The European Union’s anti-fraud office, OLAF, has taken a lot of flak in
recent years, accused of being slow, over-aggressive, secretive and even sloppy.
But it has a tough job, made harder by the unwillingness of some EU member
states to publicise their management of the EU funds they handle. Despite this,
OLAF’s handling of fraud cases has speeded up and it has recently taken a series
of scalps in high-profile fraud cases.
Just last month, an international crime ring involving EU pre-accession funds
was uncovered by OLAF working closely with authorities in Bulgaria, Germany and
Switzerland. The financial impact of the fraud is estimated at 7.5m euros.
OLAF director general Franz-Hermann Brüner is now looking to bed in the new
mandate he secured last February and also raise the profile of the organisation,
which has had a poor press in recent years.
What has been perceived as aloofness by OLAF in the past was actually, Brüner
says, a response to requests from key ‘custodians’ in the European Parliament
and in the OLAF supervisory committee for the organisation ‘to communicate
But since the former director of the UK’s Serious Fraud Office, Rosalind
Wright QC, was appointed president of OLAF’s supervisory committee, the
situation has changed.
‘We feel encouraged to increase our visibility,’ Brüner explains. ‘The OLAF
Anti-Fraud Communicators’ Network, a network of spokespersons of our partner
EU-wide, of which the Serious Fraud Office and HM Revenue & Customs are
key pillars, is a major tool in this regard.
‘All this also goes together well with the transparency initiative of [EU
anti-fraud commissioner] Siim Kallas and [EU communications commissioner] Margot
Wallström’s action plan for reducing the distance between the EU and the
citizens,’ he adds.
The souring of relations with the European press stems in part to the
notorious Tillack affair, where OLAF was involved in a raid by Belgian police on
the home of a German journalist researching irregular accounting procedures at
Eurostat, the European Commission’s statistical office.
Asked whether a different approach might better serve OLAF’s interests,
Brüner is bullish: ‘Our attitude towards the media is open and co-operative and
almost all of the thousands of journalists who have been in contact with OLAF in
recent years will tell you that we have always tried our best to meet their
needs. However, there will always be some people who are not happy with our
‘Only the case you have mentioned has ended up in court, and the courts have
found that OLAF has not done anything wrong. But of course we prefer dialogue to
confrontation. We are in close contact with the International Federation of
Journalists and the other leading trade organisation in Brussels, the
International Press Association of accredited foreign correspondents.’
The OLAF web page dedicated to correcting alleged mistakes in the press may
have done little to improve relations with reporters but Brüner stands by its
existence. ‘I think it is a sign of dialogue and transparency if we are able to
publicly make our point in reaction to things written about OLAF which are
misleading the public,’ he says.
So much for journalists, what about accountants? Brüner is at pains to stress
that OLAF wants to improve its links with the profession and raise its
understanding of fraud.
‘It is our aim to raise awareness for the fight against EU fraud in all
relevant groups of society, not only within the competent state services,’ he
‘OLAF representatives speak at conferences of relevant professions or we
receive visits from interested professionals including chartered accountants.
There have also been investigations where OLAF referred to the services of the
private sector in this field.’
Brüner makes no secret of his belief that accountants should take an active
role in fighting fraud, even if that means reporting concerns about a client to
law enforcement authorities with all the attendant embarrassment when the client
becomes aware that their accountant has shopped them.
‘It is typical that, for many types of financial crime, there is no apparent
victim, or, as is the case in manipulated tender procedures, the victims do not
know that they are victims,’ he says. ‘Therefore, law enforcement has to rely on
the awareness and co-operation of all parties. It is unavoidable that for
certain professions the issue of confidentiality arises and the right balance
has to be struck.’
Brüner continues: ‘OLAF has no power whatsoever when it comes to checking
bank accounts or the like. We also need the voluntary co-operation of the
private sector to fight fraud more effectively.’
He cites the example of a private company that was recently approached by a
civil servant asking for bribes in a multimillion tender procedure. ‘The company
did not accept this. A consultant for the company informed OLAF about the issue.
Here you see how professionals can help us without putting their clients into
trouble: you can advise them to ask for support from the right people.’
With that kind of help, Brüner thinks that OLAF can succeed without the EU
needing to pass stronger legislation to protect its financial interests better.
‘As a matter of fact, the legal instruments in place constitute a solid basis
for our work,’ he says. ‘If everybody makes the necessary effort we can achieve
a lot with the rules already in place.’
Indeed, Brüner says he is satisfied with “the approval of the revised EU
financial regulation”. He views it as the most outstanding recent event in the
fight against EU fraud because it will allow for greater scrutiny.
‘Improved transparency will help protect the EU’s financial interests,’ he
explains. ‘The names of beneficiaries of agricultural and structural funds will
have to be disclosed and will be subject to public opinion, thus ensuring
transparency in the use of taxpayers’ money.
‘The European Commission would also gain a new tool to prevent fraud and
corruption with the setting up of a central database of organisations excluded
from EU funding. This database will contain all relevant information on entities
condemned for fraud or corruption in the member states and third countries
involved in implementing EU programmes.
‘Lastly, the new financial rules will improve member states’ reporting about
the implementation of the part of the EU budget managed by them, which is 76% of
the total EU budget, mainly in agriculture and structural funds.’
Spirit of co-operation
As well as looking for help from EU member states, the OLAF boss stresses
that help from other international organisations is invaluable.
‘For example, OLAF and Interpol experts meet in working groups on currency
counterfeiting and we have also jointly organised a conference for international
Looking ahead, what are the most common new scams that accountants and other
financial professionals should be alerted to?
‘I think that tender procedures and calls for proposals have been and will
remain one of the most sensitive areas of public spending, especially if more
countries or even outside of the EU are involved.’
One specific area which always deserves attention is the funding of training
activities, Brüner warns. ‘By their nature they produce no instant material
results. It may always be tempting for fraudsters to set up some training
courses which in reality never take place or do not take place the way they had
been approved by the funding authority.’
The European Anti-Fraud Office (OLAF) – its acronym comes from its French
name l’Office Européen de Lutte Anti-Fraude – was set up in 1999 to protect the
financial interests of the European Union’s various institutions, fighting
fraud, corruption and any other irregular activity, including misconduct.
The office is not a police force. It cannot arrest fraudsters and take them
to court. It does, however, have 400 staff, including trained and experienced
investigators armed with legal powers to investigate wrongdoing. This covers
staff and records within EU institutions, where it has guaranteed access to
data, accounts, documents and buildings.
In the wider world across the EU, the Brussels-based organisation can carry
out raids and spot checks on companies, charities and individuals under EU
regulation 2185/96/EC, ‘to have access to information concerning possible
Where member states’ national laws have been breached, it can refer dossiers
to local prosecutors. There are plans to create an office of the European Public
Prosecutor, which could launch prosecute illegal attacks on the EU’s financial
interests, but until the EU gets close to agreeing a constitution, this proposal
will stay shelved.
OLAF is also charged with supplying EU member states with support and
technical assistance in fighting fraud activities and in designing EU anti-fraud
strategies.Unlike its predecessor UCLAF (the ‘task force for the co-ordination
of fraud prevention’), which was an arm of the European Commission, OLAF is
supposed to enjoy operational independence from its parent body.
EU regulations prevent OLAF’s director general from either seeking
instruction from any EU institution or taking any orders from them. If under
pressure, the director general can challenge directions at the European Court of
Justice. There is, however, a supervisory committee of five independent experts
for criticising, advising or praising OLAF, but which cannot ‘interfere with the
conduct of investigations in progress’.
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