21.2 This document contains the Commission's proposals to set up procedures and tools to improve fraud-proofing of both legislation and contracts. As regards fraud-proofing of legislation, the Commission says that this will be achieved by requiring Commission Directorate-Generals to consult a new Fraud-Proofing Unit in OLAF. In her Explanatory Memorandum of 7 March 2002, the Economic Secretary to the Treasury (Ruth Kelly) outlines the Commission's proposed four phases of this work:
"Phase I OLAF will identify the criteria necessary to identify those sectors which are at a higher risk of fraud or irregularity. It will use material already available such as audit reports, and cases reported in the annual fight against fraud reports. It will also consider the numbers of checks and controls carried out in each budget sector.
"Phase 2 A specific working group (chaired by OLAF, to include representatives of the Secretariat-General, the Legal Service, DG Budget, DG Financial Control and the Internal Audit Service) will consider OLAF's initial findings and criteria and use these to identify sectors and areas of activity considered to be high-risk.
"Phase 3 OLAF and the working group will liaise with specific Directorate-Generals to identify draft legislation in high-risk sectors which needs to be examined by OLAF.
"Phase 4 Consultation of OLAF by Directorates-General on specific draft legislation, including the drafting of anti-fraud provisions if necessary."
21.3 The Minister adds that:
"OLAF will, however, not be bound by this procedure inter-service consultation under Article 21 of the Commission's Rules of Procedure will enable it to intervene in all relevant cases (i.e. it may ask for legislation not necessarily identified under the above procedure to be referred for fraud-proofing)."
21.4 As regards fraud-proofing of contracts, the Commission intends to create a central database of contracts and contractors, and wherever possible to establish standard contracts. Directorate-Generals will be able to use the database to check the background and record of particular contractors. OLAF and the Commission's Legal Service will be involved in defining and drafting clear fraud-proofing clauses. New standard contracts will be proposed, subject to inter-service consultation. OLAF will also submit information to the central contracts database on contract fraud and irregularities it has investigated.
21.5 The Minister adds that, in addition, the Commission proposes awareness and training campaigns in order to provide information on the risks of fraud associated with complex legislation. OLAF will produce a manual, and participate in training modules. Precise guidelines on the management of contracts will also be supplied.