European Anti-Fraud Office
Outline of the Community (European Union) legislation about European Anti-Fraud Office
Topics
These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.
Fight against fraud > Anti-fraud offices
European Anti-Fraud Office (OLAF)
Acts
Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 establishing the European Anti-Fraud Office (OLAF).
Operating modalities:
Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF).
Council Regulation (EURATOM) No 1074/1999 of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF).
Interinstitutional Agreement of 25 May 1999 between the European Parliament, the Council of the European Union and the Commission of the European Communities concerning internal investigations by the European Anti-Fraud Office (OLAF).
Summary
This Decision establishes the European Anti-Fraud Office (OLAF), which is part of the European Commission with a special independent status for conducting anti-fraud investigations. Two Regulations and an Interinstitutional Agreement stipulate how it is to operate.
OLAF’s competences
The Commission Decision establishes OLAF and sets out its powers, which are to:
- carry out external administrative investigations as part of the fight against fraud, corruption and any other illegal activity that adversely affects the Community’s financial interests and for the purpose of combating fraud involving any other act or activity in breach of Community provisions;
- carry out internal administrative investigations for the purposes of:
- combating fraud, corruption and any other illegal activity that adversely affects the Community’s financial interests,
- investigating serious situations relating to the discharge of professional duties that may constitute a failure to comply with the obligations of officials and servants of the Communities liable to result in disciplinary or, where appropriate, criminal proceedings, or a failure to comply with the analogous obligations of the members of the institutions, bodies, offices or agencies or their staff who are not subject to the Staff Regulations of Officials of the European Communities and the Conditions of Employment of Other Servants of the European Communities,
- carry out investigative assignments in other areas at the request of Community institutions and bodies;
- help strengthen cooperation with the Member States in the field of fraud prevention;
- develop strategies for the fight against fraud (preparing legislative and regulatory initiatives in the areas of activity of the Office);
- set in motion any other operational activity in the fight against fraud (developing infrastructure, collecting and analysing information, providing technical support);
- maintain direct contact with the national law enforcement and judicial authorities;
- represent the Commission in the field of fraud prevention.
OLAF’s external investigative powers are mainly those that were conferred upon the Commission under Regulations (EC, Euratom) Nos 2988/95 (the European Communities’ financial interests) and 2185/96 (on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests). Furthermore, OLAF works on the basis of Regulation (EC) 515/97 on mutual administrative assistance.
How OLAF goes about its investigations
The two Regulations on investigations by OLAF, one applying to the EC and the other to Euratom, restate the Office’s main functions and define the practical arrangements for carrying out the administrative investigations for which it is responsible.
The checks and verifications OLAF carries out externally (in the Member States and in certain non-member countries with which the Community has cooperation agreements) and internally (inside the institutions and bodies established by or on the basis of the Treaties) do not affect the powers of the Member States in the area of criminal prosecution.
The Director of OLAF launches and directs investigations on his own initiative or at the request of a Member State with an interest in the matter (in the case of external investigations) or of the institution or body concerned (in the case of internal investigations).
As part of its external investigations, OLAF carries out the on-the-spot checks for which the Commission is responsible under Regulations (EC, Euratom) Nos 2988/95 and 2185/96.
For its internal investigations, OLAF has the right of immediate and unannounced access to any information held by the Community institutions, bodies, offices and agencies. It may also ask anyone concerned for oral information, and carry out on-the-spot checks on economic operators.
Where the Office discovers, in the course of an internal investigation, that a member, manager, official or other servant may be personally involved, it informs the institution, body, office or agency to which that person belongs, unless divulging such information is incompatible with the need to maintain complete strict confidentiality for the purposes of the investigation or a possible national investigation.
At the request of OLAF or on their own initiative, the Member States, institutions, bodies, offices and agencies are required to provide the Office with any document or information they hold that relates to an investigation under way.
All information passed on to the Office will be properly protected.
On completion of an investigation, OLAF draws up a report including recommendations as to the action to be taken. The report is sent to the Member States in the case of external investigations and to the institutions, bodies, offices and agencies in the case of internal investigations.
Information may also be sent to the competent authorities in the Member States and to the institutions, bodies, offices and agencies concerned, while an investigation is still under way (the Office is in direct contact with the national law enforcement and judicial authorities).
OLAF’s operational independence is protected by a Supervisory Committee consisting of five independent outsiders appointed by common agreement of the European Parliament, the Council and the Commission. Furthermore, if the Director considers that a measure taken by the Commission calls his independence in question, he is entitled to bring an action against it before the Court of Justice.
Any member of the staff of a Community institution, body, office or agency who feels that his interests are adversely affected in the course of an internal investigation may submit a complaint to the Director of OLAF or bring an action before the Court of Justice.
Interinstitutional Agreement between the Parliament, the Council and the Commission
The object of the Interinstitutional Agreement between the European Parliament , the Council and the Commission is to guarantee that internal investigations can be carried out under equivalent conditions in the three institutions and in all the other Community bodies, offices and agencies, including the European Investment Bank (EIB) and the European Central Bank (ECB).
To bring this about, the three institutions have agreed to adopt an internal decision based on the standard model annexed to the Agreement, and to call on the other institutions, bodies, offices and agencies to accede to the Agreement.
The model decision requires the Secretary-General, departments and all members of staff of the institution, body, office or agency concerned to cooperate fully with OLAF’s agents and to supply all useful information.
Where there is a presumption of fraud, corruption or any other illegal activity detrimental to the Communities’ interests:
- any member who becomes aware of such evidence must without delay inform his Head of Service or Director-General or, if he considers it useful, his Secretary-General or OLAF directly;
- the Secretary-General, the Directors-General and the Heads of Service or managers must transmit to OLAF without delay any evidence from which the existence of irregularities may be presumed;
- members of the institutions, bodies, offices or agencies must inform the President or, where appropriate, OLAF directly.
Where it becomes clear during an internal investigation that a member, manager, official or other servant is involved, the person concerned is informed rapidly. He/she will be called upon to give his/her views on the matters concerning him/her. The invitation may be deferred where necessary for the purposes of the investigation or any subsequent national judicial inquiries.
OLAF delivers an opinion on any request for a waiver of immunity from the police or judicial authorities in a Member State, if the request relates to a manager, official or other servant of an institution, body, office or agency. If a request concerns a member of an institution or body, the Office is informed.
Background
The EC Treaty provides an explicit legal basis for operations by the Community and the Member States to combat fraud and other unlawful activities that are damaging to the Community’s financial interests (Article 280). The entry into force of the Amsterdam Treaty has given the Community much more substantial means for combating fraud and stamping out economic and financial crime.
The Commission’s Task Force for the Coordination of Fraud Prevention was thus replaced by the European Anti-Fraud Office (OLAF), which, in addition to carrying out investigations, is responsible for devising and preparing legislation for the protection of the Community’s financial interests and the fight against fraud. OLAF enjoys greater independence than its predecessor in conducting investigations.
References
| Act |
Entry into force |
Deadline for transposition in the Member States |
Official Journal |
| Decision 1999/352/EC, CECA, Euratom |
28.4.1999
|
–
|
OJ L 136 of 31.5.1999
|
| Regulation (EC) No 1073/1999 |
1.6.1999
|
–
|
OJ L 136 of 31.5.1999
|
| Regulation (Euratom) No 1074/1999 |
1.6.1999
|
–
|
OJ L 136 of 31.5.1999
|
| Interinstitutional Agreement |
1.6.1999
|
–
|
OJ L 136 of 31.5.1999
|
Related Acts
Proposal for a European Parliament and Council Regulation amending Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) [COM(2006) 244 final – Not published in the Official Journal].
In substance, the proposal has the following main objectives:
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Governance, cooperation between the institutions and the Supervisory Committee. The Commission sees a need for political governance regarding priorities related to investigative activities. It proposes regular meetings between the Supervisory Committee and the other European institutions as part of a structured dialogue, without interfering in the investigative activities.
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Guarantee of the rights of persons implicated. The Commission proposes including in the Regulation a detailed provision on the procedural guarantees to be respected in the conduct of internal and external investigations.
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Improved monitoring of investigations. Monitoring that ensures the specific procedures are followed should be improved and the possibility of requesting an opinion should be introduced. A review adviser is provided for to fulfil such a role.
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Improving the information flow. With this proposal, the Commission intends to improve the flow of information between OLAF and European bodies and institutions, between OLAF and the Member States, as well as between OLAF and whistleblowers.
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Strengthening OLAF’s operational efficiency. The Commission is proposing measures that will allow OLAF to concentrate on its priority actions. For example, the opening and closing of investigations need clarification.
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Improving the effectiveness of OLAF’s investigations. The Commission proposes to clarify OLAF’s powers of investigation in the context of external investigations involving economic operators receiving Community funds on the basis of contracts, agreements or grant awards (direct expenditure).
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Term of office of the Director-General. A non-renewable term of office should be introduced for the OLAF Director-General in order to strengthen independence.
Codecision procedure (COD/2006/0084)
Activity reports:
Report of the European Anti-Fraud Office – Eighth Activity Reportfor the period 1 January 2007 to 31 December 2007 [Not published in the Official Journal].
This eighth activity report substantiates the principal trends of previous years. The volume and quality of information received by OLAF has steadily increased in the past years, confirming the public’s confidence in the Office. In the course of 2007, OLAF opened more cases than in 2006. Similarly, the number of cases closed increased as well, as opposed to previous years that have been characterised by a declining number of closed cases. Furthermore, the amount of “own investigations” OLAF carries out has exceeded the amount of investigations in which it merely provides assistance to national authorities. The average duration of cases increased slightly in 2007, due to the complexity of the cases the Office faces nowadays and to the necessity of involving Member States or outside partners in the investigations. OLAF has actively continued its cooperation with Member States, EU bodies in charge of police and judicial cooperation and international partners in the fight against fraud.
Report of the European Anti-Fraud Office – Seventh Activity Reportfor the period 1 January 2006 to 31 December 2006 [Not published in the Official Journal].
This report follows on from the sixth activity report. In it, the Commission assesses the irregularities committed and presents the most important measures taken in 2006 by the Member States and by itself to improve fraud prevention and the fight against fraud. The report also describes in detail the way OLAF decides to open an anti-fraud investigation and explains how cases are managed.
Report of the European Anti-Fraud Office – Sixth Activity Reportfor the period 1 July 2004 to 31 December 2005 [Not published in the Official Journal].
Evaluation report: Commission Report of 2 April 2003 – Evaluation of the activities of the European Anti-Fraud Office (OLAF) [COM(2003) 154 final – Official Journal C 76 of 25.3.2004].
Decisions by the institutions:
Council Decision 1999/394/EC of 25 May 1999 concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Community’s interests [Official Journal L 149 of 16.6.1999].
As laid down in the Interinstitutional Agreement, this Decision states that the Council is to cooperate with the Office and keep it informed; it also requires the Security Office to assist OLAF’s staff in their work. In return, OLAF is required to inform anyone implicated in one of its investigations.
Commission Decision 1999/396/EC of 2 June 1999 concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Community’s interests [Official Journal L 149 of 16.6.1999].
As laid down in the Interinstitutional Agreement, this Decision states that the Commission is to cooperate with the Office and keep it informed; it also requires the Security Office to assist OLAF’s staff in their work. In return, OLAF is required to inform anyone implicated in one of its investigations.
Decision of the European Parliament of 18 November 1999 concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Community’s interests [European Parliament Rules of Procedure, Annex XI – Official Journal L 44 of 15.2.2005].
As laid down in the Interinstitutional Agreement, this Decision states that the European Parliament is to cooperate with the Office and keep it informed. The Decision obliges Parliament’s Security Office to assist OLAF staff in their work. It also obliges OLAF to inform anyone who is implicated in one of its investigations.
Decision 1999/726/EC of the European Central Bank of 7 October 1999 on fraud prevention – [Official Journal L 291 of 12.11.1999].
The Decision seeks to provide adequate protection against fraud and other illegal activities at the European Central Bank (ECB), while maintaining the distribution and balance of responsibilities between the ECB and the European institutions.
Accordingly, the Decision sets up an anti-fraud committee to be responsible for monitoring the independence and functioning of the ECB Directorate for Internal Audit. The anti-fraud committee is also responsible for relations with the Supervisory Committee of OLAF. These relations are governed by the principles established by an ECB decision.
Decision of the Court of Justice of 26 October 1999 concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Community’s interests [Not published in the Official Journal].
In accordance with the provisions of the Regulations setting up OLAF, this Decision requires the Court to cooperate with the Office and to keep it informed. It also lays down the procedures to be followed by OLAF staff when carrying out internal investigations. In line with the principle of confidentiality, it denies OLAF access to documents held in connection with legal proceedings that are in progress or have been terminated.
Judgment of the Court of Justice of 10 July 2003 setting aside Decision 1999/726/EC of the European Central Bank on fraud prevention and protection of the Communities’ financial interests (Case C-11/00).