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Protecting taxpayers’ money against fraud: Commission proposes European Public Prosecutor's Office and reinforces OLAF procedural guarantees

European Commission - IP/13/709   17/07/2013

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European Commission

Press Release

Brussels, 17 July 2013

Protecting taxpayers’ money against fraud: Commission proposes European Public Prosecutor's Office and reinforces OLAF procedural guarantees

Today, the European Commission is taking action to improve Union-wide prosecution of criminals who defraud EU taxpayers by establishing a European Public Prosecutor's Office. Its exclusive task will be to investigate and prosecute and, where relevant, bring to judgement – in the Member States' courts - crimes affecting the EU budget. The European Public Prosecutor's Office will be an independent institution, subject to democratic oversight.

José Manuel Barroso, President of the European Commission, said: "As promised in my 2012 address on the State of the Union, the Commission has today proposed to set up a European Public Prosecutor's Office. This initiative confirms the Commission commitment to upholding the rule of law; it will decisively enhance the protection of taxpayers' money and the effective tackling of fraud involving EU funds. The Commission has also delivered on its commitments to reinforce and strengthening OLAF procedures applied to procedural guarantees, in line with the guarantees that the European Public Prosecutor Office will apply."

“With today's proposal the European Commission is delivering on its promise to apply a zero tolerance policy towards fraud against the EU budget. When it comes to taxpayers' money, every euro counts – even more so in today's economic climate," said Vice-President Viviane Reding, the EU's Justice Commissioner. "Criminals who exploit legal loopholes to pocket taxpayers' money should not go free because we do not have the right tools to bring them to justice. Let's be clear: If we, the EU, don't protect our federal budget, nobody will do it for us. I call on Member States and the European Parliament to rally behind this important project so that the European Public Prosecutor's Office can assume its functions as of 1 January 2015.”

"The European Public Prosecutor's Office will ensure that protecting the EU budget is given proper priority throughout Europe. It will bridge the gap between Member States' criminal systems, whose competences stop at national borders, and Union bodies that cannot conduct criminal investigations," said Algirdas Šemeta, the EU's anti-fraud Commissioner. "Meanwhile, OLAF will continue to do important anti-fraud work in areas not covered by the new Office. The ideas we have presented today to further improve its governance, combined with the recent reform, will make OLAF more efficient and more accountable in this work. As such, our success in fighting and deterring EU fraud will increase greatly."

The logic of the European Public Prosecutor's Office proposal is simple: If you have a "federal budget" – with money coming from all EU Member States and administered under common rules – then you also need "federal instruments" to protect this budget effectively across the Union. Currently, there is a very uneven level of protection and enforcement across the EU when it comes to tackling EU fraud. The rate of successful prosecutions concerning offences against the EU budget varies considerably from one Member State to another, with an EU average of just 42.3% (see annex). Many cases are not prosecuted at all, allowing fraudsters to get away with exploiting legal loopholes and pocketing citizens' money. Even when cases are prosecuted, there is a large disparity across Member States in terms of conviction rates for offences against the EU budget.

The European Public Prosecutor's Office will make sure that every case involving suspected fraud against the EU budget is followed up and completed, so that criminals know they will be prosecuted and brought to justice. This will have a strong deterrent effect.

Under the EU Treaties, Denmark will not participate in the European Public Prosecutor's Office. The United Kingdom and Ireland will not participate either unless they voluntarily and explicitly decide to do so (opt in).

In parallel to the creation of the European Public Prosecutor's Office, the Commission is proposing a reform of the European Union’s Agency for criminal justice cooperation (Eurojust) and presenting a Communication on the governance of the EU Anti-Fraud Office (OLAF).

A decentralised, cost-efficient structure

The European Public Prosecutor’s Office will have a decentralised structure, integrated into national judicial systems. Delegated European Prosecutors will carry out the investigations and prosecutions in the respective Member State, using national staff and applying national law. Their actions will be coordinated by the European Public Prosecutor to ensure a uniform approach throughout the EU, which is vital particularly in cross-border cases. The whole structure is based on existing resources and should therefore entail no substantial additional costs.

National courts will be entrusted with the judicial review, meaning questions on the European Public Prosecutors' acts could be challenged before them. At the same time, the proposal considerably strengthens the procedural rights of suspects who will be faced with investigations by the European Public Prosecutor's Office.

A "College" of ten bringing together the European Public Prosecutor, the 4 deputies and 5 delegated prosecutors will ensure a seamless integration between the EU and the national level, notably by agreeing on general rules on the allocation of cases.

Strong procedural rights

The proposal guarantees stronger protection of procedural rights for individuals concerned by European Public Prosecutor's Office investigations than currently exists under national systems. This includes for example the right to interpretation and translation, the right to information and access to case materials or the right of access to a lawyer in case of detention.

In addition, the rules establishing the European Public Prosecutor’s Office define other rights not yet harmonised by EU legislation, to ensure robust safeguards for procedural rights. These include the right to remain silent and be presumed innocent, the right to legal aid and the right to present evidence, and hear witnesses.

The proposal also sets out clear, harmonised rules on the investigative measures that the European Public Prosecutor’s Office can use in its investigations, as well as provisions on the collection and use of evidence.

Improving OLAF's governance and reinforcing procedural guarantees

The Commission is proposing to further strengthen OLAF's governance and to reinforce procedural guarantees when performing its investigations, in light of what is foreseen for the EPPO. Two key initiatives are foreseen in this respect. First, an independent Controller of Procedural Guarantees would be established, to strengthen the legal review of OLAF investigative measures. Second, a specific procedural safeguard in the form of authorisation by the Controller for more intrusive investigative measures (office searches, document seizures etc.) which OLAF may need to carry out in the EU institutions.

OLAF's role will also change with the establishment of the European Public Prosecutor’s Office.

It will remain responsible for administrative investigations in areas which don't fall under the competence of the European Public Prosecutor. These include irregularities affecting the EU's financial interests, and serious misconduct or crimes committed by EU staff without a financial impact.

OLAF will no longer carry out administrative investigations into EU fraud or other crimes affecting the financial interests of the EU. This is because such crimes will be under the exclusive competence of the European Public Prosecutor's Office once it is established. If OLAF has suspicions of such criminal offences, it will be obliged to report this to the European Public Prosecutor’s Office at the earliest possible stage. Although it will no longer conduct investigations in this area, OLAF will continue to provide assistance to the European Public Prosecutor’s Office on request (as it already does today to national prosecutors). This change will facilitate a speedier investigation process and will help to avoid duplications of administrative and criminal investigations into the same facts. In this way, the chances of a successful prosecution will be increased.

Next Steps

The proposed Regulation now needs to be unanimously adopted by Member States in the Council, after obtaining the consent of the European Parliament.

If unanimity cannot be reached in the Council, the Treaties foresee that a group of at least nine Member States may enter into an enhanced cooperation (Article 86 TFEU).

Background

Member States report that every year, around €500 million in EU expenditure and revenue is lost due to suspected fraud.

The setting up of the European Public Prosecutor's Office is called for by the Lisbon Treaty (Article 86 TFEU) as is the strengthening of Eurojust (Article 85 TFEU). President Barroso reiterated the Commission's commitment to bringing this project forward in his last State of the Union speech (SPEECH/12/296) in September 2012.

In a joint paper of 20 March 2013, the Ministers of Justice of France and Germany expressed their support for the establishment of a European Public Prosecutor's office.

In May 2011, the Commission adopted a Communication on the protection of the financial interests of the European Union by criminal law and by administrative investigations which contained proposals to improve the protection of EU financial interests (see IP/11/644).

In July 2012, the Commission proposed a Directive to fight fraud against the EU budget by means of criminal law (IP/12/767, MEMO/12/544). This included common definitions of offences against the EU budget, harmonised minimum sanctions (including imprisonment in serious cases) and for common statutes of limitation.

For more information

MEMO/13/693

Press pack

http://ec.europa.eu/justice/newsroom/criminal/news/130717_en.htm

European Commission – Criminal law policy:

http://ec.europa.eu/justice/criminal/criminal-law-policy

Homepage of Viviane Reding, Vice-President of the European Commission and EU Commissioner for Justice:

http://ec.europa.eu/reding

Homepage of Commissioner Algirdas Šemeta:

http://ec.europa.eu/commission_2010-2014/semeta/index_en.htm

Contacts :

Mina Andreeva (+32 2 299 13 82)

Emer Traynor (+32 2 292 15 48)

Natasha Bertaud (+32 2 296 74 56)

Natasja Bohez Rubiano (+32 2 296 64 70)

ANNEX 1: Breakdown of actions transferred to Member States, judicial decision and convictions, from 2006 to 2011

Actions transferred to Member States

Actions with judicial decision

Actions with judicial decisions as % of transferred

Convictions

Convictions as % of actions with judicial decision

Austria

8

4

50%

4

100%

Belgium

56

28

50%

18

64.3%

Bulgaria

37

14

37.8%

6

42.9%

Cyprus

1

0

0%

0

NA

Czech Republic

23

8

34.8%

2

25%

Denmark

4

3

75%

1

33.3%

Estonia

3

1

33.3%

1

100%

Finland

12

12

100%

11

91.7%

France

29

12

41.4%

9

75%

Germany

168

114

67.9%

65

57%

Greece

86

26

30.2%

5

19.2%

Hungary

10

1

10%

0

0%

Ireland

0

0

NA

0

NA

Italy

112

37

33%

14

37.8%

Latvia

4

0

0%

0

NA

Lithuania

9

9

100%

8

88.9%

Luxembourg

2

1

50%

1

100%

Malta

5

0

0%

0

NA

Netherlands

29

16

55.2%

5

31.3%

Poland

90

17

18.9%

6

35.3%

Portugal

21

9

42.9%

6

66.7%

Romania

225

128

56.9%

30

23.4%

Slovakia

16

9

56.3%

0

0%

Slovenia

2

0

0%

0

NA

Spain

54

5

9.3%

0

0%

Sweden

5

4

80%

4

100%

United Kingdom

19

13

68.4%

3

23.1%

Total

1030

471

45.7%

199

42.3%

Source: The Olaf Report 2011: Twelfth operational report of the European Anti-fraud Office, 1 January to 31 December 2011, Table 6, page 22.


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