EUROPEAN COURT OF JUSTICE ALLOWS OLAF TO INVESTIGATE IN CASES OF ALLEGED WRONGDOING IN ECB AND EIB

The European Court of Justice (ECJ) handed down today its judgement in the cases C-11/00 and C-15/00. It has held that the European Anti-Fraud Office (OLAF) can investigate alleged wrongdoing at the European Central Bank (ECB) and European Investment Bank (EIB). The Court also annulled decisions taken by the ECB and EIB by which they reserved the right to conduct such investigations internally.

OLAF, which was established in 1999, has as its principal role the fight against fraud and the protection of the financial interests of the European Union.

To carry out its functions, OLAF has been granted powers by Community legislation to conduct administrative investigations inside and outside the Community institutions, bodies and agencies.

The ECB and the EIB considering that the aforementioned legislation did not apply to them, decided to reserve these powers of internal investigation to themselves.

The European Commission has brought two actions for annulment before the ECJ in respect of these decisions.

In its decision, (which can be consulted at the following links)

• C-11/00
• C-15/00

the Court held that the 1999 regulation concerning investigations conducted by OLAF is, therefore, applicable to both the ECB and the EIB.

Since the decisions of the ECB and the EIB have precisely the effect of preventing that regulation from applying to them, the Court decided that the decisions should be annulled.

In its judgment, the Courts underlined, inter alia:

• Although OLAF was established by the Commission and was incorporated into the framework of that institution, the Community legislature has provided for guarantees intended to ensure that OLAF is fully independent and that it is required to comply with Community
• Notwithstanding the existence of control mechanisms specific to the various institutions, bodies, offices and agencies established by, or on the basis of, the Treaties, the legislature was entitled to take the view that it was necessary, for the purposes of strengthening the prevention of, and the fight against, fraud, corruption and other irregularities detrimental to the financial interests of the European Community, to set up a control mechanism which is simultaneously centralised within one particular organ, specialised and operated independently and uniformly with respect to those institutions, bodies, offices and agencies ;
• such a system of investigation bears no similarity to the audit of the accounts or the examination of the financial management of the entity concerned ;
• a decision by OLAF's Director to open an investigation cannot be taken unless there are sufficiently serious suspicions relating to acts of fraud, corruption or other illegal activities likely to be detrimental to the financial interests of the Communities.
• investigations undertaken by OLAF must be conducted in accordance with the Treaty and in particular with the Protocol on the privileges and immunities of the European Communities, while respecting the Staff Regulations of officials and the conditions of employment of other servants of the European Communities and with full respect for human rights and fundamental freedoms, in particular the principle of fairness, for the right of persons involved to express their views on the facts concerning them and for the principle that the conclusions of an investigation may be based solely on elements which have evidential value.

The European Commission has also published a press release (IP03/994) in connection with this case.

The Press Release published by the Press and Information division of the Court can be consulted at:
http://www.curia.europa.eu/en/actu/communiques/index.htm

Mr Alessandro Butticé
Spokesman of the European Anti-fraud Office (OLAF)
Fax : +32 (0)2 299.8101