In May 2011, a former staff member at the EU Delegation in the Ukraine was found guilty of corruption. The EU staff member initially employed as a local and then as a contract agent, asked for bribes from bidders submitting offers in several tender procedures.
In one of these tenders, concerning the implementation of post-Chernobyl aid under the TACIS programme, he requested a 4% commission. One of the tendering companies he approached agreed to pay a 2.5% commission for a contract valued at €19 million. However, the tender was stopped before the contract was awarded. No commission was paid and there was no direct impact on the EU budget.
The tipoff came from a company that had rejected the defendant’s request for a bribe. OLAF's investigations confirmed the company's allegation so the case was referred to the Belgian courts. With the staff member’s immunity lifted, he was arrested in Belgium in May 2006 and detained until November 2006. The European Commission suspended him and eventually dismissed him in July 2007. During the investigation, OLAF co-operated closely with the Belgian authorities.
The defendant was sentenced to 18 months in prison and fined €5000. As he had already served six months in preventive detention, the remainder of his sentence was suspended. The case is currently the subject of an appeal.
In September 2010, a company director in the UK was sentenced to 18 months in prison for the theft of €174,500 in the course of an EU-funded research project. He got a further 2½ years after admitting another eight fraud offences. The successful prosecution was the result of close cooperation between the OLAF and the UK authorities.
The case concerned a €174,500 grant paid by the European Commission in 2005 to a UK company for an EU-funded project "Safeguarding EU food exports by the development of natural gel products with health-enhancing properties". The payment was intended for some other companies participating in the project, but was stolen and paid into the account of a company which was not involved in the project, but was owned by the recipient company's director.
OLAF was contacted in January 2007 by the UK Department of Business Innovation and Skills, (BIS), which was conducting a criminal investigation into the matter. OLAF informed the UK authorities about the research project, and helped them to find EU officials who could give evidence in court.
In July 2004, OLAF received information from the European Court of Auditors (ECA) about possible double invoicing by a private consortium involved in the major overhaul and rehabilitation of a power station in Serbia.
The work was funded and managed by the European Agency for Reconstruction (EAR). The company which was supposed to issue the final work acceptance certificate informed EAR that the invoices and reports submitted by the consortium were "inconsistent, dubious and difficult to reconcile".
OLAF opened an investigation which revealed multiple accounting and invoicing. OLAF referred the file to the relevant Prosecutor’s Office. EAR avoided disbursing any more amounts agreed on the contract. The total alleged financial impact was estimated at €300,000.
Export refunds enable the EU to sell surplus agricultural products at prices which are competitive on the world market.
In 2007, the Belgian customs authorities became aware of regular large shipments of sugar being exported out of the EU to Croatia via the Russian port of Kaliningrad. The exporters declared that Russia was the final destination for the sugar, which was therefore eligible for export refunds totalling several million euros.
At OLAF's request, the Russian authorities investigated the company in Kaliningrad and confirmed that the sugar did not stay in Russia, but was re-exported to Croatia (which meant it was not eligible for export refunds).
OLAF carried out a control visit in cooperation with the Croatian customs authorities and found that over 3,400 tonnes of sugar had been imported into Croatia under this scheme.
Based on OLAF’s findings, the Belgian paying agency proceeded to recover unduly paid export refunds totalling €1.2 million. A further €1.5 million was blocked by the paying agency.
In 2004, OLAF was informed by the Italian authorities (Carabinieri) that large quantities of processed citrus fruit, allegedly sold by Italian manufacturers in other EU countries, were fictitious and therefore ineligible for EU compensation (for the withdrawing of fresh citrus fruit from the market).
The Italian authorities (Carabinieri and the Guardia di Finanza) in co-operation with OLAF conducted an investigation.
OLAF checked out the supposed buyers and the addresses where the juice was supposed to have sold. In Spain they found only apartment blocks, a museum and a car park and in France a hardware store. Another supposed recipient of the concentrated juice turned out to be a retired farmer, who had never received any such juice from Italy.
OLAF concluded that all the transactions relating to France and Spain listed in the Italian operator' s accounts were totally non-existent.
Assets equivalent to €14.5 million have been seized to the fraudsters. The total loss to the EU budget is estimated at €50 million.
The financial and judicial follow-up of the case is continuing in partnership with OLAF's partners in Italy.
In 2004 the EU lifted quotas on textile imports from the P R China. By mid-2005, however, the EU market had been flooded with cheap Chinese imports and quotas were re-introduced.
EU importers began circumventing the re-instated quotas and customs duties by falsely claiming that their textiles originated from Bangladesh using false or incorrect Bangladeshi certificates of origin as proof (GSP). Following research, analysis and coordination with several Member States, OLAF focused on checking with the Bangladeshi authorities the authenticity of hundreds of thousands of certificates provided to customs authorities in the EU. It soon became clear that not only were most of the certificates not genuine, but also the scale of the problem was much larger than had originally been thought, involving hundreds of importers across the majority of EU Member States.
Following OLAF’s investigations, together with the competent Bangladeshi authorities and Member States customs services, evidence of the real origin of the textiles was obtained and the customs authorities in almost every EU Member State were able to start proceedings to recover around €30 million in customs duties and to launch prosecutions of the importers involved. OLAF investigators have given evidence in legal proceedings in several Member States and enquiries are ongoing at both EU and national level.
In 2008, a series of coordinated raids in Poland and Germany led to the arrest of 26 members of an international criminal gang who had smuggled millions of cigarettes into the EU from former Soviet republics and China. The raids followed months of cooperation between OLAF, the Polish Central Investigation Bureau of the National Police (CBS), Germany's Customs Investigation Office (ZKA) and the Belgian Federal Police.
In addition to the arrests, the authorities seized some 7 million cigarettes, a lorry that was being loaded with contraband cigarettes, almost €3 million in cash and 9kg of gold. Authorities froze over 40 bank accounts belonging to key suspects and seized personal property, including cars and houses.
Since OLAF became involved in the investigation, 60 people have been arrested, including the leaders of the criminal organisation. Investigations into the money-laundering side of the operation are still ongoing.