OLAF activity report

This report covers OLAF's activities for the period for 1 July 2004 to 31 December 2005. It therefore covers, exceptionally, a period of 18 months. The strategic intelligence capability of OLAF has continued to develop. At the end of 2005 OLAF was investigating 452 cases. A further 226 cases were at the initial assessment stage. On 31 December 2005 OLAF employed 390 people and its budget for 2005 totalled EUR 55.3 million.

ACT

Report of the European Anti-Fraud Office - Sixth Activity Report for the period from 1 July 2004 to 31 December 2005 [Not published in the Official Journal].

SUMMARY

On 31 December 2005 OLAF employed 390 people: 290 "statutory" members of staff, compared with 278 twelve months earlier. A further 100 people were employed as "external" staff.

Its total budget for 2005 was EUR 55.3 million (EUR 43.2 million in the administrative budget and EUR 12.1 million in the operational budget).

Operational activities

At the end of 2005 OLAF was investigating 452 cases. A further 226 cases were at the initial assessment stage.

The total number of valid case records was 5 165.

The main information sources during this period were:

• informants (42% of cases);
• the European Commission (32% of cases);
• the Member States (15% of cases);
• the freephone number for informing OLAF of cases of fraud (5% of cases);
• the other EU institutions (3% of cases).

Since 2001 the average length of standard assessments closed in each calendar year has steadily decreased. There was a slight increase during this period following the changes to the calculation rules, with the recording, from 2004 onwards of certain cases as "non-case prima facie". The average duration of the active stage of cases has remained consistent since 2003 (between 22 and 24 months).

A total of 40 internal investigations were opened in 2005, as against 23 in 2004. At the end of 2005 there were 58 open internal investigations and 30 cases at the assessment stage;

The year 2005 saw a further increase in OLAF's activity in the external aid sector, in partnership with other bodies, in particular the EuropeAid Cooperation Office (AIDCO) and the Commission Directorate-General for Humanitarian Aid (DG ECHO). As in the past, the largest proportion of external aid cases continued to relate to Africa (35% of the total).

A total of 233 cases were closed during the year. For the first time, the number of cases closed with follow-up (133) was higher than the number closed without follow-up (100).

OLAF's own investigation activity in respect of the so-called "EUROSTAT affair" largely ended in 2005. Judicial proceedings are continuing in three Member States.

As regards the cases closed with follow-up, OLAF carried out administrative follow-up in 154 cases, disciplinary follow-up in 33 cases, financial follow-up in 611 cases, judicial follow-up in 524 cases and legislative follow-up in 9 cases (an investigation may require several types of follow-up).

The vast majority of follow-up work (85%) concerned financial recovery and judicial activities. Financial recovery reached a new peak in 2005 with a total of EUR 203 million recovered. The financial impact of cases at the follow-up stage is broken down by sector as follows:

• Structural Funds: EUR 700 million;
• agriculture: EUR 620 million;
• internal investigations: EUR 10 million;
• customs: EUR 60 million;
• cigarettes, alcohol andVAT: EUR 750 million;
• direct expenditure and external aid: EUR 15 million.

Coordination and assistance to Member States and the Commission

The strategic intelligence capability of OLAF continued to develop.

Improvements have been made in the ability to gather information and in the provision of in-depth analysis to give strategic direction and support to national authorities. The OLAF also assisted the Commission in its task of stepping up the fight against fraud in strategic and political terms.

Some 2 200 requests for information and intelligence support were handled within OLAF during 2005 (compared with approximately 1 500 in the nine months in 2004 for which figures are available). Since April 2004 such requests have been made through the Case Management System (CMS). OLAF has further enhanced CMS to widen its management applications, in particular for judicial and disciplinary follow-up. Four new CMS modules were introduced during the period covered by this report.

In the eight months in which the module operated in 2005 more than 50 requests for legal advice were handled relating to various areas of OLAF's operational activities, including internal investigations, direct expenditure, customs operations and international cooperation.

The proportion of investigations in 2005 which were "OLAF-owned" (internal and external cases) rose by comparison with those delegated primarily to Member State authorities (coordination and assistance cases).

A total of 17 legislative and non-legislative proposals were submitted to OLAF, of which 6 had been identified for fraud-proofing at the beginning of 2005 and 11 were submitted during the year at the request of Commission services. Of these 7 proposals related to agriculture, 3 to "horizontal" or "cross-cutting" issues, 2 to customs trade policy and direct expenditure, and 1 to each of external policy structural actions, and contracts.

OLAF environment

External aid infringements represented a significant proportion of work in the accession countries.

With regard to the accession countries, OLAF's efforts in this field were strengthened by the posting of OLAF liaison officers to Bucharest and Sofia. They work closely with the respective national anti-fraud coordination offices (AFCOS) and with the relevant judicial authorities. The Commission also adopted the multi-country PHARE programme (Fight against fraud affecting the financial interests of the EU) specifically for Bulgaria and Romania in October 2004, with a budget of EUR 1.5 million. It provides for a number of training actions to be carried out by OLAF and framework contractors, as well as for the organisation of work placements for Bulgarian and Romanian officials in the Member States until the end of 2007.

Moreover, in the first full calendar year after enlargement, OLAF opened 24 cases in new Member States and 23 cases in acceding or candidate countries.

As regards non-member countries, OLAF participated in the conclusion and implementation of two international agreements on mutual administrative assistance with China and India, and a third with Japan is under negotiation. In addition, OLAF helped to ensure the inclusion of specific anti-fraud provisions in textile trading agreements with China, Serbia and Belarus.

Finally, as regards EU bodies and other organisations:

• The UN called on OLAF to carry out a peer review of its investigative arm, the Office of Internal Oversight Services (OIOS).
• OLAF has devoted substantial efforts to making its cooperation with Eurojust more efficient: setting up of a joint working group, operational meetings and meetings between the Director-General of OLAF and the President of Eurojust.
• OLAF started to work with Europol under the administrative agreement of April 2004.

Disclosure of information

The Office received a total of 36 requests for access to documents and provided full access to 18 and partial access to 55 documents, while 1 new complaint to the Ombudsman made in the second half of 2004 and 5 new complaints made in 2005 related to access to documents. A total of 130 Parliamentary questions concerning OLAF (120 written and 10 oral questions) were handled.

Media and training

OLAF intensified its dialogue with journalists and their trade associations by organising a joint seminar with the International Federation of Journalists (IFJ) for members of the OLAF Anti-Fraud Communicators' Network (OAFCN) on building mutual trust between anti-fraud services and journalists.

The OLAF Website continued to be an essential tool of the communication and information policy of the Office. It is also the portal to information concerning OLAF's cooperation with partner services within the OAFCN network. The number of hits has risen constantly since it was first installed, reaching almost 600 000 in 2005.

OLAF put renewed emphasis on internal training, in particular courses for investigators (for instance interviewing techniques).

It also organised and fully financed three conference events in 2005:

• the Second Conference on Fraud and Aid Funds (Brussels, 6 - 7 October);
• the Fifth Training Seminar of the OAFCN (Brussels, 28 October);
• the Third EU Conference of Fraud Prosecutors (17- 18 November).

Background

This report covers OLAF's activities for the period from1 July 2004 to 31 December 2005. It therefore covers, exceptionally, a period of 18 months. The Annual Report for 2006 will cover a calendar year.

Last updated: 03.12.2006