannot be expected to have any substantial
impact on the level of criminal investigation and prosecution of offences in
the area of Union fraud.
There are also inherent
limitations concerning the role played by Europol and Eurojust. These bodies
are entrusted with cooperation and coordination tasks, but they have no powers
to conduct or direct investigations or prosecutions themselves, nor can they be
given such powers under the applicable provisions of the Treaty. Whilst
Eurojust may request the initiation of an investigation, it cannot ensure its
follow up on a Member State level, nor direct national investigations or
prosecutions. In this context the Commission has proposed further improvements
to the functioning of both Europol and Eurojust this year.[18]
However, even the most far reaching reform of Eurojust, which would give the
agency the power to initiate criminal investigations, could not address the
present shortcomings in the prosecution of Union fraud. The proposed changes of
the existing structures are expected to lead to some improvements, but by the
very nature of those structures they cannot address the insufficient level of
investigations and prosecutions in the Member States.
Harmonisation of
substantive criminal law is an important element of the overall protection of
the Union's financial interests. As stated, the Commission has put
forward a proposal
for a Directive on the fight against fraud to the Union's financial interest by
means of criminal law.[19]
Nevertheless, harmonised definitions of offences and sanction levels will not,
as such, produce satisfactory results without being accompanied and supported
by effective investigation and prosecution measures. The proposal for that
Directive and the proposal to establish a European Public Prosecutor's Office
have different, although complementary, objectives. The proposed Directive aims
at harmonising definitions of relevant offences, introducing common sanctions,
as well as harmonising time limitation periods. The Commission considers that
it does not need to wait to be in a position to assess the results of the
proposed Directive before proposing the establishment of the European Public
Prosecutor's Office. The results of the proposed Directive do not have any
direct bearing on the subsidiarity test regarding the current proposal.
In addition, with regard
to measures aimed at preventing fraud, the anti-fraud strategy provides for
integrated measures to prevent, detect and investigate fraud. However, given
that not all fraud can be prevented, prevention efforts need to be complemented
by an effective and deterrent enforcement mechanism, as norms work better when
strong non-compliance mechanism exist.
Finally, none of the
existing mechanisms or bodies can address the shortcomings identified in
relation to the admissibility of cross-border evidence, the identification of
cross-border links, or getting assistance from authorities in other Member
States, nor can these issues be addressed through measures taken solely at Member State level. The Commission therefore maintains that, as regards investigations and
prosecutions, a genuine improvement of the protection of the Union financial
interests may only come through the establishment of the European Public
Prosecutor's Office.
The Commission therefore
considers that, in accordance with Article 5(3) TEU, the objectives of the
proposed action cannot be sufficiently achieved by the Member States, by
existing mechanisms of by proposed legislation.
2.4.                
Added-value
A number of national
Parliaments (CZ Senát, HU Országgyűlés, RO Camera
Deputaților, NL Eerste Kamer and Tweede Kamer) question
the added-value of the proposal, whilst some acknowledge the advantages of
setting up the European Public Prosecutor’s Office. For example, the MT Kamra tad-Deputati considers that
the European Public Prosecutor's Office would provide added-value. The UK House of Commons is of the opinion that the Commission did not demonstrate that
Union-level action could achieve better results. The UK House of Lords
states that the assumptions of the Commission are overly optimistic.
Contrary to these
statements, the Commission considers that the system proposed would bring
significant added-value in the fight against Union fraud. There are many
elements which substantiate this view.
One of the main
improvements is expected to come from a common Union-level prosecution policy.
This will address the wide divergences between the different Member States on how
Union fraud is investigated and prosecuted. This will also prevent forum
shopping by perpetrators and create more deterrence, as fraudsters will be
aware that the risk of detection, investigation and prosecution is considerably
increased throughout the Union.
In addition, the
proposal tackles a number of important practical and legal issues. For example,
the fact that the European Public Prosecutor's Office would deal with all cases
of fraud affecting the financial interests of the Union means that it would be
possible to discover cross-border links which might not be noticed in purely
national investigations. It would also be possible to more effectively direct
and coordinate investigations, since the European Public Prosecutor's Office
would have an overview of all the available information, and would therefore be
in a position to determine where the investigation can most effectively be
pursued. 
The proposed structure,
with its European Delegated Prosecutors, would also mean that it would no
longer be necessary to use time consuming mutual legal assistance procedures
for obtaining information or evidence: since all European Delegated Prosecutors
would work within the same structure, in most cases a simple contact with a
colleague would suffice.
Another element which
the Commission expects to bring significant added-value is the proposed way of
handling cross-border evidence. Unlike the current practice, evidence collected
in accordance with the law of one Member State should be admitted in the trial,
unless its admission would adversely affect the fairness of the procedure or
the rights of defence, even if the national law of the Member State where the
trial court is located provides for different rules on the collection or
presentation of such evidence.
In this context, the CZ Senát expresses the
concern that the proposal is lowering procedural standards and the CY Vouli
ton Antiprosopon states that, as the list of investigative measures would
include measures not allowed under national law, it would not ensure the
necessary level of protection. However, in so far as these arguments may be
relevant for the subsidiarity test, the proposal strengthens procedural
standards by providing a Union catalogue of procedural safeguards and of
investigative measures for which prior judicial authorisation by national
courts is mandatory under Union law, in addition to mandatory provisions under
national law.
Finally, the creation of
a decentralised European Public Prosecutor's Office would pool expertise and
know-how in investigating and prosecuting Union-fraud cases at the European
level and yet ensure proximity of action to the place of the crime.
The Commission thus
considers that, pursuant to Article 5(3) TEU, the objectives of the proposed
action can be better achieved, by reason of their scale and effects, at Union
level.
2.5.                
Structure
of the European Public Prosecutor's Office
A number of national
Parliaments also raise concerns with respect to the proposed structure of the
European Public Prosecutor's Office. The FR Sénat informs the Commission
that while the establishment of the European Public Prosecutor's Office was
welcome in itself, it does not support the creation of a central office with
hierarchical competences. The FR Sénat would rather favour a collegial
structure representing all the Member States and electing a president from
among its members, possibly with a rotation among those States. According to the
RO Camera
Deputatilor, the Commission should have sufficiently justified the
non-collegial character of the proposed structure. The MT Kamra tad-Deputati
also
declares to be in principle in favour of establishing the European Public
Prosecutor's Office. However, in its view the proposed structure and the
competences attributed to it are not the only and best conceivable solution,
and the college structure would adhere more closely to the principle of
subsidiarity. Finally, the HU Országgyűlés is of the
opinion that the exclusive right of instruction (Article 6(5) of the proposal)
would put the operation of the European Delegated Prosecutors as integrated
into the Member State's prosecution system into question.
According to the
Commission, the arguments included in the reasoned opinions in favour of a
collegial structure and against the organisational model set out in the
proposal are more related to the principle of proportionality than to that of subsidiarity.
Indeed, the FR Sénat expressly argues that in proposing a ‘"centralised"
structure the proposal exceeds what is necessary to achieve the objectives of
the Treaties, echoing the language of Article 5(4) TEU (principle of
proportionality).
In addition, according
to the Commission a collegial structure is not necessarily less centralised
than that of the proposal: it is merely a different way of organising the
European Public Prosecutor's Office, which would in any event remain an office
of the Union. Hence the comparison between the decentralised model of the
proposal and the collegial structure preferred by a number of national
Parliaments is not a comparison between action at the Union level and action at
the Member State level, but a comparison between two possible modes of action
at the Union level. In the Commission’s view, that is not a question concerning
the principle of subsidiarity.
The structure of the
European Public Prosecutor's Office may however be relevant for the principle
of subsidiarity in a different way. Indeed, its structure, organisation and
powers could have an influence on whether the proposed action can be better
achieved at Union level, and that is an issue that clearly concerns the
principle of subsidiarity. From that point of view, the Commission considers
that creating the European Public Prosecutor's Office with a fully-fledged
collegial structure could hamper its efficiency, rendering its decision-making
less efficient. For the same reason, a collegial structure for prosecution
services is not a model that is generally used in the Member States or in
international organisations such as the International Criminal Court,
especially with regard to the need of adopting swift operational decisions in
concrete cases. Through such a structure, some of the expected advantages of
the European Public Prosecutor's Office could be hampered.
However, for a number of
internal matters a quasi-collegial approval is foreseen in the proposal.
Article 7 thereof gives to a forum of ten members (the European Public
Prosecutor, his four Deputies and five European Delegated Prosecutors) the
power of adopting the internal rules of procedure. These rules have a major
operational importance since they will cover, inter alia, the organisation of the
work of the European Public Prosecutor’s Office, as well as the general rules
on the allocation of cases. This approach does not compromise its efficiency.
Finally, the European
Delegated Prosecutors are, in functional terms, an integral part of the European
Public Prosecutor's Office. They exercise the powers of the European Public
Prosecutor’s Office. A clear chain of command, including the new possibility of
giving instructions, is indispensable for its effective decision-making and
operation.
The Commission therefore
considers that the structure of the proposed European Public Prosecutor’s
Office is compatible with the principle of subsidiarity.
2.6.                
Nature
and scope of competence of the European Public Prosecutor's Office
The issue of the
competence of the European Public Prosecutor's Office is raised by several
national Parliaments. The NL Eerste Kamer and Tweede Kamer, the
HU Országgyűlés, the RO Camera Deputaţilor
and
the SI Državni Zbor do not support the
exclusive competence of the European Public Prosecutor's Office. The NL Eerste
Kamer and Tweede Kamer, as well as the UK House of Lords also
see the risk that European investigations would be able to override the
priorities set by the Member States on how to use criminal investigation
instruments and resources most effectively. The CY Vouli ton Antiprosopon states that
the provisions on ancillary competence indirectly extend the scope of the
proposed legislation. The CZ Senát is of the opinion that
the Commission had not demonstrated the need for the European Public
Prosecutor's Office to be also competent for non-cross-border offences.
2.6.1.   Scope and exclusive
character of the competence
Whilst the Commission
understands the concerns raised by the national Parliaments, it recalls that
Article 86 TFEU encompasses all cases of Union fraud with no distinction
between national and cross-border cases. The main argument for including all
cases in the European Public Prosecutor's Office's competence is that this is
the most effective way of ensuring a consistent investigation and prosecution
policy across the Union and to avoid parallel action at Union and national
level, which would lead to duplication and a waste of precious resources. Also,
without at least knowing of all cases, it would be difficult for the European
Public Prosecutor's Office to identify cross-connections between suspects and
cases in different Member States. Limiting its competence to some cases, e.g.
serious or cross-border cases, would not only reduce its added-value but also
call into question the Union’s competence in this matter.  
The need to grant the
European Public Prosecutor's Office exclusive competence for all crimes
affecting the financial interests of the Union, including non-cross-border
cases, arises out of the nature of the crimes in question, which have an
intrinsic Union dimension. It implies Union-level steering and coordination of
investigations and prosecutions because these criminal offences affect the Union’s own financial interests.
However, the exclusive
competence of the European Public Prosecutor's Office would not mean that
national authorities would be excluded from dealing with the cases handled by
it. Given its decentralised structure, the European Public Prosecutor's Office
would investigate offences with the active assistance of national law
enforcement authorities, and would bring prosecutions to national courts
through the European Delegated Prosecutors located in the Member States.
Finally, the HU Országgyűlés objects to
the exclusive competence granted to the European Public Prosecutor's Office by
Article 11(4) of the proposal because, in its view, Article 86 TFEU does not
provide an exclusive competence to the European Public Prosecutor's Office. The
Commission considers, in contrast, that even if the Treaty does not enshrine
Article 86 TFEU as an exclusive competence, as stated above, that does not mean
that the Regulation establishing the European Public Prosecutor's Office cannot
lawfully grant it, as a matter of secondary law, an exclusive competence to
investigate and prosecute criminal offences against the Union’s interests.
2.6.2.   Ancillary
competence
The ancillary competence
of the European Public Prosecutor’s Office enshrined in Article 13 of the
proposal ensures an effective prosecution, allowing the Office to investigate
and prosecute offences which are inextricably linked to an offence affecting
the financial interests of the Union, while the latter is preponderant. In
practice, illicit conduct against the financial interests of the Union may be closely associated with other offences under national law (e.g. forgery of
documents). In those cases a joined prosecution is in the interest of the
effective administration of justice, saving time for both the prosecution
authorities and the courts, whilst the suspect only needs to stand trial once.
The criteria are strict: the different crimes must be inextricably linked, they
must be based on identical facts, and for the European Public Prosecutor's
Office to be competent the Union crime must be preponderant. In other cases,
national authorities would be competent to investigate and prosecute the crimes
affecting the financial interests of the Union, together with the other linked
and preponderant national offences. The European Public Prosecutor's Office and
the national prosecution authorities should consult each other in accordance
with Article 13(3) of the proposal to determine who is competent in the light
of the criteria above. 
The Commission therefore
emphasises that the rule concerning ancillary competence in Article 13 of
the proposal does not exclusively favour the competence of the European Public
Prosecutor's Office to the detriment of national competence, but may work in
both directions, depending on the factor of preponderance. The main reason for dealing
with ancillary competence is that quite often the crimes affecting the
financial interests of the Union are inextricably linked to other crimes that
do not affect those interests. Without this ancillary rule concerning such
mixed cases, parallel investigations and prosecutions concerning inextricably
connected crimes could happen regularly and could thus seriously undermine the
efficiency of anti-fraud activities. Moreover, as far as parallel proceedings
concern the same offence, once a final decision is taken in one case the
connected action would need to be closed immediately, according to the
principle that no-one should be prosecuted twice for the same offence (ne
bis in idem). The relevant provision concerning ancillary competence ensures
that such ineffective action would not occur.
The Commission therefore
considers that the nature and the scope of the competences of the proposed
European Public Prosecutor’s Office are compatible with the principle of
subsidiarity.
  
3.                      
Conclusion
In the light of the
above, the Commission concludes that its proposal complies with the principle
of subsidiarity enshrined in Article 5(3) TEU and that a withdrawal or an
amendment of that proposal is not required. The Commission therefore maintains
it. During the legislative process the Commission will, however, take due
account of the reasoned opinions of the national Parliaments.
[1]               COM(2013) 534.
[2]               Under Protocol 22 TFEU, Denmark does not take part in
the adoption of the proposed Regulation. The United Kingdom and Ireland have not notified their wish to take part in the adoption and application of this
Regulation under Protocol 21 TFEU.
[3]               State of the Union 2012 Address, Strasbourg, 12
September 2012.
[4]               COM(2013) 535.
[5]               See Commission annual Reports of 2011 and 2012 on the
protection of the European Union's financial interests – Fight against fraud,
COM(2012) 408 and COM(2013) 548.
[6]               See Annex 1. The issued reasoned opinions represent
18 votes out of 56. In accordance with Article 7(2) of Protocol No 2, the
threshold to trigger the review is 14.
[7]               See, for example, Case C-58/08, Vodafone
[2010] ECR I-4999, paragraph 72; or Case C-377/98, Netherlands v Parliament
and Council [2001] ECR I-7079, paragraph 32.
[8]               Case C-233/94, Germany v Parliament and
Council [1997] ECR I-2405, paragraph 25.
[9]               Cited in Fn. 6, paragraphs 55 to 60.
[10]             COM(2012) 363 of 11 July 2012.
[11]             OLAF report 2011, pp. 18-20.
[12]             An action represents a criminal action pursued against
a single natural or legal person in one country's jurisdiction. Each case may
contain multiple actions in a number of countries.
[13]             Percentage of actions transferred in the period from
2006-2011 by OLAF to Member States without reported judicial decisions, OLAF
report 2011, table 6, p. 20.
[14]             51,2% of the actions transferred in the period from
2006-2011 by OLAF to Member States with reported judicial decision were
dismissed before trial, OLAF report 2011, table 6, p. 20. 
[15]             OLAF report 2011, table 6, p. 20.
[16]             See, for example, Case T-29/03, Comunidad Autónoma
de Andalucía v Commission [2004] ECR II-2923, paragraph 37; and Case
T-309/03, Camós Grau v Commission [2006] ECR II-1173, paragraph
51.
[17]             Regulation (EU, Euratom) No 883/2013 of the European
Parliament and of the Council of 11 September 2013 concerning investigations
conducted by the European Anti-Fraud Office (OLAF), OJ L 248, of 18 September
2013, pp.  1-22) which entered into force on 1 October 2013. 
[18]             See COM 2013(173) for Europol and COM 2013(535) for
Eurojust. The implementation period for the previous Eurojust reform (Council
Decision 2009/426 JHA of 16 December 2008) expired on 4 June 2011.
[19]             COM(2012) 363.