1.1.

In the context of assessing initial information received by OLAF, Unit C4, ‘Operational Intelligence’, which supports the two Directorates in charge of Investigations and Operations, needs to be able quickly, accurately and discreetly to identify, particularly where allegations of conflicts of interest may arise, an alleged person. To do this, OLAF needs to have access to information contained in the Human Resources databases maintained by the Commission. In particular, OLAF requires access to data relating to individual employees and to their family status and connections, the home addresses and telephone numbers and dates of birth of the employees and their family members. This latter data is referred to as ‘family tree’ data.

1.2.

OLAF is anxious that, in accessing this information, the reputation of innocent individuals working in the Commission or other EU bodies is not harmed and that where allegations made are groundless that fact can be verified without disseminating the allegations made — sometimes, based on very flimsy grounds. Equally, where the allegations turn out to be well founded, OLAF is anxious that, at this preliminary stage, as few people as possible are alerted to the allegations, so that the person who may potentially be the subject of an investigation is not alerted prematurely.

1.3.

OLAF proposes, therefore for a limited number of staff in C4 to have direct, read-only, confidential ‘pull’ access to the family tree data, allowing them to see a limited set of data to be able to validate allegations prior to the opening of an investigation.

2.1.

Article 4(2) of Regulation (EC) No 1073/1999 provides that:

2.2.

This provision enables OLAF to have unrestricted access (providing that it complies with the requirements of paragraph 1 of Article 4 (1)) to data held by the Commission, including data relating to Commission personnel. The provision applies to OLAF internal investigations which are underway.

2.3.

The Secretariat-General is prepared to grant OLAF ‘push’ access to the family tree data, but not ‘pull’ access, as requested. The reason provided for refusal of pull access is data protection. As controller of the personal data, the Commission asserts that it must filter requests and provide only the personal data that it deems legitimate, necessary and proportional for OLAF to ask. This ‘filtering process’ appears to be applied only to requests made by OLAF, as other services within the Commission having a direct ‘pull’ access without the intervention of the controller.

2.4.

The Supervisory Committee is concerned that this limitation on OLAF’s direct, read-only confidential access to family tree data may prejudice its independence in relation to its investigatory function.

3.1.

The Supervisory Committee and members of the Secretariat have met with the staff of the Secretariat-General on two occasions, on the 25 November 2010 and 8 December 2010 and with the Secretary-General herself on the 15 December 2010 to discuss this issue. The Secretariat-General recognises that OLAF ‘has indeed the right to access any database it considers relevant for investigative purposes for the opening and throughout the duration of an investigation, even before the formal opening decision, when linked to a specific CMS case number’ but it maintains that OLAF cannot have direct ‘pull’ access.

3.2.

Since OLAF’s request for access to data is covered by the provisions of Article 7.2.2 of Regulation (EC) No 45/2001, OLAF and the Supervisory Committee have sought the views of the EDPS and, in consequence have had two meetings with Mr Hustinx, the EDPS, on 15 December 2010 and 25 March 2011.

4.1.

A requirement for compliance with Article 7.2 paragraph 2 of Regulation (EC) No 45/2001 (2) is the need to establish necessity for the transfer of the data from the Commission to OLAF.

4.2.

Necessity must be verified. If the type and amount of data accessed varies on each occasion, then the verification of necessity should take place ex ante for each individual access. If there are categories of similar limited access for the same purpose, which can be verified ex post by both sides, then it may be possible to cluster them together to verify necessity. This is part of the structure that should be developed between the data controller and the data recipient. The solution must address the question of necessity, and be verifiable. It must also include a strict purpose limitation.

4.3.

In the situation outlined above, OLAF is able to predefine the necessity of the transfer of the data because the necessity is always the same: identification of the individual(s) allegedly involved in a matter under assessment or investigation. As explained by Unit C.4, OLAF needs access to a limited number of data fields in the Commission data bases for the purpose of ensuring the proper identification of a Commission staff member allegedly involved in a fraud or irregularity. The data fields which OLAF will access for this purpose are:

(Other relevant data fields, such as Name, statute, ID No, organisational entity and dates of working for that entity are available to all Commission staff in Sysper 2).

4.4.

In cases where allegations of conflict of interest involving a family member are involved, OLAF will also need to access the ‘family tree’ data in order to verify the identification of the relatives who may be concerned, including partner and relatives in the ascending and/or descending line. The data fields in these cases would be:

Access will be made by one of a small group (three or four) of trained intelligence staff. Furthermore, OLAF keeps a careful log file of each instance of access to such data bases. It logs the following information:

4.5.

OLAF expects these records to be logged automatically by the CMS, later this year. These access logs are available for review by the controller, the Data Protection Officers, and the EDPS at any time.

4.6.

In such circumstances, where the purpose of the transfer is limited to the identity of individuals, and accurate log files are kept, the Supervisory Committee believes that the requirements of Article 7(2) are satisfied without having to ask the controller’s permission before each individual access.

5.1.

Article 7.2 of Regulation (EC) No 45/2001 appears to allow for a number of different scenarios. It could be read as creating a structured dialogue between the data controller and the data recipient, as both need to verify the necessity of the transfer.

5.2.

It appears that ‘pull’ access is not accorded on an automatic basis but it is granted on request within the Commission in other contexts. In the following instances, ‘pull’ access gave rise to problems, but in the last example below, it was accorded:

Indeed, ‘push’ access can also be unacceptable, if personal data is sent without verifying necessity.

5.3.

It does not appear, therefore, that there is any fundamental data protection bar in principle to allowing OLAF access to the data sought.

6.1.

The Supervisory Committee considers that the need for OLAF to have access on a ‘pull’ basis to personnel data held by the Commission to establish, prior to the opening of an investigation whether a person can be identified or eliminated, is essential to its work. To deny OLAF this access could threaten its independence in its investigatory function.

6.2.

The Supervisory Committee recommends a modification to the ‘Memorandum of understanding concerning a code of conduct in order to ensure a timely exchange of information between OLAF and the Commission with respect to OLAF internal investigations in the Commission’ (3). This provision could set out a protocol for access to Commission data at the selection phase, along the same lines as that provided for in Article 4.2 of Regulation (EC) No 1073/1999 for investigations which have been commenced.

6.3.

The Committee therefore suggests that a practical way forward is for negotiations to commence to find a solution between OLAF and the Commission. One practical suggestion would be for an external mediator to be appointed who has the trust and confidence of both OLAF and the Commission. An appropriate mediator could be someone such as a former high level official or Commissioner. The Supervisory Committee therefore recommends that agreement be sought as soon as possible with the Commission to appoint a suitable mediator to resolve this problem.

6.4.

The Supervisory Committee would hope and expect that agreement can be reached on this issue. The Supervisory Committee recommends that the reform of Regulation (EC) No 1073/1999 would provide an ideal and opportune moment to amend Article 4 to include access by OLAF to information held by the institutions prior to the opening of a case and also at any stage of an investigation.

1.

On 20 March 2011The Sunday Times newspaper published a press article entitled ‘An MEP claims to earn more than EUR 450 000 a year moonlighting for clients. He is one of three ready to take cash to help change EU laws’. The press article explained how reporters ‘posing as a lobbying firm’ offered cash for amendments to legislation to three Members of the European Parliament (MEPs) (up to EUR 100 000 per year in two cases) and ‘they went on to do so’ and amendments were tabled. Journalists reported meetings in the EP premises and outside, phone conversations, e-mails, correspondence and sending of invoices between them and some of the MEPs. Following the disclosure of this undercover investigation by The Sunday Times two of them resigned as MEPs by the next day and a third one was expelled from his group (1).

2.

On 22 March the European Anti-Fraud Office (OLAF) opened an internal investigation on the following legal basis: ‘Article 4 of Regulation (EC) No 1073/1999 in conjunction with European Parliament Decision concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Communities’ interests (Annex XII Rules of Procedure of the European Parliament).’

3.

On 15 April 2011 the Director-General of OLAF requested an opinion from the Supervisory Committee (SC) on OLAF’s powers to open and conduct internal investigations within the institutions and the limitation posed by the privileges and immunities of their Members, in particular in the case of MEPs to the right of immediate and unannounced access to any information held by the institutions and to their premises.

4.

Article 12 of Regulation (EC) No 1073/1999 provides that the Director-General of OLAF shall not take instructions from any institution in the performance of his duties with regard to the opening and carrying out internal investigations.

5.

OLAF is responsible for the initiation and conduct of administrative investigations within the institutions for the purpose of fighting fraud, corruption and any other illegal activity affecting the financial interests of the European Union.

It has powers to investigate to that end any serious matter relating to the discharge of professional duties such as to constitute a dereliction of the obligations of the officials liable to result in disciplinary or, as the case may be, criminal proceedings, or an equivalent failure to discharge obligations on the part of the members of institutions (2).

6.

The SC notes that the responsibility of OLAF concerning internal investigations within the institutions includes all activities relating to the need to safeguard Community interests against irregular conduct liable to give rise to administrative or criminal proceedings.

7.

These activities have been listed in detail in the European Parliament (EP) Decision concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Communities’ interests, based on recital 5 and on Article 4(1) of Regulation (EC) No 1073/1999.

Situations such as conflict of interest, the duty to behave with integrity as regards the acceptance of benefits, refraining from action or behaviour which might reflect adversely upon the member’s position or serious misconduct, fall within the scope of OLAF’s investigations (3).

8.

The SC takes the view that all these matters form part of the facts allegedly committed, and, as such, they fall within the scope of OLAF’s investigation powers as indicated in Rule 10 of the Rules of Procedure of the EP: ‘Internal investigations conducted by the European Anti-Fraud Office (OLAF)’.

9.

The SC considers that fraud, corruption and any illegal activities affecting the ‘financial interests of the European Union’ encompass those which even if not directly related to the budget of the Community, are capable of harming the financial interests of the Community in a broad sense by adversely affecting its assets (4).

10.

The SC agrees with the Advocate General’s opinion in the case referred to above, that ‘the source of the assets in question is not decisive (…); ensuring the proper use of all funds held by the institutions, bodies, offices or agencies of the Community must be regarded (…) as forming part of the financial interests of the Community and may thus be the subject of measures adopted on the basis of Article 280(4) EC’ (5).

11.

The SC recalls the Court of Justice rulings on this matter which considered that the expression ‘financial interests of the Community’ seems wider than the expression ‘items of revenue and expenditure of the Community’: ‘…the fact that a body, office or agency owes its existence to the EC Treaty suggests that it was intended to contribute towards the attainment of the European Community’s objectives and places it within the framework of the Community, so that the resources that it has at its disposal by virtue of the Treaty have by their nature a particular and direct financial interest for the Community’ (6).

12.

The SC underlines that the proper use of the funds that the EP has at its disposal in order to cover the exercise of the Parliamentary mandate: salary of its members, reimbursement of expenses (travel, telephone expenses...), payment of allowances, etc. is based on the compliance with the Financial Regulation and on the principle that those funds are reserved exclusively for the funding of activities linked to the exercise of a Member’s mandate  (7) and not to work for purposes determined by a private payment.

13.

Article 7.1 of Regulation (EC) No 1073/1999 provides that the institutions, bodies, offices and agencies shall forward to the Office without delay any information relating to possible cases of fraud or corruption or any other illegal activity.

14.

The SC stresses the fundamental duty to fully cooperate with OLAF, to supply information and to provide assistance in the practical conduct of investigations that all institutions and their members have. The unequivocal fulfilment of these duties allows OLAF to carry out investigations under equivalent conditions in all the Community institutions, bodies, offices and agencies (8). The lack of cooperation puts into question the credibility of the tools that the institutions adopted to fight against any kind of fraud, corruption, illegal activities or irregular conduct.

15.

The SC considers that the rules laid down in the Rules of Procedure of the EP comprising the measures needed to facilitate the smooth running of investigations conducted by OLAF shall be rigorously respected (9).

16.

The SC considers that it is premature to categorically deny OLAF’s powers to investigate the alleged facts at the initial stage of the investigation; especially in cases of alleged corruption and irregular behaviour, the complexity of which does not allow for verification of all illegal activities at the beginning of the investigation.

17.

The SC points out that those internal investigations can be conducted only if OLAF is guaranteed access to all premises of institutions, bodies, offices and agencies and to all information and documents held by them. This key power must be exercised in full independence by the Director-General of OLAF and the institutions’ security offices shall assist OLAF in its practical conduct (10).

18.

OLAF shall carry out administrative investigations within the institutions that shall be carried out subject to the rules of the Treaties, in particular the Protocol on Privileges and Immunities. OLAF shall have the right of immediate and unannounced access to any information held by the institutions, bodies, offices and agencies, and to their premises. It shall be empowered to inspect the accounts of the institutions, bodies, offices and agencies. OLAF may take a copy of and obtain extracts from any document or the contents of any data medium held by the institutions, bodies, offices and agencies and, if necessary, assume custody of such documents or data to ensure that there is no danger of their disappearing (11).

19.

The Protocol of Privileges and Immunities of the European Union contains several rules on privileges and immunities of the MEPs (Articles 7 to 9), in particular that MEPs shall not be subject to any form of inquiry, detention or legal proceedings in respect of opinions expressed or votes cast by them in the performance of their duties. However, immunity cannot be claimed when a member is found in the act of committing an offence.

20.

The SC points out that, on this matter, the Court of First Instance held that ‘the Protocol refers to the Members of Parliament only in a general fashion and contains no provision explicitly governing internal investigations in the Parliament (…). As the President of the Court of First Instance was able to observe in paragraph 107 of the order in Rothley and Others v Parliament, the risk cannot be excluded a priori that, in conducting an investigation, the Office [OLAF] might perform an act prejudicial to the immunity enjoyed by every Member of the Parliament. However, if that were to occur, any Member of the Parliament faced with such an act could, if he considered it damaging to him, avail himself of the judicial protection and the legal remedies provided for by the Treaty’ (12).

21.

The SC considers this to be a sensitive area where the position upheld by the Advocate General in Case C-167/02 is worth reading; ‘As regards the measures taken by OLAF during the course of an internal investigation, whilst it is difficult to pronounce in the abstract on the admissibility of future proceedings, it seems probable to me that, as the Court of First Instance held and as the other parties have suggested, Members of the Parliament who considered their rights to have been infringed would have various opportunities to bring judicial proceedings. The Commission points to a number of legal acts which might be challenged in that way: the decision of the Director of OLAF to open an internal investigation as required by the second paragraph of Article 5 of the Regulation; various measures taken by OLAF in the course of an investigation, including the decision to have access to an office, to seize documents or to request oral information; as well as the agreement, explicit or implicit, of the institution in question.

It appears to me, however, that the need for discreet and expeditious action in the detection of fraud renders some such risk unavoidable. It should, moreover, be noted that the contested measure contains provisions designed to minimise the danger. Thus, Article 5 of the model decision requires Members to be informed rapidly of their implication in an investigation, as long as that would not harm the investigation. That article also prevents Members from being named in OLAF’s conclusions without their first having been heard except in so far as national investigative procedures require the maintenance of absolute secrecy’ (13).

22.

The SC considers that OLAF should act with scrupulous respect of those rules and following a thorough assessment of the risk involved on each case and the proportionality of the measure to be taken.

23.

The SC recalls that the Court of Justice found that, in Case T-17/00, the provisions ‘relating to cooperation with OLAF or to supplying it with information are intended — whatever their exact scope may be — to impose obligations upon Members of the Parliament, so that it is in the first instance for Members, in any given case, either to act upon those obligations or not to comply with them if they are persuaded that it is open to them to do so without infringing Community law. If, in a specific case, one of the Members of the Parliament adopts that approach, any subsequent measures taken by the Parliament with regard to that Member and to his disadvantage will, in principle, be subject to judicial review’ (14).

As regards the various measures that OLAF could take when exercising its investigative powers, the Court of Justice bore in mind the risk that OLAF might perform an act prejudicial to the immunity enjoyed by every Member of the EP and recalled that the review of the legality of acts of the institutions has been entrusted to the Community Courts (15).

24.

The SC considers that the institutions, bodies, offices and agencies (which are not the ‘person concerned’ by an OLAF investigation) shall fully cooperate with OLAF and refrain from taking measures hindering OLAF’s investigation powers.

The SC believes that preventing OLAF from exercising this key investigative activity following an interpretation made by an institution, body, office and agency of OLAF’s mandate is a limitation of OLAF’s independent conduct of investigations.

25.

The SC recommends that OLAF follow a rigorous implementation of the rules of procedure and the existing jurisprudence in this area.

—

75 000 (2,8 %) of external staff

—

159 000 (4,8 %) other management expenditure (namely mission expenses)

—

587 000 (4,9 %) Buildings and related costs

—

36 000 (2,25 %) Financing anti-fraud measures

—

discontinuation of five or more contractual agent contracts,

—

termination of two interim staff contracts,

—

delay in the launching of the recruitment process for the replacement of Directors for Directorates B and C,

—

additional delays in the temporary agent reclassification exercise which concerns, for the most part, investigators from the operational units mainly in the highest grades.

—

The SC supports OLAF’s proposal for its draft budget 2012 which foresees no increase in administrative expenditure.

—

The SC strongly disagrees with additional savings in personnel costs which should be reconsidered by the Commission to avoid adverse impact on OLAF case work.

—

If additional savings are to take place anyway, the SC recommends that the Director-General of OLAF should be allowed to freely allocate the effects to any budget line he decides.

—

OLAF to develop its human resources strategy based on clear policy to be agreed by management.

—

All OLAF temporary agents to be regraded as appropriate.

—

Eight staff members to be reserved for the SC Secretariat in the draft budget 2012.

1.

2.

2.1.

2.2.

2.2.1.

2.2.2.

2.3.

2.3.1.

2.3.2.

2.3.3.

2.4.

2.4.1.

2.4.2.

2.4.3.

2.5.

3.

3.1.

3.2.

3.2.1.

3.2.2.

3.3.

4.

4.1.

4.1.1.

4.1.2.

4.2.

4.2.1.

4.2.2.

4.3.

1.

The Supervisory Committee (SC) welcomes the amended proposal for a Regulation of the European Parliament and the Council amending Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (Euratom) No 1074/1999. The Committee appreciates the efforts made by the European Commission to set in motion the reform of Regulation (EC) No 1073/1999 and the Commission’s intentions to reinforce the efficiency, effectiveness and accountability of OLAF, while preserving its independence in the field of investigations. However, the SC recommends that certain aspects of the reform would benefit from further clarification and some amendment.

2.

The SC has analysed both the proposals for the revised text prepared by the Commission (1) and amended by the Council (2) together with the European Parliament’s resolution (3). In addition, the SC has taken into account its own previous opinions on the reform of Regulation (EC) No 1073/1999 (4), together with the opinions of the European Court of Auditors (5) and of the European Data Protection Supervisor (6). This opinion follows the objectives set by the European Commission in its amended proposal of 17 March 2011.

3.

The SC notes that the term ‘administrative investigation’ as outlined in the current regulation (7) covers both investigations within the institutions and external investigations relating to economic operators. Experience has shown that this dichotomy has often proved artificial and confusing. Indeed, if an economic operator has enjoyed an unfair advantage, it may have been as a result of the actions of a person subject to the Staff Regulations. It is therefore necessary to clarify Article 1 of the new regulation, to indicate that OLAF was set up in order to conduct administrative investigations, these investigations being either internal, external or both. It should be noted that OLAF’s roles also include coordinating operations between the competent authorities of Member States (MS).

4.

The SC welcomes the effort made in Article 2 of the text to define certain concepts such as ‘administrative investigations’, ‘person concerned’ and ‘Staff Regulations’. Even were this exercise to be worthwhile, it remains limited to the extent that it should have defined the many other concepts relating to the fight against fraud such as ‘financial interest of the EU’ or ‘corruption’ contained in Regulation (EC) No 1073/1999. This exercise will be complete only when the legislator consolidates the texts of all the relevant EU anti-fraud legislation.

5.

The SC is disappointed to note that OLAF’s competence to conduct investigations has not been clearly defined, especially relating to investigations within the institutions, bodies, offices and agencies. The wording of Article 1 of the amended proposal excludes from OLAF’s competence cases which have no impact on the financial interests of the EU (8). However, the SC notes that other legal instruments that are still in force empower OLAF to conduct internal investigations on matters which go beyond the protection of the financial interests of the EU (9). Moreover, recent experience has shown that there is a need to have clear rules concerning investigations within the institutions of allegations of serious misconduct by persons not subject to the Staff Regulations, which may have no impact on the financial interests of the EU, but may result in disciplinary or criminal proceedings. Consolidation of the anti-fraud legislation might have avoided such inconsistencies or filled in the gaps of the texts currently in force. The SC believes that, in the absence of such consolidation, which it regrets, the definition of OLAF’s competence in the amended proposal needs further clarification.

6.

The SC therefore considers that the Director-General of OLAF (DG) should be empowered to bring an action before the Court of Justice if he considers that a measure taken by any institution (and not only by the Commission, as proposed) calls into question his independence or the independent conduct of his investigations. Similarly, he, or any OLAF staff member delegated by him should be empowered to intervene in cases, in connection with the conduct of OLAF’s investigations, brought before the national courts, as proposed in Article 12(a) of the EP resolution.

7.

The SC has always urged strongly that OLAF carry out investigations within the shortest timeframe possible. The SC notes that the resources available to OLAF are limited and this will remain the case during times of budget austerity. Institutions must nevertheless clearly demonstrate that even during such times, the fight against fraud remains a priority. OLAF must set realistic priorities in its investigation policy, focus its strength on investigative activities and the fight against fraud and assist MS in judicial follow-up. The reduction in the duration of investigations can only be achieved through greater involvement of management in controlling the investigations including careful planning of these investigations (10). The time taken to open investigations must also be strictly limited regardless of the information source (11).

8.

The SC considers that the amended proposal does not sufficiently take into account cases where national investigations are conducted in parallel with OLAF’s investigations. Where OLAF’s obligation to ask the person concerned to make his or her views known is deferred in order not to prejudice an investigation carried out by national authorities, OLAF cannot close its investigation as long as the national investigation is still open. The amended proposal should take this aspect into consideration, in order to allow OLAF to conduct its investigations ‘continuously’, as required by Article 6.

9.

The SC shall be informed of the reasons why OLAF has failed to complete an investigation within 12 months. This notification must be repeated every six months thereafter (12). Monitoring by the SC of the duration of investigations would be effective only if the amended proposal stipulates that the SC shall also be regularly informed of the measures envisaged to speed up the investigation (13) and the estimated time for its completion (14).

10.

The SC notes that the person entrusted with the review procedure shall give, at the request of a person concerned, an opinion regarding the duration of an investigation (15). This opinion should also be sent to the SC to enable the SC to monitor developments concerning the duration of investigations, in the light of the opinions and analysis reports regularly drawn up by the person entrusted with the review procedure (16). In this regard, the SC notes that the text of the amended proposal needs to be revised (17).

11.

The current regulation provides that where investigations reveal that a member, manager, official or other servant may be personally involved, the EU institution, body, office or agency to which he belongs shall be informed (18). The provision of such information may be deferred in cases requiring absolute secrecy for the purposes of the investigation or where the investigation falls within the competence of a national judicial authority. The SC considers it important to maintain these exceptions in the new regulation. Indeed, at the beginning of an investigation it is not always possible for OLAF to identify all persons involved and uncontrolled disclosure may be detrimental to the effectiveness of investigation and harmful to the institution concerned. The SC therefore strongly disagrees with the new wording of Article 4(6) second paragraph (19). Besides being vague, this provision deprives OLAF of any discretion and the ability to keep its investigation confidential, at least for some time. An unconditional obligation of this kind could undermine OLAF’s independence. The SC suggests that the decision to defer information could be taken every three months, via a reasoned, written decision which would be attached to the case file. The SC and the person entrusted with the review procedure should be informed. This would enable the person entrusted with the review procedure to act on his own initiative in the event of a serious problem, e.g. a potential violation of procedural rights in cases where the person concerned was not informed of the ongoing investigation.

12.

The amended proposal provides that OLAF shall, without delay, inform the institution, body, office or agency concerned of the investigation in progress where it appears that it might be appropriate to take precautionary administrative measures to protect the financial interests of the EU (20). The SC would accept this obligation where it is possible to defer the provision of this information, both in internal and external investigations. The SC therefore prefers the text adopted by the European Parliament.

13.

The institutions, bodies, offices and agencies shall inform OLAF of the follow-up given to the recommendations made in reports following an internal investigation (21). Moreover, the DG must inform the SC where these bodies have failed to act on the recommendations in OLAF’s report (22). The SC is disappointed to note that, in the past, OLAF has not made regular use of this opportunity. In the future this provision will be important in the framework of the exchange of views with the institutions as a means to overcome any difficulties.

14.

The SC remains concerned that OLAF does not have unrestricted access to staff databases held by the institutions. Despite the fact that Article 4(2) first paragraph of Regulation (EC) No 1073/1999 (which remains unchanged in the amended proposal) recognises clearly the right for OLAF to have immediate and unannounced access to any information held by the institutions, bodies, offices and agencies, in reality the institutions are reluctant to give OLAF rapid and discreet access to some categories of personal data, because of a very restrictive interpretation of Regulation (EC) No 45/2001 (23). In the SC’s view, such a position is a sign of mistrust vis-à-vis OLAF and could also undermine its investigative independence.

15.

The SC believes that allowing OLAF quickly and discreetly to verify facts without disseminating the allegations made would avoid any perceived risks. The new regulation should therefore include provisions allowing a fair balance between the need for OLAF to have access to information held by the institutions prior to the opening of a case and at any stage of an investigation and relevant data protection rules.

16.

Increased efficiency of OLAF’s operational activity requires better cooperation with MS. When monitoring the implementation of OLAF’s investigative function, the SC has noted that OLAF has often had difficulty in identifying the national competent authorities able to provide it with the assistance needed, for example when carrying out on-the-spot checks on the premises of economic operators. This difficulty is even more important in cases related to direct expenditure, where the institutions or agencies, but not the MS, manage EU funds. The amended proposals are intended to set up an anti-fraud coordination service, which will facilitate proper coordination between all competent authorities at national level and ensure an effective cooperation and information exchange with OLAF (24) or alternatively facilitate an effective cooperation and information exchange with OLAF (25). The new regulation should oblige each MS to identify quickly the relevant national competent authority to assist OLAF in investigations, especially those related to direct expenditures.

17.

In line with the ruling of the Court of First Instance of the European Union (Case T-48/05 Franchet and Byk), the SC has always verified the quality of transmissions by OLAF to judicial authorities of the MS. Without interfering in ongoing investigations, the SC has seen a steady improvement in the quality of these transmissions. The SC has also expressed concern about the assistance provided by OLAF to the national judicial authorities during criminal proceedings related to the protection of the financial interest of the EU which have been previously opened on their own initiative and the relatively disappointing outcomes. The SC believes that monitoring of judicial follow-up by the SC must remain a priority. It is important that the SC continues to receive copies of the transmissions to the judicial authorities of MS as it is currently done.

18.

OLAF may at any time forward information obtained in the course of external investigations to the competent authorities of the MS concerned (26) or has the obligation to forward to the judicial authorities of the MS concerned information obtained in the course of internal investigations concerning facts which require investigative proceedings within the jurisdiction of a national judicial authority (27). In the latter case, OLAF must first inform the institution concerned. Prior to transmission, the person concerned must have been allowed to comment on the facts alleged against him in accordance with Article 7a(4). However, it is possible to defer this requirement with the approval of the institution concerned. If the institution does not respond within one month, it shall be deemed to be accepted. The SC considers this provision to be very complex and to provide little protection for the person concerned. It would also be likely to have a negative effect on any national criminal investigation. The SC suggests that the procedure be entrusted to the person charged with the review procedure, who alone has full access to the case file and can appreciate the interests of all concerned. The proposal also does not address the problem where an institution refuses to approve the deferral of the right of the person concerned to make his or her views known.

19.

Where the report (28) drawn up after an internal investigation reveals the existence of facts which could give rise to criminal proceedings, OLAF has an obligation to transmit this information to the judicial authorities of the MS concerned, unless internal measures allowing for more appropriate follow-up are available in the light of the nature of the facts and the scale of the financial impact. The SC notes that, despite having its own specialists in criminal law, OLAF has no competence to act in the area of criminal law. Indeed, OLAF’s main task is to conduct ‘administrative investigations’, which should not affect a MS bringing criminal proceedings (29). The SC notes that the Commission’s intention was to clarify the de minimis policy and to allow OLAF to forward the case to the Investigation and Disciplinary Office of the Commission (IDOC) or to the institutions, bodies, office or agency concerned, instead of sending it to the competent national judicial authorities. However, IDOC or the institutions, bodies, office or agency concerned could also decide not to forward to these authorities the information received from OLAF. Were this to be the case, the MS would be deprived of any power to bring a criminal prosecution. The SC therefore strongly disagrees that there should be any exception in the regulation which could prevent OLAF’s notifying MS of facts which could give rise to domestic criminal proceedings.

20.

The SC is also disappointed to note that the obligation to inform the judicial authorities of the MS concerned, where the report drawn up reveals the existence of facts which could give rise to criminal proceedings, does not apply to external investigations. It is not clear if this possibility is provided for by Article 9(3). Therefore, further clarification of the text is required.

21.

When requested by OLAF, the competent authorities of the Member States must inform it regarding the action taken following transmission by OLAF of its investigation reports (30). The SC considers it important for OLAF to have a regular exchange of information on cases transmitted to MS, especially since not only does OLAF have an obligation to report to the SC on cases in which the competent authorities of the MS have failed to act upon OLAF’s recommendations (31), but, additionally, the exchange of views as established in Article 11a might refer to the relations between OLAF and the competent authorities of the MS. The SC therefore supports the EP proposal to put in place a regular reporting obligation for MS. Such an obligation would improve cooperation between OLAF and MS, without necessarily introducing cumbersome and formal procedures.

22.

Article 10a of the amended proposal (32) allows OLAF to agree to administrative arrangements with Eurojust, Europol, third countries and international organisations, aimed at facilitating their cooperation. The SC considers it important for OLAF to be able to agree to such arrangements, in order for it to better protect the financial interests of the EU. These arrangements would allow a reinforced cooperation, which would be to the benefit of all parties concerned.

23.

The SC emphasises that the amended proposal should maintain a balance between the protection of the rights of persons and the independent conduct of investigations. The SC has already expressed its concerns regarding the requirement for OLAF to obtain the prior agreement of the Secretary-General or the President of the institution to which the person concerned belongs, when deciding whether to defer the obligation to ask the person concerned to make his or her views known (33). The SC considers that this requirement could impair the operational independence of OLAF in the event of refusal or delay, as has occurred several times in the past, despite appearing to represent a guarantee of the rights of defence. The SC considers that the new regulation should contain provisions allowing for the avoidance of such situations in the future (see point 29 of this opinion). Indeed, the provision in the amended proposal stipulating that failure of the institution, body, office or agency to reply within one month shall be deemed to be agreement thereto (34), demonstrates that no progress has been made in this area. This is not sufficient, given the lack of any alternative in the event of refusal. The SC reiterates its wish to be informed systematically of all cases in which institutions, bodies, offices or agencies have refused to give their agreement to defer the obligation to ask the person concerned to make his or her views known.

24.

The SC notes that the Review Adviser proposed by the Commission in 2006 was replaced by a review procedure to be set up by the DG within OLAF. The SC is not convinced that this new procedure fully meets the objective of the amended proposal to further reinforce the procedural rights of persons concerned in OLAF’s investigations. Indeed, the review procedure does not allow a regular control of the legality of investigations, nor does it establish sufficient guarantees in order to ensure the independence of the person(s) entrusted with it. The SC therefore suggests that the new regulation should allow for both a regular internal control of the legality of investigations at precise stages of the investigation as well as a complaints mechanism or review procedure to be carried out by an independent person reporting to the SC.

25.

As the SC has already stated (35), ensuring the respect for fundamental rights and procedural guarantees of persons under investigation is first and foremost the responsibility of the Director-General of OLAF and of the management team. Therefore, it falls within the remit of the DG to put in place adequate internal controls and monitoring mechanisms.

26.

The SC considers that the amended proposal does not allow for the setting up of such a regular control for two reasons. First, the review procedure would be initiated only at the request of a person concerned in an investigation. The cases where it is necessary to preserve the confidentiality of the investigation (and where the person concerned would not even be aware of the existence of the investigation) would systematically escape this form of control. Second, the mechanism proposed by the Commission (but not accepted by the Council) of an internal body to be consulted by the DG at different stages of the investigation (upon the opening of an investigation, prior to closing an investigation and whenever he deems appropriate) (36) is not the appropriate forum to redress any potential violation of the rights of the person concerned, since its composition, mandate and role are not clearly defined.

27.

The SC therefore supports the idea of a regular review of the legality of OLAF’s investigations to be carried out by those within OLAF who are experts in legal and investigative procedures and are qualified to hold judicial office in a MS, prior to the opening and again prior to the closing of an investigation, as well as prior to any forwarding of information to the competent authorities in the MS concerned (37).

28.

The SC is aware of the difficulty of putting in place an independent control system to assess the legality of OLAF’s investigative acts. The SC takes note and agrees with the opinions of the Court of Auditors with regard to the lack of adequate guarantees of independence for the Review Adviser proposed by the Commission in 2006 (38) and for the person(s) entrusted with the review procedure as proposed in 2011 (39). The SC repeats its view that, within the general architecture governing OLAF, the SC is the only body able to meet this requirement. However, neither the current regulation nor the amended proposal have entrusted the SC with the power to analyse individual complaints. The SC’s role is rather to provide for systemic analysis. The SC considers therefore that there is a clear need to assign this task to an independent person.

29.

The SC has expressed previously its concerns regarding the creation of a Review Adviser as proposed by the Commission in 2006. However, the SC could agree with the creation of a review procedure or a complaints mechanism to be carried out by an independent person (i) if the mandate and the role of this person were more clearly defined in order not to overlap with the powers and responsibilities of the SC and (ii) if the guarantees of his or her independence were deemed to be adequate. In particular, the SC considers that this person should be able not only to analyse complaints against OLAF, but also to act on his/her own initiative by regularly ensuring the respect of procedural rights before information has been given to the person concerned in case of deferral of the obligation to ask the person concerned to make his or her views known and in cases transmitted to the national judicial authorities when the person concerned was not informed about the investigation. The SC also considers that the person entrusted with the review procedure should be informed of all decisions to defer the information of the person concerned and/or of the institution to which the person concerned belongs so as to be able to act on his/her own initiative. Indeed, it is particularly in these circumstances that his/her intervention might be important. This would make the intervention of the Secretary-General or of the President of the institution concerned unnecessary.

30.

He or she should have unannounced, automatic and permanent access to OLAF case files. New provisions could be inserted in the regulation in order to ensure the respect by this person of confidentiality of investigations and compliance with the rules of data protection. His/her opinions shall be sent to the DG. These opinions, if not binding, shall be followed by a reasoned reply from the DG in the event that he decides not to follow the recommendations made. The SC should systematically receive copies of the complaints and of the opinions of the person entrusted with their analysis. Moreover, in order to ensure the complete independence of this person, neither he nor she should be appointed by or be under the authority of the DG. Were this to be the case, the independence of such a person would be illusory were his or her evaluation and promotion to depend on the DG.

31.

The SC fully supports the idea of establishing clear rules of procedure aimed at reinforcing transparency and legal certainty. The SC favours the inclusion of these rules in a manual of procedures rather than a procedural code (40). Indeed, a procedural code would need a complex procedure both for its adoption as well as for any future amendments and would also need time for adoption and the involvement of all three institutions.

32.

The primary role of the SC is to reinforce OLAF’s independence, by regular monitoring of the implementation of the investigative function. This role implies (but is not limited to (41)) monitoring the functioning of exchange of information between OLAF and the institutions, bodies, offices and agencies and the competent authorities of the Member States on the one hand, and monitoring developments concerning the application of procedural guarantees and the duration of investigations, on the other. It also implies monitoring of the effectiveness of OLAF’s work and of the results of investigations.

33.

The SC welcomes the new task of monitoring the functioning of information exchange between OLAF and the institutions, bodies, offices and agencies and favours the Commission’s proposal, which would extend this task to the functioning of information exchange between OLAF and the competent authorities of the MS (42).

34.

The SC shall also monitor developments concerning the application of procedural guarantees and the duration of investigations. Therefore, the SC strongly disapproves of the new wording of Article 11(7)(b) (43). This modification ignores the rule established by the Franchet and Byk case, which recognised that the SC has a role to play with regard to the protection of the rights of the persons concerned by OLAF’s investigations. Indeed, the SC’s role in this field would be diminished, since the DG will no longer have the obligation to systematically inform the SC before forwarding information to the national judicial authorities, but only to ‘periodically’ inform it of cases in which information has already been forwarded to these authorities (44).

35.

As is the case under the current regulation, the SC will continue to monitor the results of investigations, on the basis of information supplied by the DG regarding cases in which the institution, body, agency or office concerned has failed to act upon the recommendations made by OLAF. The SC is disappointed to note that, in the Council’s proposal, this information does not include cases where the competent authorities of the Member States have failed to act (45). The SC considers it important to assess the reasons for such failure (for example, time barring) and thus detect any potential interference with OLAF’s independence and to make appropriate recommendations. The SC believes that there is a clear need for the monitoring of the results of OLAF’s investigations and is ideally placed to assume this task. The SC has serious doubts that the proposed exchange of views with the institutions should be the sole forum for discussions concerning the effectiveness of the work of OLAF with regard to investigations (46).

36.

The SC is disappointed to note that the increases in its responsibilities and the clarification of its role have not been matched with the appropriate support for both the SC and its Secretariat. The SC reiterates its concerns and remarks expressed in its previous Opinion No 3/2010 with regard to the SC’s resources (information transmitted by OLAF, SC’s access to data, SC’s Secretariat), which should be appropriate and adequate to enable it to fulfil its role and perform its functions in full independence.

37.

The SC shall perform its monitoring role on the basis of the information and documents sent to it by the DG and taking into account the opinions and analysis reports as drawn up by the person(s) entrusted with the review procedure (47).

38.

The SC notes that the provisions of Article 7b(5) are not consistent with those of Article 11(1)(b): although Article 11(1)(b) states that the SC shall ‘monitor developments concerning the application of procedural guarantees and the duration of investigations in the light of (…) the and analysis reports regularly drawn up by the person(s) entrusted with the review procedure’, Article 7b(5) mentions that this/these person(s) shall present the SC ‘with regular statistical and analytical reports’, and not the opinions issued following a request filed by a person concerned  (48). The obligation for this/these person(s) to send regular reports is not equivalent to the obligation to send each and every opinion to the SC, as should be the case.

39.

Moreover, the SC disagrees with the proposal whereby the SC would no longer receive any regular information concerning the cases transmitted to national judicial authorities, for the reasons stated above.

40.

The SC emphasises that its work, as an independent body, cannot and should not be based solely on information received from OLAF. The SC makes its own analysis using not only documents and information received from OLAF, but also any documentation the SC deems necessary for the purpose. The last sentence of Article 11(1) of the amended proposal has only partially taken into consideration the need for the SC to have access to data and information held by OLAF, as requested in its Opinion No 3/2010 (49). The SC considers that this provision is not sufficient to allow proper and adequate monitoring by the SC and thus the detection of potential interference with OLAF’s independence, since the SC’s access to information would be left to the discretion of the DG (50). The SC therefore needs permanent and unannounced access to all OLAF’s closed case files. In order not to interfere with the ongoing investigations, the SC should have access to open case files upon written request.

41.

Members of the SC are assisted in the performance of their duties by a Secretariat. Although provided by OLAF, the Secretariat shall work in complete independence under the chair of the SC and its members. In the opinion of the SC, independent functioning of its Secretariat (51) necessitates further guarantees provided by the text of the regulation itself: the Secretariat shall be adequately staffed; members of the Secretariat under the terms of the regulation shall be appointed by an Appointing Authority different from OLAF DG, at the suggestion of the SC; they shall be periodically evaluated solely by the SC (52); they shall act with loyalty and in full respect of the instructions received exclusively from the SC. As it is the case for the person entrusted with the review procedure, the SC considers that the requirement for the independence of its Secretariat — and consequently for the SC — is illusory if the staff of the Secretariat is appointed, administered and promoted by the service which it is in charge of monitoring.

42.

While the SC is content with the form of the recruitment procedure for the post of the Director-General which was followed after the death of the previous incumbent, it notes that the process took an inordinately long time and therefore recommends that a relatively short timeframe should be included in the Regulation for future appointments to this role.

43.

The SC is not convinced that the power of the DG to delegate the performance of his functions to one or more members of OLAF staff is without risk to the independent conduct of investigations. The SC notes that some of the functions which can be delegated are directly linked to the conduct of investigations (53). Therefore, the person(s) entrusted with these functions shall act in full independence, in the manner of the DG.

44.

It is important to ensure continuity in the independent conduct of OLAF’s investigations by creating the function of a Deputy Director-General to replace the Director-General were the latter to resign, retire, be on sick-leave or otherwise be unable to fulfil his obligations. The deputy should be chosen among the Directors with the consensus of all three institutions.

45.

The SC supports Article 12(6) of the amended proposal imposing an obligation on the DG to consult an internal body on the opening of an investigation or prior to the closing of an investigation and whenever he deems appropriate, but only to the extent that appropriate guarantees be added to the text in order to prevent any possible delay in the event of an emergency.

46.

The SC supports the concept of an exchange of views at political level (54) to discuss OLAF’s investigations policy providing the purpose is to support OLAF’s activities and it does not undermine its operational independence. The SC considers that the obligation for OLAF to take appropriate action whilst taking into account the opinions expressed in the exchange of views could undermine the independence of the DG. The DG could thus be put under pressure from the institutions, particularly regarding the establishment of the strategic priorities for OLAF’s investigative policies (55). Moreover, the SC strongly disapproves of the amendment made by the Council which it believes could seriously jeopardise OLAF’s independence, since it significantly changes the meaning of Article 11a(1) in the sense that the participation of the SC in this exchange of views would not be mandatory on every occasion (56).

A —

B —

(a)

(b)

C —

(a)

(b)

1.

The European Anti-Fraud Office (OLAF) conducts internal administrative investigations to determine whether fraud, corruption or any other illegal activity affecting the financial interests of the European Union have occurred. OLAF also investigates allegations of dereliction of the obligations of officials and other servants of the EU liable to result in disciplinary or criminal proceedings (1). If evidence is revealed which tends to show that such has occurred, OLAF refers the results of its investigations to the appropriate authorities for disciplinary, administrative, financial or, if necessary, judicial follow-up. Reports drawn up following an internal investigation and any useful related documents are sent to the institution, body, office or agency concerned (2).

2.

It has been OLAF’s practice, until recently, to forward only reports of internal investigations closed with follow-up. When internal investigations were closed without any further action taken, OLAF would inform the institution, body, office or agency concerned by sending a note (3) stating that the case had been closed without follow-up action being taken (4).

3.

The Supervisory Committee (SC) took note that OLAF decided to take into account a ‘request [from the European Commission] for also receiving all final case reports closed without follow-up’. In addition, OLAF decided to inform ‘the other institutions that a similar policy will apply to them unless otherwise requested’ (5).

4.

The SC understands that this transmission of final case reports drawn up following internal investigations closed without follow-up will henceforth be carried out automatically, at the end of each investigation and on a systematic basis. The SC therefore took the decision to assess this practice, with the express purpose of determining whether it could jeopardise OLAF’s investigative independence. The SC examined 17 internal cases closed without follow-up in which the final case reports were forwarded to the institutions or bodies concerned and assessed the legal basis for these transmissions, as well as the compliance of this practice with EU law.

5.

When examining the case files, the SC found two notes sent by the Secretariat-General of the European Commission to OLAF. The first note is drafted as follows: ‘Comme vous le savez et comme discuté lors de la dernière réunion du Clearing House, la Commission ne peut accepter que, depuis mai 2010, l’OLAF ne communique plus les rapports finaux d’enquêtes internes clôturées sans suite concernant ses services’ (6). The Secretariat-General indicates in this note that this transmission is foreseen by Article 9(4) of Regulation (EC) No 1073/1999. The second note (7) makes reference to the first one ‘par laquelle je [the Secretary General of the EC] rappelais l’obligation faite à l’OLAF par le Règlement (CE) no 1073/1999 de transmettre tous les rapports finaux des enquêtes internes, y compris celles clôturées sans suite’ (8).

6.

Following analysis of the cases mentioned above, the SC determined that:

7.

In a small number of the investigations examined OLAF has cited Article 9(4) of Regulation (EC) No 1073/1999 as the legal basis for the transmission. Furthermore, the SC notes the existence of a draft and unsigned Memorandum of Understanding concerning a code of conduct designed to ensure a timely exchange of information between OLAF and the Commission with respect to OLAF internal investigations in the Commission (11). The SC doubts that either Article 9(4) of Regulation (EC) No 1073/1999 or Article 7 of the Memorandum of Understanding represents a sufficient legal basis for the transmission, for the reasons stated below.

8.

OLAF does have a legal obligation to send the reports drawn up following an internal investigation and any useful related documents to the institution, body, office or agency concerned (12). However, on reading the first sentence of Article 9(4) in conjunction with its second sentence, which stipulates that ‘the institution, body, office or agency shall take such action, in particular disciplinary or legal, on the internal investigations, as the results of those investigations warrant’, the SC interprets this provision as concerning only investigations closed with follow-up. Indeed, in the SC’s view, the scope of this paragraph is such as to ensure that appropriate follow-up is given to OLAF’s investigations.

9.

This conclusion is reinforced by Article 1(3) of Annex IX to the Staff Regulations, specifying that, in cases where an investigation is closed without further action, the OLAF DG shall inform the official and his institution in writing (13). Article 5 of the Commission Decision of 2 June 1999 (14) also stipulates that when an investigation has been closed without any further action, the DG shall inform the person concerned in writing. For the SC, this information clearly refers to the results of the investigation and not to the transmission of the case report.

10.

The SC notes that the Memorandum of Understanding, whilst respected both by OLAF and the European Commission, is still in a draft version and, as far as the SC is aware, it has not yet been signed.

11.

The SC notes that while the draft Memorandum provides in its Article 7(1) that DG OLAF ‘will promptly forward all final reports concerning internal investigations and any useful related documents to the Commission’, it also foresees a different treatment for cases closed without follow-up. Article 7(2) clearly states that ‘whenever a case is closed without further action, OLAF will inform the Commission’. Again, the SC interprets this provision as requiring OLAF to inform the European Commission as to the results of the investigation and not to forward it the final reports.

12.

The SC considers that OLAF’s decision to send to the institutions, bodies, offices and agencies concerned all final reports drawn up following investigations closed without follow-up at the end of each investigation and on a systematic basis may breach both the requirement of confidentiality of investigations and data protection rules. Since their protection is the shared responsibility of DG OLAF and the SC (15), the SC is dismayed that this decision was taken by DG OLAF without any prior consultation of the SC in order to ascertain its opinion. Moreover, the SC is surprised that neither the OLAF Data Protection Officer nor the EDPS was informed of this decision.

13.

According to Article 8 of Regulation (EC) No 1073/1999, OLAF is subject to professional secrecy when transmitting information forwarded or obtained in the course of internal investigations. Transmission of information arising from OLAF’s investigations must respect two concurrent conditions: (i) the ‘need to know’ principle in relation to the recipient and (ii) the exact purpose of communicating the information (for example, ensuring follow-up of the investigation) (16).

14.

The SC interprets this provision in two ways (17): on the one hand, as sender of information forwarded or obtained in the course of internal investigations, OLAF has an obligation to assess the need to know of the recipient of its reports. In the SC’s view, transmission of final case reports cannot therefore be carried out automatically, at the end of each and every investigation closed without follow-up, and on a systematic basis. On the contrary, such transmission must take place on a case-by-case basis, following a duly reasoned request from the European Commission or other institution or body. In any case OLAF cannot disclose to the recipient the information which it intends to use in other ongoing internal and external investigations without jeopardising their successful outcome, as has been the case. On the other hand, as recipient of this information, the European Commission (or other institution or body) may not use it for purposes other than to prevent fraud, corruption or any other illegal activity. In the absence of any specific purpose relating to the prevention of fraud, corruption or any other illegal activity, as is the case for final case reports in investigations closed without follow-up, the transmission of all final reports in investigations closed without follow-up does not appear to be necessary.

15.

OLAF must respect the right to the protection of personal data which is protected by Article 8 of the Charter of Fundamental Rights of the EU, and is closely connected with the right to respect of private life expressed in Article 7 of the Charter. Moreover, Article 8(3) of Regulation (EC) No 1073/1999 imposes on DG OLAF an obligation to ensure that EU provisions for the protection of personal data are complied with (18). When sending to the institution, body, office or agency concerned reports drawn up following an internal investigation and any related useful documents (19), OLAF transfers personal data of the persons concerned, whistleblowers, informants, witnesses and OLAF staff. Consequently, OLAF is legally bound by both the provisions of the Charter and the rules of Regulation (EC) No 45/2001. The latter requires OLAF, in its capacity as a personal data controller, to transfer these reports and/or the related documents containing personal data only if this data is necessary for the legitimate performance of tasks covered by the competence of the recipient (20). When doing so, OLAF must verify that (i) the recipient has the appropriate competence and (ii) the transfer is necessary (21).

16.

The SC is of the opinion that automatic and systematic transmission of final case reports in investigations closed without follow-up does not comply with these requirements. The SC points out that the European Data Protection Supervisor (EDPS) has stated that ‘even if the transfer of information is foreseen in relevant legislation, such transfer is only lawful if it meets these two additional requirements. Whether a given transfer meets such requirements will have to be assessed on a case by case basis. Accordingly, OLAF follow-up agents should apply this rule for each particular data transfer. Doing so will avoid unnecessary transfers of information as well as transfers of information to parties that do not have the appropriate competences. To ensure compliance with this rule, the EDPS suggests that OLAF puts in place a procedure whereby a note to the file is drafted establishing the necessity of the data transfers that have taken place or will take place in the context of a given case’ (22).

17.

The SC believes that this statement also applies to those cases closed without follow-up. Therefore, OLAF needs to assess on a case-by-case basis whether a given transfer to EU institutions and bodies of personal data in cases closed without follow-up meets such requirements. The evaluation of the necessity of the transfer can also be made for a specific category of files. For example, it is reasonable to believe that in some cases the European Commission (or other institution or body) would need to know what action OLAF has carried out following initial information coming from one of its services. However, the SC notes that, in practice, OLAF not only sent to the European Commission the final case reports regardless of the source of information, but also to other institutions in the absence of a specific request from them and, consequently, without evaluating their need to know.

18.

Even supposing that the requirements mentioned above are complied with, final case reports may contain personal data which is not necessary for the performance of the tasks covered by the competence of the recipient. This is especially the case for whistleblowers’ and informants’ personal data. In this regard, the SC draws attention to the statement of the EDPS that the European Commission does not need to know whistleblowers’ personal data in order to take the necessary measures to protect the financial interests of the EU (23). OLAF cannot therefore transmit these case reports without protecting the whistleblowers, by redacting their personal data.

19.

The SC also notes that Article 27(1) of Regulation (EC) No 45/2001 subjects to prior checking by the EDPS the processing of operations likely to present specific risks to the rights and freedoms of data subjects by virtue of their nature, their scope or their purposes. The list of processing operations likely to present such risks includes ‘processing of data relating to … suspected offences, offences, criminal convictions or security measures’, as well as ‘processing operations intended to evaluate personal aspects relating to the data subject, including his or her ability, efficiency and conduct’ (24). The SC notes that the EDPS considers that the conduct of EU officials is analysed by OLAF in its internal investigations; moreover, the processing of personal data in the context of internal administrative investigations by OLAF could be seen as a processing operation relating to ‘… suspected offences, offences, criminal convictions or security measures’ (25). Since the prior checking made by the EDPS on the processing of personal data in the context of internal investigations or of the ‘follow-up’ data processing operations did not examine the specific issue of the transfer of final case reports in internal investigations closed without follow-up, the SC considers that OLAF should have notified the EDPS for prior checking and sought his opinion.

20.

The SC is concerned that this transmission could affect the rights of the persons implicated in investigations and consequently lead them to bring an action for damages before the European Court of Justice. As the EU judiciary stated, the provisions of Regulation (EC) No 45/2001 and Article 8(3) of Regulation (EC) No 1073/1999, as well as the obligation to maintain confidentiality placed on OLAF pursuant to Article 8(2) of Regulation (EC) No 1073/1999 confer rights on individuals who are affected by an OLAF investigation (26). Where there has been violation of these rules, the European Commission would incur non-contractual liability for OLAF’s unlawful conduct, which has already happened on several occasions. Such a conclusion would be detrimental not only to the European Commission, but, in particular, to OLAF whose credibility and reputation would be put into question.

21.

Moreover, the SC is worried that this practice could jeopardise the success of investigations. In its capacity as an investigative body for internal cases, OLAF is highly dependent on being respected and trusted to be able to encourage witnesses and whistleblowers to come forward and point out suspected fraudulent or corrupt behaviour. This reporting practice directly threatens the necessary trust and confidence amongst potential witnesses and whistleblowers and is likely to discourage them from coming forward and assisting OLAF. On the other hand, it is important to note that where an investigation is closed without follow up it may have depended on factors that may change in the future. If the final case report in such a case is to be disseminated outside OLAF, a potential new investigation into the same matter could unnecessarily be made more difficult.

22.

Transmission of final reports drawn up following internal investigations closed without follow up can be questioned from a number of purely legal aspects relating both to professional secrecy and data protection issues as outlined above. Moreover, this practice will inevitably affect the efficiency of OLAF’s investigatory functions and, at the very least, may give other institutions inappropriate means to influence OLAF’s investigative activity, which would be detrimental to the public’s trust and confidence in OLAF’s independence.

23.

The SC strongly recommends that OLAF reconsider its decision to transmit to the institutions, bodies, offices or agencies concerned the final case reports mentioned in this opinion without taking all necessary measures in order to ensure that this practice complies with EU law and does not jeopardise the efficiency and independence of its investigations.