Commission takes steps to make EU anti-fraud office more efficient

In reaction to the Eurostat scandal, the Commission has just published a Communication on the overhaul of the rules of procedure of OLAF, the Commission’s anti-fraud office.

Adopted by the Commission on 9 February 2004, the new rules of procedure of OLAF, the Commission’s anti-fraud unit, aim at improving the protection of the EU institutions against fraud and financial mismanagement.

The proposal envisages better flows of information between OLAF and the institutions. OLAF would be able to inform the Commission about ongoing investigations. This means that the Commission would be able to sideline suspected officials to prevent further fraud.

Those working for the EU institutions who are suspected of committing fraud, would also be informed when they are under investigation, unless informing them would damage the enquiry. Where an investigation is closed without any follow-up, OLAF would have to inform those involved.

The proposal also tightens up the rules for opening, closing and prolonging investigations. The Director of OLAF would have to decide whether or not to start proceedings within two months of receiving a request to open an investigation. OLAF would then have twelve months to conclude an inquiry. The investigation period could be extended for up to six months provided that a clear explanation was given to OLAF’s supervisory committee (made up of five outside persons independent of the Community Institutions).

 

Background

Set up in 1999, OLAF, the Commission's anti-fraud unit, is responsible for conducting administrative investigations on fraud and corruption involving EU funds. Enquiries can be opened on individuals or organisations inside or outside the EU institutions.

Despite OLAF's existence, a new fraud scandal (involving top officials working for the EU's statistical agency, Eurostat) broke last autumn. The allegation was that these officials had set up secret bank accounts to embezzle funds from contracts between the office and private companies.

Addressing MEPs in the Parliament's Budgetary Control Committee on 18 November 2003, Commission President Romani Prodi said he would launch reforms at OLAF in the wake of the Eurostat scandal.

 

Timeline

The Commission's proposal must now receive the backing of the European Parliament and of the Council of Ministers before being implemented.

 

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