Brussels, 22/10/2001 (Agence Europe) - The Director General of the European Anti-Fraud Office (OLAF), Franz-Hermann Brüner, has unveiled OLAF's report on its activities from 1 June 2000 to 31 May 2001. Despite recruitment problems and the current staff shortages, the priority when it comes to processing cases that have been launched is clearly given to internal investigations, adding that it was vital for its response to suspected internal corruption be fast, in-depth and fair. OLAF feels that the disciplinary procedures for internal investigations clearly need to be reformed and that work must continue on external investigations (441 cases). The report concludes that various changes in practice and attitude were implemented at OLAF this year (setting up its own legal framework with an operations manual, a case management and monitoring system and an internal team of magistrates) which should help raise confidence in OLAF's ability to meet its responsibilities and raise the level of awareness in the Community that the EU's financial interests are vitally important and have to be adequately protected, according to the Report's conclusions.
OLAF reports that 36 internal investigations were launched in the 2000/2001 year, 8 of them concerning institutions or bodies other than the Commission and its departments. 9 investigations led to a report being compiled (concerning the Commission, the Economic and Social Committee, the Translation Service of the EU organs and the European Parliament), while 8 investigation reports resulted in a decision being transmitted to the national judicial authorities. In general, signals the report, these are complex cases of fraud carried out by well-organised individuals, isolated individuals or individuals behaving in a manner that can constitute a failure to meet their professional obligations. OLAF says the cases bear witness to a diverse range of behaviour (siphoning off funds, producing false documentation, manipulating bids, supplying information that could carry a legal penalty, or secret activities) by officials or agents of the different institutions in question. The report mentions: 1) the "Stockholm Representation Office" case (alleged financial malpractice at the Commission Representation in Stockholm) for which the Commission started disciplinary proceedings on 28 June 2001); and 2) the "Tourism case/France" case (fraud detected in the field of tourism, reported by the Commission in December 1994, which gave rise to prison sentences of between one and four years and fines on the five main defendants. As the parties concerned have appealed, the Paris Court of Appeal will retry the case with the hearings scheduled of the end of 2001). OLAF signals that the other proceedings underway in the same case (particularly in Belgium) also commenced in 1994 and should come to judgement in the near future.
A breakdown of the different types of external investigation being carried out by OLAF:
Direct expenditure: "Although investigations in this area are recognised as important, the priority given to internal cases and to reorganising and overhauling procedures has for the moment necessarily reduced the available resources." Despite these constraints, the following cases were investigated: development and humanitarian aid (alleged fraud in ACP countries concerning financial aid granted under the Lomé Convention); enlargement (two cases in Romania in the area of public procurement, allegations of corruption in the management of PHARE funds in Slovakia); and internal policies (long-term funding of a non-profit making organisation that created de facto dependence).
Structural measures: OLAF was particularly vigilant regarding cases of transnational irregularities and recipients receiving Community funding from different sources (direct financing and Structural Funds).
Customs, external trade in agriculture and taxation: OLAF here concentrates on investigations being carried out in Italy, Belgium, France, Portugal and Spain concerning the import of bananas (false import licences for free circulation of bananas from South and Central America); fraud in the field of fisheries (canned tuna imported with the undue benefit of preferential treatment reserved for ACP countries, shrimp and squid imported with the undue benefit of preferential treatment, also in order to circumvent prohibitive health measures aimed at certain Indian producers, and salt cod imported from Iceland with the undue benefit of preferential arrangements); fraudulent textile imports (fraudulent use of certificates of origin for jeans); and VAT (coordination of investigations into precious metals).
Agriculture. OLAF paid special attention to inquiries in the flax sector in Spain and to presumed infringements in application of milk quotas.
Cigarettes. It is specified that the organisers of fraud make huge profits and that cigarette smuggling is often linked to other illegal activities such as VAT fraud, money laundering and the illegal narcotics trade.
During this exercise, the office has made considerable progress in recomposing its resources, mainly with regards staff, at the price of heavy procedures for the recruitment and redeployment of personnel. While part of the resources was reallocated to other Commission services, the staff increased by 70% without discontinuation of the service. Today there are 199 agents. A first reorganisation took place in September 2000 aimed at breaking the sometimes over-rigid framework of inquiry organisation and in order to set up a flexible and transparent operational structure. During a second stage, the office created an intelligence directorate and recruited judiciary advisers. The arrival of experts on the legal side is an essential asset for ensuring the follow-up of inquiries and for guaranteeing the correct application of procedures. The office also indicates that it has made good headway in clarifying its position in the institutional environment. The conditions for its administrative and budgetary autonomy are now clarified, in the same way as the conditions for the implementation of its functional independence and its relations with Community institutions, mainly from the point of view of mutual information obligations and rules of cooperation. All this effort, however, has not yet had results, stressed the report, specifying that the redeployment of staff and recruitment, mainly of magistrates, takes time.
Once adjustment of its structures and the renewal of its methods have been finalised, the office will then be able to define its priorities in an objective and transparent manner in the context of global operational policy. One of its ambitions is to form an "observatory of economic and financial crime", able to give extra value at Community level to the advantage of national authorities and institutions, naturally over and beyond its own capacity for operational initiative. The office, which has an efficient structure, will also contribute to the implementation of a policy for preventing corruption in order to contribute to the strengthening of the legitimacy and credibility of the institutions.
OLAF also published a progress report for its surveillance committee in which it confirms that the transition from UCLAF to OLAF is almost complete. The Committee considers that it will be able to turn more to questions of independence.