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Fraud

2. OLAF in action

Coordination

One of OLAF’s key roles is to ensure coordination between the different national investigation and judicial systems. The Office also helps train fraud specialists in Member States and candidate countries.

A coordination centre for joint customs operations in Brussels provides technical and logistical facilities for customs operations involving several Member States. The centre is accessible 24 hours a day, seven days a week. Information is exchanged through the Customs Information System (CIS), which allows customs, police, coastguards, agricultural and public health services to share sensitive data in a single database. The CIS complements the existing Anti-Fraud Information System (AFIS) through which hundreds of thousands of messages are exchanged each year. Towards the end of this decade, a third computerized information system will cover excise goods – tobacco, alcohol and mineral oils – to provide real-time information on where goods are moving between member states.

The powers of OLAF

The European Anti-Fraud Office was established by a Commission Decision. Two Regulations and an Inter-institutional Agreement stipulate how it is to operate.

Broadly speaking, the powers of OLAF are:

• to carry out external administrative investigations -in the Member States and certain non-member countries with which the Community has cooperation agreements- with the aim of combating fraud, corruption and other illegal activities which adversely affect the Community’s financial interests;
• to carry out internal administrative investigations -inside the European institutions- with the same purpose;
• to help strengthen cooperation with the Member States in the field of fraud prevention;
• to develop strategies for the fight against fraud (including preparing legislative and regulatory initiatives);
• maintain direct contacts with the police and judicial authorities;
• represent the Commission in the field of fraud prevention.

OLAF also has the obligation to protect all whistleblowers, witnesses and others who entrust their information about corruption or fraud to the Office, and to guarantee the confidentiality of its operations.

OLAF works under a Supervisory Committee consisting of five independent experts from outside the European Institutions appointed by a common agreement between the European Parliament, the Council and the Commission. These experts are mostly senior public lawyers with a high level of experience in prosecution and investigations. A new Committee took office in November 2005 for a three-year term.

While it has an individual independent status for the investigative function, OLAF is also part of the European Commission, under the responsibility of the Estonian Commissioner Siim Kallas, vice-president, in charge of Administrative Affairs, Audit and Anti-Fraud.

How does OLAF carry out its investigations?

Investigations can be launched either by OLAF’s director or at the request of a member state with vested interest (for external investigations) or of the institution concerned (for internal investigations).

During external investigations, OLAF can carry out on-the-spot checks. During internal investigations, the Office 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.

If so requested by OLAF, the Member States, institutions and bodies are required to provide it with any document or information they hold which relates to an investigation under way.

On completion of an investigation, or sometimes when it is still under way, the Office 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 institution concerned in the case of internal investigations.

Inter-institutional Agreement between the European Parliament, the Council and the Commission

The aim of the Inter-institutional 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 Communities bodies, offices and agencies, including the European Investment Bank (EIB) and the European Central Bank (ECB).

To this end, the three institutions have jointly agreed to require the Secretary-General, all departments and members of staff of the institution concerned to cooperate fully with the Office's agents and to supply all useful information. The three institutions also called on the other institutions, bodies, offices and agencies to join the Agreement.

International Agreements

OLAF has cooperation agreements with many countries ranging from the United States to Uzbekistan and from China to Chile; it also has close links with Europol, the European Police Office and Eurojust, the agency meant to improve coordination in the fight against serious crime.