Explanatory Memorandum to COM(2018)338 - Amending regulation 883/2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) as regards cooperation with the European Public Prosecutor's Office - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2018)338 - Amending regulation 883/2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) as regards ... |
|---|---|
| source | COM(2018)338  |
| date | 23-05-2018 |
1. CONTEXTOFTHEPROPOSAL
Reasons for and objectives of the proposal
The Commission is pursuing an ambitious legislative agenda to strengthen the protection of the Union's financial interests. In July 2017, the Parliament and the Council adopted the Directive on the fight against fraud to the Union's financial interests by means of criminal law.
In October 2017, the Council adopted the Regulation implementing enhanced cooperation on the establishment of the European Public Prosecutor's Office (EPPO). The establishment of the EPPO is a key Commission priority in the areas of criminal justice and the fight against fraud to the Union budget. The EPPO will change the EU institutional anti-fraud landscape significantly. It will have the power to conduct criminal investigations and prosecute before the courts of the participating Member States. It is expected to bring a more consistent and effective prosecution policy for crimes affecting the Union budget, leading to more prosecutions, convictions and a higher level of recovery.
As a consequence of the adoption of the EPPO Regulation, Regulation No 883/2013 governing investigations by the European Anti-Fraud Office (OLAF) needs to be adapted.
OLAF was set up in 1999 with the task, in particular, of conducting administrative investigations in the area of the protection of the Union's financial interests. Within its administrative mandate, OLAF investigates administrative irregularities as well as criminal behaviour. It plays a significant role in the fight against fraud, corruption and other illegal activities through its investigations aimed at enabling financial recoveries, disciplinary and administrative action, as well as indictments and prosecutions. OLAF has used its investigative expertise in a constantly developing context of fraud to the Union budget. It has handled increasing numbers of investigations, leading to increasing numbers of recommendations and amounts recommended for recovery.
In the area of fraud, the creation of the EPPO will be a substantial improvement to the current situation. Today, OLAF carries out administrative investigations using administrative powers which are limited compared to criminal investigations. When it encounters possible criminal offences, it can only address a recommendation to national judicial authorities, but with no guarantees as to whether a criminal investigation will be opened. In future, in the Member States participating in the EPPO, it will report such suspected offences to the EPPO, and collaborate with it in the context of its investigations.
Provisions to regulate the relationship between the EPPO and OLAF already exist in the EPPO Regulation. They are based on the principles of close cooperation, exchange of information, complementarity and non-duplication. These rules need to be mirrored and complemented in Regulation No 883/2013. The adaptation of the OLAF legal framework by the time the EPPO becomes operational is therefore the main driver for the amendment of Regulation No 883/2013. To ensure a smooth transition into the new framework, the amended Regulation should enter into force before the EPPO becomes operational (envisaged for the end of 2020).
The EPPO and OLAF are both, within their respective remits, entrusted with the mandate to protect the Union's financial interests. While the EPPO will conduct criminal investigations aimed at investigating, prosecuting and bringing to judgment the perpetrators of, and accomplices to, offences affecting the financial interests of the Union, OLAF will continue conducting administrative investigations with a particular emphasis on facilitating
administrative recovery and preventing further harm to the EU finances through administrative measures. Thus, the focus of activity of the future EPPO and of OLAF is distinct, although they converge towards a common goal.
OLAF will also continue its investigations, in the same way as today, in the Member States not participating in the EPPO at this stage. In these Member States, the national authorities as well as OLAF should contribute to creating the conditions to ensure an effective and equivalent level of protection of the Union’s financial interests in the whole EU.
In such circumstances, it is essential that the legal framework for OLAF is fit-for-purpose to allow it to fulfil its role with regard to the EPPO, the Member States and Union institutions, bodies, offices and agencies. The Commission evaluation of Regulation No 883/2013 concluded that the Regulation allowed OLAF to continue delivering concrete results in the protection of the Union budget. The 2013 changes brought clear improvements, as regards the conduct of investigations, cooperation with partners and the rights of persons concerned. At the same time, the evaluation highlighted shortcomings which impact on the effectiveness and efficiency of investigations. These findings relate to a wide range of areas including OLAF’s investigative tools, the enforcement of OLAF powers, uniform conditions in the conduct of internal investigations, the conduct of digital forensic operations, divergences in the follow-up to OLAF recommendations, the duties of cooperation by Member States and Union institutions, bodies, offices and agencies, or the overall coherence of the legal framework.
However, addressing all evaluation findings is outside the scope of this proposal, as the revised Regulation should be in force by the time the EPPO becomes operational. The proposal therefore contains a limited number of targeted changes, based on the most unambiguous evaluation findings. These are essential changes necessary in the short term to strengthen the framework for OLAF investigations, in order to maintain a strong and fully-functioning OLAF that complements the EPPO's criminal law approach with administrative investigations, but which do not entail a change to its mandate or powers.
The focus is on areas where, today, the lack of clarity of certain provisions in the current Regulation results in obstacles which hinder OLAF’s effective operations, regarding, notably, on-the-spot-checks and inspections or access to bank account information. The amendments proposed aim to clarify and reduce ambiguity in the current provisions for the economic operators concerned, for the Member States, and for OLAF, thus enhancing legal certainty. They would allow OLAF to operate in an effective and more coherent manner in all its investigations. This is directly related to the objectives of a strong protection of the budget across the Union coupled with appropriate procedural safeguards for economic operators subject to investigation.
The overall objective of the proposal is to strengthen the protection of the Union's financial interests. This will be achieved by three specific objectives to:
– adapt the operation of OLAF to the establishment of the EPPO;
– enhance the effectiveness of OLAF’s investigative function;
– clarify and simplify selected provisions of Regulation No 883/2013.
The Commission evaluation report already indicated that the proposal containing these targeted changes could be followed by a more far-reaching process to modernise the OLAF framework, which in its core aspects dates from the creation of OLAF in 1999. This would be the opportunity to consider other more fundamental changes in the context of 21st century fraud areas and trends, and it should take account of the experience gained in the cooperation between the EPPO and OLAF. It would also allow considering other evaluation findings, as well as aspects of the legal framework where further reflection and discussion may be needed.
Consistency with existing policy provisions in the policy area
The amendment of Regulation No 883/2013 is a consequence of the creation of the EPPO, and is precisely intended to ensure the coherence of the legal framework for the protection of the Union’s financial interests. It is a further step, after the adoption of the Directive on the fight against fraud to the Union's financial interests by means of criminal law and of the EPPO Regulation, towards a strengthened legal framework which ensures that all available means are used effectively in the fight against fraud.
This is particularly relevant as the Union moves towards the next Multiannual Financial Framework. An efficient and proper spending of the Union budget is key to building trust of EU citizens and boosting the added value of the European project. The establishment of the EPPO and the strengthening of the OLAF legal framework contribute to the Treaty goal of a high level of protection of the Union budget in the whole territory of the Union (Article 325 TFEU).
Consistency with other Union policies
This initiative is consistent with other legislative developments aimed at making Union revenues, expenditure and assets more fraud-proof, and enhancing cooperation between law enforcement bodies.
2. LEGALBASIS, SUBSIDIARITYAND PROPORTIONALITY
Legal basis
The proposal is based on Article 325 TFEU and Article 106a of the Treaty establishing the European Atomic Energy Community.
Subsidiarity
OLAF carries out a specifically European task - the protection of the Union's financial interests in the framework of Articles 317 and 325 TFEU - which cannot, in the same way, be carried out at national level. The proposal concerns investigations by an office of the Union, which are currently regulated in a Union Regulation. It does not modify the Member States’ powers and responsibilities for combating fraud affecting the Union's financial interests, a responsibility that Member States share with the Union, nor does it extend OLAF's powers and mandate.
The proposal concerns the relations with the EPPO, which will be a Union body set up on the basis of an EU Regulation. As a consequence, addressing the cooperation between OLAF and the EPPO requires action at Union level.
The amendments intended to better frame references to national law in OLAF's legal framework (in the context of on-the-spot checks and inspections and admissibility of OLAF reports) and the assistance provided by the Member States (in particular to provide OLAF with access to bank data) are necessary to ensure the effective and more coherent conduct of investigations of OLAF throughout the Union. This is required for OLAF to use its investigative tools effectively in all Member States in order to protect a European interest (the Union’s financial interests), while ensuring appropriate procedural safeguards for economic operators subject to OLAF investigations. These objectives require action at EU level.
Proportionality
The proposed changes are limited to what is necessary in order to attain the proposed objectives, and are therefore compliant with the principle of proportionality.
The amendments related to the EPPO are the consequence of the adoption of Regulation 2017/1939. They are limited to what is necessary to adapt the functioning of OLAF to reflect the principles of the relationship between the EPPO and OLAF laid down in that Regulation.
In addition, certain limited aspects of the Regulation are addressed where practice has revealed shortcomings in the existing system. Although the conclusions of the evaluation were wide-ranging, amendments are only proposed where changes are essential in the short term to ensure the effectiveness of OLAF investigations. The concrete amendments do not go beyond what is necessary to achieve this objective and balance the various legal interests concerned. Provisions on the conduct of on-the-spot checks are modified only to the extent necessary to ensure that OLAF can use this investigative tool effectively across the Member States. These amendments do not impact the application of national law in the situations where it remains relevant, i.e. where national authorities are called on to assist OLAF in accordance with their national procedural rules. This principle also applies as regards the new provision on access to bank information: while it was necessary to clarify in the Regulation that national competent authorities should assist OLAF to access such information which is essential to uncover many types of fraud, they will do so in accordance with their national laws.
Choice of the instrument
Regulation No 883/2013 needs to be amended through the same type of instrument.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER
Contents
ANDIMPACTASSESSMENTS
Evaluation of Regulation No 883/2013
On 2 October 2017, the Commission adopted its Report on the Evaluation of the application of Regulation No 883/2013. It was accompanied by an opinion of OLAF's Supervisory Committee.
The evaluation concluded that the Regulation allowed OLAF to deliver concrete results in the protection of the EU budget. It also unveiled a number of shortcomings that negatively impact the effectiveness of OLAF investigations. These findings relate to a wide range of areas relating to the application of the Regulation. Those that are addressed in the proposal, and which are considered essential in the short term to strengthen the framework for OLAF investigations, are summarised below.
As regards the conduct of investigations, OLAF's investigative powers stem from various acts of Union law, including the Regulation. In various instances these acts make the application of those powers subject also to conditions of national law, notably as regards on-the-spot checks and inspections of economic operators and digital forensic operations conducted in the territory of the Member States. The evaluation showed that the extent to which Regulation No 883/2013 makes national law applicable is not completely clear. Different interpretations of the relevant provisions, and differences in national law, lead to a fragmentation in the exercise of OLAF's investigative powers and even hinder OLAF’s ability to conduct its investigations effectively in all Member States.
The evaluation also suggested that the need for and possibility of better access to bank account information under appropriate conditions, which could be central to uncovering many cases of fraud or irregularity, should be assessed. In the area of VAT, it showed that OLAF’s mandate should be clarified and strengthened.
The evaluation also identified certain instances in the cooperation with national authorities where it was difficult for OLAF to obtain the necessary assistance, while recognising that the anti-fraud coordination services introduced by Regulation No 883/2013 were a very positive development in that regard.
As regards the follow-up to investigations, the most important factor affecting the follow-up to OLAF recommendations identified by the evaluation relates to the rules on the admissibility of OLAF-collected evidence in national judicial proceedings. The Regulation provides that OLAF reports constitute admissible evidence in the same way and under the same conditions as administrative reports drawn up by national administrative inspectors. The evaluation suggested that in some Member States this rule does not sufficiently ensure the effectiveness of OLAF’s activities.
The Regulation also mandates OLAF to provide the Member States with assistance to coordinate their action for the protection of the Union's financial interests. This is a key element of OLAF’s mandate to support cross-border cooperation among the Member States. However, the Regulation does not contain detailed provisions on the modalities of coordination.
Finally, the evaluation identified a number of provisions in the Regulation which could benefit from clarification.
Stakeholder consultation
Regulation No 883/2013 regulates the conduct of OLAF investigations and cooperation mechanisms with institutional partners. The groups of stakeholders that it impacts are well-defined, for the most part within the Union institutional framework and relevant Member State authorities. The public at large cannot be considered as directly impacted by the provisions of the Regulation, or responsible for their application, or possessing specific evidence that is needed for the revision. Therefore, an open public consultation was not carried out.
The roadmap for the initiative stayed open for 4 weeks to public feedback; no feedback was received.
A targeted consultation of relevant groups of stakeholders was conducted:
– National authorities (anti-fraud coordination services, judicial, enforcement and
managing authorities) were consulted in the framework of a survey. All Member States were targeted, with dissemination of the survey via the anti-fraud coordination services, and 44 responses from 21 different Member States were received;
– Union institutions, bodies, offices and agencies were consulted in the framework of a
survey, to which 28 responses were received;
– Academics and defence lawyers expressed their views in a dedicated workshop.
The vast majority of stakeholders consulted agreed to the possible amendment of Regulation No 883/2013 in the light of the future creation of the EPPO, in order to allow OLAF and the EPPO to cooperate closely, and each of them to exercise effectively their mandate. There is a large consensus that clear rules are necessary, in order to avoid overlapping, as well as to ensure maximum complementarity and avoid gaps.
Stakeholders consulted agreed to different extents to the need to amend Regulation No 883/2013 in order to improve the effectiveness of OLAF's investigations. The need to improve OLAF's ability to conduct investigations in an effective and coherent manner across Member States was supported by a majority of responses. A majority also supported the
clarification and strengthening of the Regulation as regards VAT and OLAF's access to bank data. Respondents expressed divergent views on matters such as the admissibility in national proceedings of OLAF's reports, or the role and mandate of anti-fraud coordination services.
On 16 February 2018, COREPER endorsed an ‘outcome of proceedings on the Commission's report on the evaluation of the application of Regulation (EU, Euratom) No 883/2013’. It calls on the Commission to focus primarily on the topics that are necessary to enable OLAF to cooperate smoothly with the EPPO without, however, extending the competencies and powers of OLAF. In addition, it lists a number of topics that certain delegations would wish to see addressed in the proposal.
The revision of Regulation No 883/2013 was also discussed by the Justice Ministers of the Member States, first at their informal meeting in Sofia on 26 January 2018, then in the Justice and Home Affairs Council in Brussels on 8-9 March 2018. The Council emphasised that the cooperation between the EPPO and OLAF is essential and should be based on a clear division of competences and responsibilities, complementarity, avoiding competition or duplication of work. Regulation No 883/2013 should reflect the provisions in the EPPO Regulation on the relationship between the two offices.
Opinion No 2/2017 of the Supervisory Committee of OLAF on the application of Regulation No 883/2013 was also considered in the preparation of the proposal. The Opinion highlights the amended Regulation should provide for uniform grounds for all the investigations in order to avoid fragmentation and interpretation difficulties, and to strengthen clarity of law and procedural guarantees. It addresses the need to access information related to bank accounts and money transfers, and to investigate intra-EU VAT fraud. The Opinion also calls for judicial review and strengthening the procedural guarantees and their control, particularly in the context of the establishment of the EPPO and in order to improve admissibility of OLAF evidence in judicial proceedings. It emphasises the need for clarity in the future interaction between OLAF and the EPPO. Finally, the Opinion calls for clarification of the Supervisory Committee's role and mandate, and its access to information related to OLAF's investigative function.
In addition, the wide consultation of stakeholders carried out for the evaluation of the application of Regulation No 883/2013 supports the analytical work accompanying the proposal.
Collection and use of expertise
The external study conducted for the evaluation of Regulation No 883/2013 and several independent studies were used in support of the preparation of the proposal. Experts were consulted in a dedicated workshop.
Impact assessment
An impact assessment was not considered necessary. The proposal is accompanied by an analytical staff working document which is based on an extensive use of the evaluation report, external studies and the results of the consultations mentioned above.
Fundamental rights
Fundamental rights are protected in the framework of OLAF investigations including by specific provisions on procedural guarantees in Regulation No 883/2013 and in Regulation No 2185/1996 applicable to on-the-spot checks and inspections. In addition, OLAF must generally ensure that its activities respect the rights enshrined in the Charter of Fundamental Rights of the European Union ('the Charter').
A new Article 9 on procedural guarantees was introduced when Regulation No 883/2013 was adopted. Article 9 restates a range of principles that are essential in OLAF investigations, including, notably, the duty of OLAF to seek evidence for and against the person concerned, the right to an objective and impartial investigation, the presumption of innocence and the right to avoid self-incrimination. Article 9 further contains specific provisions on, inter alia,
interviewed/heard,
for persons concerned, the right to comment on the facts of the case once the investigation has been completed and before conclusions are drawn up, and the duty of OLAF that the final investigation report makes reference to any such comments,
• for witnesses, if evidence emerges that they may be a person concerned, the right that an interview is ended and that the interviewee is informed of her/his ri ghts,
• the right of persons interviewed to use any of the official languages of the institutions of the Union (officials or other servants of the Union may be required to use an official language of the institutions of which they have a thorough knowledge) and to approve or make comments on the record of the interview; for persons concerned, these are complemented by the right to be
assisted by a person of the individual’s choice and to receive a copy of the
record of the interview,
• the right of officials, other servants, members of an Union institution or body, head of office or agency, or staff members to be informed when an investigation reveals they may be a person concerned by an investigation, and the right to comment where OLAF informs national authorities before opening or during an internal investigation.
The new Article 9 on procedural guarantees is complemented by provisions on:
• the need for written authorisation by the Director-General for the conduct of investigative tasks, indicating the subject matter, purpose and legal basis for the investigation, and the powers ste mming from those bases (Article 7 (2)),
• a legality check (Article 17(7)) for the review of legality (including respect of procedural guarantees and fundamental rights), proportionality and necessity of the investigative activities, prior to their conduct, and the overall review of final reports,
• provisions on confidentiality and data protection (Article 10),
• various internal and external controls (possibility for any person affected by an investigation to address a complaint to OLAF, and controls conducted by the Supervisory Committee, the European Data Protection Supervisor, the European Om buds m an, the European Court of Auditors an d European Court of Justice, in accordance with their respective mandates).
This set of provisions and controls sets a standard for the safeguard of procedural guarantees and fundamental rights of persons involved in OLAF investigations that is appropriate and in line with the fact that OLAF conducts administrative investigations using administrative powers. Moreover, OLAF investigations are completed by a report and recommendations that are followed up, where appropriate, by other authorities. Where such other authorities prepare
a decision affecting the legal position of the persons concerned, further procedural rights and guarantees apply in accordance with the applicable legal framework.
The legal framework on procedural guarantees in OLAF investigations, as it resulted from Regulation No 883/2013, was generally recognised in the evaluation as a positive improvement for the protection of the rights of individuals subject to an OLAF investigation. In this regard, the evaluation has not shown a need to revise the existing provisions.
The amendments proposed do not have an impact on the overall balance between OLAF's investigative powers and the procedural rights of the persons investigated. OLAF’s powers will not change with this initiative, although they will be clarified in several instances. The amendments proposed to the conduct of on-the-spot checks and inspections maintain the current powers, and would frame more clearly the application of national law, thereby providing also more clarity on the applicable safeguards and rights of the operators concerned.
Moreover, the proposal clarifies that the procedural guarantees provided for in Regulation No 883/2013, as well as in other Union acts, apply to these on-the-spot checks and inspections. This includes the rights against self-incrimination, to be assisted by a person of choice, and to use a language of the Member State where the check is conducted. Further guarantees will apply when the assistance of national authorities is necessary for the carrying out of the check if it is resisted by an economic operator, or in other cases in which the Member States’ authorities assist OLAF in the framework of a check. In such cases, national law will apply, including procedural guarantees, in the context of the Member States' general duty to ensure that OLAF's action is effective.
The cooperation between OLAF and the EPPO, as well as new provisions on assistance from national authorities to access bank data and on cooperation with Eurofisc, may require the exchange of personal data. OLAF shall apply the provisions of Regulation No 45/2001 to such transfers. In order to reflect current practice, as well as to reinforce the data protection, the proposal modifies Article 10 i, which allowed OLAF to appoint a data protection officer, in order to make this an obligation.
4. BUDGETARYIMPLICATIONS
The amendments proposed to the Regulation do not have implications for the Union budget.
5. OTHERELEMENTS
Implementation plans and monitoring, evaluation and reporting arrangements
In accordance with the Better Regulation Guidelines, there is no need to prepare an implementation plan for a Regulation.
In the context of the setting up of the EPPO and defining the detailed modalities of operational cooperation, working arrangements will have to be concluded between OLAF and the EPPO.
Detailed explanation of the specific provisions of the proposal
I. Relations with the EPPO
General principles
Articles 1(4a) and 12g set out the general principles of the relationship between OLAF and the EPPO. They mirror Article 101 of Regulation 2017/1939 that requires a close and complementary relationship so that all available means are used to protect the Union budget.
Working arrangements are provided for as they will be necessary to specify the concrete modalities of cooperation and exchange of information.
Reporting to the EPPO
Article 12c contains an obligation on OLAF to report to the EPPO without undue delay any conduct on which the EPPO may exercise its competence, as required by Article 24 of Regulation 2017/1939. The report should contain the minimum information of Article 24 of Regulation 2017/1939. OLAF is enabled to conduct a preliminary evaluation of incoming information, to ensure that the information supplied to the EPPO is sufficiently substantiated and contains the necessary elements. Article 12c also reflects the provision in Regulation 2017/1939 that OLAF may be asked by Union institutions, bodies, offices and agencies to perform this verification on their behalf.
Non-duplication of investigations, support to the EPPO and complementary investigations
Article 12d reflects Article 101(2) of Regulation 2017/1939, which provides that OLAF shall not open a parallel investigation into the same facts which are the object of an investigation by the EPPO. It also establishes a mechanism of consultation to ascertain whether the EPPO is conducting an investigation.
Article 12e contains the specific procedural rules applicable to requests from the EPPO to OLAF to support or complement the EPPO's activity in accordance with Article 101(3) of Regulation 2017/1939.
Article 12f provides that, in duly justified cases, with a view to allowing the adoption of precautionary measures or of financial, disciplinary or administrative action, OLAF may open or continue an administrative investigation to complement a criminal investigation being carried out by the EPPO. This is in keeping with Regulation 2017/1939, which specifies that all available means should be used to protect the Union's financial interests (Article 101(1)) and that the non-duplication rule should not prejudice the power of OLAF to start an administrative investigation on its own initiative, in close consultation with the EPPO (recital 103). This provision enables administrative investigations which are not aimed at ascertaining possible elements of a criminal offence, but which are focused at ensuring recovery, or at preparing the ground for administrative or disciplinary action. Instances where administrative action can usefully complement the EPPO's activity would include e.g. administrative recovery when there is a risk of time-barring or the amounts at stake are very high, or the need to avoid further expenditure in risk situations through administrative measures.
In order to protect the effectiveness of the EPPO investigations and prosecutions, Article 12f enables the EPPO to object to the opening or continuation of an investigation by OLAF, or to the performance of certain acts of this investigation. This possibility is consistent with Article 101(3) of Regulation 2017/1939, as in such cases the absence of an objection from the EPPO is equivalent, in functional terms, to a request made pursuant to that provision.
Other provisions
Several adaptations of existing provisions of Regulation No 883/2013 are proposed in order to reflect the establishment of the EPPO (Articles 8(1) and i, 9 i, 16, 17(5) and (8)).
II. Enhancing the effectiveness of OLAF's investigative function
On-the-spot checks and inspections and assistance of national authorities
The proposal aims at removing ambiguities and obstacles revealed by the evaluation by better framing the references to national law, to ensure a more effective and coherent application of
OLAF's power to conduct on-the-spot-checks and inspections, without however changing the way the Regulation operates in relation to the Member States.
The amendment to Article 3 clarifies that the conduct by OLAF of on-the-spot checks and inspections, where economic operators submit to a check by OLAF, is subject to Union law alone (Regulations No 883/2013 and No 2185/1996). This includes the procedural guarantees of Regulation No 883/2013 and of Regulation No 2185/1996, whose application in the context of on-the-spot checks and inspections is clarified in Article 3(5). When the economic operator does not cooperate and OLAF needs to rely on the national authorities, or receives their assistance for other reasons, Articles 3(7) and 7(3) maintain the principle that such assistance will be provided in compliance with national law. Article 3(3) provides for the duty of economic operators to cooperate with OLAF in the course of its investigations.
These amendments to Article 3, regarding the applicable law to the conduct of on-the-spot checks and inspections, are clarifications in line with the interpretation of Regulation No 883/2013 given by the General Court in its recent ruling of 3 May 2018 in case T-48/16, Sigma Orionis SA v European Commission1. The Court ruled that, in the absence of opposition by the economic operator, on-the-spot checks and inspections are conducted by OLAF on the basis of Regulation No 883/2013 and Regulation No 2185/1996, and of the written authorisation of the Director-General of OLAF. Union law supersedes national law when a matter is regulated by Regulations No 883/2013 or No 2185/1996. Moreover, it finds that the provisions (in Regulation No 2185/1996) concerning the possible opposition of the economic operator concerned to a check do not entail the existence of a right to oppose but simply provide for the consequence that the check may be imposed on them through the assistance of national authorities (on the basis of national law). As regards procedural guarantees, the Court recalls that OLAF must respect fundamental rights as laid down in Union law, in particular in the Charter.
The amendments to Articles 8(2) and (3) and 12(3) are intended to ensure the effectiveness of OLAF's action, in cases where the Regulation makes reference to the application of national law.
Bank account information
Article 7(3) is amended to clarify Member States' duty to assist OLAF by transmitting bank account information. In order to increase the effectiveness of OLAF investigations, this should include the information on bank account holders contained in the national centralised bank account registries or data retrieval systems in the Member States (5th Anti-Money laundering Directive, agreed by the Union co-legislators in December 2017). In those cases where the modus operandi of the fraud investigated requires such knowledge, information on financial transactions should as well be transmitted. The principle already enshrined in the Regulation that such assistance will be provided in compliance with national law will be maintained.
VAT
Article 3(1) is clarified to ensure that on-the-spot checks and inspections are available to OLAF in all areas of its mandate. In addition, to allow for an efficient cooperation with Member States, the amendment to Article 12(5) enables OLAF to exchange information with the Eurofisc network established by Regulation No 904/2010.
Admissibility of OLAF-collected evidence
The amendment to Article 11(2) maintains the principle of equivalence to the rules applicable to administrative reports drawn up by national administrative inspectors in the context of criminal proceedings. It introduces a principle of admissibility of OLAF reports - subject only to a verification of authenticity – in judicial proceedings of a non-criminal nature before national courts and in administrative proceedings in the Member States. Finally, the provision provides for the admissibility of the reports in administrative and judicial proceedings at Union level. This will improve the effective use of the results of OLAF investigations without interfering, however, with the assessment of such evidence.
Anti-fraud coordination services
Article 12a further specifies the role of the anti-fraud coordination services in the Member States in order to ensure that OLAF is provided with the assistance it needs for its investigations to be effective. Their organisation and powers remain the competence of each Member State. The anti-fraud coordination services may support OLAF in external and internal investigations and in coordination activities, as well as cooperate among themselves.
Coordination activities
Article 12b introduces a new provision specifying the coordination activities that OLAF can conduct.
III. Clarification and simplification
The amendment to Article 4(2) adapts the conduct of digital forensic operations to technological progress.
The amendments to Articles 3(9), 11(3) and 12(1) increase coherence of the rules on internal and external investigations.
The amendment to Article 7(6) clarifies that Union institutions, bodies, offices and agencies may consult OLAF at any time with a view to deciding on precautionary measures.