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Algirdas Šemeta

Commissioner responsible for Taxation

"Towards a more efficient European Anti-Fraud Office"

European Parliament - CONT Committee

Brussels, 22 March 2011

Distinguished Members,

Ladies and gentlemen,

I am very pleased to be here today to present you the Amended proposal for the reform of the European Anti-Fraud Office.

In the Reflection paper I presented you before last summer, the Commission committed itself to amend its initial proposal.

This amended proposal integrates many of the suggestions and ideas previously proposed by the EP and the Council. It also addresses the most recent working needs of OLAF, in order to come up with suitable, up-to-date solutions.

This amended proposal has been prepared by an internal working group in which all the concerned Commission services have taken part and brought valuable contributions. The new Director General of OLAF, Mr. Kessler, also contributed to the draft text.

The reform of OLAF has two main objectives. The first one comprises the changes proposed to achieve better operational efficiency for OLAF, the second one comprises changes aiming at improving OLAF's accountability.

1) I would start by explaining what the Commission proposes to improve efficiency of investigations.

A common concern we share is that of the efficiency of OLAF's cooperation with Member States' competent authorities, including the judicial authorities. As also emphasized by the Parliament, this cooperation is extremely important, not only during the investigative process per se, but also for the follow-up given to the investigations results.

First of all, in order to step up cooperation between the Office and the competent authorities of the Member States, the Commission proposes that an authority (referred to as an "anti-fraud coordination service" - AFCOS) should be designated by each Member State. This anti-fraud coordination service would assist the Office in its collaboration with the national competent authorities, as it is already the case in the new Member States.

This way, OLAF investigators will be able to address any request for assistance to a competent authority which facilitates their investigative tasks in that specific Member State.

Regarding follow-up of OLAF cases, it is proposed that Member States report on the follow-up given to the information the Office transmits them.

In order to avoid an unnecessary administrative burden for the Member States, the amended proposal provides that they will report to the Office upon its request on actions taken and progress made following transmission of information by the Office.

The judicial authorities of the Member States will also inform OLAF of action they have taken following information forwarded to them by the Office.

Another aspect of OLAF's efficiency concerns the need to improve its relations and exchange of information with the EU institutions, bodies, offices and agencies.

The institutions, bodies, offices and agencies whose member/staff member or budget is concerned by an investigation should be informed by the Office without undue delay.

This way, the institutions, bodies, offices and agencies may take precautionary administrative measures to prevent further damage.

In turn, the institutions, bodies, offices and agencies will report back to the Office on the legal and disciplinary actions taken by them following the transmission of OLAF case reports to them.

Pursuant to the regulation, OLAF will continue to have immediate and unannounced access to any relevant information connected with the investigation, held by the institutions, bodies, offices and agencies.

As the EP proposed, OLAF should have the possibility to conclude administrative arrangements with Eurojust, Europol and third countries authorities, as well as with international organizations.

Given the scale of EU funds allocated to the external aid sector, OLAF should be able to seek practical assistance from competent authorities and international organizations in performing its tasks on the basis of administrative arrangements.

Another important challenge in improving OLAF's efficiency is related to the duration of the investigations. As before, it is the role of the Supervisory Committee to monitor at regular intervals the duration of OLAF's investigations. OLAF has to inform the Supervisory Committee also on which cases the authority concerned has failed to act.

Thus, in cases where the investigations cannot be closed after 12 months, OLAF should inform the Supervisory Committee of the reasons preventing the finalisation of the investigation at intervals of 6 months.

When looking at the working procedures, we have tried to find solutions that would facilitate the workflow in OLAF, increase transparency, and remain flexible enough to be adapted to the needs of OLAF.

To improve working procedures, the Director-General should be able to delegate in writing certain tasks in the conduct of investigations. While he continues being responsible for the opening and the conduct of investigations, he should be assisted by an internal body which he will consult when opening and closing an investigation and whenever he deems necessary.

For some issues the EP addressed in its report the Commission proposes to address these in the manual of procedures which the Director-General of OLAF enacts rather than in the Regulation (for example the review of legality of OLAF's investigations).

The details of OLAF's investigative procedures should also be included in the OLAF manual of procedures to be adopted by the Director-General. The Director General of OLAF shall adopt this manual of procedures after consultation of the Supervisory Committee, the Office's Data Protection Officer, and the person or persons entrusted with the review procedure.

To reinforce the Director-General's independence, the Commission proposes a 7-year non-renewable term of Office. In the light of recent experience, deputising rules are also provided.

An important issue we have previously discussed was that of the de minimis approach when it comes to the opening of investigations.

Regarding internal investigations, the Office should consider whether internal measures allow for more appropriate follow-up, for example to forward the case to the Investigation and Disciplinary Office of the Commission (IDOC) instead of sending it to the competent national judicial authorities. This depends on the nature of the facts and the scale of the financial impact.

However, when implementing the de minimis policy, the Office should apply precise guidelines. This has also been proposed by the Council in its conclusions.

OLAF has also to inform the Supervisory Committee on the internal cases it decided not to transmit to national judicial authorities.

2) I would now like to refer to improvements that the amended proposal brings in terms of accountability of the Office.

The challenge in this respect is to strike the right balance between independence and accountability of the Office.

To reinforce OLAF's independence aside from the appointment of the Director-General for a non-renewable mandate, the Supervisory Committee should continue ensuring that the Office exercises its mission in full independence. As proposed by the Parliament, the Commission proposes now a staggered renewal of the members of the Supervisory Committee. Transition rules foresee that these rules can apply to the next Committee that will be selected for the next term starting in December 2011.

As concerns the structured dialogue between the Supervisory Committee and the institutions on the investigative function of the Office, the Council has expressed preference for a less formal approach and the EP has proposed a concertation procedure between the institutions with a large range of issues to be discussed.

We have tried to find the right balance between an effective dialogue on anti-fraud issues and the need to formalise it.

The Commission now proposes that an exchange of views should take place periodically between the European Parliament, the Council and the European Commission, with the participation of the Office and the Supervisory Committee.

This exchange of views should contribute to the exchange of information and opinion between the stakeholders for an improved efficiency of the Office's activity. The exchange of views should not interfere with the conduct of investigations.

One of the most important issues discussed during the legislative process so far was that of the procedural guarantees of the persons concerned by investigations. The Commission has given due consideration to upholding the rights of the persons concerned.

The procedural guarantees needed to be made clearer and more transparent. They need to be applied to all investigations conducted by the Office, both internal and external.

These guarantees respect the fundamental rights recognised in particular by the Charter of Fundamental Rights of the Union. For both internal and external investigations procedural rights are provided by this amended proposal:

  • the right for the person concerned by an investigation to make his/her views known before conclusions referring by name to him or her have been drawn;

  • the right to be given a summary of the matters under investigations and to be invited to comment on these matters;

  • the right to be assisted by a person of his/her choice during an interview;

  • the right to use the EU language of his or her choice;

  • the principle that any person concerned by an investigation shall be entitled to avoid self-incrimination.

I believe that the practical application of these rights should be reflected in the Office's manual of procedures for investigations as adopted by the Director-General. These rights also need to be put in the context of the investigations conducted by OLAF which are of an administrative nature.

One right that deserves special attention is the right to administrative review: a member, staff member or a natural person concerned by an investigation should be able to ask for an independent opinion with regard to the respect of its procedural rights. This is without prejudice to legal control by the Tribunal in Luxembourg.

The Commission now proposes instead of a Review Adviser that a review procedure be set up by the Director-General within the Office. The details are to be set up by the Director-General in the manual of procedure.

Overlapping with the tasks of the Supervisory Committee and additional formal structures should be avoided while guaranteeing an effective, efficient, and independent handling of individual complaints. The person or persons entrusted with the review procedure should act in full independence. The Director-General of the Office will report to the institutions about the measures taken for the setting up of the review procedure.

I have tried to briefly refer to the main issues that have been part of our debate and I hope that the proposal that we have submitted to your attention covers the concerns previously raised by the EP and the Council, and that it contains appropriate and practical solutions to enable OLAF to become even more efficient in the future.

As you can see, the amended proposal reflects to a great extent the improvements the EP and the Council have proposed.

I am counting on your support for a constructive dialogue in the next weeks on this amended proposal. The aim would be to conclude the legislative process by the end of 2011.

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