The European Anti-Fraud Office (OLAF) 27 June 2014

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1 The European Anti-Fraud Office (OLAF) 27 June 2014

2 Institutional History 1988 creation of predecessor UCLAF 1999 creation of OLAF, based in Brussels mandate of F.H. Brüner, the first OLAF Director General 2011 mandate of G. Kessler, OLAF Director General OLAF is the French acronym of the Office Européen de Lutte Anti-Fraude 27 MARKED June 2014 NOT PROTECTIVELY MARKED 2

3 OLAF Mission to protect the financial interests of the European Union (EU) by investigating fraud, corruption and any other illegal activities; to detect and investigate serious matters relating to the discharge of professional duties by members and staff of the EU institutions and bodies that could result in disciplinary or criminal proceedings; to support the EU institutions, in particular the European Commission in the development and implementation of anti-fraud legislation and policies. 27 MARKED June 2014 NOT PROTECTIVELY MARKED 3

4 Status 1. INVESTIGATIONS: fully independent Director-General of OLAF: appointed by the European Commission after consultations with the European Parliament and the Council for a seven-year term, not renewable; may neither seek nor accept instructions from any government or any institution, body, office or agency; entitled to bring an action against the Commission before the European Court of Justice. Supervisory Committee: made up of 5 outside independent experts who ensure/reinforce the Office's independence. 2. POLICY: administratively part of the European Commission 27 MARKED June 2014 NOT PROTECTIVELY MARKED 4

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6 OLAF's Human Resources STAFF 2013: 440 staff members (2012: 435) Many with prior professional experience as: Magistrates or prosecutors Customs officers Police officers Tax inspectors Financial controllers Auditors Intelligence experts. 27 MARKED June

7 OLAF Investigates under administrative law Seeks evidence for and against the suspect (à charge et à décharge) Under a range of legal bases (Regulation 883/2013, Regulation 2185/1996, Customs law, Mutual Assistance agreements) Produces recommendations to national judiciaries and EU disciplinary authorities. They prosecute, we don t! 7

8 What is fraud affecting the European Communities' financial interests? Any intentional act or omission relating to: in respect of expenditure: the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities, the misapplication of such funds for purposes other than those for which they were originally granted; In respect of revenue: the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the illegal diminution of the resources of the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities, misapplication of a legally obtained benefit, with the same effect. non-disclosure of information in violation of a specific obligation, with the same effect. 8

9 Examples of fraud and Embezzled construction aid for bridges and power stations Fiddling in public contract processes Non-payment of import levies on bicycles, televisions, energysaving lamps, sugar Tax evasion caused by cigarette smuggling and contraband goods Financing for fruit juice that is never produced, trees that are never planted, fruit that never exist Corruption inside the EU institutions, bodies and agencies Importing goods via third countries in order to avoid taxes 9

10 Consequences for the European citizen Waste of public money Reduction of EU purchasing power EU businesses are harmed by illegal imports European projects fall into disrepute Less EU support for genuinely deserving projects 10

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12 Selection of cases - criteria OLAF s competency (financial and other interests of the EU) Information is sufficient (reliability of the source, credibility of the allegation) Information falls within OLAF s Investigative Policy Priorities: Proportionality (expected results vs resources; likelihood of recovery/prosecution ) Efficient use of investigative resources (workload, priorities, expertise ) Subsidiarity/added value (OLAF s sole competence ) Special Policy Objectives Financial impact 12

13 Investigative tools legality check Legality check during the investigation Interviews with persons concerned Inspection of premises On-the-spot checks Forensic operations Checks and inspections under sectoral rules Missions in third countries 13

14 Intelligence capability Forensic acquisition Open source intelligence s Data mining Text mining Relationships 27 MARKED June 2014 NOT PROTECTIVELY MARKED 14

15 Can OLAF punish perpetrators? OLAF has no judicial power OLAF may request EU and national authorities to cooperate OLAF can only make recommendations following its investigations 15

16 Outcome of investigations OLAF investigations lead to recommendations: Financial: OLAF and the European Commission can decide to ask for a recovery of the misused funds Judicial: OLAF will send its report to the relevant national authorities recommending legal action Disciplinary: the case is referred to the authority having disciplinary powers in the relevant EU institution. The European Commission operates a zero-tolerance policy Administrative: OLAF can recommend changes to procedures (and to the EWS) to prevent fraud being repeated Authorities of Member States shall inform the Office in due time of the actions taken on the basis of the information transmitted to them by OLAF (Article 12.3 of Regulation n 883/2013) 16

17 Cooperation with national partners in Member States Regular meetings and contacts with national control bodies like: AFCOS (Anti-Fraud Coordination Services) in the Member States and Candidate Countries Attorney General s and other Public Prosecutor s Offices Anti-Corruption Commissions Specialised fraud squads in the police Auditors General s Offices National Customs Authorities 17

18 Cooperation with national partners in non-eu countries A growing number of national control bodies (such as General State Inspectorates, Anti-Corruption Commissions, Public Prosecutor s Offices etc.) which: assist OLAF in carrying out inspections and on-the-spot checks in non-eu countries share information and expertise sign Administrative Cooperation Arrangements in order to facilitate practical aspects of the cooperation 18

19 Cooperation with other European bodies and international organisations Europol Eurojust International Organisations and Financial Institutions UN WCO World Bank WHO Interpol OECD 19

20 Cooperation with national and international partners Define together the needs and solutions Training Technical assistance Investigate in joint teams Provide all the assistance required to OLAF teams or vice versa 20

21 Thank you OLAF website: 27 MARKED June 2014 NOT PROTECTIVELY MARKED 21