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Retsudvalget 2013-14
KOM (2013) 0534 Bilag 3
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House of Representatives of the States General position paper with regard to the

establishment of a European Public Prosecutor’s Office (EPPO)

Introduction

The House of Representatives of the States General considers the effective combat against

fraud with EU funds extremely important, due in part to the importance of efficient spending

of European funds and confidence in the performance of the European Union. It goes

without saying, therefore, that fraud with EU funds should be investigated, prosecuted and

tried. Grants ans subsidies should be withdrawn in the event of fraud and/or if a Member

State fails to investigate, prosecute and condemn such fraud effectively. We note that Article

86 of the Lisbon Treaty provides an

opportunity

to implement a European Public

Prosecutor’s Office (hereafter referred to as EPPO) and not an obligation for Member States

to accept a proposal thereto, regardless of the content.

Subsidiarity objections

A vast majority of the House of Representatives is of the opinion that investigation,

prosecution and trial is a (primarily) national competence. Transferring this competence

would impair the sovereignty of the national state. In order to assess the scale of the breach

of sovereignty by any proposal it is essential that the competences are clearly delineated.

The present wording of the proposal offers no such delineation, leaving it unclear where the

proposed competences of the EPPO end and those of the Member State begin. In addition,

the democratic legitimacy of the investigative and prosecution authorities (and the trial) is

essential. It is essential to provide democratic accountability within the Member State for

the consequences of investigation and prosecution. It is not acceptable that democratic

control will be exercised solely on the basis of an annual report submitted to the European

Parliament and that democratic control can only be exercised by the European Parliament,

whereas the actual investigative and prosecutorial actions are carried out in the Member

State and by the competent law enforcement authorities of that Member State. Intensive

co-operation between the Member State´s authorities and Eurojust and OLAF would also

enable fraud with EU funds to be tackled more effectively without EPPO. The House of

Representatives furthermore believes that the objective – effective combat against fraud

with EU funds – can be achieved without breaching the sovereignty of the Member States.

These are the primary reasons why the House of Representatives cannot accept the

European Commission’s present proposal to establish an EPPO. Such has been bindingly laid

down for the Dutch Government by MPs Recourt and Van Oosten in a motion requesting the

government not to agree with the establishment or foundation of an EPPO as set out in the

proposal of the European Commission

First and foremost, the objections of the House of Representatives relate to subsidiarity.

Subsidiarity is co-determined by the content and thus the proportionality of the proposal

and both aspects are discussed in this position paper. Having taken note of the proposal by

32317-189

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the Greek Presidency

, the House of Representatives will formulate an alternative which, in

the opinion of a majority of the House of Representatives, could meet the requirements in

terms of subsidiarity and proportionality and could achieve the intended goal: the effective

combat of fraud with EU funds. An EPPO could still be established to enable the application

of the provisions of Article 86 of the TFEU without unnecessarily breaching the sovereignty

of the Member States.

Crucial points regarding subsidiarity

•

Investigation and prosecution regarding fraud is (primarily) the responsibility of

national authorities;

•

The power to investigate and prosecute criminal offences which damage the financial

interests of the Union are insufficiently defined, making it impossible to determine

the scale of a breach of sovereignty (legality principle);

•

Democratic control of the investigative and prosecution authorities must be possible.

The proposed assessment by the European Parliament on the basis of an annual

report is inadequate;

•

As the actual investigation and prosecution actions (and trial) are carried out in the

Member State itself, these actions should be democratically controlled by bodies in

the relevant Member State;

•

With the aid of Eurojust and OLAF the investigation and prosecution of fraud

affecting EU funds can also be organised without an EPPO;

•

The intended objective – the effective combat of fraud with EU funds – can also be

realised without a breach of sovereignty of the Member States by the foundation of

an EPPO as formulated below.

History

European Commission’s proposal

On 17 July 2013, the European Commission published the proposal for a Regulation

concerning the establishment of the European Public Prosecutor’s Office (hereinafter

referred to as EPPO). At the same time, the Regulation to reform the EU Agency dealing with

judicial co-operation in criminal matters (Eurojust) was also published, as well as a

notification on OLAF, the European Anti-Fraud Office

. This package of draft legislation fulfils

Article 86 of the Treaty on the Functioning of the European Union (TFEU), the Lisbon Treaty.

This Article provides for the possible establishment of an EPPO with the power to

investigate, prosecute and bring to justice those who commit criminal offences affecting the

Union’s financial interests.

33709-6

COM(2013) 534, COM(2013) 535 and COM(2013) 533

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The European Commission proposes the establishment of an EPPO with the exclusive

authority (Art. 11) to investigate and prosecute fraud with European funds (Art. 4) and

inextricably related criminal offences (Art. 13), with a European Public Prosecutor heading a

body with a centralised structure (Art. 6) and a power to overrule or prioritise investigation

into fraud with EU funds in the Member States (Art. 11).

Functioning of the subsidiarity mechanism (‘yellow card’)

Together with 13 (chambers of) other parliaments from 11 Member States of the EU, the

House of Representatives has expressed objections to the EPPO. The European Commission

initially responded with a Notification (November 2013). This Notification set out reasons as

to why the parliaments’ objections regarding subsidiarity are unfounded. A letter to each

separate Parliament or House considered the objections submitted which, according to the

European Commission do not relate to subsidiarity and fall outside the field of application of

the subsidiarity control mechanism. With this opinion, the Commission apparently deviates

from the position of 2009 that the limitations of the subsidiarity principle are extremely

difficult to define

The House of Representatives considers the European Commission’s response

unsatisfactory. Even though the arguments put forward by the House of Representatives do

concern the subsidiarity of the proposal. The Treaty allows the European Commission to

disregard the opinion of a large number of parliaments. This is an option which should only

be considered as a last resort, not in the case of justified subsidiarity objections from a large

number of parliaments of the Member States.

Proportionality objections

The proposed competences have not been defined clearly enough and reach too far

The European Commission’s proposal contains a lack of clarity as to the scope of the

competence of an EPPO. The limitation to the authority to act in the event of damage to the

Union’s financial interests should be clearly defined. The present proposal creates a lack of

clarity and leads to competence problems. This is in conflict with the legality principle.

Furthermore, the implicit competence relating to other criminal offences offers too much

scope for the expansion of competences without doing justice to the relevant provisions of

the Lisbon Treaty. This is contrary to legal certainty. The offences for which an EPPO is

competent should be clearly defined in the actual Regulation. A realistic threshold is not

provided as a result of which there is no limit to the competence of EPPO to investigate and

prosecute.

It is unclear to the House of Representatives how the proposed exclusive competence of

EPPO relates to the efforts of the Member States to criminally prosecute fraud on a national

Barroso (2009) D/2652

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level. It is strange that Member States wishing to actively prosecute fraud with EU funds

would no longer be able to do so, not even if this would produce results more quickly, more

effective and less expensive. Furthermore, the House of Representatives considers the

EPPO’s power to overrule national authorities problematic, as this would have consequences

for national priorities and the consideration on a national level of how investigative means

can be used most effective. This is also problematic for the democratic control exercised on

the national priorities. The Regulation focuses on co-operation between an EPPO and the

national criminal authorities but is unclear as to how any conflicts between an EPPO and the

national authorities should be resolved. The proposed Regulation is inadequate regarding

the delineation of the EPPO’s authority and the division of the competences between the

EPPO and the Member States.

The Greek Presidency published its own proposal on 17 March 2014. This is based on a

college model. Each Member State would delegate a Public Prosecutor, who subsequently

conducts the investigation and prosecution in it’s own member state. Whilst the House of

Representatives finds the idea interesting, it also realises that a college model could involve

more bureaucracy. In its favour, it would make the EPPO more recognisable and possibly

improve acceptance of decisions made by the EPPO.

European Public Prosecutor’s Office as an ‘ultimum remedium’

The House of Representatives finds that fraud with EU funds generally occurs at national,

regional or local levels. Adequate prosection of this fraud is consequently dependent on

decisive action taken on the corresponding level within the Member States. The House of

Representatives is of the opinion that the optimal use of existing European mechanisms,

including the withdrawal of EU funds, offers sufficient possibilities for the effective combat

against fraud.

First and foremost, the House of Representatives stresses the importance of far-reaching co-

operation between the national investigation and prosecution authorities of the Member

States. In addition, the European Commission could focus more on improving and

strengthening the independence, effectiveness and efficiency of OLAF and Eurojust and

facilitating improved collaboration between these agencies and the Member States. The role

of OLAF, as fraud watchdog, is crucial to the detection of fraud with EU funds. OLAF should

therefore continue to exist in its current form to provide both judicial authorities in the

Member States and an EPPO with information. The discontinuation of OLAF in favour of an

EPPO is undesirable.

A majority of the House of Representatives believes that, in the event of cross-border fraud

or fraud in several Member States, an EPPO, in whatever form, could fulfil a role either at

the request of the Member States or in other circumstances. If no prosecution is brought or

prosecution is not adequately followed through – due to a lack of co-operation or a conflict

between or negligence on the part of national authorities – an EPPO could provide added

value if co-operation within Eurojust does not guarantee the investigation and prosecution.

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The task of an EPPO could then be: the supervision of investigation and prosecution in the

individual Member States, advising on such and, as a last resort, to initiate investigation and

prosecution if the Member State fails to take adequate action. The EPPO therefore serves as

an ultimum remedium. The Member State remains competent to initiate investigation and

prosecution. The EPPO may only act in the event that the Member State neglects to do so.

The EPPO advises and supervises. The college model may be an interesting suggestion in this

respect.

A majority of the House of Representatives feels that the European Public Prosecutor’s

Office would consequently play a valuable role in the prosecution of fraud with EU funds

provided that it is organised in such a way that it can be deployed if all other possibilities

have been exhausted. This alternative proposal satisfies the intended objective, the effective

combat of fraud with EU funds, and meets the subsidiarity objections of a large number of

parliaments.

Crucial points regarding proportionality

•

The formulation of the proposal for an EPPO is too vague;

•

The proposal would lead to the erosion rather than the strengthening of OLAF and

Eurojust;

•

OLAF should not be dismantled;

•

Fraud prosecution should be in place at the same level at which the fraud occurs:

local, regional or national;

•

The exclusive authority of an EPPO is undesirable, especially if the Member State is

itself prepared to undertake the investigation and prosecution;

•

The delineation of the exclusive authority is unclear;

•

The implicit competences as formulated will lead to a vague and unintended

expansion of competences;

Alternative proposal

•

Investigation and prosecution is primarily the task of the Member States;

•

An EPPO could offer added value in the role of supervisory authority for investigation

and prosecution in the Member States;

•

An EPPO can provide the national authorities with solicited and unsolicited

recommendations regarding effective investigation and prosecution of fraud with EU

funds;

•

Eurojust ensures the co-operation between the Member States;

•

An EPPO would only have any added value if the co-operation within Eurojust is

inadequate or international implications necessitate that an EPPO be deployed;

•

OLAF should continue to exist;

•

The EPPO can only take over the investigation and prosecution if the Member State

continues not to undertake investigation or is insufficiently proactive in this respect;

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•

The EPPO will acquire exclusive competence only in the event of non-performance by

the national authorities of the Member States;

•

The Member States can prevent the EPPO from acquiring exclusive competence by

doing what they should do: implementing a strict approach to combating fraud with

EU funds;

•

A college model would be interesting provided attention is paid to the increase in

bureaucracy;

•

Making these adjustments may meet the subsidiarity objections of the parliaments

and achieve the objective.

The House of Representatives calls on the European Commission to seek, through

consultation with the national parliaments, to realise a proposal that can count on wider

support from the representatives of the citizens of Europe. In addition, the House of

Representatives calls on the Council of Ministers and the European Parliament, when

considering this proposal, to include in their deliberations the objections of the national

parliaments of Member States of the EU and the suggestions for an alternative proposal

submitted by both the Greek Presidency and the House of Representatives of the

Netherlands. With due respect, the House of Representatives asks the national parliaments

of the Member States to include the proposed alternatives in their deliberations and to co-

operate in the realisation of a method acceptable to many, if not all, Member States for the

effective combat against fraud with EU funds. To conclude, the members of the House of

Representatives reserve the right to judge the end result on its merits.

The Hague, 11 April 2014

On behalf of the House of Representatives of the States General

Ard van der Steur

Rapporteur on the European Public Prosecutor’s Office