7 European Anti-Fraud Office
| (a)
(25396)
6387/04
COM(04) 103
(b)
(25397)
6389/04
COM(04) 104
(c)
(27692)
11281/06
+ ADD1
COM(06) 244
|
Draft Regulation amending Regulation (EC) No. 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)
Draft Regulation amending Regulation (Euratom) No. 1074/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)
Draft Regulation amending Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF)
|
| Legal base | Article 280 EC; co-decision; QMV
|
| Document originated | (c) 24 May 2006
|
| Deposited in Parliament | (c) 17 July 2006
|
| Department | HM Treasury |
| Basis of consideration | EM of 24 July 2006
|
| Previous Committee Report | (a) and (b) HC 42-xiii (2003-04), para 4 (17 March 2004)
|
| To be discussed in Council | Not known
(c) 7 November 2006
|
| Committee's assessment | Politically important
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| Committee's decision | (a) Cleared
(b) and (c) Not cleared, further information awaited
|
Background
7.1 The European Anti-Fraud Office (OLAF — Office Européen
de Lutte Anti-Fraude)
was set up in 1999 to replace the Commission's previous anti-fraud
unit, UCLAF (Unite de Co-ordination de la Lutte Anti-Fraude).
Two identical Regulations were required for this because OLAF
functions under the two separate legal frameworks of the EC Treaty
and the Euratom Treaty. OLAF was given increased powers of investigation
and operational independence. But OLAF's annual activity reports,
a Commission evaluation report of the activities of OLAF from
1999 to 2002[20] and
the Eurostat affair have suggested weaknesses in the organisational
set-up and in inter-institutional flows of information.
7.2 In February 2004 the Commission presented two
draft Regulations, documents (a) and (b), to amend the legislation
governing the operation of OLAF. When the previous Committee considered
these documents it welcomed the intention to improve the regulatory
framework under which OLAF works, noted there were a number of
important issues in the draft Regulations, including a subsidiarity
problem, which would need to be addressed and asked to be kept
informed of progress on these matters. It did not clear the documents.[21]
7.3 In June 2005 the European Court of Auditors published
a Special Report on the management of OLAF and we recorded the
Government's view of its relevance to the continuing consideration
of the two draft Regulations.[22]
The new document
7.4 Document (c) is a draft Regulation to amend the
current OLAF Regulation made under the EC Treaty. It replaces
document (a), which the Commission has formally withdrawn. (We
understand that document (b) which proposes parallel amendments
to the current OLAF Regulation made under the Euratom Treaty will
be treated similarly.) The new proposal takes account of the European
Court of Auditors' Special Report.
7.5 The draft Regulation covers six main areas:
- governance, co-operation
between Community institutions and the Supervisory Committee
— including priorities for relations between the Supervisory
Committee, the Office and the institutions and other bodies, offices
and agencies, and meetings between the Supervisory Committee,
on the one hand, and representatives of the European Parliament,
the Council and the Commission, on the other;
- guarantee of the rights of persons implicated
— including details of the procedural guarantees to be respected
in the conduct of internal and external investigations;
- strengthening the review of investigations
— appointment of an independent Review Adviser, but within
OLAF, to review:
- extensions of investigations beyond 12 months;
- decisions, for the sake of an investigation,
not to inform immediately a person implicated; and
- at the request of any person implicated or on
his own initiative, respect for the procedural guarantees;
- improving the information flow
— between OLAF and Community institutions and bodies, between
OLAF and Member States and between OLAF and informers;
- strengthening OLAF's operational efficiency
— allowing OLAF to concentrate on its priority activities;
- improving the effectiveness of OLAF'S investigations
— by clarifying OLAF's powers of investigation in the context
of external investigations into economic operators receiving Community
funds, by improving OLAF's access to information held by Community
institutions and by allowing access to information held by economic
operators; and
- the term of office of OLAF's Director-General
— providing for a non-renewable seven-year term, in place
of five-year renewable terms, in order to reinforce independence.
The Government's view
7.6 The Economic Secretary to the Treasury (Ed Balls)
says that:
- the Government is pleased that
the revised proposal, document (c) has taken account of the European
Court of Auditors' Special Report;
- this revised proposal is helpful in that it puts
forward practical suggestions to improve OLAF's performance and
its responsibilities to the Community, and to individuals who
blow the whistle as well as those under investigation;
- in considering the revised proposal the Government
intends to make use of the recommendations made by the House of
Lords European Union Committee, Sub Committee E, in the report
on its inquiry into the earlier proposal in document (a)[23]
— for example, in relation to the provision requiring OLAF
to inform any body, institution, office or agency if any member
of staff is subject to an OLAF investigation, the Government agrees
with the Lords recommendation that OLAF should be allowed some
discretion on when to inform the body in question, else there
is a potential risk of breaching confidentiality;
- in reaction to the provision about a Review Adviser
the Government notes the Lords made a similar suggestion, but
recommended that this post should be independent of OLAF. It agrees
with this recommendation and will press for the Review Adviser
to be independent of OLAF; and
- the Government is concerned at the proposal for
OLAF's Director-General to serve a seven-year term, thinking that
is unacceptably long and could cause problems.
7.7 The Minister also comments that "The amending
Regulation is fully compatible with the principle of subsidiarity."
Conclusion
7.8 As the proposal in document (a) has been withdrawn
we clear it.
7.9 While document (b) remains formally on the
table we continue to keep it under scrutiny.
7.10 As our predecessors did in relation to the
original proposal, we welcome the intention of the proposal in
document (c) to improve the regulatory framework under which the
European Anti-Fraud Office works. But we note that there are a
number of issues in the draft Regulation which the Government
will be addressing in negotiations and we should like the Minister
to keep us informed of progress on these matters. Additionally,
we should like to be reassured that the potential subsidiarity
identified in the original proposal does not re-occur in the revised
draft Regulation (and this question remains open also in respect
of document (b)).
7.11 Meanwhile we do not clear document (c).
20 (24929) -: See HC 63-xxxv (2002-03), para 1 (29
October 2003) and HC 42-x (2003-04), para 1 (11 February 2004);
and (24811) 11954/03 and ADD 1: HC 63-xxxiii (2002-03), para 3
(15 October 2003). Back
21
See headnote. Back
22
(26727) 11216/05 (26740) 11452/05 + ADDs 1 and 2: See HC 34-vi
(2005-06), para 2 (19 October 2005). Back
23
Twenty-fourth Report from the European Union Committee, 2003-04,
Strengthening OLAF, the European Anti-Fraud Office, HL
139. Back
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