Documents considered by the Committee on 21 July 2015 - European Scrutiny Contents

37 European Public Prosecutor's Office

Committee's assessment Legally and politically important
Committee's decision(a) and (c) Not cleared from scrutiny; further information requested; drawn to the attention of the Home Affairs, Justice, Northern Ireland Affairs and Scottish Affairs Committees; (b) Cleared from scrutiny
Document detailsProposal for a Regulation on the establishment of the European Public Prosecutor's Office (EPPO):

(a) original Commission proposal;

(b) first alternative Council text;

(c) second alternative Council text

Legal baseArticle 86 TFEU; EP consent; unanimity

Document numbers

Home Office

(a) (35217), 12558/13 + ADDs 1-2, COM(13) 534;

(b) (36044), 9834/14, — ; (c) (36931), 9372/15,—

Summary and Committee's conclusions

37.1 In July 2013 the Commission proposed a Regulation to establish a European Public Prosecutor's Office (EPPO) with the objective of combatting fraud on the EU budget (document (a)). This provided a supranational model for an EPPO. It would have exclusive competence to investigate and prosecute offences against the EU's financial interests, meaning that the relevant national authorities would be excluded from so doing without the permission of the EPPO. The EPPO would comprise: a central European Public Prosecutor (EPP) assisted by Deputies. In each Member State there would be at least one European Delegated Prosecutor (EDP). The EDPs would carry out the investigations and prosecutions under the authority and management of the EPP.

37.2 The proposal is subject to a special legislative procedure requiring the consent of the European Parliament and unanimity in the Council. After the Council has exhausted all options for obtaining unanimity, a group of at least nine Member States may enter into enhanced cooperation. The UK is not participating in the proposed Regulation in accordance with the previous Government's Coalition Agreement. The European Union Act 2011 requires any future participation to be sanctioned through a referendum.

37.3 As the establishment of an EPPO could adversely affect the UK and EU bodies such as Eurojust and OLAF, the preceding Committee had concerns about the proposal. On its recommendation, the House agreed to issue a Reasoned Opinion. This annexed a relevant Opinion from the Justice Committee of the Scottish Parliament. The total number of Reasoned Opinions from national Parliaments exceeded the "yellow card" threshold under the Subsidiarity Protocol[ 292] but the Commission did not withdraw the proposal. It remains under scrutiny, not least because it has not been entirely superseded by the subsequent texts (documents (b) and (c)).

37.4 Documents (b) and (c) are partial, alternative Presidency texts to the original EPPO proposal (a). They are, to some extent, revisions of the original Commission proposal which take into account the concerns of Member States, including those expressed by national Parliaments in Reasoned Opinions. Document (b) was scrutinised by the preceding Committee but is now superseded by new document (c).

37.5 New document (c) retains the new collegiate model for an EPPO which was first innovated by document (b). At EU level, a Central Office will comprise a College of European Prosecutors and Deputies and its Permanent Chambers. The national level will consist of the EDPs — national prosecutors acting on behalf of EPPO. The College will be responsible for monitoring the EPPO's activities and for strategic matters, including the consistent application of prosecution policy. It also provides for concurrent competences for an EPPO and national prosecution services to investigate offences against the EU budget.

37.6 Specifically, document (c) contains the text for Articles 1 to 16 but also a redrafted version of Articles 17 to 33. Recitals have not yet been negotiated and redrafted, but Member States have made extensive suggestions in footnotes for recitals to provide clarity on their interpretation of definitions and key concepts or features covered in the text.

37.7 The new Government now provides its view of the text. In summary, it reports that "broad conceptual support" expressed by participating Member States to Articles 1-16 at the JHA Council of 15 June. The relationship between an EPPO and non-participating Member States (including the UK) and EU bodies such as Eurojust and OLAF has still not been addressed. Developments on the text at this Council meeting were also the subject of a Written Ministerial Statement by the Home Secretary (Mrs Theresa May).[ 293]

37.8 We thank the Minister for his Explanatory Memorandum on the new Council text, document (c).

37.9 We note that the important question of how an EPPO will interact with other EU bodies, third countries and non-participating Member States, has still yet to be addressed in Council. We ask the Minister to continue to keep us informed of developments, particularly on this significant question. We are particularly interested in:

a)  whether the relationship between the EPPO and non-participating Member States might also be underpinned by the principle of sincere co-operation; and

b)  whether national Parliaments of non-participating Member States will also be able to invite the European Chief Prosecutor to appear before them—or does the understanding that "Member State" means "participating Member State" extend to national Parliaments in this respect?

37.10 In the meantime, we clear document (b) from scrutiny as it has been superseded by document (c). We retain documents (a) and (c) under scrutiny and draw this Report to the attention of the Home Affairs, Justice, Northern Ireland Affairs and Scottish Affairs Committees.

Full details of the documents: (a) Proposal for a Regulation on the establishment of a European Public Prosecutor's Office: (35217), 12558/13 + ADDs 1-2, COM(13) 534; (b) Proposal for a Regulation on the establishment of the European Public Prosecutor's Office — State of Play/Orientation debate: (36044), 9834/14, —; (c) Proposal for a Council Regulation on the establishment of a European Public Prosecutor's Office: (36931), 9372/15, —.

Background and previous scrutiny

37.11 An account of the provisions of the original Commission proposal (document (a)) and the Government's view is set out in our predecessors' Fifteenth Report of 2013-14 which also includes the draft Reasoned Opinion.[ 294] For document (b), a similar account is set out in our Fourth Report of 2014-15.[ 295]

37.12 We note that during the previous scrutiny of these proposals the devolved administrations of Scotland and Northern Ireland have been concerned about the potential impact of the establishment of an EPPO on the independence and functions of their own prosecutorial and investigative systems.

The current document (c)

37.13 Article 2 and Article 4 have been revised to reflect developments in negotiations on the Directive on the fight against fraud to the Union's financial interests by means of criminal law (commonly known as the PIF Directive).[ 296]

37.14 Article 5 now states that EPPO practitioners will look to the Regulation for their primary powers but where the Regulation does not cover a matter they should use powers available to them under national law. The principle of sincere cooperation will now apply to competent national authorities of participating Member States to ensure they actively assist the EPPO. In return, footnote 6 carries a suggested recital explaining that this principle should also apply to the EPPO. This is in order to ensure that it informs competent national authorities of any information it receives or finds about an offence which is outside its legal remit.

37.15 A new Article 6a has been added to create a reporting process. Every year the EPPO will issue a public Annual Report which will be transmitted to the Council, the Commission, the European Parliament and national Parliaments. The European Chief Prosecutor will appear before the European Parliament, the Council, and national Parliaments (at their request) once a year to give an account of the EPPO's activities.

37.16 The Latvian Presidency has focused negotiations on Articles 7 to 15, which deal with the internal structure of the EPPO. The new text retains the two-tiered structure already described. The rules on appointment and dismissal (including replacement and substitution) in Articles 13, 14 and 15 are drafted on the basis that the primary power to appoint and dismiss the College should lie with the Council of Ministers, while the power to appoint and dismiss the EDPs should lie with the College.

37.17 Section 4 on competence and jurisdiction — Articles 17, 18 and 19 — draws on Article 4 but cannot be settled until the PIF Directive's list of offences affecting the financial interests of the Union are agreed. The Presidency records that there is continuing debate on whether there should be a dynamic or static reference to the PIF Directive, and the inclusion of any form of ancillary offence in the EPPO Regulation.

37.18 Articles 20 to 25 (there is no Article 22) cover reporting and basic rules on how to conduct investigations, with Articles 26 to 29 covering investigative powers and other measures. The text and footnotes for Articles 30 to 33 reflect the state of play at the end of the Italian Presidency in December 2014 as they have not been rewritten during the Latvian Presidency.

The Government's view of document (c)

37.19 The Minister for Immigration (James Brokenshire) in his Explanatory Memorandum of 30 June first outlines the provisions of the next text (see paragraphs 37.13-37.18 of this chapter). He then provides some overall comments on the text:

    "The Government is clear that the UK will not participate in any EPPO proposal. There is agreement among the Member States that any reference to 'Member State' in this text refers to a participating Member State only.

    "All Member States recognise and acknowledge that the interests of non-participating Member States must be respected, but the negotiation have yet to consider in detail any necessary safeguards in that respect. The final form that an EPPO might take, and how it would interact with non-participating Member States, remains unclear. Despite non-participation, the Government is fully engaged in this negotiation and is constantly reviewing the proposal. Where issues raised may impact on the UK, we actively remind others of our concerns.

    "The Government also notes that once the PIF Directive is agreed this will clarify the criminal offences affecting the financial interests of the Union for which the EPPO shall have competence. We are fully engaged in the separate negotiation of the PIF Directive."

37.20 The Minister continues to note the concerns of the devolved administrations on the establishment of an EPPO. He says:

    "Scotland maintains policy concerns in terms of the independence of the Lord Advocate at the head of its systems of prosecution and investigation of crime. Northern Ireland has similar policy concerns in terms of the independence of the DPP for Northern Ireland at the head of the PPS for Northern Ireland. It has also confirmed its prosecutorial and investigative functions are separate and that prosecutors in Northern Ireland do not have powers in relation to search, seizure, interception, surveillance, monitoring financial transactions or covert video surveillance."

37.21 On the question of next steps, the Minister says:

    "The Latvian Presidency held an expert level meeting on 18 and 19 June to discuss the outcome of the Council and then handed the dossier over to the incoming Presidency, Luxembourg. Detailed discussions on Articles 17 to 19 will start in the first week of July."

Previous Committee Reports

(a) Nineteenth Report HC 83-xviii (2013-14), chapter 6 (23 October 2013); Fifteenth Report HC 83-xv (2013-14) chapter 1 (11 September 2013); (b) Thirty-fourth Report HC 219-xxxiii (2014-15), chapter 11 ( 25 February 2015); Fourth Report HC 219-iv (2014-15), chapter 6 (25 June 2014); (c) None.

292   Protocol No 2 to the EU Treaties on the application of the principles of subsidiarity and proportionality. Back

293   HC Deb, 23 June 2015, col. 19WS (Commons written ministerial statement). Back

294   Fifteenth Report HC 83-xv (2013-14) chapter 1 (11 September 2013). Back

295   Fourth Report HC 219-iv (2014-15), chapter 6 (25 June 2014). Back

296   (34091), 12683/12: Proposal for a Directive of the European Parliament and of the Council on the fight against fraud to the Union's financial interests by means of criminal law. Back

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Prepared 30 July 2015