Select Committee on European Communities Ninth Report


PART 2: EVIDENCE

Difficulties in investigating and prosecuting frauds

25.  National authorities face real difficulties in investigating and prosecuting major frauds on the Community's budget. The Bar European Group (BEG) said that problems were "endemic to the European Union which creates a commercial territory without frontiers but which retains the independent criminal jurisdictions of each Member State". Budgetary fraud committed at supranational level were said to pose unique problems for prosecutions at national level where elements of the crime were committed in various Member States and where no national authority had complete jurisdiction, either to investigate or prosecute the fraud and recover funds (p.43).

26.  Professor John Spencer, University of Cambridge, had no doubt that there were difficulties in all Member States in prosecuting frauds against Community funds. One problem was the territorial basis of criminal jurisdiction in most countries. It was necessary to find a court competent to prosecute fraud where it might be unclear in which Member State the fraud occurred and where frequently the various participants were spread across several Member States and, possibly, third States. Investigative powers only pertained to the territory of the investigating authority. Mutual legal assistance was needed to get evidence from abroad. There was, in Professor Spencer's view, no lack of will in national authorities to investigate but they came up against extreme difficulties in checking evidence from foreign countries. A particular difficulty as regards the United Kingdom was the principle of orality in giving evidence. It was difficult to prosecute with a written statement from a witness rather than a witness present in court to give live evidence (QQ 5,7).

27.  From the standpoint of the person accused, Fair Trials Abroad identified four main problems: the obtaining and transmission of evidence; bail or provisional liberty; interpretation and translation; and access to justice or legal aid (Q 220).

Territoriality

28.  The Association of Lawyers for the Protection of the Financial Interest of the European Community (ALPFIEC) described the limited jurisdictional reach of some offences, notably deception and conspiracy, as "possibly the biggest problem caused to prosecutors of trans-national fraud by the substantive law as it presently exists" (p 109). JUSTICE also took the view that the principle of territoriality was a major barrier to effective prosecution of Community budget fraud (p 121).

29.  The Criminal Bar Association, however, did not accept that the territorial nature of English criminal law created considerable barriers to the prosecution of the type of offence at which the Corpus Juris was aimed. English law conferred considerable jurisdiction on its courts where conspiracies with a foreign element were concerned. As to Articles 3-7, there was considerable overlap with existing domestic law. There were few offences in Articles 1, 2 and 8 which could not be tried in an English court were Part 1 of the 1993 Act to be brought into force with certain amendments (p.47). But Miss Montgomery, for BEG and the Criminal Bar Association, pointed out that one of the problems in prosecuting conspiracy was proving that there is more than one conspirator (Q 177).

30.  Few Member States have legislation specifically addressed to fraud on the Community budget (Q 267). Witnesses made reference to section 71 of the Criminal JUSTICE Act 1993, a provision expressly directed at fraud perpetrated against the European Communities. The Criminal Bar Association had the impression that its provisions were not as widely known as they ought to be (p 48). The offence has in fact been charged in some cases. It is necessary to show that a breach of another Member State's law has occurred and to produce a certificate to this effect in evidence. ALPFIEC said: "So far it has proved difficult if not impossible to obtain certificates to a standard which will satisfy the court" (p 109).

31.  The Government accepted that the difficulty in England and Wales in prosecuting offences where the constituent elements were not confined to the United Kingdom was a significant weakness in the criminal law. This had been remedied with regard to conspiracies by the Criminal Justice Act 1998 and would be remedied with regard to substantive fraud offences upon entry into force of Part 1 of the Criminal Justice Act 1993 (p 94).

The 1995 Convention

32.  The Government explained that the proposals in the Corpus Juris had been made against the background of long-standing concern about the incidence of fraud against the Community budget and the need for effective criminal law measures. The EU had responded by adopting the 1995 Convention and three Protocols to it. The target date for ratification had been mid-1998 (p 92). Professor Delmas-Marty, l'Université Pantheon-Sorbonne (Paris II), said that the problem was that these instruments had not been ratified (Q 10). Mr Bontempi (MEP) contrasted the delay in implementing conventions with the speed with which organised crime operated. He feared that there might be some Member States who would never ratify the 1995 Convention (QQ 268-9). Some were awaiting completion of the Explanatory report on the Second Protocol. This, the Minister reported, had now been agreed (Q 302). Ratification by the United Kingdom has been delayed mainly because of the need to bring into force Part 1 of the Criminal Justice Act 1993, to ensure compliance with Article 4 of the 1995 Convention (p 92).

Part 1 of the Criminal Justice Act 1993

33.  Part 1 of the 1993 Act would enable prosecutions to be brought in the United Kingdom where some element of the offence took place here. It would not have to be the main or largest element (Q 303). ALPFIEC said that it would help by bringing within UK jurisdiction certain aspects of behaviour prevalent in frauds on Community finances but would not alter what was fundamentally territorial jurisdiction (p 109). The Criminal Bar Association thought that there would be few offences as defined in Articles 1, 2 and 8 of the Corpus Juris which could not be tried in an English court were the 1993 Act to be brought into force, with appropriate amendments to reflect the passing of the 1998 Act (p.47). BEG said that if the Part 1 of the 1993 Act were brought into force the existing provisions for prosecution would be adequate (p.44).

34.  Witnesses believed the problem, and hence delay, in bringing it into force was one of expense (QQ 160,185). The Minister confirmed that agreement had been reached between the Home Office and the Lord Chancellor's Department on the issue of costs (including legal aid and court administration). The Home Office had plans to bring Part 1 into force "in the near future". The Minister said: "We are talking about the end of the summer". She thought that by the time the United Kingdom was thus in a position to ratify the 1995 Convention other Member States would also have moved forward in the ratification process (p 92, QQ 299, 300, 304).

Co-operation between Member States

35.  As regards co-operation between Member States, the Government identified a number of problems:

  • delays in securing information from other jurisdictions, due to administrative delays or appeal procedures;
  • the lack of a legal framework enabling UK enforcement agencies to ask foreign agencies to intercept communications and give such assistance to foreign authorities;
  • the lack of provisions to compel a witness abroad to give evidence in the UK;
  • problems over admissibility of evidence obtained in other jurisdictions (in particular written evidence);
  • gaps in provision for Member States to assist each other in tracing, seizing and confiscating criminal assets.

Progress had been and was being made. In addition to the 1995 Convention and its Protocols, other initiatives had been or were being undertaken to improve co-operation. The Government listed the Joint Action of 29 June 1998 on good practice in mutual legal assistance in criminal matters[27], the European Judicial Network, and the draft EU Convention on Mutual Legal Assistance in Criminal Matters[28]. The EU had, pursuant to a 1997 Joint Action, also begun a series of mutual evaluations of Member States, the first evaluations being concerned with mutual legal assistance and urgent requests for the tracing and restraint of property. Member States were being evaluated at the rate of five each year. The Minister said that the United Kingdom was playing a full part in implementing the programme, though it had not yet been the subject of an evaluation (p 94, Q 326).

Judicial co-operation - the 1959 Convention

36.  Professor Delmas-Marty said that Continental judges had expressed dissatisfaction at how co-operation, particularly under the European Convention on Mutual Assistance in Criminal Matters 1959 (the 1959 Convention), was presently working. (This was manifested in the so-called Geneva Appeal[29], to which seven Continental judges put their signatures.) There were considerable delays in investigating cases. There had also been obstacles in establishing co-operation between the Member States and the Commission (Q 10). JUSTICE described the present arrangements as "both time consuming and inefficient". JUSTICE also criticised the operation of the United Kingdom's Central Authority. JUSTICE attributed delays to the Government's failure to provide sufficient resources (p.121). Mrs Wright, of the SFO, said that delays might be because the Central Authority was overwhelmed by requests and, possibly, that it was not staffed by investigators and lawyers but by administrators (Q 128). The Law Society said that one undoubted improvement would be the employment of staff with legal training (Q 213, p 55). Fair Trials Abroad said that the system was overburdened and slow though in comparative terms the Home Office provided, in Mr Jakobi's words, " a pretty high class service compared to most" (Q 223).

37.  Last year the United Kingdom Central Authority (total staff 12) handled some 3600 requests for legal assistance (2400 inwards, 1200 outwards) mainly by channelling requests, co-ordinating their execution and exercising quality control functions. The Minister was not aware of significant levels of dissatisfaction from other Member States. "We are not complacent but at the same time we do not think we are any worse than anyone else in Europe. In fact, in a lot of areas, we are a lot better". She doubted whether the employment of lawyers would improve things significantly or would be cost effective. But she acknowledged that the existing arrangements had been in operation for a long time and that pressure on judicial co-operation was growing. "There is the opportunity now to review the working arrangements and to look at whether we can make improvements generally to the way we work". Among the possibilities to be considered was the scope for decentralisation of the process (Q 305).

Investigations

38.  In the United Kingdom most of the significant offences against Community finances are dealt with by HM Customs and Excise. ALPFIEC contrasted the position in other Member States, where investigations and prosecutions were more locally based and subject to competing pressures on resources. ALPFIEC also said that cross-frontier co-operation was much better developed in relation to the responsibilities of HM Customs and Excise than elsewhere. ALPFIEC drew attention to Customs' responsibilities in relation to the illegal importation and sale of drugs and the similar characteristics which drugs-related offences had to fraud on the Community's finances. They were conducted across national frontiers by organised groups with careful arrangements for laundering of the proceeds (pp 110-111).

39.  Fair Trials Abroad said that a lack of co-ordination between investigative forces internationally and within a State caused serious injustice (p.73). BEG said that there was no doubt that investigation of Community budgetary fraud was neither adequate nor effective. The lack of effectiveness was, however, largely a result of practical problems and difficulties, rather than the absence of the necessary legal framework. There was, in BEG's view, something to be said for an investigator who had European-wide powers of investigation, subject to the scrutiny of a judge. However, some of the investigatory powers in the Corpus Juris were not as extensive as existing powers in the United Kingdom. Experience had also shown that the scheme of investigation proposed by the Corpus Juris, a form of inquisitorial process, lent itself to much greater delay than the English system where the charge was laid much earlier (pp. 43-44).

Collection of evidence

40.  A number of witnesses said that it was in the area of collection and presentation of pertinent admissible evidence that problems tended to arise. The State rendering assistance would take the evidence under their own procedures, in ways which met admissibility requirements in that State but not in the United Kingdom. The other State might not, for example, appreciate the nature and extent of application of the hearsay rule in English criminal procedure (Q 124). The requirements of the Police and Criminal Evidence Act relating to computer records caused difficulties. Mrs Wright, for the SFO, said: "Asking an overseas jurisdiction for a section 69 certificate fills them full of wonder and amazement that such a thing is needed and often it is not met with any degree of co-operation". As regards incoming requests, other States did not always appreciate the requirements needed to obtain a search warrant under English law or that it was not possible to freeze a bank account before a criminal charge was laid. There was anecdotal evidence that other States had experienced delays in the processing of requests for assistance by the UK Central Authority. (QQ 126, 128).

41.  In ALPFIEC's view, the absence of a legally qualified and experienced investigator, both to receive requests for assistance and to conduct their processing as well as to formulate outgoing requests and negotiate with overseas magistrates, was critical to the successful obtaining of information. Moreover, in relation to co-operation and mutual assistance, ALPFIEC said that "perceived reciprocity" was all-important. While the United Kingdom could provide speedy access to bank information (the identity of true ownership behind trusts and the corporate veil remaining, however) money recovery, including asset freezing, was an area where the UK lagged behind. Investigating magistrates in other Member States could not understand why UK courts cannot offer reciprocity (pp 109-110).

42.  Both prosecutors and defence lawyers said that the 1959 Convention failed to deal adequately with witnesses. Witnesses could not be compelled to give evidence in the United Kingdom (Q 133). Fair Trials Abroad said that because there was no penalty under the Convention for non-compliance with a witness summons injustices inevitably occurred, both to the accused and the prosecution (p.73).

Background to the Corpus Juris

43.  Professor Delmas-Marty argued that traditional co-operation was ill-suited to the fight against the sorts of organised fraud concerned. Traditional co-operation was organised in a bilateral rather than a multilateral context. In the latter, the current position was a complex one, with a number of conventions on the same subject drawn up by the same partners in different regional capacities (including the Council of Europe, Benelux, and Schengen). It was very difficult to know who can do what in what country. At the same time many of the agreements had not been ratified by all Member States. For that reason she thought that it was necessary to act at Community level, by way of the Corpus Juris (Q 10).

44.  Professor Spencer had no doubt that matters could be made to work better under the current system and that instruments for international co-operation could be made more effective. But there was, he said, a limit beyond which the present international arrangements simply cannot work. "We think ultimately the problems cannot be solved without a common set of rules applicable throughout the Community and without giving some supranational body the power of directing prosecutions" (Q 11).

45.  Professor Spencer explained that the Commission (DG XX), following a series of studies into the problem of budgetary fraud, had brought together a group of academic lawyers from various Member States. It was told: "please dream up a solution to this problem that might work if the political means of implementation were present". Both he and Professor Delmas-Marty described the present text of the Corpus Juris as a Green paper. It was not a complete text, in the sense that additional regulations might be needed to define the offences being created. Nor was it a final text. (Q 3).

General reactions to the Corpus Juris

46.  The Corpus Juris has provoked some strong reactions in the media and in the evidence of some of our witnesses. The Faculty of Advocates considered the Corpus Juris to have profound political implications touching on national sovereignty. "The width of the proposals is such that they do not merely have a direct bearing on the sovereignty of the United Kingdom. They, in fact, result in surrendering the sovereignty of the State in relation to a range of criminal offences" (pp 50-51). The London Criminal Courts Solicitors' Association (LCCSA) said that in constituting itself part of a single legal area the United Kingdom would be transferring powers, such as the issue of arrest warrants, to an external authority. Those powers were attributes of statehood. They should not be transferred without the political decision having been taken, through constitutional means, that the United Kingdom no longer wished to regard itself as a sovereign state (p.126). Mr Dick-Erickson, a lawyer and author of articles on the Corpus Juris, wrote, saying: "Corpus Juris will drive a destructive wedge into the British judicial system, for its principal provisions are in irreconcilable conflict with fundamental tenets of British law" (p.117).

47.  The Government said that the Corpus Juris contained "far-reaching proposals affecting Member States' criminal law and procedure in relation to fraud against the EC budget". Many of its proposals would be "difficult to square with important principles of UK law". The creation of a separate prosecution authority with no accountability to Parliament would raise difficult issues. The insertion of inquisitorial procedures into a largely adversarial system raised fundamental issues for procedure in criminal trials and the admissibility of evidence. The necessity for such radical changes had not been demonstrated. The Minister did not believe that the Corpus Juris was a realistic way forward. "My view is that a European prosecution service and a superimposed body of European criminal law and procedure would not be remotely compatible with either national sovereignty or the principle of subsidiarity. Even more importantly, we do not see very much that is practical in these proposals … it may sound a very grandiose idea but I do genuinely think that it is pie in the sky. I think it is not something on which we would want to spend the time and effort that would have to go into even starting a debate on trying to get to that stage" (pp 92-93, 95, QQ 297-8).

48.  Those representing legal practitioners (prosecutors and defence lawyers) were not attracted by the Corpus Juris. In general terms, they had greater problems with Part II (Criminal Procedure) than Part I (Criminal Law). Miss Montgomery (for BEG and CBA) said: "The criminal offences that are defined are broadly familiar, albeit that we have criticisms to make about some of their terms; whereas the procedural part is designed to create what would be wholly unfamiliar, namely an initial inquisitorial phase of investigation, followed by a judge only trial, both of which we think are controversial, to say the least" (Q 163). Mr Moynihan, for the Faculty of Advocates, agreed. The offences gave rise to grave concerns, but less than the procedural provisions which had no counterpart in Scots law (Q 164). Miss Montgomery thought the position might be the reverse in other Member States, where the Corpus Juris might provide a wider definition of crime than they presently have (Q 165).

49.  Both the Faculty of Advocates and the Law Society of Scotland questioned whether the Corpus Juris was necessary at all and whether existing arrangements in Scotland failed to meet the needs of the Community (pp 51, 53). The Criminal Bar Association considered that there might be no case for implementing the proposals unless it could be established that there was a real and continuing difficulty which could not be cured by better co-operation and by co-ordinated national legislation dealing with jurisdictional and related matters (p 47).

50.  Practitioners expressed concern at the prospect of creating a parallel jurisdiction to lie alongside domestic ones. They described potential problems arising from different rules relating to such matters as the rights of the accused and the admissibility of evidence (QQ 172-4). Mrs Wright (SFO) said: "All this to detect, investigate and prosecute one single type of fraud seems to us to be highly artificial and unnecessary. Our view is that we need to concentrate on fighting fraud generally, not only fraud against the EU budget, and we ought to devote resources to its prevention, detection, investigation and prosecution … We would argue as forcefully as we can that the entire area of transnational fraud in Europe and outside Europe is something that ought to be looked at urgently" ( Q 152).

51.  Practitioners pointed out difficulties and numerous shortcomings in the text. Insofar as they are not described in the following paragraphs they are set out in Appendix 4.

52.  In its recent Resolution on criminal procedures in the European Union (Corpus Juris)[30] the European Parliament "welcomes the Corpus Juris, which sets out provisions relating to the protection of the European Union's financial interests, since it might serve as an example for future developments, and looks forward with interest to the Commission's report on the possible implications of the Corpus Juris for national legal principles". The Resolution states that the Parliament is not seeking the creation of a European Penal Code but calls for the gradual establishment of "a European criminal law system in which account is taken of Member States' legal traditions". It contemplates the creation of an independent European Public Prosecutor, initially "to centralise judicial information on transitional investigations under way relating to offences covered by the European criminal law system" in order to ensure better co-ordination of national investigations. At a later stage the European Public Prosecutor might be given responsibility to open investigations and bring proceedings involving offences covered by the European criminal law system.

Legal basis for Corpus Juris

53.  There is a difference of view as to whether, and if so under what provision, the Corpus Juris could be adopted under the Treaty. The Faculty of Advocates said that it was aware of no basis in current Community law for such radical proposals (p.51). A number of witnesses thought it likely that the Corpus Juris would be presented as a "measure against fraud" under Article 280 of the EC Treaty (as amended by Amsterdam). Qualified majority voting would apply and no power of veto would be available for the United Kingdom. Concern was expressed that the Government might be acting under a misapprehension as to the position (pp 117, 123, 126). Dr Simone White (Institute of Advanced Legal Studies) pointed out that various possible legal bases under the Treaties had been discussed, including Articles 95, 280, 308 EC and Title VI TEU. None were satisfactory. Dr White concluded that given the political will a legal base would be found, though Treaty amendment would be needed if the Corpus Juris were to be incorporated wholesale (p 129).

54.  Professor Delmas-Marty said that that question of the appropriate legal base was still open. There were those who argued that Article 280 EC (ex Article 209a as amended by the Treaty of Amsterdam) could be interpreted in such a way that if the Corpus Juris did not have a direct effect on the administration of national justice but only on the question of European frauds it could be based on that Article. She added: "Others do not think so and would prefer either the Third Pillar or a Convention or an amendment to the Treaty itself" (Q 12). Both Mrs Theato (MEP) and Mr Bontempi (MEP) thought that Article 280 EC offered scope for the implementation of the Corpus Juris (QQ 270, 274). However, Mr Mercer (for BEG) took the view that the proviso in Article 280(4) ruled out the introduction of the Corpus Juris under the EC Treaty, especially if it were to create the EPP as a new European institution. He thought it more likely that any measure would be brought forward under Article 31 TEU (ex K3). This might be desirable in terms of ensuring that Corpus Juris provisions remained limited to additions to national criminal investigations and procedures and did not become the start of a process of unnecessary harmonisation of the different traditions of European States (p.45, QQ 189-90).

55.  The Government rejected the principle that far-reaching changes to Member States' criminal laws should be introduced under Community law. Nor did it accept that there was any legal base for this in the EC Treaty as revised at Maastricht or Amsterdam. The last sentence of Article 280(4) EC (as revised at Amsterdam) ruled this out. The Government said: "It is clear that Article 280 could only be used to introduce supplementary measures which did not concern the application of national criminal law or the national administration of justice, whereas the main proposals of Corpus Juris have major implications for both". The Government also doubted whether the Corpus Juris could be introduced by a convention or other measure under the Title VI of the revised Treaty of European Union as the Corpus Juris went beyond the aims of Article 31 TEU (ex Article K3). In any event, measures under Title VI required unanimity (p.95).

Subsidiarity - proportionality

56.  BEG said that any Community action to implement the Corpus Juris would fall under the principles of Article 5 EC (ex Article 3b), which included the principle of subsidiarity. A case might be made for some further trans-national co-operation and action to make the fight against fraud more effective. But if any action was to be taken then, in terms of Article 3b, it should be limited to "what is necessary" (p.45). Mr Moynihan, for the Faculty of Advocates, also drew attention to the importance of the principle of proportionality. Article 280(4) EC, which preserves the position of national criminal laws and procedures, also had to be seen in that context. He said that "the Corpus Juris goes too far and accordingly has no Treaty base" (Q 191).

57.  ALPFIEC's view was that the Corpus Juris had been born out of frustration at the apparent failure of the various conventions aimed at countering fraud against the Community's finances. It was not devised as a treaty, leaving it to States to work out the detail of implementation. ALPFIEC pointed to the consequent difficulties of the approach taken by the draftsmen. The text was too ambiguous to be applied directly. Interpretation of its provisions was likely to provide United Kingdom courts with "something of a nightmare". It was unclear what principles of interpretation would need to be applied to the Corpus Juris because questions remained about the legal basis and nature (p.111). The Law Society of Scotland drew attention to Articles 26, 27 and 33, which contain provisions requiring national law to be applied where there is a lacuna in the Corpus Juris. It was difficult to see how harmonisation could be effected on such a basis (p.55).

The offences created

58.  The Government said that Part 1 of the Corpus Juris largely duplicated key provisions of the 1995 Convention. Article 1 and 10 went further than the Convention in defining fraud as including acts of gross negligence. In the Government's view intent was a necessary component of fraud offences since fraud implied dishonesty (p 96). Other witnesses agreed. The Faculty of Advocates saw no justification for extending the crime of fraud in such a manner as to approximate it to negligence, particularly when a mandatory sentence appeared to be envisaged for any completed fraud (p.52, Q 164).

59.  Mrs Wright (SFO) welcomed the notion of a common definition of fraud which the Corpus Juris would give (Q 152). Other witnesses expressed concern at the broad nature of the offences created in Part 1 of the Corpus Juris (their detailed criticisms are described in Appendix 4). They were also highly critical of the lack of precision in the drafting of the offences created. The Faculty of Advocates spoke of "significant provisions being clouded in obscurity" (p.50). BEG said: "The imprecise language used does not bode well for the success of any prosecution" (p.45). Professor Delmas-Marty said that the intention was to have the same definition of offences for all States. The present text was a general outline. There would be "supplementary regulations which will be much more concrete on technical points" (Q 29).

The European Public Prosecutor

60.  The Corpus Juris requires the creation of the European Public Prosecutor (EPP), with responsibility for investigating offences (Article 20), deciding whether to prosecute (Article 21), bringing and closing prosecutions (Article 22), and executing sentences (Article 23). The EPP's functions would be exercised by a European Director of Public Prosecutions (EDPP) and European Delegated Public Prosecutors (EDelPP).

61.  The direction of proceedings by an EPP was, Professor Delmas-Marty said, the key point of the draft. More obstacles appeared during the pre-trial stage (where very different systems applied in the Member States, creating problems of co-operation and comprehension from one country to another) and there were not so many disparities at the trial stage (Q 22). Mrs Theato (MEP) was clear that an EPP was needed to deal with transnational offences, but appreciated the national sensitivities of the creation of such an office (QQ 272, 290). Professor Spencer said that they had tried to be as "non-shocking" as possible. The EDelPPs would come from national prosecuting agencies: "essentially somebody local who understands the system rather than a completely new bureaucracy imposed from outside" (Q 22). The European Parliament was considering whether the EPP might be introduced only gradually, initially to co-ordinate anti-fraud procedures and to superintend Europol (Q 281)[31].

62.  The Minister made clear that the Government had difficulties of principle and practice with the notion of an EPP and a "two track system". These included:

  • the lack of Ministerial accountability for the EPP's actions in the UK;
  • the proposal that the EPP should be bound by the "legality principle", ie there would be no discretion whether or not to prosecute in the public interest;
  • the division of responsibility for investigation between the EPP and national authorities, and resulting problems of sharing information;
  • a possible tension or conflict of interest for UK prosecutors acting for the EPP between their role as officers of the domestic court and as agents of an EU institution;
  • the power to remand in custody for up to nine months and, apparently, wider grounds on which remands would be granted;
  • the inability of the EPP to request mutual legal assistance from countries outside the European Union;
  • the lack of any clear legal basis in the Treaties for a proposal of this kind

The Minister believed that national authorities should retain the primary responsibility for investigating and prosecuting fraud (p 96, QQ 313, 316).

63.  Fair Trials Abroad considered that the structure of the EPP should be as European as possible in the circumstances (p.73). Other witnesses, however, drew attention to the practical, political and constitutional problems raised by the proposal to have an EPP. In BEG's view, transferring control over investigations and prosecutions to the EPP would be "an unprecedented incursion into the right to control the criminal and civil process in this country". Moreover, the EPP's duty to investigate and prosecute ran counter to the principle that investigation and prosecution were subject to discretionary control (pp.44-45). The Criminal Bar Association said that the powers bestowed on the EPP were excessive. National prosecuting authorities would be placed in a wholly subordinate position where relevant offences were concerned (this, Professor Spencer explained, was clearly envisaged (Q. 34)). The Association said that national authorities ought to retain the right to decide independently which cases they conduct (p 49). JUSTICE said: "To superimpose this new system on existing national powers of investigation and prosecution would cause chaos and would be counterproductive" (p 122).

64.  In Scotland the Lord Advocate has responsibility for prosecutions. The Law Society of Scotland said that the imposition of an additional layer of prosecutorial authority in Scotland would result in the possibility of conflict between the position of the Lord Advocate and the Crown Office and the EPP. This would be disadvantageous to the administration of justice (p.53). The Faculty of Advocates said: "These proposals would relegate the Lord Advocate to the position of an administrative assistant to the EPP" (p.51).

65.  Such problems might not be restricted to the United Kingdom. Mr Harvey doubted whether the proposed procedures fitted any more neatly into the systems existing in other Member States (p 120). ALPFIEC said that the EPP provisions raised more constitutional problems for other Member States. It wondered whether the small number of cases likely to be dealt with by the EPP provided a sufficient justification. Tension already existing between agencies over staff resources and management might be exacerbated if those directing them are not providing resources but are directing them to collect evidence (p.112).

66.  Witnesses were concerned that the EPP would be both the investigator and prosecutor. Attention was drawn to the importance attached to the separation of those functions in the United Kingdom. LCCSA drew particular attention to the possible implications of Article 23, under which the EPP had certain responsibility for ordering and overseeing the implementation of the sentence. In England and Wales these matters were beyond the control of the police, prosecutor and judge. LCCSA said; "Whatever our reservations may be about the manner in which the Home Office exercises those powers, we would utterly oppose their being given to the investigator and prosecutor, just as we oppose making the same person investigator and prosecutor in the first place. If the risk of abuse of power and even corruption, which is always present to some degree, is to be minimised, such powers must be separated" (p.127).

EPP - Accountability

67.  Witnesses raised concerns as to whom the EPP would be accountable. Its status and that of its Director was unclear. Professor Delmas-Marty said that the EPP would be subject to "disciplinary rules and professional responsibility" before the European Court of Justice. As to whether the EPP would be susceptible to local courts where, for example, he had acted unlawfully in entering premises without authority, Professor Spencer said that that had not been thought through by the draftsmen. But he assumed national laws would apply to the same extent that a national prosecutor would be liable in such circumstances (QQ 26, 27).

68.  The Law Society questioned the extent to which the EPP would be subject to the judicial supervision by national courts. "Whilst independence is a necessary pre-requisite of the investigator, there must be some eventual form of control to protect the potential victims of abuse of power in the investigative process" (p 56). The Association of Chief Police Officers in Scotland considered it to be "a significant omission" that the Corpus Juris did not deal with the investigation of complaints against and obtaining redress from the EPP (p.116). Miss Montgomery, for BEG and CBA, said: "on any view there ought to be judicial oversight and there ought to be judicial oversight on a case by case basis" (Q 197).

69.  Witnesses also raised the question of political accountability. ALPFIEC said that there was no clue in the text as to the EPP's accountability to any body unelected or elected (p 112). Professor Spencer said that there would not be anyone with political responsibility for the prosecution process in the sense in which the Attorney General is responsible in England and the Lord Advocate in Scotland. "We do not feel that there should be some Minister who ultimately has the power to tell the European Public Prosecutor what should be done or not done or even what the broad lines of an approach to a question should be" (QQ 31, 33).

70.  Both Liberty and Mr Harvey suggested that the EPP should be accountable to the European Parliament. Liberty said that mechanisms should be put in place to allow the European Parliament to exercise effective supervision of the office of EPP (pp 120, 124). The Minister did not consider that this would be acceptable. People in the United Kingdom would expect the EPP to be accountable to the national Parliament (QQ 314-5, 324).

Scope of application

71.  The Corpus Juris, as presently drafted, would apply to any fraud on the Community's finances. There is no limitation to trans-national cases, however that might be defined. Professor Delmas-Marty pointed out that it would be possible under the current text for the European Public Prosecutor to abandon a prosecution in a Member State if it did not seem to be a serious fraud affecting European interests. She accepted that the text might be more precise and include criteria as to when the Corpus Juris should apply. Consideration might be given to its applying only in cases which have trans-national aspects (QQ 8, 17). But the Government thought that it would be extremely difficult to identify at a very early stage whether a case was clearly an international one. There could be serious practical difficulties where a case started as a domestic one (with evidence collected under national rules) and became an international one subject to the Corpus Juris (Q 324).

Exclusive application

72.  Article 17(2) of the Corpus Juris provides that when a single act constitutes a criminal offence under both Community regulations and national law the former are to be applied. Witnesses queried the effect of this on national proceedings. BEG wondered whether Article 17(2) would exclude a national prosecution which might result in a more severe penalty. If so that might undermine the importance of protecting of the Community's budget rather than strengthening it (p.47). Mr Brown (Crown Office) described how the Corpus Juris might give less protection against fraud than national laws. It would seem to exclude the facility, available in Scotland, to convict for a (lesser) common law offence where the prosecution failed to prove the essential elements of a statutory offence (QQ 147, 149). ALPFIEC said that in England indictments frequently contained a number of lesser offences, in addition to the more serious offence, to cover the same conduct. The prosecution might succeed only in relation to a lesser offence or might even accept a plea to it. ALPFIEC believed that Article 17(2) was, given the difficulties of proving offences under the UK systems of law unnecessarily restrictive, if it meant that a failure of a prosecution brought under, say, Part 1 of the Corpus Juris removed the possibility of proceeding under national law (p 113). The Law Society of Scotland queried whether national proceedings could be brought when the five year time limit (imposed by Article 22 of the Corpus Juris) had expired (p.54). LCCSA was opposed to the ousting of national laws in favour of Community law in the field of criminal law (p 128).

73.  Professor Spencer said: "We are not sure whether it should be possible to prosecute simultaneously for a Corpus Juris offence and a national offence". His provisional view was it should be possible, particularly if the broadly defined offence of fraud on the Community budget (in Article 1) remained. That offence covered many national offences and in many cases might be more conveniently prosecuted as such (Q 35).

Rights of defence

74.  Fair Trials Abroad said that in Corpus Juris the majority of accused were likely to be tried in a country other than their own and therefore it was necessary to tackle the questions of possible discrimination and procedural fairness (Q 243). Liberty welcomed the fact that at numerous places throughout the Corpus Juris the standards set by the European Convention on Human rights (ECHR) and the International Covenant on Civil and Political Rights (ICCPR) were expressly incorporated into the proposal. Examples were found in Article 18(1) (right not to be tried or punished twice), Article 25(2) (rights and freedoms of the accused and witnesses guaranteed by the ECHR in the preliminary stages), Article 29 (rights of the accused), Article 33 (exclusion of evidence illegally obtained) and Article 34 (publicity of court proceedings) (p 123). Fair Trials Abroad emphasised the importance of the rights of the accused (in Article 29) to be assisted by the services of both lawyer and interpreter. The issue of interpretation and translation was "of pivotal importance". The accused needed direct and full knowledge of the charges being made against him in order to enable him to mount an effective defence. An interpreter needed to be competent and all statements should be tape recorded in both languages for verification in cases of doubt (p.75).

75.  But Miss Montgomery, for BEG and CBA, said that it was insufficient for the Corpus Juris to refer to the "amorphous and widely drawn rights" in Articles of the ECHR. "It does not inform the defendant what the content of his rights may be in relation to any particular procedure and we are concerned about that". The absence of such rights might not enable the judge of freedoms (see para. 84) to exercise his role (QQ 202, 205).

European warrant of arrest

76.  Under Article 24 of the Corpus Juris a European warrant of arrest would be valid across the whole of the Community. The Government noted that this would avoid the need for extradition procedure. It believed that the idea of a European warrant of arrest or the possibility of a fast-track extradition procedure merited further consideration (p.96).

77.  The warrant is "issued on the instructions of the EPP by a national judge". The Criminal Bar Association questioned whether that wording left the national judge any discretion to refuse the EPP. It appeared that there was no mechanism by which the warrant sought could be reviewed (p 49). Professor Spencer said: "Certainly we meant coercive acts of all sorts to be subject to the authorisation, after weighing the matter up, of the judge in the national state" (Q 36).

78.  Two individuals, Mr Dick-Erickson and Mr Fergusson, wrote, contending that the Corpus Juris would, within its sphere of competence, abolish habeas Corpus[32]: "suspects could be arrested and held with no public hearing and no obligation on the prosecution to produce any evidence, for indefinite periods of time, and transported around Europe at will" (pp 117, 119). The Government said that the European warrant of arrest would not mean the end of habeas Corpus (p 96).

Remand and bail

79.  Article 20 (3)(g) gives the EDPP or the EDelPP power to request a person's remand in custody or remand on bail for a period of up to six months, renewable for three months, where there are reasonable grounds to suspect the accused has committed one of the offences in Articles 1-8 or good reasons for believing it necessary to stop him from committing such an offence or from fleeing after committing it. Witnesses had grave concerns about this provision (p.127). The Law Society said: "This will introduce to the English law for the first time the concept of a person being held in custody without charge, making massive in-roads into safeguards in place under UK legislation for those in custody" (p 57). Both the Faculty of Advocates and the Law Society of Scotland pointed out that the possibility of remand in custody for nine months was at variance with the strict time limits for remand under Scots law (the 110 day rule) (pp 52, 54). Mr Brown (Crown Office) said that the Scottish system expected a person in custody to be brought to trial within three to four months of arrest. "Under Corpus Juris, there is contemplated a remand of six months extendable to nine months without any very strong reasons being given apparently and there appears to me to be a disparity there which would require some explaining if the public were to understand it" (Q 151).

80.  Professor Spencer accepted that Article 20 (3)(g) was poorly drafted. But he was firmly of the view that the Corpus Juris offences were ones for which individuals could be held in custody if necessary before trial. He accepted that the present text of the Corpus Juris was unsatisfactory if it gave the impression that an individual could be retained in custody on mere suspicion without serious grounds and a substantial amount of evidence against him (QQ 37, 38, 39).

81.  The Law Society drew attention to the absence of provisions for applications for bail and appeal (p 57). Fair Trials Abroad said that the application of remand and bail rules where the accused is from another Member State gave rise to discrimination in practice. Imprisonment of an accused foreign national not only punished the individual before trial but also handicapped him in the collection of evidence for his defence. It was "inconceivable that any form of Corpus Juris approach to crime could be allowed to proceed without measures designed to eliminate remand discrimination". Fair Trials Abroad advocated a system of Eurobail under which responsibility for production at trial "moved with the body". If the accused wished to return to his native country, the appropriate courts in that country would set the bail conditions and have responsibility to deliver the accused for trial. Under the Corpus Juris it would be for the judge of freedoms to decide if the accused should be given bail (p 73, Q 232).

82.  The Minister accepted that because of the potential difficulty of locating the person concerned and bringing him back it was more difficult for a non-resident applicant for bail to convince a court that he was not going to abscond. But the Government had not seen any definitive evidence of discrimination as described by Fair Trials Abroad. "It is fairly anecdotal". The matter needed to be fully researched. The issue was one which the European Union should be addressing (Q 317). Professor Spencer was sympathetic to the points made by Fair Trials Abroad and was concerned that in practice it was difficult to persuade any court to release a foreigner on bail because it was afraid he would go home and could not be brought back. "That makes me think that we need a single set of rules relating to remand in custody. What the maximum period should be is then open to negotiation" (Q 37).

83.  The Minister said that the notion of Eurobail was something the Government wished to explore as part of its proposals on the mutual recognition of decisions and judgments in criminal matters alongside the need to identify fast track surrender procedures for fugitives. But forms of expedited surrender procedures were, Mr Stadlen (Home Office) said, "a very radical concept" given the difficulties Member States had had in ratifying the 1995 and 1996 Extradition Conventions, especially in relation to the handing over of their own nationals (QQ 319-20). Mr Brown (Crown Office) added that there might also be ECHR issues to consider, in particular Article 8 concerning the right to respect for private and family life (Q 321).

Judge of Freedoms

84.  Professor Spencer said that the basic idea was that there should be somebody, with the status of a judge rather than an investigator, who had to authorise coercive steps for gathering evidence and then coercive steps in the procedure, such as remands in custody - "somebody like the Sheriff in Scotland or somebody like the Circuit Judge in England who has to give permission for the production of documents". The intention was to benefit people in Continental systems like France and Holland where a single person might act as investigator and also decide on coercive measures (Q 41). Professor Delmas-Marty considered it important that, rather than the functions of the judge of freedoms being exercised by any judge of a certain level, there should be one judge, as was the case under the existing practice in Germany and the Netherlands, to carry out those functions in the particular case. Though Article 20 was unclear, it was the intention that the judge of freedoms would exercise his supervision from the outset of the proceedings (QQ 42, 43).

85.  Liberty welcomed the incorporation of the principle of judicial supervision throughout the process, particularly in relation to search, seizure, telephone tapping and remands in custody. It was concerned, however, that the supervisory jurisdiction of the judge of freedoms was too restrictive effectively to safeguard the rights and interest of the individual subject to investigation. There were gaps in relation to the bringing of prosecutions without an independent (judicial) assessment of the evidence and to the issuance of European warrants of arrest (p.124).

86.  Both the Law Society and the Criminal Bar Association considered that Article 25 was too vague as to the judge of freedom's powers and responsibilities. The Association was especially concerned as to whether he would conduct any independent review of the sufficiency of the evidence before a case is brought to trial (p 49, Q. 203). The Law Society of Scotland advised that caution should be taken when considering whether the role of such a judge should be accepted into United Kingdom law (p.54). The Faculty of Advocates was opposed to the notion of a judge of freedoms. There was no precedent for a member of the Scottish judiciary reviewing the decision to prosecute and the evidence on which it was based and issuing the indictment or complaint. The Faculty saw no grounds for altering the function of Scottish judges in this way (p.51).

87.  The Government expressed doubts as to whether the creation of a "judge of freedoms" would add value to existing safeguards in the United Kingdom (p.96). Miss Montgomery, for BEG and CBA said: "If there is to be a judge of freedoms he must be a genuine judge arbitrating on two competing views advanced before him otherwise he will tend to become simply a creature of the European Public Prosecutor who will feed the necessary information in order to justify the coercive action and it will be granted" (Q 205).

Trial by jury

88.  A number of witnesses was strongly against the removal of the right of the defendant to have his case heard before a jury (pp 119, 127). Liberty said that this was a matter of "grave concern" (p.125). The Criminal Bar Association said that "the right to trial by jury for offences of this level of seriousness is fundamental, and we are confident that our view is extremely widely held in this country" (p.49). The Faculty of Advocates said: "Jury trial continues to be regarded as one of the essential safeguards in Scottish Criminal procedure, and the Faculty is not aware of any evidence to suggest that Scottish Juries are incapable of trying fraud cases, or cases involving financial crimes" (p.52). Fair Trials Abroad said: "Almost all the countries in Europe have some form of lay participation in trials whether by way of jury or assessor and it is a safeguard to the accused that the accepted practice in the country concerned should continue" (p.74).

89.  Professor Spencer said: "people on the Continent do not always have the same high view of juries as a safeguard of human rights and civil liberties as the British do … There is a feeling … that trial by jury in cases involving complicated fraud is on the one hand, not a good safeguard for the innocent and, on the other hand, a greatly complicating factor for fraud trials, making them very difficult". If the issue of trial by jury were critical to the question of accepting or rejecting the Corpus Juris, the requirement for trial before "professional judges, specialising wherever possible in economic and financial matters" was, in Professor Spencer's view, "a clearly detachable part of the proposals" (QQ 44, 45).

90.  The Government said that Article 26 would import a different type of criminal court in England and Wales and in Scotland to try a specific type of case. It said that it was reviewing the issue of the use of juries in complex fraud trials and was still considering the large number of responses made to its consultation document "Juries in serious fraud trials"[33] (p 97, Q 322). JUSTICE did not consider that special courts were necessary to try frauds on the Community budget (p 122). Fair Trials Abroad believed that trying to provide a uniform system of trial in enforcing the Corpus Juris was unnecessary (Q 242). The Criminal Bar Association said that it would be particularly objectionable for one defendant to have a right to jury trial while another defendant in the same location, who faced an allegation no less serious had no such right simply because his alleged offence related to Community money (p 49). Witnesses accepted that if jury trials were removed for domestic cases it would be hard to justify them in European fraud cases (QQ 207,210). BEG noted that the Corpus Juris did not itself appear to have greatest confidence in the fact-finding abilities of such a professional judge. Article 27 not only gave an automatic right of appeal but the wording appeared to go so far as to insist that there must be an appeal (p 46).

A template for change

91.  The Corpus Juris was conceived in order to deal with fraud on the Community's finances. Fair Trials Abroad believed that the Corpus Juris would become the template for a more general concept tackling the threats to civil liberties resulting from the lack of equal treatment of citizens of the European Union under the law in each others jurisdictions and the impermeability of national legal systems to the needs of the Union (p 72). Professor Spencer acknowledged that the Corpus Juris might be a model for something larger. If it worked well there would be those who would propose its extension to other kinds of trans-national fraud. (Q 15). Mr Bontempi (MEP) described the Corpus Juris as "a point of departure". He envisaged it leading to further action at European Union level, particularly directed against organised crime (Q 268).

Options for reform

92.  Practitioners advocated putting more resources and effort into the present arrangements (QQ 213, 215, 217). In the view of the Criminal Bar Association the proper approach to combating EC fraud was by reforming existing structures and proceedings rather than attempting to establish some supra-national system. Improving co-operation would be less glamorous but likely to yield better results more easily, effectively and rapidly (p 50). The Law Society said that enormous progress had been made since the Criminal Justice (International Co-operation) Act 1990. This showed that "this fast developing area of the law can be improved in an empirical fashion rather than resorting to legislative change such as would be required were the provisions of the Corpus Juris to be introduced" (p.55).

93.  ALPFIEC regretted that the Corpus Juris had taken little account of Third Pillar initiatives for dealing with organised crime and had dismissed them as unlikely to be effective. Such measures should be vigorously pursued and supported. They offered a good chance of achieving progress and there was more evident political will and public support for them. (p 114). Customs' impression was that things were already getting better. The practical problems could be solved without having to replace the basic legal framework (QQ 119,124). Mr Brown (Crown Office) agreed but added that there was scope for improvement (Q 133).

94.  The Government pointed out that a major programme of work was already in hand which was designed to improve co-operation between Member States in combating serious and organised crime, including EC budget fraud. The main elements were set out in the Action Plan for establishing an Area of Freedom Security and Justice, adopted at the Vienna European Council in December 1998[34]. The Government considered the following elements were particularly important:

  • ratification of the EU Conventions on fraud, corruption and extradition;
  • completing the EU Convention on Mutual Assistance in Criminal Matters;
  • implementing the joint action on good practice in mutual legal assistance;
  • developing the work of the European Judicial Network in ways which will strengthen co-operation;
  • continuing the sequence of mutual evaluations of the EU Member States;
  • achieving further progress on asset confiscation and sharing;
  • developing the concept of mutual recognition of court decisions.

The Minister said: "We fully support co-operation across the European Union to promote common standards in relation to justice and the rule of law and particularly to fight against organised crime, corruption and fraud. The simplest way of putting it is that we actually support co-operation between jurisdictions rather than creating a single jurisdiction" (p 98, Q 297).

95.  As regards changes to the substantive criminal law, witnesses expressed support for the introduction of the 1995 Convention (QQ 94,159). A number preferred the approach of the Convention to that of the Corpus Juris. The offences were closer to existing criminal law in the United Kingdom and, as Mr Moynihan (Faculty of Advocates) said, "the Convention simply builds upon existing municipal procedures rather than displacing them" (Q 167). The Government observed that it would not wish to support proposals to amend these provisions before they had entered into force (p.96).

96.  The Criminal Bar Association spoke of co-ordinating legislative activity in the fields of extension of jurisdiction and admissibility of evidence obtained in other jurisdictions (p.50). BEG favoured the abolition of territorial restrictions in the definition of crimes, though Mr Mercer cautioned that this would have to be done in an orderly and co-ordinated way (p.46, Q 213). More specifically, the Criminal Bar Association said that the remaining parts of sections 1-6 of the Criminal Justice Act 1993 should be brought into force (also supported by Mrs Wright Q 159) and consideration given to extending the ambit of section 71 of that Act (p.50). There was also support for trying to remove differences in procedure and admissibility between the common law and civil law systems. Miss Montgomery suggested that, for example, technical rules such as section 69 of the Police and Criminal Evidence Act might be removed (Q 200).

97.  ALPFIEC advocated building on the programmes for networking and liaison between practitioners. "It is our experience that a lack of knowledge and understanding foster suspicion and mistrust between practitioners which are positively unhelpful to co-operation" (p 114). Both the Law Society and LCCSA believed that there was a need for better education of police and lawyers in the means of investigating, prosecuting and defending fraud cases in other Member States and, in particular, in the evidential requirements of other Member States' jurisdictions (p 128, Q 218). JUSTICE said that there was a need for more resources and better training and expertise in Central Authorities and investigators and prosecutors (p 122).

98.  The Government believed that the proposed Convention on mutual legal assistance in criminal matters was very important. The Minister said that they were very keen to get the Convention ratified and implemented because it would help to resolve a number of difficulties (Q 325). Mr Bontempi (MEP) was also clear that reform of mutual legal assistance should not be delayed pending the Corpus Juris (Q 288).

99.  The Criminal Bar Association and BEG advocated greater co-operation at the trans-national level. BEG said that there should be fast track mutual assistance. Miss Montgomery spoke of improving mutual legal assistance on the general plain that could then be used for the purpose of serious fraud (Q 169). Witnesses might be able to give evidence and be cross-examined by video link, as was being proposed in the EU Convention on mutual legal assistance. This required the consent of the party concerned. There was support for extending mutual assistance to require witnesses to give evidence. Mr Jakobi, for Fair Trials Abroad said: "I would wish to make high tech arrangements, if it were possible to make them, for witnesses to go to a regional evidence centre on close circuit television and be compellable and subject to their native contempt laws if they did not turn up" (Q 225).

100.  Mrs Theato spoke of the need to simplify channels of communication in mutual legal assistance (Q 285). Practitioners thought that consideration could also be given to simplified extradition procedures, provided always that fundamental safeguards were retained (QQ 157, 217). Miss Montgomery questioned the need for the involvement of the executive in transmitting and in some cases determining requests for extradition or mutual assistance. "My view is that if ultimately we can reach a situation where parties would accept warrants backed in the receiving State that will solve the problem" (Q 215). The Faculty of Advocates supported the enhanced mutual recognition of Court judgments and orders (p.52).

101.  The Minister drew attention to the Government's recent paper "The Mutual Recognition of Judicial Decisions and Judgments in Criminal Matters". The aim was to develop a regime where each Member State recognised as valid the decisions of another Member State's judicial authorities with the minimum of formality. There would have to be "a degree of approximation". Agreed minimum standards and safeguards would have to be adopted to ensure public confidence in the validity of judicial decisions in all Member States. Initially there might be arrangements for certain decisions and judgments to be endorsed by a judicial authority in the requested State, with a presumption in favour of endorsement and limited grounds for refusal. Later, there might be direct enforcement of certain types of decisions and judgments. The Government believed that it would be a better and more achievable approach than the Corpus Juris (p 98, Q 327).

102.  Both Mr Rawsthorne (Customs) and Mrs Wright (SFO) supported the mutual assessment and peer review of various States' mutual legal assistance arrangements (QQ 145, 157). The Minister said that the United Kingdom was playing a very full part under the Joint Action of 1997 which enabled Member States to review each other in terms of how they were implementing and adhering to their international obligations in criminal matters. The subject for evaluation could be any aspect of judicial, police or customs co-operation or related matters. The Minister said: "It is a new initiative, a way of getting countries themselves to face up to the responsibilities of monitoring and evaluating what is going on" (Q 326).

103.  JUSTICE saw a greater and more useful role for UCLAF. In particular its investigative powers should be enhanced and it should have better resources, with officers attached to national investigation and prosecution authorities (p 122). (The investigation role of UCLAF seemed likely to be taken over by a newly proposed (and strengthened) European Fraud Investigation Office (Q 311)). But other witnesses favoured national authorities retaining the lead (Q 143-4). ALPFIEC doubted whether direct intervention by EC institutions was helpful. Since 80 per cent of the budget was administered by the Member States responsibility for dealing with problems of fraud on the Communities finances should lie with them. In particular on-site checks and monitoring by Commission officials with little knowledge of national systems and sensibilities can give rise to resentment (p 115). The Government believed that national authorities should continue to play the leading role in the fight against fraud, with technical support from the Commission as necessary (p 99).

104.  A number of witnesses called for improvement in the Commission's own budgetary and accounting procedures. ALPFIEC said: "We cannot emphasise too strongly our support for the introduction of better systems to prevent fraud on Community funds". National experience showed that to be the most cost-effective way of dealing with the problems. ALPFIEC referred to the European Parliament's Report on Transit Fraud, in particular its recommendation for the introduction of computerisation. ALPFIEC also supported the introduction of SEM 2000 to check Community expenditure (p 115). LCCSA believed that such measures would assist the detection and prosecution of fraud by enabling the Commission to trace funds, to establish that loss or diversion has occurred and to quantify it (p.125). UCLAF acknowledged that the Commission might make a greater effort in improving the quality of legislation and administrative procedures, though the Council also had a role to play and needed to be more disciplined when exercising its lawmaking powers and taking decisions (Q 95).


27   [1998] O.J. L191/1. Adopted by the Council on the basis of Article K3 of the Treaty on European Union. Back

28   The subject of an earlier Report of the Select Committee, Mutual Assistance in Criminal Matters, 14th Report, Session 1997-98. HL Paper 72. Back

29   The text of the Appeal is set out in an annex to the European Parliament's Working Document, Towards a European Judicial Area, 1997 Doc LIBE 101 EN. Back

30   A4-0091/99, adopted on 13 April 1999. The Government's response to the Resolution is set out in a Written Answer to Lord Stoddart. HL Deb, 28 April 1999, col. WA 44Back

31   Committee on Civil Liberties and Internal Affairs, Report on criminal procedure on the European Union (Corpus Juris, (the "Wiebenga Report"), paras 5-8. Back

32   Whereby a person arrested in England and Wales can challenge the legality of an arrest warrant, and in Scotland an arrested person may apply to the High Court of Judiciary for review of the committal. Back

33   Issued in February 1998. Back

34   [1999] O.J. C19/1. Back


 
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