Who is speaking?

1. Who is speaking? Marco Pecoraro Case & Board Management Advisor A Tel. 0032 2 2951350 e-mail: Marco.Pecoraro@ec.europa.eu

2. Contents • What OLAF is • What OLAF does • Case of connected investigation • Case of joint investigation

3. What is OLAF Birth and background : • Operational since 1 June 1999 • Successor to the Task Force for the Coordination of the Fight against Fraud (UCLAF) in the Commission Secretariat-General, set up in 1988 Its legal bases : • Articles 274 and 280 of the EC Treaty • Decision 1999/352/EC, ECSC, 28 April 1999 • Parliament and Council Regulation (EC) No 1073/1999, 25 May 1999 • Council Regulation (Euratom) No 1074/1999, 25 May 1999

4. Its mission • Protect the European Union’s financial interests and, through them, the European taxpayer’s interests • Combat fraud and other illegal activities

5. How the mission is accomplished • Internal administrative investigations • External administrative investigations • Coordination • Assistance • Other tasks

6. OLAF’s Organisation chart

7. OLAF’s structure • Investigations & Operations I • Investigations & Operations II • Operational Support • General Affairs

8. Horizontal structures • Support for candidates countries: Provides support to Acceding and Candidate countries to establish an effective AFCOS (Anti Fraud Co-ordinating Service). • Judicial and Legal Advice : the Unit consists of judicial advisers and similar experts in judicial proceedings and is responsible for providing judicial assistance and follow-up.

9. The main areas in which investigators are active Directorate A • Internal investigations, direct expenditure and external aid Directorate B • Operations in the areas of structural actions, agriculture and customs (including cigarettes and VAT).

10. Internal investigations Intended: to investigate serious facts linked to the performance of professional activities which may constitute a breach of obligations by officials and servants of the Communities

11. Internal investigations The legal framework • Parliament and Council Regulation (CE) No1073/1999 of 25 May 1999lays down the rules governing internal investigations into cases of fraud, corruption and all other illegal activities detrimental to Community interests.

12. Internal investigations The Office has • No judicial powers but conducts only administrative investigations • Right of immediate and unannounced access to any information held by the institutions, bodies, offices and agencies, and to their premises. • Right to inspect the accounts of the institutions, bodies, offices and agencies.

13. Internal investigations The Office can • Request oral information from members of the institutions and bodies, from managers of offices and agencies and from the staff of the institutions, bodies, offices and agencies. • Carry out on-the-spot inspections at the premises of economic operators concerned, in order to obtain access to information relating to possible irregularities which such operators might hold.

14. External investigations Sectors • Customs • Agriculture • Structural funds • Direct expenditure & External Aid

15. Customs investigations: the powers(Regulation (EC) 515/97 of 13 March 1997) • Assistance on request • Spontaneous assistance • Cooperation with the Commission

16. Investigation powers: Reg. 2185/96 • WHEN: • for the detection of serious or transnational irregularities • where, for the detection of irregularities, the situation in a Member State requires on-the-spot checks and inspections to be strengthened in a particular case in order to improve the effectiveness of the protection of financial interests and to ensure an equivalent level of protection within the Community, or • at the request of the Member State concerned.

17. Investigation powers: Reg. 2185/96 • WHO: Commission officials • WHOM:on economic operators to whom Community administrative measures and penalties pursuant to Article 7 of Regulation (EC, Euratom) No 2988/95 may be applied, where there are reasons to think that irregularities have been committed. • Where strictly necessary in order to establish whether an irregularity exists, the Commission may carry out on‑the‑spot checks and inspections on other economic operators concerned;

18. Investigation powers: Reg. 2185/96 • HOW: • Previous verification that no other check is under way • Notification to Member State • Possible participation of Member State • MS rules of procedure applicable • Resistance • Report

19. Agriculture: Investigation powersArticle 37 of Regulation 1290/2005 To conduct on-the-spot inspections with a view to verifying in particular: a. compliance of administrative practices with Community rules b. the existence of the requisite supporting documents and their correlation with the operations financed by the EAGF or the EAFRD c. the terms on which the operations financed by the EAGF or the EAFRD have been undertaken and checked. Commission inspectors have access to the books and all other documents relating to expenditure financed by CAP

20. Structural Actions: Investigation powers Art. 38 of Council Regulation (EC) No 1260/1999 of 21 June 1999 Commission officials or servants may, in accordance with arrangements agreed with the Member State in the framework of cooperation described in paragraph 3, carry out on-the-spot checks, including sample checks, on the operations financed by the Funds and on management and control systems with a minimum of one working day's notice. The Commission shall give notice to the Member State concerned with a view to obtaining all the assistance necessary. Officials or servants of the Member State concerned may take part in such checks.

21. Direct expenditure: legal basis • Research: art. 18 and 20 of Regulation 2321/2002 refer to Regulation 2185/96 • Environment: art. 9 of regulation 1655/2000 • Education: Leonardo da Vinci Article 6 of the Commission decision adopting the provisions concerning the responsibilities of the Commission and the States etc..)

22. External aid: legal basis • External aid: Cotonou agreement with ACP countries, Art. 8 Regulation 2666/2000 referring to Regulation 2185/96, as regards Albania, Bosnia and Herzegovina, Croatia, the Federal Republic of Yugoslavia and the Former Yugoslav Republic of Macedonia

23. External aid: legal basis • Pre-accession: Article 18 of Regulation 1085/2006 refers to Regulation 2185/96 • Neighborhood policy: Article 20 of Regulation 1638/2006 refers to regulation 2185/96

24. External aidPre Accession The old legal framework • Article 9(2) and Annex III of Regulation 1267/1999 (ISPA) • Article 11(3) and Annex of Regulation 1266/1999 (Phare/ISPA/Sapard)

25. Direct expenditure: the eternal problem of finding a partner The AFCOS: based on Article 280 of the Treaty and Chapter 28 of Accession negotiations (Financial control)

26. PATTERNS • Independent investigations • Connected investigations • Joint investigations

27. 1. Intelligence • Audit by Deloitte & Touche • Analysis of working papers • Serious suspicions of fraud (Judgment of the European Court of Justice of 10th July 2003 in Case C-11/00)

28. 2. Assessment • Establishment • Board procedure • Opening • Work plan

29. 3. Investigation • On-the spot check or interviews ? • A trip through Germany • The outcome • The Interim report

30. 4. AFCOS • The report is sent to AFCOS and DG EAC • AFCOS Investigation • AFCOS Report

31. 5. Judicial Authorities & Recovery • Prosecution • Recovery by EAC & Agency • Judicial & Financial follow-up

32. Joint on-the-spot check with Romanian Judicial authorities • How the information was received and processed • The contacts with the Romanian prosecutors • The check

33. Joint on-the-spot check with Romanian AFCOS • The initial information • The meeting with AFCOS • The check

34. The message • Mutual trust • Flexibility • OLAF does not necessarily take the lead

35. What we have told • What OLAF is • What OLAF does • Case of connected investigation • Case of joint investigation

36. Thank you for your attention Marco Pecoraro Case & Board Management Advisor A Tel. 0032 2 2951350 e-mail: Marco.Pecoraro@ec.europa.eu