European Anti-Fraud Office

Legal background

Legal background

The legal basis for the fight against fraud is Article 325 of the Treaty on the Functioning of the European Union (replacing Article 280 of the EC Treaty).

1. Establishment of OLAF

Amendments:

2. OLAF's role and investigations

The following regulations and agreements define the Office’s main role and  remit for carrying out its administrative investigations. These include investigations (concerning EU financial interests) in the Member States and those involving staff of the EU institutions.

3. Horizontal EU legislation concerning on-the-spot checks/inspections in the Member States

4. Sectoral EU legislation

 The following regulations contain provisions on the prevention and detection of irregularities:

5. Notification of irregularities and recovery of misused funds

Financing of the CAP:

European Structural Funds, Cohesion Fund and European Maritime and Fisheries Fund:

Fund for European Aid for the Most Deprived:

Home Affairs Funds:

6. Harmonisation of EU criminal law

Conventions on the harmonisation of EU criminal law

1) 1st Protocol
2) 2nd Protocol and its explanatory report
3) Protocol on the competence of the Court of Justice

Commission reports concerning the implementation by Member States of the EU Convention of 26 July 1995 and its related protocols:

a) 2004 report and annex
b) 2008 report and annex

Note: for all Member States except UK and DK, the PIF Convention will be replaced by the PIF directive (see below). The PIF Convention will remain applicable only to UK and DK. The deadline for implementing the PIF directive is July 2019.

Directive on the fight against fraud to the Union's financial interests by means of criminal law ("PIF directive")

Member States bound by the directive (all Member States except UK and DK) have two years to transpose it (by July 2019). After that the directive will replace the PIF Convention and its protocols for those Member States bound by it, while the PIF Convention will remain in force in UK and DK.

7. Working Arrangements

8. Agreements with third parties

Agreements with third parties containing provisions on mutual administrative assistance in customs matters

9. Customs anti-fraud measures in preferential tariff regimes

Tariff preferences for goods can be suspended under anti-fraud clauses if:

  • there is large-scale fraud or a major irregularity, or
  • cooperation among the parties concerned is not sufficiently effective to successfully tackle a breach of customs legislation.

Anti-fraud clauses are designed to tackle illicit trade by preventing the abuse of tariff preferences. They support legitimate traders by eliminating improper and unfair competition.

The European Union grants tariff preferences to non-EU countries on the condition that these preferences are coupled with appropriate anti-fraud measures.  This principle is set out in policy documents adopted by the Commission, the Council, the European Parliament and the European Court of Auditors.

As a result, the following are equipped with anti-fraud clauses:

  • all autonomous regimes, such as the Generalised Scheme of Preferences (GSP), covering around 76 countries (in 2018)
  • conventional preferential tariff arrangements, i.e. free trade agreements (FTAs) or economic partnership agreements (EPAs), covering over 45 additional countries.

Anti-fraud clauses may appear under different names, e.g.:

  • Special provisions on administrative cooperation (FTA with Colombia, Peru and Ecuador; and pending entry into force, with Mexico)
  • Enforcement of preferential treatment (Chile)
  • Failure to provide administrative cooperation (Montenegro)
  • Specific measures concerning the management of preferential treatment (Vietnam, and pending entry into force, Japan).

List of anti-fraud clauses

10. Case law

List of rulings of the Court of Justice of the European Union with relevance to OLAF