OLAF/04/24 Brussels, the 26 November 2004
An Italian NGO fraudulently obtaining double funding from different donors for the same development project; thousands of tons of cane sugar falsely declared as produce of Croatia; collusion between contractors and an EU-official who allowed them to submit excessive invoices and had them carry out private work for his own benefit: these are only three of the 26 fraud and corruption cases described in the new Annual Activity Report, presented by the European Anti-Fraud Office (OLAF) today in Brussels. Overall, 511 cases were under investigation by OLAF by the end of the period included in the Report that covered twelve months up to the end of June, 2004. This is the fifth such report presented since the creation of the Office. On this occasion, OLAF also outlines progress made since its establishment in June 1999.
"Since its creation OLAF has reduced the average time needed to assess information received and to investigate new cases. There has also been a marked increase in investigations which have produced substantive results in the form of recommendations for judicial, disciplinary, financial or administrative follow-up", OLAF Director General Franz-Hermann Brüner pointed out. "OLAF's reputation has grown as the main instrument in the fight against corruption within EU-Institutions and as a partner of the national law enforcement agencies in the fight against transnational fraud and financial crime", he added. "In its task of protecting the Union's financial interests against fraud, smuggling and other criminal acts, OLAF can count on the close cooperation of its operational partners in the Member States, Candidate Countries, third countries and International Organisations", Mr. Brüner explained.
In the course of a typical OLAF investigation, different legal systems and proceedings, as well as diverse languages and cultures have to be dealt with. In spite of the inherent complexities in performing its tasks, OLAF has reduced, during the past five years, the time spent in assessing initial information from an average of 18 months to approximately 5 months. The amount of time involved in the investigation phase as such has also been lowered from an average of 33 months to about 22 months. At the same time, the percentage of cases that were closed with a recommendation for follow up (judicial, disciplinary, financial or administrative) has increased from 18% in 1999-2000 to just above 50% in the current period 2003-2004. The total financial impact for all cases, including those of OLAF's predecessor UCLAF, is estimated at 5.3 billion Euros.
From a financial point of view, OLAF's main success in the past year has been an agreement between the European Community, some EU-Member States and cigarette manufacturers in the United States that reached a conclusion, inter alia, as a result of OLAF's operational activities. A figure amounting to 1.25 billion US-Dollars will be paid over the next 12 years to the EU and to those Member States which participated in this legal action. This sum would cover the costs of running OLAF for many years.
As far as cases within the European institutions are concerned, the complex set of internal investigations into the so called "Eurostat" affair has made steady progress during the period covered in the Report. The "Eurostat" Task Force dealt with 14 cases: 4 external and 10 internal, 9 of which are still ongoing. It completed 5 final reports, two of which were forwarded to the judicial authorities in Luxembourg and three to those in France. Four cases were recommended for financial recovery procedures, while three were also recommended for possible disciplinary action. In addition to the Eurostat cases, 48 other internal investigations were opened.
"Operational services must take difficult decisions - to open investigations or to refrain from doing so - often with consequences for individuals, always in strict respect of the law", said Mr. Brüner. On occasion these decisions have exposed OLAF's stakeholders in the EU Institutions to issues which those Institutions have seldom had to address. "But an independent anti-fraud organisation", added Mr. Brüner, "does not require or seek popularity. Rather, it needs to earn respect through the quality of its work, through its results, and by demonstrating integrity and an ability to make the right decision under pressure".
By the end of June, OLAF's database contained a total of 3989 case records. 2566 of these related to cases registered following information received by OLAF after its creation, i.e. between June 1, 1999 and June 30, 2004.
"I am pleased to say that, despite the fact that the climate within which OLAF operates among the European Institutions has not always been easy, OLAF's independent operational activities have always received firm support from the Commission, and to emphasise that the Commission has never sought to interfere with my operational independence in any way", Mr. Brüner stated.
First copies of the OLAF Annual Activity Report are available today, at 11h00, during a Press point at the Albert Borschette Conference Centre, rue Froissart 36, Brussels, on the occasion of the 4th Training Seminar of the OLAF Anti-Fraud Communicators' Network (OAFCN): Deterring Fraud by Informing the Public.
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