Anti-Fraud Commissioner Algirdas Semeta expressed hope that the reform of the European Anti-Fraud Office (OLAF) could be concluded by the end of 2011 as he presented a reflection paper, on 12 July, at the European Parliament’s Committee on Budgetary Control (CONT). MEPs voiced concerns about the Council’s position in the matter, the appointment of the new director-general, the role of the supervisory committee and cooperation with Europol and Eurojust. The Lithuanian commissioner’s paper, while insisting on striking the right balance between control and independence and improving efficiency, remained vague on some points.

Rapporteur Ingeborg Graessle (EPP, Germany) expressed satisfaction with the paper’s broad orientation but fears the Belgian EU Presidency, just as the previous one, has no intention of giving the reform project a boost. Semeta plans to discuss the paper in the Council working group before the end of September. He also offered to present it in the Ecofin.

Semeta, who asked both institutions for feedback before the end of October, then intends to present an amended proposal, which he hopes the Commission will be able to adopt before the end of the year. The ultimate aim is to conclude the legislative process of the reform of OLAF by the end of 2011.

“We have an obligation to ensure that EU taxpayers’ money is properly protected and that we take all possible measures to tackle fraud. These issues are of particular importance during times of economic difficulty,” said Semeta.

OLAF came under fire after the temporary appointment of Nicholas Ilett as director-general following the death, on 9 January, of German Franz-Hermann Brüner. This move was seen by part of CONT as an “illegal” procedure (see Europolitics3931). Since then, calls have been forthcoming to appoint a new director-general. Semeta assured the EP committee that the procedure was going according to schedule. On 20 September, short-listed candidates will be interviewed, he said.

Graessle demanded that the Parliament have a “real choice” in the matter. The Lithuanian commissioner guaranteed the EP it would be fully involved in this process: it will receive the list of potential candidates and will be able to question them.

One point of critical importance to guarantee full independence of the anti-fraud office is its supervisory committee. Zigmantas Balcytis (S&D, Lithuania) wants increased powers to be extended to this committee. The reflection paper recommends that the supervisory committee be involved in monitoring the length of investigations but its future role still remains to be properly defined.

With regard to improving efficiency, the paper also identifies the need for an increased exchange of information and cooperation with member states and agencies, such as Europol and Eurojust - a point Balcytis insisted upon. Such an approach may improve the number of OLAF cases that end up in court. As Graessle pointed out, this proportion currently stands at only 7%.

The issue of the creation of a European Public Prosecutor’s Office (EPPO), as established by the Lisbon Treaty, was raised during the hearing. Graessle and Semeta concurred that this issue was not a priority. The focus should now be on improving OLAF. Semeta did, however, add that preparatory work for the EPPO needed to be started now and that he was working with Justice Commissioner Viviane Reding on this.

Background

After strong pressure from the European Parliament, OLAF was created in 1999 in order to combat any fraud affecting the sound financial management of the budget with greater powers than its predecessor, the Anti-Fraud Coordination Unit (UCLAF). The creation of OLAF happened amid corruption scandals, which led to the resignation of the Santer Commission.

The purpose of this reflection paper is to identify convergent and divergent points in the Council and EP’s positions on the Commission’s initial reform proposal, presented in 2006, which were synthesised in a 2007 Council working document and a 2008 Parliament resolution.