EUROPEAN ANTI-FRAUD OFFICE
(21388)
9094/00
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Annual Report on operational activities by the European Anti-Fraud Office (1 June 1999 — 31 May 2000) to the Institutions.
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| Legal base: |
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| Document originated:
| 23 May 2000 |
| Forwarded to the Council:
| 25 May 2000 |
| Deposited in Parliament:
| 5 July 2000 |
| Department: |
HM Treasury |
| Basis of consideration:
| EM of 13 July 2000 |
| Previous Committee Report:
| None |
| To be discussed in Council:
| No date known |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Cleared |
Background
17.1 We reported[37]
last year on the setting up of the new anti-fraud office (OLAF)
within the Commission, which replaced its predecessor (UCLAF).
In our Report of 21 July 1999, we noted that, whilst OLAF would,
like UCLAF, be within the Commission, it would have operational
independence and stronger powers of investigation and follow up.
UCLAF was regarded as relatively ineffectual, in particular in
getting action taken on fraud or irregularities it identified.
17.2 Although OLAF was formally established
last year, it was not until 1 March of this year that its new
Director (Franz-Hermann Bruener) took up post. The establishment
of OLAF was described by the Helsinki European Council in December
1999 as "an important new step in the fight against fraud".
The document
17.3 This report summarises OLAF's activities
and progress in the first year of its existence. Inevitably this
has been a transitional year with its operations much influenced
by inherited priorities of UCLAF and completing existing work.
In the period of the report, 68 new investigations were opened,
67 reports were sent to the competent authorities and 30 files
closed; 181 co-ordination files were opened (on which OLAF works
with national agencies in Member States and in third countries).
17.4 The report says that OLAF has reviewed
its information gathering and investigation procedures and carried
out risk analysis and assessment. A new Intelligence Unit has
been set up to improve information analysis and prepare the investigators'
programme. It will be assisted by an Economic and Criminal Monitoring
Unit. The function of following up investigations will be organised
separately from investigations and have more resources —
to remedy a weakness in UCLAF, OLAF wants to develop its partnerships
with Member States, through specific agreements, and information
exchange with third countries. Its staff will be strengthened
to reach a target of 300 by the end of 2001 with an emphasis on
a more flexible task-orientated approach, within a specific operational
strategy, covering fields of action and priority methods.
17.5 In his foreword to the report, the
Director notes that he has been in office only since March 2000.
He says his priorities are the development of co-operation with
Member States and strengthening the transparency of European institutions.
In respect of internal investigations (within the Commission)
he says that he intends to make careful use of the new means of
investigation provided for by the legislation establishing OLAF
"to neutralise the deleterious effects of criminal networks
and thus to guarantee the credibility of the Community institutions
and bodies".
The Government's view
17.6 In her Explanatory Memorandum of 13
July 2000, the Economic Secretary to the Treasury (Miss Melanie
Johnson) says that:
"The Government has always given strong support
to measures to improve the detection of fraud in the European
Union, and played a prominent rôle in the discussions prior
to the setting up of the European Anti-Fraud Office. We therefore
welcome this first report by the new Director. It is a comprehensive
account which indicates the seriousness with which fraud detection
and prevention is taken.
"The Government recognises the need for OLAF
to have appropriate staffing and resources in order to operate
effectively, but it is important to concentrate on the recruitment
of staff who have the right background and qualifications, especially
those who are currently working in Member States' national investigation
services.
"While the Government recognises that there
may be some need for improvements in legislation to facilitate
the detection and prevention of fraud, we will look very carefully
at any proposals to change existing legislation or introduce new
legislation".
Conclusion
17.7 The jury is necessarily still out
as regards the relative effectiveness of OLAF. The Community has
considerably strengthened its legal powers and independence as
compared with UCLAF and has shown that it is prepared also to
put substantial additional resources into it. We hope that this
act of faith will be duly rewarded but it is clearly too soon
to be looking for much evidence of that. However, we welcome the
approach the new Director proposes, in particular in ensuring
transparency of its operations and in working in partnership with
others. The biggest threat to the Community's resources now comes
from trans-national organised crime, and effective partnership
with and between Member States needs to be developed rapidly to
counter this. We look forward to seeing the OLAF work programme
for the coming year and to its next annual report.
37 (19671) 14031/98: see HC 34-vi (1998-99), paragraph
1 (20 January 1999); (20049) 7226/99: see HC 34-xxvii (1998-99),
paragraph 11 (21 July 1999); (20049) 7226/99: see HC 34-xx (1998-99),
paragraph 1 (19 May 1999) and HC 34-xix (1998-99), paragraph 2
(12 May 1999); and also (20168) OJ No. L 136; (20328) 8345/1/REV1. Back
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