ESTABLISHMENT OF A EUROPEAN PUBLIC PROSECUTOR
Green Paper on criminal law protection of the financial interests of the Community and the establishment of a European Prosecutor.
|Document originated:||11 December 2001
|Deposited in Parliament:||17 December 2001
|Basis of consideration:||EM of 16 January 2002
|Previous Committee Report:||None
|To be discussed in Council:||Justice and Home Affairs 28 February/1 March
|Committee's assessment:||Legally and politically important
|Committee's decision:||Not cleared; further information requested
5.1 The proposal to establish a European Public Prosecutor
aims to improve the protection of the Community's financial interests
through effective enforcement. The Commission presented an outline
of its proposal, which draws on the work of Corpus Juris,
at the Nice Intergovernmental Conference in 2000,
but the Commission also notes that this contribution was not then
taken up by the European Council. The European Council at Laeken
in 2001 asked the Council to examine the present Green Paper "taking
account of the diversity of legal systems and traditions"
of Member States.
5.2 The Green Paper states that, in 1999, the scale of
fraud detected by the Member States and by the European Anti-Fraud
Office (OLAF) was estimated to amount to a total of _413 million.
The Green Paper argues that there is a need for specific response
to the specific form of crime involved where the Community's financial
interests are affected, and refers to Article 280 EC as requiring
protection of the Community's financial interests to be effective,
dissuasive and equivalent in all the Member States.
The Green Paper proposals
5.3 The Commission introduces the discussion of its proposals
by referring to the "cumbersome and inappropriate traditional
methods of judicial cooperation between Member States" and
makes the somewhat sweeping statement that "none of the instruments
currently in force or at proposal or negotiation stage gives an
adequate response to the specific question of criminal proceedings
for acts to the detriment of the Community's financial interests".
Referring to the "barriers" created by the different
rules of Member States governing criminal prosecutions in the
Member States, the Commission comments that:
"The integration of the investigation and prosecution functions
that the European Public Prosecutor would achieve would iron out
5.4 The Commission acknowledges that there is as yet
no proper legal basis for the establishment of a European Public
the Commission proposes an amendment to the Treaty by inserting
a new Article 280a, which would provide for the adoption by the
Council (acting by qualified majority and in co-decision with
the European Parliament) of general rules applicable to the European
The suggested Treaty amendment would also extend to rules on the
definition of fraud, on the admissibility of evidence, criminal
procedure and on judicial review of measures taken by the European
5.5 The Green Paper proposals may be summarised as follows.
Role and status of the European Public Prosecutor
5.6 At the core of the proposal is the establishment
of an independent European Prosecution Service (as a Community
authority) headed by a European Public Prosecutor. The jurisdiction
of the European Public Prosecutor would be confined to the protection
of the Community's financial interests within the meaning of Article
280 of the EC Treaty. "Financial interests" in this
context concerns, not only the management of budget appropriations,
but extends to all measures affecting or liable to affect the
The Commission proposes that the Prosecutor's jurisdiction should
also extend to revenue from the application of a uniform rate
to the Member States' VAT bases, especially in transnational cases.
5.7 The European Public Prosecutor would perform the
dual function of investigator and prosecutor in relation to financial
offences; specifically, he would be responsible for "detecting,
prosecuting and bringing to judgment the perpetrators of offences
prejudicial to the Community's financial interests and their accomplices
and for exercising the functions of prosecutor in the national
courts of the Member States in relation to such offences".
5.8 The Commission proposes that the European Public
Prosecutor would be appointed by the Council acting by qualified
majority vote and with the assent of the European Parliament.
The Commission suggests that such a mode of appointment "would
ensure the total legitimacy of the European Public Prosecutor".
The Commission also suggests that the Prosecutor be appointed
for a non-renewable six year term and that he should be removable
from office only on the grounds of serious misconduct and then
only by application to the Court of Justice of the European Communities.
Structure and organisation of a European prosecution
5.9 As the head of the European Prosecution Service,
the European Public Prosecutor would "act in a common investigation
and prosecution area, since his acts would have the same value
in all the Member States". The Commission also proposes that
"at the preparatory stage and trial stages acts done by the
European Public Prosecutor would be valid throughout that area.
But the trial stage would remain entirely in national hands".
The Prosecutor would "gather all the evidence for and against
and would direct and coordinate prosecutions. The Prosecutor would
have specialised jurisdiction, "prevailing over the jurisdiction
of national enforcement authorities but meshing with them to avoid
duplication". It also appears that the Prosecutor would have
a power to direct investigations by national police authorities.
5.10 Any action taken by the Prosecutor which could impinge
on individual freedoms and basic rights would be subject to review
by a national judge performing the office of "judge of freedoms".
The review by this judge "would be recognised throughout
the Community, to allow the execution of authorised acts and the
admissibility of evidence gathered in any Member State".
5.11 The Commission proposes that the Deputy European
Prosecutors be integrated into the national justice systems on
the basis of one of three models. First, the Deputy could be excluded
from holding any other office, thereby remaining a specialist
European prosecutor. Secondly, the Deputy could perform a dual
role as national prosecutor who also specialised in European prosecutions.
The third model would leave Member States free to choose between
the first and second. Although each Deputy would be based within
one Member State, they would be under a duty to co-operate with
one another and could be authorised by the European Public Prosecutor
to take action in any other Member State.
Offences and penalties
5.12 The Commission states that a common definition of
financial offences and common penalties are essential to the effective
operation of the European Public Prosecutor. The proposed directive
on the criminal law protection of the Community's financial interests,
which defines the offences of, and penalties for, fraud, corruption
and money-laundering, is used as a starting point.
5.13 The Commission proposes that a unified definition
of fraud should be adopted, along the lines of Article 1 of the
Corpus Juris, which also extends to grossly negligent conduct.
Article 1 of the Corpus Juris extends fraud to both reckless
and grossly negligent conduct.
In addition, the Commission suggests that the successful outcome
of the fraudulent act should not be precondition for prosecution
of the offence; the Community should be able to prosecute fraudulent
conduct which merely endangers the Community's financial interests.
5.14 In addition to dealing with corruption and money-laundering,
the Commission proposes that the European Public Prosecutor should
have jurisdiction to prosecute other offences connected with the
protection of the Community's financial interests, such as "market-rigging",
conspiracy, "abuse of office" and "disclosure of
secret's pertaining to one's office". There is no definition
of these additional offences in the Green Paper, beyond a reference
to acting intentionally, or to disclosing information, to the
detriment of the Community's financial interests.
5.15 The Commission proposes that the maximum penalties
for offences against the Community's financial interests should
be determined by Community legislation. It also proposes the creation
of additional Community penalties, such as exclusion from the
European public service, from access to grants or from access
to public contracts if Community financing is applied for. Specific
definitions of penalties are not set out in the Green Paper.
5.16 The Commission also suggests that the present diversity
of limitation periods in Member States could give rise to unequal
treatment. It accordingly proposes that a common limitation period
should apply to those offences that fall within the jurisdiction
of the European Public Prosecutor. The Commission suggests that
specific rules relating to the "interruption" or extension
of limitation periods could be left to Member States, subject
to the principle of mutual recognition between Member States.
It is unclear as to how this would work in practice.
5.17 A common set of European rules of procedure is described
as a further essential condition for the establishment of the
European Public Prosecutor, although the Commission concedes that
some degree of approximation between national procedures may be
sufficient "if all the European Public Prosecutor really
needs is equivalence between Member States".
5.18 The common set of procedural rules would include
rules on information, so that any person should be able to pass
information to the European Public Prosecutor, whilst Community
authorities, their staff and national authorities should be under
an obligation to refer cases to the Prosecutor. The rules would
also provide for the mandatory referral of cases involving both
Community and national offences to the European Public Prosecutor.
The European Public Prosecutor would then decide, in appropriate
cases, to refer back to the national authorities offences which
affect principally national interests. The Commission proposes
that a definition of "principally" could be laid down
in Community legislation, although it recognises that any attempt
at definition is likely to be contentious.
5.19 The Commission proposes that the European Public
Prosecutor should have recourse to coercive investigation measures
available in national law (i.e., powers of search and seizure,
arrest, freezing of assets, interception of communications, covert
investigations etc), subject to review by a national "judge
5.20 In relation to cooperation with national criminal
justice agencies, the Commission proposes three possible options.
First, the European Public Prosecutor could have direct powers
of investigation for the purpose of discharging his functions
in relation to national investigation authorities. Secondly, national
agencies could be placed under an obligation to assist the European
Public Prosecutor, where required. Thirdly, the powers of the
European Public Prosecutor could be tailored to the relationship
that exists at national level between the investigation and prosecution
agencies. Where a national prosecution authority has power to
direct an investigation, the European Public Prosecutor would
have a corresponding power. Where a national prosecution agency
has no power to direct an investigation, the European Public Prosecutor
could only make suggestions to the investigation authorities.
If the third option were adopted, the powers of Deputy Prosecutors
would differ from Member State to Member State. For example, the
Deputy Prosecutor based in Scotland would have significantly more
power than the Deputy Prosecutor based in England and Wales.
5.21 In relation to Eurojust, the Commission remarks
that "in all logic, the establishment of the European Public
Prosecutor would enable Eurojust's powers in relation to financial
crime to be preserved".
5.22 In relation to the decision to prosecute, the Commission
expresses a preference for a mandatory prosecution in all cases
where exceptions did not apply.
Under the Commission's proposals the European Public Prosecutor
would have the power to commit for trial
and to determine the Member State in which the trial is to be
held. The Commission
also proposes that the European Public Prosecutor should have
a discretion to discontinue a prosecution. The Commission also
suggests that evidence lawfully gathered in one Member State should
be admissible in any other Member State.
5.23 The Commission proposes that decisions and acts
of the European Public Prosecutor should be subject to review
by national courts. At the preparatory stage, this would be undertaken
by the national "judge of freedoms". On committal to
trial, a review would be conducted by the relevant national court.
The Commission remarks that the European Public Prosecutor should,
in principle, be able to appeal against any acquittal decision.
Whilst not recommending any jurisdiction of the Court of Justice
to hear appeals on the substantive merits, the Commission suggests
that the Court might have a role in determining conflicts of jurisdiction.
The Government's view
5.24 In his Explanatory Memorandum of 16 January, the
Parliamentary Under-Secretary of State for the Home Department
(Mr Bob Ainsworth) reviews the Commission's proposals, and assesses
their policy implications as follows:
"As it made clear in response to the earlier Corpus Juris
study, the Government is unconvinced of the need for an EPP. There
are difficulties of principle and practice with both the earlier
study and the ideas in the Green Paper. Corpus Juris would involve
major changes in laws and procedures. It seeks to intertwine the
inquisitorial and adversarial/written and oral traditions in Member
States. The result would be more akin to the Continental European
than the AngloSaxon model. There would need to be significant
added value to justify changes of such magnitude. Specific problems
mentioned in the Home Office's evidence to the House of Lords
Select Committee in 1999 were: that the EPP would be accountable
to the EC, but not to our Law Enforcement Officers or to Parliament;
that practical difficulties could arise from the sharing of information
between the EPP and national authorities; and that tension could
arise for national prosecutors acting for the EPP, between their
domestic role and their role as agents of an EU institution. These
problems remain with the Green Paper and moreover it does not
provide a coherent approach to situations where fraud against
the EU budget involves nonEU as well as EU jurisdictions.
"Creating a EPP on a first pillar legal base such as Article
280 would be a significant departure from the current treaty arrangements
which are based on the principle that the application of national
criminal law and the national administration of justice are not
matters for the European Community, but cooperation between
Member States in relation to the criminal law should take place
intergovernmentally on the basis of Title VI TEU.
"The Government is strongly committed to ensuring that fraud
against the Community budget is addressed robustly, and that those
who commit fraud are prosecuted. It is open to examining ways
of improving judicial cooperation between Member States,
but it is important that this is done on the basis of concrete
evidence highlighting any weakness in the current arrangements.
The agreement last month on the establishment of Eurojust provided
that Eurojust would have competence in relation to fraud and corruption
and any criminal offence affecting the European Communities' financial
interests. Priority should now be given to supporting the rapid
establishment of Eurojust proper so that it can make a significant
contribution to the fight against fraud through a close working
relationship with the EC's antifraud office, OLAF. Additionally,
all Member States should be pressed to ratify the fraud convention.
"As noted at paragraph 12 above, the Government is just beginning
a wide ranging consultation exercise in response to the Green
Paper. The Government will send a copy of its response to both
Scrutiny Committees once it has been prepared."
5.25 We agree with the Government's assessment that
no sufficient case has been made out for the creation of a European
Public Prosecutor. We are concerned to see that so much effort
appears to have been expended on the details of this impractical
proposal, when this might have been better directed towards the
prevention of fraud affecting the Community's financial interests.
We also agree that the establishment of Eurojust makes the present
5.26 We consider that the proposal raises more problems
than it solves and we note with particular concern its effect
of putting the prosecution function beyond the reach of democratic
accountability, either to national parliaments or elsewhere. We
also note with concern the ready assumption that a prosecution
function can properly be combined with that of investigation.
5.27 We are aware that prosecution functions are organised
differently in the various parts of the United Kingdom, a situation
which has prevailed for many years without giving rise to the
practical problems suggested by the Commission in its Green Paper.
We note that the Minister intends to consult widely and we invite
him to have particular regard to these differences and to canvass
views from Scotland and Northern Ireland on the Commission's Green
5.28 We ask the Minister to send us a copy of his
proposed response to the Green Paper in sufficient time to allow
us to contribute further comments and to consider whether the
matter should be debated. In the meantime, we shall hold the document
Corpus Juris is a research report prepared by a group of
academic lawyers from different Member States and published in
1997. See the Ninth Report of the House of Lords Select Committee
on European Communities: Prosecuting fraud on the Communities'
finances - the Corpus Juris (1998-1999), HL 62. Back
COM(2000) 608 (see also COM(2000) 34). Back
from questioning the soundness of this view, one may also ask
the Commission why it is that none of its proposals gives the
desired adequate response. Back
statement seems to take no account of the fact that in a number
of Member States, including the United Kingdom, the separation
of the investigation function of the police from that of prosecution
is regarded as an essential safeguard of individual liberty. Back
280(4) EC specifically precludes the adoption of measures concerning
the application of national criminal law or the national administration
of justice. Back
effect of this would be to move elements of the substantive law
of Member States from the third (i.e. EU Treaty) to the first
(EC) pillar. Back
recital of Regulations Nos 1073/99 and 1074/99. Back
suggested role has some similarity with that of the Procurator
Fiscal in Scotland, but is quite unlike that of a Crown Prosecutor
in England and Wales, who has no role in the investigation of
an offence. Back
is striking that there is no mention of any accountability by
the Prosecutor to national parliaments or to the European Parliament
for the exercise of his functions. Back
is not explained how such matters as (in England and Wales) pre-trial
review, or witness orders would be dealt with. Back
is not clear from this whether there is any implication that any
other evidence would become inadmissible. Neither is it
clear how national rules on disclosure of unused prosecution material
would continue to operate. Back
would seem to involve the Deputy assuming in another the powers
available to prosecutors in that country. Back
(2001) 272. Back
criticised this aspect of Article 1 of the Corpus Juris during
the inquiry by the Select Committee on European Communities (1998-1999),
HL 62. It would seem to extend the scope of fraud in English law
by removing the requirement to show a dishonest intent. Back
limitation rules would, at least in English law, have the effect
of excusing criminal behaviour and would introduce a dual standard
of criminal liability in relation to such matters as fraud, depending
on whether or not the Community's financial interests were affected. Back
powers of the Crown Prosecution Service may be strengthened in
response to Sir Robin Auld's recommendations in his Report on
the Review of Criminal Courts (October 2001). Back
equal logic, it could be remarked that the creation of Eurojust,
the remit of which extends to crimes affecting the Community's
financial interests, makes unnecessary the creation of a European
Public Prosecutor. Back
the United Kingdom, the decision to prosecute is not mandatory
but discretionary cf. Code for Crown Prosecutors (England and
the United Kingdom, this power is exercised by the court. Back
assumes that the courts of more than one Member State would have
concurrent jurisdiction. The Prosecutor's decision would affect
such matters as mode of trial (e.g. whether the trial would be
before a jury or not). Back
a general right of appeal by the prosecution would be an innovation
in the law of the United Kingdom. Back