Questions and Answers: the reform of the European Anti-Fraud Office (OLAF)
European Commission - MEMO/11/176 17/03/2011
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Brussels, March 17 2011
Questions and Answers: the reform of the European Anti-Fraud Office (OLAF)
What is the European Anti-Fraud Office (OLAF)?
OLAF was created in 1999 to protect the EU's financial interests and taxpayers' money against fraud, corruption and any other illegal activity. Although the Office is attached to the Commission, it is fully independent from the Commission when conducting investigations, both external (especially investigations into beneficiaries involving EU funds) and internal (investigations within the EU institutions and bodies). In addition to carrying out its own investigations, OLAF also cooperates with and assists national authorities in Member States and third countries in stopping criminals and fraudsters who conduct illicit activities at an EU and international level. Moreover, OLAF contributes to strengthening EU legislation in the field of anti-fraud. Sometimes, it sets up task-groups to work on specific products such as cigarettes or alcohol.
Why is OLAF independent from the Commission for investigations?
The protection of EU's financial interests against fraudulent activities is a priority of the Commission. As the EU budget is financed through tax payers' money, the Commission wants to ensure that EU funds are used in a transparent and proper way. As a consequence, any investigation involving EU funds should be handled in an objective and impartial way, without any interference from the Commission or other EU institution. This is the reason why OLAF is granted a special independent status for its investigative functions. For the other work it does, notably on developing anti-fraud measures and strategies, OLAF falls under the responsibility of the Commission.
Why is the Commission proposing to reform OLAF?
OLAF has now been operational for more than 10 years, with many successes to show in tackling mismanagement, fraudulent and criminal abuse of EU funds. However, the Commission believes that it is a good time to take stock, review the experience of the Office’s first decade, and see where improvements can be made.
In 2005, a special report from the European Court of Auditors showed that there was room for improvement concerning the operational efficiency of OLAF. After negotiations between the European Parliament and the Council on previous Commission suggestions to improve OLAF's management, which led to some divergent conclusions, the Commission presented a Reflection Paper in July 2010 to try to align the institutions’ views. Both the Council and European Parliament responded positively to the Reflection Paper at the end of 2010, and today's proposal reflects this close inter-institutional collaboration.
What is the objective of the proposed reform of OLAF?
The aim of the Commission’s proposal is to reinforce OLAF’s efficiency, effectiveness and accountability in its daily business, while safeguarding its independence in carrying out investigations. Among the key areas on which the Commission focuses to this end are:
What is proposed with regard to OLAF’s relations with EU Member States?
The Commission's proposal aims to step up cooperation between the Office and EU Member States' competent authorities. This should ultimately ensure better follow up on the investigations by national authorities. In order to facilitate this, the Commission proposes that each Member State designates an "Anti-Fraud Coordination Service" to assist the Office and to facilitate proper cooperation. This does not necessarily mean that a new body needs to be established. However, the national services should ensure that OLAF can easily identify the responsible national authority with whom to cooperate, and have systems in place that enable smooth cooperation with OLAF investigators.
What is proposed with regard to OLAF’s relations with EU institutions?
The Commission believes that a right balance must be found between the independence and accountability of OLAF. This means that OLAF’s independence in investigations must be fully respected, but at the same time, the Office should maintain close and regular contact with the Commission, EU institutions, and other relevant bodies and agencies. Its strategic priorities should be known to all EU actors involved, and they should be able to give their opinion, when necessary, on how OLAF is carrying out its tasks. In practice, the Commission proposes a procedure for the exchange of views between OLAF, the Commission, the European Parliament and the Council. This exchange of views should serve as a basis for its participants to share views on OLAF's strategy and activities. It would take place in a flexible way, to allow each EU institution, as well as OLAF itself, to convene meetings more spontaneously and when needed. Such a dialogue should contribute to enhancing the cooperation between OLAF and the EU institutions. In addition, OLAF should inform without delay any institution, office or agency whose staff member or budget is affected by an investigation. This will allow the body in question to take the appropriate measures to prevent any further or potential financial loss and to implement precautionary administrative practices against suspected irregularities.
What is proposed with regard to OLAF’s relations with other EU bodies, international organisations and third countries?
Given the scale of EU funds allocated to external relations and international aid, OLAF’s work in protecting the EU’s financial interests extends well beyond the EU’s borders. With this in mind, the reform will allow OLAF to conclude administrative arrangements with competent services in third countries, in coordination with the Commission and European External Action Service. The reform proposal also enables OLAF to further strengthen its cooperation with Eurojust, the EU's judicial cooperation body and Europol, the EU's Police Office through administrative agreements. In such a way, resources should be used to maximum efficiency and the duplication of work avoided in the fight against fraud and protection of EU funds.
What provisions are set out with regard to the recruitment, mandate and responsibilities of OLAF’s Director General?
Building on the recent experience, today's proposal clarifies the procedure for the nomination of OLAF's Director General. OLAF's Director General will still be appointed by the Commission, after consultation with the European Parliament, the Council and OLAF's Supervisory Committee. The mandate of the Director General is extended to seven years, rather than the current 5 years. In order to avoid any conflict of interest during the Director General’s term, this mandate would not be renewable. The Director General of OLAF will be responsible for deciding the Office’s operational priorities, and for agreeing on when cases should be opened or closed. He/she will be assisted in this function by an internal body, and rules on deputising Directors are also laid down.
What is the OLAF Supervisory Committee and what is said about its function in the reform proposal?
The role of OLAF Supervisory Committee is to reinforce the Office's independence by regularly monitoring the implementation of its investigative functions. It is composed of five senior, independent persons, qualified in areas related to OLAF’s activities. The Supervisory Committee is appointed through the common accord of the Commission, European Parliament and the Council. The reform of OLAF clarifies the role of OLAF Supervisory Committee as well as its functions. For instance, the proposal indicates that the Supervisory Committee is informed on the duration of investigations and the way the fundamental rights of the persons concerned by investigations are being upheld. The mandate of its members can not be longer than 5 years and is not renewable, but the replacement of the Supervisory Committee will be staggered, to avoid a knowledge or information gap.
What are the fundamental rights of the persons referred to in the proposal, which OLAF needs to respect?
The Commission is fully committed to ensuring the respect of the fundamental rights of the persons as laid down in Chapter VI of the EU Charter of fundamental rights. In this respect, the Commission wants to make sure that all OLAF investigations are conducted in an objective, confidential and impartial way. The principles of presumption of innocence and the right of defence are confirmed, along with other rights such as the right to a fair trial and the right not to be tried or punished twice in criminal proceedings for the same criminal offence. When it comes to OLAF investigations, people under investigation should be aware of their rights and should be able to access them easily. This means, for instance, the right to have his/her name kept secret until the investigation's final report is drawn up; the right of the investigated person to comment on the findings within a certain time limit and the right to use the official EU language of his/her choice. A review procedure is included in the reform proposal, for cases where there is considered to have been a possible violation of these rights.
Is this reform a first step towards the creation of a European Public Prosecutor's Office?
The Commission has said that its first priority is to ensure that the systems and bodies already in place to protect the EU’s financial interests are functioning fully and properly, before considering the establishment of any new body. Therefore, the possible creation of a European Public Prosecutor’s Office would only be considered after the OLAF reform has been completed.
On average, how many cases does OLAF open a year and how long does a 'normal' investigation last?
OLAF carries out over 200 investigations a year (220 in 2009), and the average duration of an OLAF case is around 24 months.
Will the reform impact the number of staff working for OLAF or its budget?
No, the reform will impact neither the number of staff working for OLAF nor its budget. The Office currently employs around 500 staff and manages an annual budget of some €50 million. The aim of the reform is to ensure that both the staff and resources are used to maximum efficiency.
See also IP/11/321