Documents considered by the Committee on 1 March 2017 Contents

10European Public Prosecutor’s Office

Committee’s assessment

Legally and politically important

Committee’s decision

(a)-(b): Not cleared from scrutiny; further information requested; (c)-(d): Cleared from scrutiny; drawn to the attention of the Home Affairs Committee

Document details

Proposed Council Regulation on the establishment of a European Public Prosecutor’s Office (EPPO): (a) the original Commission proposal and (b) an alternative Council text; Commission Communications on: (c) Better protection of the EU’s financial interests: Setting up the EPPO and reforming Eurojust and (d) Improving OLAF’s governance and reinforcing procedural safeguards in investigations in light of the EPPO’s establishment

Legal base

(a) and (b) Article 86 TFEU; EP consent; unanimity; (c) and (d)—

Department

Home Office

Document Numbers

(a) (35217), 12558/13 +ADDs 1–2, COM(13)534; (b) (36931), 9372/15, —; (c) (35214), 12551/13, COM(13) 532; (d) (35215), 12554/13, COM(13) 533

Summary and Committee’s conclusions

10.1The two texts under scrutiny seek to establish a European Public Prosecutor’s office (EPPO) to investigate and prosecute fraud and other criminal offences in relation to EU funds,54 but they differ in the nature of the models they propose and the extent to which they would oust the competence of national authorities.

10.2The UK’s long established position is not to participate in the EPPO55 to preserve the autonomy of its prosecuting and investigative authorities. Despite having opted out of the proposal, concerns remain in the UK about the impact of an EPPO on the remit and resources of Eurojust and OLAF56 or in creating indirect obligations on non-participating Member States.57

10.3The UK’s concern about Eurojust stems from the requirement in Article 86 TFEU for an EPPO to be established “from Eurojust”. The latest, public EPPO text58 says this “implies that this Regulation should establish a close relationship between them based on mutual cooperation” (Article 4). Eurojust itself facilitates forms of cooperation between two or more Member States to combat serious crime, including requests for mutual legal assistance (MLA), execution of European Arrest Warrants (EAW) and supporting Joint Investigation Teams. The UK currently participates in Eurojust and rejoining the existing Eurojust measures59 after the 2014 JHA block opt-out demonstrated the importance of the agency to UK law enforcement. However, it did not opt into the 2013 proposal to reform Eurojust launched at the same time as the EPPO proposal, citing the extension of the mandatory powers of Eurojust “national members” and the intention to create a special relationship with the EPPO.60 We summarise provisions on the relationship between an EPPO and Eurojust in the latest public text61 at paragraph 10.16.

10.4The original Commission proposal (a) provided a supranational model for an EPPO. The EPPO would have exclusive competence to investigate and prosecute the offences concerned, preventing national authorities from doing so. It 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. The UK joined other national parliaments in issuing a subsidiarity Reasoned Opinion against this proposal. The resulting “yellow card” meant that the Commission had to review the proposal but it decided not to withdraw it.62

10.5Faced with a lack of Member State support for the Commission’s text, the then Presidency proposed its own alternative, document (b). Negotiations have been based on that text since 2015. Despite that, we have retained document (a) under scrutiny as it is the text on which the House’s Reasoned Opinion is based and might influence document (b) as negotiations advance.

10.6Text (b) is largely a revision of the original Commission proposal in the light of the Reasoned Opinions. It provides a collegiate model for an EPPO and for concurrent national and EU competences to investigate and prosecute fraud. At EU level, a Central Office would comprise a College of European Prosecutors and Deputies and its Permanent Chambers. The national level would consist of the EDPs—national prosecutors acting on behalf of EPPO. The College would be responsible for monitoring the EPPO’s activities and for strategic matters, including the consistent application of prosecution policy.

10.7In December, negotiations on document (b) reached a critical stage. In default of the unanimous support in the Council required by Article 86 TFEU, the Presidency concluded that the latest text63 should be put to the European Council to seek agreement to move forward under “enhanced cooperation” provisions. These require the support of at least nine Member States, but as the Presidency noted, the December text already had the support of a majority of Member States.64

10.8Also relevant to our scrutiny is the progress of another proposal which is integral to the EPPO: the proposed Directive on strengthening protection of the EU’s financial interests or PIF Directive.65 This sets out criminal offences relating to fraud on the EU’S budget. In chapter 16 of this Report, the Government updates us on the agreement of the proposed PIF Directive at the General Affairs Council of 7 February.66 It now remains to be formally adopted by the Council at a later stage in the Maltese Presidency. The Government did not opt into the proposal and will also not be considering a post-adoption opt-in, mostly due to VAT fraud being brought within the proposal’s scope.

10.9The Government writes now to update us on the latest discussions in Council on the EPPO, the prospect of an enhanced cooperation and, after discussions with officials, provides us with the latest public and limité texts.67 The Minister for Policing and the Fire Service (Brandon Lewis) says little about the UK’s position after Brexit either in relation to an EPPO or Eurojust, though reference to remaining “closely engaged regarding any impacts on Eurojust for as long as [the UK is] a contributing partner” seems sufficiently ambiguous to possibly leave that door open as far as Eurojust is concerned.

10.10Given that events have moved on since the publication of the two related Commission Communications (c) and (d), we now clear them from scrutiny as being no longer relevant to our scrutiny.

10.11An EPPO, based on document (b), seems likely to result from the enhanced cooperation process. Despite Brexit and the decisions not to opt in to the EPPO and PIF proposals, we consider that the UK as a non-participating Member State or third country could still be affected by an EPPO. To that end, we have set out a summary of provisions in the latest public text (b)68 relating to non-participating Member States and third countries (see paragraphs 10.15–10.17). However, we recognise their relevance depends on many factors, including:

10.12Whilst it is possible the UK might consider cooperating as a third country with Eurojust after Brexit, the possibility of co-operation with an EPPO is not so apparent. This is mainly due to long-standing UK opposition to an EPPO. We ask the Government to confirm that this, opposition remains. There are other reasons why co-operation may be unlikely; it is unlikely that significant EU funds will be to be passing across UK borders or through UK hands if the post Brexit model for an EU-UK relationship is a Free Trade Agreement. The UK also dislikes aspects of the related PIF Directive which would be integral to an EPPO.69 Nevertheless, at the very least, the UK might become indirectly involved with the EPPO though its participation in any multilateral international criminal legal assistance agreement (see paragraphs 10.15–17).

10.13Once the final outcome of enhanced cooperation on EPPO is known, we would be interested to learn from the Minister what, if any, future co-operation might be attractive to the UK after Brexit with Eurojust and even with an EPPO in terms of legal assistance on cross-border criminal matters, specifically fraud.

10.14Given these outstanding issues, we retain documents (a) and (b) under scrutiny until the outcome of enhanced co-operation is known, and draw them to the attention of the Home Affairs Committee.

Full details of the documents

(a) Proposal for a Council Regulation on the establishment of a European Public Prosecutor’s Office: (35217), 12558/13 +ADDS 1–2, COM (13) 534; (b) Proposal for a Council Regulation on the establishment of a European Public Prosecutor’s Office—Policy Debate: (36931), 9372/15, —; (c) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Better protection of the Union’s financial interests: Setting up the European Public Prosecutor’s Office and reforming Eurojust: (35214), 12551/13, COM (13) 532; (d) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Improving OLAF’s governance and reinforcing procedural safeguards in investigations: A step-by-step approach to accompany the establishment of the European Public Prosecutor’s Office: (35215), 12554/13, COM (13) 533.

Summary of provisions relating to non-participating Member States, Eurojust and third countries in document (b)

Non-participating Member States

10.15According to the latest public text,70 non-participating Member States would not be bound by the Regulation:

Eurojust

10.16The EPPO is to:

Third countries

10.17Again, the latest public text states that EPPO would be able to:

The Minister’s letter of 14 February 2017

10.18The Minister of State for Policing and the Fire Service (Brandon Lewis) writes to update us “on a potential agreement” relating to the proposed EPPO Regulation.

10.19Given the time which has elapsed since the Government’s last update and the proposal’s importance in the light of the Reasoned Opinion our predecessors issued and to Brexit, we reproduce the rest of the Minister’s letter in full:

“The proposal has been in negotiations in Council since the text was originally proposed by the Commission in July 2013. The Committee will be aware that this is a complex and controversial dossier for all Member States. The Government has always been clear that we will not participate. However, it is closely linked to the new proposal on Eurojust (under general approach except Articles relating to the EPPO), which is of particular interest to the UK given that we are currently a member of Eurojust.

“As the UK is not participating, we do not have a vote in negotiations. Nonetheless we have engaged closely and have intervened wherever necessary to protect our legitimate interests. In particular, during negotiations we have lobbied for the following:

Previous Committee Reports

(a) and (b) Tenth Report HC 342-x (2015–16), chapter 6 (25 November 2015); First Report HC 342-i (2015–16), chapter 37 (21 July 2015); (a), (c) and (d): Nineteenth Report HC 83-xviii (2013–14), chapter 6 (23 October 2013); Fifteenth Report HC 83-xv (2013–14), chapter 1 (11 September 2013); (d) Eighteenth Report HC 83-xvii (2013–14), chapter 6 (16 October 2013).


54 As set out in the proposed Directive on strengthening the protection of the EU’s financial interest (the PIF Directive) which was politically agreed on 7 February and due to be formally adopted later in the Maltese Presidency. The UK will not be participating in this Directive.

55 In accordance with the previous Government’s Coalition Agreement. Also, the European Union Act 2011 requires any future participation to be sanctioned through a referendum. The debate concerning the UK’s intention to not opt into the EPPO proposal was held on 29 October 2013.

56 OLAF investigates fraud against the EU budget, corruption and serious misconduct within the European institutions, and develops anti-fraud policy for the European Commission (see OLAF’s website).

57 For example, would a non-participating Member State have to comply with an EAW issued by a participating Member State at the behest of the EPPO?

58 Text of 22 December.

59 Eurojust was established by a 2002 Council Decision, which was amended in 2003 and 2009.

60 HC Deb, 2 December 2013, col36WS: Written Ministerial Statement on decision not to opt-in.

61 Text of 22 December.

62 The Commission received 14 Reasoned Opinions from national parliaments and chambers of 11 Members States, representing 18 of the 56 votes allocated to national parliaments. For JHA proposals 14 votes are required for a Yellow Card. Those submitting Reasoned Opinions were the UK Parliament (both Houses), the French Senate, Dutch Parliament (both Chambers), Swedish Parliament, Irish Parliament (both Chambers), Hungarian Parliament, Czech Senate, Slovenian Chamber, Cypriot Parliament, Romanian Chamber and the Maltese Parliament.

63 We understand that this January text is still limité.

64 See further the Council Press Release of 7 February 2017. The European Council then has a period of up to four months to try to reach a consensus. If consensus is reached, then the draft text should be sent back to the Council for adoption. If not, as long as least nine Member States wish still to proceed with enhanced cooperation, and notify the Council, Commission and European Parliament, authorisation to proceed will be deemed to have been granted. If it still proves impossible to secure a consensus, a group of at least nine member states can express the wish to establish enhanced cooperation.

65 PIF is an acronym based on the French for protecting financial interests.

66 Outcome of the General Affairs Council of 7 February 2017.

67 Subject to the usual undertaking not to disclose the contents of the latest restricted text.

68 Text of 22 December.

69 See chapter 16 of this Report on the PIF Directive (34091), 12683/12+ ADDs 1–4.

70 Text of 22 December.

71 Adequacy decisions are used in the field of EU data protection law to establish that a third country has equivalent data protection safeguards to the EU to enable it to receive data from the EU.




3 March 2017