Select Committee on European Union Forty-Ninth Report


Letter from Bob Ainsworth MP, Parliamentary Under Secretary of State, to the Chairman

  I enclose the United Kingdom response to the Commission's Green paper on the establishment of a European Public Prosecutor to investigate and prosecute fraud and corruption offences affecting EC financial interests as requested.

  In the responses I have maintained the line that we remain unconvinced of the need for, or desirability of, a European Public Prosecutor.

  I would welcome any comments or additional thoughts you may have and I would be grateful if you could inform me of them by Thursday 27 June.

24 April 2002


  We are grateful for this opportunity to comment on the proposal for a European Public Prosecutor, set out in the European Commission Green Paper of 11 December 2001.

  2.  The Green Paper sets out a number of detailed questions relating to the powers, structure, and organisation of a European Public Prosecutor (EPP). These are based on the presumption that the establishment of an EPP in the future has been agreed. Although United Kingdom strongly supports effective measures to combat fraud affecting the Communities' financial interests, we remain unconvinced that creating an EPP would be necessary or desirable. The following response therefore sets out our views on this question of principle, rather than responding to questions about how the office of an EPP could be set up.

  3.  We note that the Green Paper takes account of the further studies carried out since the original Corpus Juris study. Some of the changes to the original study are welcome. In particular, the Commission's move towards Mutual Recognition and away from harmonisation of criminal procedures as originally proposed in the Corpus Juris study. However, the United Kingdom believes that the proposal in the Green Paper still contains many difficulties of both principle and practice:

    —  they appear to conflict with the subsidiarity principle, since they would have a major impact on Member States' laws and procedures without clear justification to show that new arrangements are necessary and that they would bring added value;

    —  the lack of accountability of the EPP to any national law offices or to Parliament. The Green Paper proposal fails to address crucial issues of transparency and accountability;

    —  creating a European Public Prosecutor on a first Pillar base such as Article 280 is incompatible with the balance currently found in the Treaties whereby the application of criminal law should, like the maintenance of law and order and national security, remain reserved to Member States.

  4.  The United Kingdom accepts that more needs to be done to ensure effective prosecution of fraud within the Community. We believe that this can be achieved through other means, based on effective implementation of the mutual recognition principle, the development of new bodies at European level such as Eurojust, and further improvements in practical co-operation between the Member States. It is important to develop measures that will enhance the ability of the law enforcement agencies and judicial authorities to work together by sharing information and co-ordinating their actions in the fight against fraud. This co-operation is most likely to be effective if it takes into account the differing structures of the national criminal justice systems, rather than seeking to impose a uniform European model. We are keen to see the Convention on the protection of the EC's financial interests (1995) and its protocols brought into force, and remain concerned at the slowness of some Member States to ratify these instruments. We also stress the need for "fraud proofing" EC measures. About 60 per cent of fraud appears to relate to the Common Agricultural Policy, and many frauds stem from unduly complex regulations.

  5.  A number of important and ground breaking measures have been taken recently in the field of Justice and Home Affairs, including the creation of Eurojust and agreement on a European Arrest Warrant. We believe that efforts should be focused on implementing the Tampere conclusions and making full use of the new structures such as Eurojust, joint investigative teams and the European Judicial Network.

  6.  Eurojust, especially, has the potential to make a significant contribution to the fight against fraud, particularly through a close working relationship with OLAF. Article 4 of the Decision establishing Eurojust provides that "fraud and corruption and any criminal offence affecting the European Community's financial interests" is a main competence of Eurojust. Eurojust is able to ask Member States to investigate or prosecute particular offences, and Member States are normally obliged to give reasons when such action is not taken. Whilst national authorities may at present be reluctant to assume responsibility for an investigation affecting more than one Member State, Eurojust will be able to promote joint action by all the authorities concerned. Article 26 provides that Eurojust is to establish and maintain close co-operation with the Commission's anti-fraud organisation, OLAF, regarding the protection of the financial interests of the Communities. The appointment in OLAF of expert prosecutors and magistrates from Member States should further enhance their co-operation with Eurojust. We believe these provisions strike the right balance and are likely to be very beneficial in fighting fraud. It is important that OLAF makes full use of the opportunities provided by the Eurojust Decision.

  7.  In addition to the difficulties of principle already mentioned, we are not convinced that the EPP would bring added value in the fight against fraud, and we have a number of practical concerns. For example, we are concerned that the EPP's remit would oblige it to give priority to prosecution rather than other measures which can be more effective in protecting EU financial interests: for example, disrupting the activities of those involved in fraud, seizing illicitly trafficked goods before they reach the market, or negotiating out of court settlements to have the amounts illegally obtained repaid without the costs and risk of a prosecution. An EPP attempting to concentrate effort on mounting credible prosecutions would divert national authorities from selecting the best strategy to achieve the key objective of protecting Community funds.

  8.  Another practical difficulty in the EPP proposals is that they mainly focus on co-operation within the EU. Major frauds affecting EU financial interests are usually transnational and involve third countries. As the Green Paper acknowledges the EPP would need to rely on mutual legal assistance requests by Member States. It is unlikely that the EPP would be more successful than individual Member States in securing co-operation from third countries.

  9.  Further practical difficulties may arise from the proposal for mutual admissibility of evidence. Although we support the principle of mutual recognition and welcome the fact that the Green Paper makes use of this concept, we have serious doubts about applying it just to one type of offence. The proposals in paragraph of the Green Paper could lead to two almost identical fraud cases being tried in one jurisdiction, but applying different rules of evidence because one case related to EU fraud but the other did not. Such differential treatment would be difficult to justify, and might even create bad publicity for the EU.

  10.  These practical considerations underscore our concern that creating the EPP without clear and convincing justification would be in breach of the subsidiarity principle. We are open to any measures which would secure better protection of EU financial interests, but we remain unconvinced that the proposals in the Green Paper would achieve this result.

Letter from the Chairman to Mr Bob Ainsworth MP, Parliamentary Under Secretary of State, Home Office

Thank you for your letter dated 24 April which I did not receive until yesterday, 25 June. In the circumstances it is not possible to give a considered reply by Thursday 27 June. I am however arranging for your paper to be sent to Sub-Committee E (Law and Institutions) for information.

26 June 2002

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