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The European Commission has adopted a Communication outlining a global strategy for the fight against fraud and the protection of EU financial interests on the 29 June 2000.
Background
The Maastricht Treaty added a new Article 209a (now 280) to the Treaty of Rome. As amended by the Treaty of Amsterdam, this Article reads:
Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests... [They] shall coordinate their action aimed at protecting the financial interests of the Community against fraud... [and] shall organize, together with the Commission, close and regular cooperation between the competent authorities.
Fraud takes many forms in the EU: in the last year much attention has been paid to the allegations of fraud and mismanagement within the European Commission as discussed in the reports by the Committee of Independent Experts. However, it is also the case that much fraud is carried out by outside interests depriving the EU of 'own resources' due to it or by outside interests fraudulently claiming for financial support from European programmes or support mechanisms. In these cases, as is frequently pointed out in the annual and special reports of the European Court of Auditors, it is primarily the responsibility of Member States to enforce the rules.
Background information can be found in:
The Communication
The Communication lays down four key challenges for the EU and the Member States to take up to deal with fraud:
- Development of a coherent anti-fraud legislative policy: the approach is based on Article 280 of the Treaty, which associates the prevention and the fight against fraud to guarantee effective and identical protection throughout the Community. The prevention aspect requires all legislative and political initiatives of the Commission to be systematically accompanied by anti-fraud provisions. The legal detection instruments, control and sanction of fraud must moreover be strengthened. The fight against fraud aspect means, in particular, joint definitions of concepts such as fraud or corruption, improvement of the administrative and financial follow-up in case of fraud (fund recovery, for example) and clearer rules for co-operation and exchange of information between the Commission and the national authorities.
- Strengthening of co-operation culture between all the competent authorities: OLAF's creation endowed the Union with a powerful instrument for protection of the financial interests of the Communities. The Office can provide an overall view at Community level, but this presupposes improved use of the information available. OLAF will also have to evolve in its structure in order to become a service able to give expertise and operational support to the national authorities. OLAF has to become a genuine multidisciplinary 'platform of services'. The same approach has to apply beyond the Union, in particular with the accession countries.
- Preventing and combating fraud inside the institutions: within the Commission departments, the objective is to make all agents aware of the need for prevention. In addition, the legislator has granted OLAF independence when exercising its investigative functions within all the Community's institutions and bodies. The effectiveness of OLAF, the mission of which is not to carry out systematic controls, will rely on the information transmitted to it by the members and agents of the institutions according to their duty of loyalty. The reform of disciplinary procedures, as proposed in the White Paper on Reform, including clearer rules and obligations laid down in the staff regulations will facilitate the fair and effective follow up of the Office's investigations.
- Enhancement of the criminal judicial dimension: in case of serious fraud, it is necessary to resort to the penal instrument, but its use still encounters obstacles which will have to be removed. The handling of complex cases, problems of compatibility of national legal systems too frequently lead the national authorities to rely solely on the national investigations. The Commission proposes, on the contrary, to develop a strategy based on an overall grasp of facts thanks to a better overall vision and a close and regular co-operation between OLAF and the legal authorities of the Member States.
Further information within European Sources Online:
European Sources Online: Topic Guide
- The budget of the European Union, March 2000
European Sources Online: In Focus
- The Annual Report of the European Court of Auditors + the Annual Report of the Task-Force for the Co-ordination of the Fight Against Fraud, November 1999
- Reform of the European Commission, November 2001, November 2001
European Sources Online: European Voice:
- 21.1.99: EU to step up its scrutiny of funding programmes
- 18.3.99: Independent fraud office moves closer
- 25.3.99: Independence of fraud unit in doubt
- 29.4.99: EU fraud-busting office set for early launch
- 6.5.99: Commission seeks ground rules for second stage of fraud probe
- 27.5.99: EU institutions agree to boost staffing for independent fraud-busting office
- 16.9.99: New legal powers vital to fight fraud
- 30.9.99: UK to resist calls for EU public prosecutor
- 28.10.99: Decision on chief EU fraud-buster delayed
- 18.11.99: Kinnock plans shake-up of financial controls
- 18.11.99: Governments must not be allowed to pass the buck
- 18.11.99: Auditors underline need for 'deep-seated' reforms
- 6.1.00: Franz Hermann Breuner has been appointed to head the new European Anti-Fraud Office (OLAF) from 1 March...
- 27.1.00: MEPs divided over financial control plan
- 24.2.00: Bid to clamp down on customs fraud
- 9.3.00: Commission audit chief to be an outsider
- 16.3.00: Union's anti-fraud chief pledges new strategy to fight criminals
- 27.4.00: Parliament seeks to boost anti-fraud office's powers
- 4.5.00: Commission sets up new audit service
- 11.5.00: Prodi moves to avert showdown with MEPs
- 18.5.00: Anti-fraud unit barred from MEPs' offices
- 15.6.00: Candidates move to counter fears of crime explosion
- 15.6.00: MEPs set to launch special fraud probe
- 22.6.00: Union's anti-fraud chief calls for stronger powers
- 22.6.00: Stepping up the fight against fraud
Further information can be seen in these external links:
(long-term access cannot be guaranteed)
European Commission: DG Budgets
European Commission: DG Financial Control
Committee of Independent Experts
European Court of Auditors
European Anti-Fraud Office (OLAF)
United Kingdom: HM Treasury
United Kingdom: House of Lords: Select Committee on the European Union
Labour Euro-Safeguards Campaign Bulletin
Transcrime
Roy Davies
BBC News:
Further and subsequent information on the subject of this In Focus can be found by using 'Search ESO' or 'Advanced Search' in European Sources Online and by inserting 'fraud', 'anti-fraud' or 'OLAF' in the keyword field.
Ian Thomson
Executive Editor, European Sources Online
Compiled: 1 July 2000
The European Commission adopted a Communication outlining a global strategy for the fight against fraud and the protection of EU financial interests on the 29 June 2000.
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