OLAF (French acronym for "Office Européen de Lutte Anti-Fraude") the "European Anti-Fraud Office" has been charged by the
European Unionwith protecting the financial interests of the European Union: Its tasks are to fight fraudaffecting the EU-budget, as well as corruption and any other irregular activity, including misconduct, within the European Institutions, in an accountable, transparent and cost-effective manner. OLAF achieves its mission by conducting, in full independence, internal and external investigations. It also organises close and regular co-operation between the competent authorities of the Member Statesin order to co-ordinate their activities. OLAF supplies Member States with the necessary support and technical know-how to help them in their anti-fraud activities. It contributes to the design of the anti-fraud strategy of the European Union and takes the necessary initiatives to strengthen the relevant legislation.
OLAF is an administrative investigative body. It has no judicial or disciplinary powers and it cannot oblige national prosecutors to act.
OLAF is a General Service Directorate General of the
European Commission. For its investigative and operational tasks OLAF works in full independence. In a [http://www.eca.europa.eu/audit_reports/special_reports/docs/2005/rs01_05en.pdf Special Report] of July 2005 the European Court of Auditorsconcludes that "the hybrid status of the Office, which has investigative autonomy but reports to the Commission for its other duties, has not adversely affected the independence of its investigative function. Being part of the Commission, the Office has been able not only to benefit from substantial administrative and logistical support, but also to take advantage of the anti-fraud legislation that is available to Commission departments". Director-Generalis the former German public prosecutor Franz-Hermann Brünerwho has been [http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/06/165&format=HTML&aged=1&language=EN&guiLanguage=en appointed] for a second five-year term on 14 February 2006 after agreement between the European Commission, Parliament and Council.
OLAF has 400 staff, out of which 160 are investigators.
OLAF was created in 1999, after strong pressure from the
European Parliament. Its predecessor UCLAF (Unité de coordination de lutte anti-fraude), an anti-fraud unit dependent of the European Commission, had failed to convince in the fight against irregularities within the European Institutions. The creation of OLAF is one result of the debates about allegations of fraud and the conduct of former European Commissioner Édith Cressonwhich in the end led to the collective resignation of the Santer Commission.
An evaluation of the work of OLAF can be found in the [http://www.eca.europa.eu/audit_reports/special_reports/docs/2005/rs01_05en.pdf Special Report] of the
European Court of Auditorsof July 2005.
European Parliamenttook stock of the first six years of OLAF during a [http://www.europarl.europa.eu/news/expert/infopress_page/036-1441-238-08-34-905-20050826IPR01423-26-08-2005-2005-false/default_en.htm public hearing] in July 2005.
House of Lords, in a report published in November 2006 [ House of Lords, European Union Committee, [http://www.publications.parliament.uk/pa/ld200506/ldselect/ldeucom/270/270i.pdf 50th Report of Session 2005–06, "Financial Management and Fraud in the European Union: Perceptions, Facts and Proposals", Volume I: Report, published 13 November 2006] ] , stated: "On the basis of the evidence we have received we emphatically refute claims that OLAF is too close to the Commission or that the Commission seeks to divert and influence OLAF’s investigative activities". The House of Lords concluded: "We are content with the extent of the investigations which OLAF has undertaken."
Cigarette companies' smuggling
Based on OLAF investigations and under OLAF's assistance the European Commission and 10 Member States entered into a law suit against three major international cigarette companies before US courts. According to the allegations, the cigarette companies had used smuggling as a channel of distribution. One of the companies later agreed on a settlement which earned the European Union a compensation of around 1 billion Euros.
The most politically delicate OLAF investigations were those into alleged wrongdoings in the EU statistical office EUROSTAT. The case caused serious political problems for the Prodi Commission in 2003. OLAF itself faced the accusation of having started the investigations only after the press reported about the case in 2002 and, especially, in May 2003. On top of that, on 8 July 2008 the European Commission and OLAF were condemned to pay the legal costs plus 56,000 euros to Eurostat's director-general Mr. Franchet and its director Mr. Byk in the judgment of case T-58/05 of the European Court of First Instance.
The Tillack case
OLAF came under pressure in 2004 in the course of an investigation that aimed to identify a leak within its own ranks. In February 2002 the journalist who had first written about the EUROSTAT case, the then Brussels correspondent of the German magazine Stern
Hans-Martin Tillack, and subsequently also other journalists had published details from a confidential OLAF document. Quoting that document Tillack revealed that OLAF was in the possession of serious fraud allegations against EUROSTAT. Two years later and based on statements by a former Commission spokesman OLAF claimed that Tillack might have received the internal documents from an official in exchange for money and passed this information to the Belgian public prosecutor. In 2004, following a request from OLAF, a Belgian judge ordered a search of the journalist's home and office in Brussels where the authorities seized his archives and his mobile phone. On the basis of the same information, the German authorities opened also an investigation but decided not to search his German offices. It is unclear why the suggestion was made that a pressing reason for the search would be the journalist's expected move to Washington while in fact he left Belgium for Hamburg. The search was widely condemned as an attempt to violate the principle of protection of journalists' sources.
Following the events Tillack initiated legal proceedings in Germany, Belgium, Strasbourg, and before the European Court of Justice. His complaint before the German courts against the Commission spokesman on whose statements OLAF had based the case was unsuccessful after the spokesman insisted on his immunity as a former Commission official. Tillack's appeals to the Belgian courts were not successful either as the judges did not consider the provisions of article 10 European Convention of Human Rights as pertinent and the Belgian law at the time did not explicitely grant journalists the right to protect their sources. Tillack subsequently took Belgium to the European Court on Human Rights in Strasbourg which may decide to open a case in September this 2006. Supported by the International Federation of Journalists (IFJ) the journalist also took OLAF to the
European Court of Justicewhere all his pleas were [http://curia.europa.eu/en/actu/communiques/cp06/aff/cp060083en.pdf dismissed] .
On the political level, Tillack complained to the European Ombudsman who wrote a [http://www.ombudsman.europa.eu/special/pdf/en/042485.pdf special report] in May 2005 in which he recommended that OLAF should acknowledge that it made incorrect and misleading statements in its submissions to him and that the European Parliament could consider adopting his recommendation as a resolution. The European Parliament, however, decided to await the final decision of all Court cases before further treating the Ombudsman's report. However, after a decision that was favourable for the journalist had been reached by the European Court of Human Rights on 27 November 2007, the European Parliament rapporteur responsible for drafting a report was not given the green light to suggest that the Ombudsman's suggestion be taken on board.
An - incomplete - overview of the events is given in the [http://curia.europa.eu/jurisp/cgi-bin/form.pl?lang=en&Submit=Submit&docj=docj&numaff=T-193%2F04&datefs=&datefe=&nomusuel=&domaine=&mots=&resmax=100 judgement] of the European Court of First Instance.
* "“There are problems with the European anti-fraud office. The reforms of Olaf that were recommended by a committee of experts in 1999 after the fall of the Commission have not been implemented."::
Paul van Buitenen, July 2007 [ George Parker: " [http://www.ft.com/cms/s/0bfe4d5e-2b5a-11dc-85f9-000b5df10621.html EU's anti-fraud chief facing allegations] ", Financial Times, 6 July 2007]
* Internal Audit Service (IAS)
Institutions of the European Union
European Court of Auditors
* [http://ec.europa.eu/anti_fraud/index_en.html OLAF homepage]
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