Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11.

EUROPEAN COMMISSION EUROPEAN ANTI-FRAUD OFFICE (OLAF) General Affairs Legal affairs

NOTE

COURT RULINGS WITH RELEVANCE TO OLAF:

LEGAL NATURE, PRACTICAL IMPACT AND VALUE ADDED OF ANTI-FRAUD MEASURES AS REFLECTED IN THE CASE LAW OF

THE ECJ AND THE CFI

* * *

No legal value- this document is purely informative

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TABLE OF CONTENTS

1. INTRODUCTION ................................................................................... 4

2. SUMMARY ............................................................................................. 4

2.1. Institutional framework ................................................................... 4 2.2. Investigative activity ....................................................................... 5 2.3. Follow-up on investigations ............................................................ 6

3. INVESTIGATIONS................................................................................. 8

3.1. Institutional matters ......................................................................... 8 3.1.1. Legal basis ........................................................................... 8 3.1.2. Obligations of members of the Institutions......................... 9

3.2. Internal investigations ................................................................... 10 3.2.1. Procedural guarantees........................................................ 10 3.2.2. Judicial Review of an act committed by the Office as

part of an internal investigation......................................... 13 3.2.3. Disciplinary procedures and criminal proceedings,

extent of investigative powers........................................... 14 3.3. OLAF and National Authorities .................................................... 15

3.3.1. OLAF investigations and judicial proceedings ................. 15 3.3.2. OLAF findings and Acts adversely affecting

economic operators............................................................ 16 3.3.3. Legal status of the decision to forward information

to the national authorities .................................................. 16 3.4. Transparency, access to information ............................................. 18

3.4.1. Access to OLAF documents.............................................. 18 3.4.2. MEP’s access rights........................................................... 27 3.4.3. Transparency towards the public....................................... 27

4. FOLLOW-UP TO IRREGULARITIES AND FRAUD ........................ 29

4.1. Sanctions........................................................................................ 29 4.1.1. Institutional principles....................................................... 29 4.1.2. Administrative sanctions ................................................... 30 4.1.3. Penal sanctions .................................................................. 32

4.2. Recovery........................................................................................ 32

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4.2.1. Institutional aspects, third-country legal action by the EC ...................................................................................... 32

4.2.2. Irregularities and abuse of law .......................................... 33 4.2.3. Limitation period............................................................... 33 4.2.4. Legality principle .............................................................. 34 4.2.5. Non-performance of contractual obligations .................... 35 4.2.6. Sectoral aspects: Customs, Mutual assistance

obligations, Tax fraud........................................................ 36 4.2.7. Sectoral aspects: Strucural funds, Regulation

4253/88.............................................................................. 38

5. ACTION FOR DAMAGES AGAINST OLAF’S ACTIONS............... 39

5.1. General conditions......................................................................... 39 5.2. Specific case law regarding OLAF ............................................... 42

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1. INTRODUCTION

To give an updated overview presentation of ECJ and CFI court cases on matters of anti-fraud, it is necessary to take stock of the body of available case law.

The purpose of this note is limited to identifying the practical use of Court rulings for OLAF investigations, it does not provide any legal interpretation.

In order to reflect case law properly for practical use within OLAF, the document proposes to summarise it in a structured manner, not to provide in-depth analysis.

In particular, to avoid this overview becoming lengthy, it has been considered preferable to concentrate on remarks regarding the legal issues which are most relevant for OLAF and the protection of the financial interests of the EC: no factual case summaries are therefore given.

2. SUMMARY

The ECJ and CFI judgments cited in this document all have a direct or indirect bearing on combating fraud, corruption and other illegal activities affecting the financial interests of the Communities.

The salient points of the courts' interpretation of the law on the components of EU fraud-prevention measures can be identified in the text of these judgments, and can be grouped under the following headings: institutional framework; investigative activity; follow-up on investigations.

2.1. Institutional framework

In institutional terms, Community case law in many respects confirms the effectiveness of the legal framework put in place in 1999.

It recognises the protection of the Communities' financial interests as an autonomous objective of the Treaties. As such, it is central to the provisions introduced by the Community legislator and legitimates the body created for this purpose (OLAF), which is integrated in the Commission's administrative and budgetary structures and independently exercises autonomous investigative functions.

This specific investigative function is what distinguishes the anti-fraud system. In marked contrast to general monitoring activities such as financial control, OLAF's investigative function, from the moment when its Director-

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General decides to launch an investigation and throughout the ensuing proceedings, focuses on checking serious suspicions of fraud, corruption or other illegal activities affecting the Communities' financial interests.

Such investigations must comply with general and specific rules, identified in the case law. It must fully comply with Community rules, including those on human rights and fundamental freedoms, those applicable to the functions of members of the Institutions and those set out in the Staff Regulations of EC officials.

Issues concerning the situation of members of the Institutions have given the Community courts occasion to set out certain requirements and interpret the obligations arising from those members' positions as imposing on them the most rigorous standards of behaviour.

2.2. Investigative activity

For both internal and external investigations, Community case law places fundamental emphasis on honouring the guarantees attached to the exercise of OLAF's powers of investigation.

Among these guarantees, it highlights:

– procedural guarantees for those under internal/external investigation; the courts consider that these are an essential procedural requirement for investigations, and that failure to honour them undermines the legality of the final decision;

– impartiality in the conduct of the investigation, which requires in particular that the investigators should not be involved in any conflict of interest;

– rigor in seeking to ascertain the truth, failing which the Community may be subject to non-contractual liability;

– respect of the presumption of innocence in the context of an OLAF investigation when transmitting information to third parties and communicating with the public;

– protection of whistleblowers, who are covered by the guarantees contained in the Staff Regulations and continue to be covered by them even after the investigation launched on the basis of the information they provided is closed.

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The legal authority of Community case law also covers steps taken by the Commission as owner of the facilities provided for its staff at the work place, which status entitles it to access the computer and office provided for staff members in their absence since they are provided exclusively for the performance of their duties.

It covers the Commission's actions as an institution in its relations with the Member States, and in particular with the national judicial authorities, which the Commission is required to actively assist by providing the documents requested and authorising its staff to act as witnesses.

Beyond the emphasis on procedural guarantees, the case law also covers the final phase of the investigation. The Community courts take pains to define the scope of the conclusions of OLAF investigations. They deem the final report drawn up at the end of an (internal/external) investigation and sent to the competent authorities/institutions to be no more than a set of recommendations or opinions without mandatory legal effect on the persons concerned.

The extra-contractual liability of the Commission towards a person concerned by an OLAF investigation may, however, derive from an act which results in a serious violation of legal principles and statutory rules that have as their effect to protect the rights of the individual, like the presumption of innocence and the right to be heard.

2.3. Follow-up on investigations

The Community courts have set out a number of principles governing Community powers in this field and the system of penalties guaranteeing real and effective protection of the EC's financial interests.

Thus case law has enhanced the Community's traditional powers to impose administrative penalties to prevent and combat irregularities damaging to the Community's finances by recognising that the Community legislator is, by way of exception, entitled to take measures that relate to the criminal law of the Member States where this is indispensable to guarantee that the rules laid down for a specific Community policy are fully applied.

Case law places Community administrative penalties within a specific set of categories and also determines how they are to apply in relation to national criminal penalties.

The particular nature of Community administrative penalties can be seen in the fact that they are incurred irrespective of intent to commit an offence and

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even if the irregularity was the result of an error. They may be combined with national administrative penalties. It is thus recognised that the same actions may give rise to both Community and national penalties, provided that, when the second penalty is imposed, the first must be taken into account.

Community administrative penalties, in their interaction with national criminal penalties, take on some of the characteristics of the latter, particularly the retroactive application of the less severe penalties.

They can even be combined with national criminal penalties as, according to the Community courts, even if only civil or administrative penalties are incurred at Community level for acts damage the Communities' financial interests, the Member States must take all necessary measures, including applying criminal penalties.

Lastly, the Community courts regard Regulation (EC) No 2988/95, which lays down the general rules applicable to Community administrative penalties, as the framework legislation setting out a series of general principles which all the sectoral regulations must abide by. This is, then, recognition of the exemplary status of the legal framework of Community administrative penalties for all the fields covered by Community policies.

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3. INVESTIGATIONS

3.1. Institutional matters

3.1.1. Legal basis

Independent status of OLAF, specific nature of the investigative function

Commission v ECB Commission v EIB

The OLAF regulations express the Community legislator's determination to subject the powers conferred on OLAF, first, to guarantees intended to ensure OLAF's complete independence, in particular from the Commission, and, second, to strict observance of the rules of Community law.

Neither the fact that OLAF was established by the Commission and is integrated in its administrative and budgetary structures, nor the fact that the Community legislation has conferred investigative powers on this body, external to the other EC institutions and bodies (ECB), can, as such, undermine the independence of the EC institutions and bodies.

OLAF's director cannot decide to launch an investigation if there are no sufficiently serious suspicions; the authorisation in writing which must be carried by OLAF investigators must state the subject of the investigation.

The OLAF investigation system is specifically designed to allow suspicions of fraud, corruption or other illegal activity affecting the Communities' financial interests to be checked. It is in no way related to systematic forms of monitoring such as financial control.

OLAF's investigative function differs in its nature and its objectives from general control tasks such as those of the Court of Auditors and the ECB external auditors1,2

.

Viomichania Syskevasias Typopoiisis kai Syntirisis Agrotikon Proïonton

1 Judgment of the Court of Justice 10 July 2003 in Case C-11/00, Commission v ECB, p. 139, 138, 141

and 159. 2 Judgment of the Court of Justice of 10 July 2003 in Case C-15/00, Commission v EIB, p. 107, 106,

164 and 105.

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In view of OLAF's functions and its independence from the Commission, OLAF is not competent to determine what stage the work of the Commission has reached with regard to a third party and even less to commit the Commission in that respect3.

Anti-fraud as a distinct EC-policy objective

Commission v Council

Even before the Treaty of Amsterdam and Article 325 TFUE as set out in that Treaty entered into force, the Court determined that the protection of the financial interests of the Community did not follow from the establishment of customs union but was an independent objective which, under the scheme of the Treaty, is placed in the part concerning the Community's institutions. Article 325 TFUE stated the objective, but without giving the Community the powers to establish the system provided for in Regulation (EC) 515/97; recourse to Article 352 TFUE was justified4.

3.1.2. Obligations of members of the Institutions

Parliament, immunities

Rothley

The European Parliament Decision concerning the terms and conditions for internal investigations considers the situation of members of Parliament with rights and obligations. It applies to objectively defined situations and has legal effects with respect to categories of persons envisaged generally and in the abstract (present or future members, but also all the Parliament's staff, whether or not they are covered by the Staff Regulations).5

The possibility cannot be ruled out a priori that OLAF, in the course of an investigation, might take action prejudicial to the immunity enjoyed by every Member of the Parliament. If that were to occur, any Member of the Parliament faced with such an act could, if he considered it damaging to him, avail himself of the judicial protection and the legal remedies provided for by the Treaty.6

3 Order of the General Court of 2 December 2003 in Case T-334/02, Viomichania Syskevasias

Typopoiisis kai Syntirisis Agrotikon Proïonton v Commission, p. 39. 4 Judgment of the Court of Justice of 18 November 1999 in Case C-209/97, Commission v Council,

p.28 to 33. 5 Judgment of the Court of Justice of 30 March 2004 in Case C-167/02, Rothley and Others v

Parliament, p. 29. 6 Judgment of the General Court of 26 February 2002 in Case T-17/00, Rothley and Others v European

Parliament, p. 73.

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Obligations of Members of the Commission, defence rights

Cresson

The third subparagraph of Article 245(2) TFUE specifies the way in which members of the Commission must honour their obligations as members. This should be understood in the broad sense: members must meet the strictest standards of behaviour. However, it does not follow that the slightest deviation from such standards can be censured. The Commission can only refer a case of alleged misconduct of a member to the Court, and it is the Court which decides whether to rule that there has been infringement, and, if so, to impose a penalty.

The right to a fair hearing means that the Commission member against whom the Commission has initiated an administrative procedure under Article 245(2) TFUE must be afforded the opportunity during that procedure to make known his views on the truth and relevance of the facts and circumstances alleged and on the documents used by the Commission to support its claim that there has been an infringement of Community law.7

3.2. Internal investigations

3.2.1. Procedural guarantees

Camós Grau

The continuing presence and substantial involvement in the investigation of one of OLAF's investigative officers, who was found to have had a conflict of interests, constitutes a serious and manifest breach of the requirement of impartiality. This is a fault capable of giving rise to non-contractual liability on the part of the Community.

The undue accusations made by OLAF against the official in its final report on the investigation, attributing to him wrongful acts that would have rendered him liable to criminal and disciplinary action, seriously impairing his honour and reputation, constitute non-pecuniary damage justifying pecuniary compensation.8

7 Judgment of the Court of Justice of 11 July 2006 in Case C-432/04, Commission v Cresson, p. 69, 70,

72, 94 and 104. 8 Judgment of the Court of Justice of 6 April 2006 in case T-309/03, Camós Grau v Commission, p.

113, 126, 141, 157 and 162.

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Gómez-Reino

OLAF is not obliged to allow a Community official allegedly implicated in an internal investigation access to the documents which are the subject of that investigation, or to those which it has drawn up itself in that connection, before a final decision is made by his appointing authority.

Failure to take account of the rights of defence of an official under investigation, as guaranteed by Article 4 of the inter-institutional agreement constitutes a violation of the substantial formal requirements applicable to the investigation procedure and thereby affects the legality of the final decision of the appointing authority.9

Strack

A whistleblower who alleges that irregularities have taken place can under no circumstances oblige OLAF to launch an investigation of the allegations. The fact that OLAF did not tell the whistleblower what time-limit had been set for the action needed was not prejudicial to the whistleblower.

The guarantees offered to the whistleblower by Articles 22a and 22b of the Staff Regulations are in no way undermined when OLAF decides to close the investigation opened on the basis of the information received as, under these circumstances, the whistleblower continues to be protected by the same guarantees if he meets the conditions set out in those Articles.10

Giraudy

Article 8(2) of Regulation No 1073/1999 defines in a broad way a confidentiality rule applicable to OLAF investigations. This rule must be interpreted as not only aiming to protect the confidentiality of information for gathering the facts, but also to safeguard the presumption of innocence, and therefore the reputation, of the officials or servants concerned with these investigations. The successful performance of an investigation may require keeping it secret towards those persons concerned by the investigation.11

9 Order of the General Court of 18 December 2003 in Case T-215/02, Gómez-Reino v Commission,

p.65. 10 Order of the General Court of 22 March 2006 in Case T-4/05, Strack v Commission, p. 39, 44, and 46

confirmed with Order of the Court of Justice of 8 March 2007 in Case C-237/06 P, Strack v Commission.

11 Judgment of the Civil Service Tribunal of 2 May 2007 in Case F-23/05, Jean-Louis Giraudy v Commission, p. 161.

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Violetti

The article 8(2) of the Regulation No 1073/1999 constitutes a confidentiality rule in the field of internal investigations.

In case if, in the breach of this rule, information, forwarded or obtained in the course of internal investigation, are being communicated to persons other than those whose functions require them to know, it can constitute an illegality that can incur liability of the Community12.

Nikolaou

During an internal investigation OLAF must invite the persons concerned to express their views about the facts. This obligation may be deferred exceptionally in cases requiring absolute secrecy for the purposes of the investigation and requiring the use of means of investigation falling within the competence of a judicial authority.

Further, OLAF must take measures to ensure that no information concerning the OLAF investigations is leaked, given that such a leak constitutes a violation of the personal data protection obligations.13

Franchet & Byk

The obligation to seek and obtain the agreement of the Secretary-General of the Commission is not a mere formality that might, in an appropriate case, be complied with at a later stage. The requirement to obtain such agreement would lose its rationale, which is to ensure that the rights of defence of the officials concerned are respected, that OLAF can defer informing them only in truly exceptional cases and that the assessment of that exceptional nature is not a matter solely for OLAF but also requires the assessment of the Secretary-General of the Commission.

Admittedly, Article 4 of Decision 1999/396 confers a margin of discretion on OLAF in cases necessitating the maintenance of absolute secrecy for the purposes of the investigation and requiring the use of investigation procedures falling within the remit of a national judicial authority (see, by analogy, Nikolaou v Commission, paragraph 153 above, paragraph 264). However, as regards the procedures for the adoption of the decision to defer

12 Judgement of the General Court of 20 Mai 2010 in Case T-261/09 P, Commission v Antonello Violetti

and Nadine Schmit, paragraph 63.

13 Judgment of the General Court of 12 September 2007 in Case T-259/03, Nikolaou v Commission, p. 216 and 264.

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informing the officials concerned, OLAF has no discretion. Nor does OLAF have any discretion.

Pursuant to Article 11(7) of Regulation No 1073/1999, in the context of the regular monitoring of the implementation of the investigative function carried out by the Supervisory Committee, ‘[t]he Director [of OLAF] shall inform the committee of cases requiring information to be forwarded to the judicial authorities of a Member State’. It should be observed that the wording of that provision indicates that the committee must be informed before the information is forwarded to the national judicial authorities14.

3.2.2. Judicial Review of an act committed by the Office as part of an internal investigation

Pre-litigation procedure

An action for damages seeking compensation for damage imputable to OLAF is admissible only if it has been preceded by a pre-litigation procedure, introduced by the article 14 of the Regulation 1073/1999 and consistent with the provisions of the Staff Regulations.

Verheyden

Pre-litigation procedure differs according to whether the harm in respect of which reparation is sought results from an act adversely affecting the applicant or from the conduct on the part of OLAF which is not in the nature of a decision15.

When an act adversely affecting the applicant is concerned - the person must submit a complaint, within the meaning of Article 90(2) of the Staff Regulations, against the act in question to the Director of OLAF within the prescribed period.

When the conduct on the part of OLAF does not have a nature of a decision – the person concerned must first submit a request for reparation, within the meaning of Article 90(1) of the Staff Regulations, and where appropriate to submit a complaint against the decision rejecting the request.

However, where there is a direct link between an action for annulment and a claim for compensation, the latter is admissible as incidental to the action for

14 Judgment of the General Court of 8 July 2008 in case T-48/05, Franchet & Byk v Commission, p.

151, 154 and 164.

15 Judgement of the Civil Service Tribunal of 28 April 2009 in Case F-72/06, Luc Verheyden v Commission, paragraph 53.

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annulment, without necessarily having to be preceded by a request from the person concerned to the administration for compensation for the damage allegedly suffered and by a complaint challenging the validity of the implied or express rejection of that request16.

OLAF’s obligation to reply to the complaint

Violetti

OLAF is obliged to reply to the complaints brought under the Article 90a of the Staff Regulation as a situation, in which the author of a contested decision does not comment on the criticism made against that decision, is hardly compatible with the principle of sound administration and reveals the problems to which an absence of clearly affirmed and effective judicial supervision is liable to give rise17.

Failure to comply with the time-limits established in the article 90 of the Staff Regulation can cause the liability of the institution concerned, in case of damage. On the other hand, it does not affect the validity of the decision in question18.

3.2.3. Disciplinary procedures and criminal proceedings, extent of investigative powers

François

Article 88(5) of the Staff Regulations establishes the principle that disciplinary proceedings have to await the conclusion of criminal proceedings. This means that the appointing authority is precluded from giving a final decision on the disciplinary aspect of the case involving the official concerned by adjudicating on facts which are at the same time at issue in criminal proceedings, so long as the decision given by the criminal court has not become final. This prohibition applies equally where the respective legal characterisations of the facts in question in the criminal proceedings and in the disciplinary proceedings are different.19

16 Judgement of the General Court of 28 June 1996 in Case T-500/93, Y v Court of Justice, p. 66 and

Judgement of Civil Service Tribunal of 28 April 2009 in Joined Cases F-5/05 and F-7/05, Antonello Violetti and Nadine Schmit v Commission, p. 120 and 122.

17 Judgement of Civil Service Tribunal of 28 April 2009 in Joined Cases F-5/05 and F-7/05, Antonello Violetti and Nadine Schmit v Commission, p. 82.

18 Judgement of the General Court of 26 January 2005 in Case T-267/03, Anna Maria Roccato v Commission, p. 84.

19 Judgment of the General Court of 10 June 2004 in Case T-307/01, François v Commission, p. 59, 74 and 75.

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Tzoanos

It is the responsibility of the official concerned to provide the authorising officer with all the facts needed to establish whether the facts concerned by the disciplinary proceedings are also the subject of criminal proceedings against the official.

The Commission is not trespassing when it accesses data on a computer or enters an office since these are facilities provided for the official exclusively for the performance of his duties, while the Commission remains the owner of the facilities.

As the Commission owns these facilities, it cannot be required to give a specific reason for accessing them. It is not necessary for the official to be present when the Commission accesses the facilities, since the Commission is merely examining its own material resources.20

3.3. OLAF and National Authorities

3.3.1. OLAF investigations and judicial proceedings

Tillack

The duty of the Member States to cooperate in good faith implies that when OLAF forwards them information pursuant to Article 10(2) of Regulation No 1073/1999, the national judicial authorities have to examine that information carefully and on that basis take the appropriate action to comply with Community law, if necessary by initiating legal proceedings Such a duty of careful examination does not, however, require an interpretation of that provision to the effect that the forwarded information has binding effect.21

Zwartveld

The duty to cooperate in good faith imposed on Community institutions and the Commission in particular is of particular importance vis-à-vis the judicial authorities of the Member States, who are responsible for ensuring that Community law is applied and respected in the national legal system.

20 Judgement of the Court of Justice of 19 March 1998 in Case T-74/96, Tzoanos v Commission, p. 35,

320, 321 and 322. 21 Judgment of the General Court of 4 October 2006 in Case T-193/04, Tillack v Commission, p. 72; see

also judgment of the European Court of Human Rights of 27 November 2007, application no. 20477/05, case of Tillack v. Belgium (confirmed violation of Art. 10 ECHR and rejected violation of Art. 6 ECHR).

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This duty of cooperation requires the Commission to give active assistance where a national court, which is hearing proceedings on the infringement of Community rules, seeks the production of information concerning the existence of the facts constituting those infringements by providing the documents to the national court and authorising its officials to give evidence in the national proceedings, unless the Commission can establish that there are imperative reasons, associated with avoiding interference with the functioning and independence of the Communities, for not doing so.22

3.3.2. OLAF findings and Acts adversely affecting economic operators

Andalucía

The letter from OLAF informing an economic operator that no action could be taken on his complaint about the final report can not be deemed a decision against which an action for annulment may be brought. The final report drawn up by OLAF at the end of the external investigation and sent to the competent authorities of the Member States is only a set of recommendations and opinions which have no mandatory legal effects that could impinge on the economic operator's economic interests by altering his legal situation.23

Nutral

The same position is taken concerning the Commission's (Uclaf's) communication, following an investigation in which it was involved, to the authorities of a Member State asking the latter to recover certain amounts of aid granted to an economic operator and certain import duties; the court found that such a communication did not constitute a measure with binding legal effect such as to affect the interests of the economic operator.24

3.3.3. Legal status of the decision to forward information to the national authorities

This decision does not constitute a preparatory act 22 Orders of the Court of Justice of 13 July and 6 December 1990 in Case C-2/88 Zwartveld and others,

p. 18 and 22 in the first one and p. 10 in the second one. 23 Order of the General Court of 13 July 2004 in Case T-29/03, Comunidad Autónoma de Andalucía v

Commission, p. 31 to 33. 24 Judgment of the Court of Justice of 23 November 1995 in Case C-476/93, Nutral v Commission, p. 29

and 30.

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Violetti

A preparatory act, in principle, can not be challenged by the action for annulment as it does not adversely affect the officials.

In this judgement, Civil Service Tribunal confirmed that a decision to forward information to the national authorities does not constitute a preparatory act, as it is a decision where the Director of OLAF takes a stand of, on the basis of the provisional or definitive results of the investigation conducted by his staff, on the existence of matters liable to result in criminal proceedings and concludes that the person or persons to whom the investigation relates could be criminally implicated.

Moreover, this decision is taken by an independent Community body, on its sole responsibility, under special procedure distinct from the national judicial procedure. It does not precede the adoption of any other act adversely affecting the official and falling within the competence of the Director of OLAF, and therefore determines the position of its author25.

This decision does not constitute an “acte faisant grief” (an act adversely affecting an official)

The general rule states that only measures producing binding legal effects of such a kind as to affect the applicant’ interests by bringing about a distinct change in his position constitute acts against which an action for annulment may be brought26.

Tillack

This judgement established the rule that the decision to forward information to the national authorities does not constitute an act adversely affecting an official, as it does not bring a distinct change in the legal position of the person concerned by the information in question.

According to the General Court, article 10(2) of Regulation 1073/1999 merely provides for the forwarding of information to national judicial authorities, which remain free, in the context of their own powers, to assess

25 Judgment of the Civil Service Tribunal of 28 April 2009 in Case F-5/05 et F-7/05, Antonello Violetti

and Nadine Schmit v Commission, p. 87 and 90.

26 Judgement of the Court of Justice of 11 November 1981 in Case 60/81, International Business Machines Corporation v Commission, p. 9 and Judgement of the General Court of 22 June 1990 in Joined Cases T-32/89 and T-39/89, Georges Marcopoulus v Court of Justice, p. 21.

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the content and significance of that information. They make their own decision whether to take the action or not27.

Violetti

The Civil Service Tribunal, in the first instance, tried to change the case law approach to this issue by saying that the decision to forward information to national authorities does, indeed, constitute an act adversely affecting an official28. This approach was not held by the General Court in its judgement given after the appeal brought by the Commission29.

Civil Service Tribunal tried to argument its position mainly by saying, that the nature of the judicial protection guaranteed for persons implicated in an investigation opened by OLAF is altered when the Director of OLAF takes a decision pursuant to the first sentence of Article 10(2) of Regulation No 1073/1999. In this view, the protection, which before such a decision was granted by the Community Courts, becomes a protection granted merely by the national judicial authorities.

This argument was rejected in its entirety by the General Court, who has stressed, that the previous case law still applies and that the decision to forward information to the national authorities can not constiute an act adversely affecting an official as it does not have any binding legal effects on the career of the applicant or on his financial situation.

However, according to the General Court, this conclusion does not prejudge that other acts of OLAF will be also without an adversely affect on the applicant.

3.4. Transparency, access to information

3.4.1. Access to OLAF documents

Interest in having access to documents 27 Judgement of the General Court of 4 October 2006 in Case T-193/04, Tillack v Commission, p. 70.

28 Judgement of the Civil Service Tribunal of 28 April 2009 in Joined Cases F-5/05 and F-7/05, Antonello Violetti and Nadine Schmit v Commission, p. 90-91.

29 Judgement of the General Court of 20 Mai 2010 in Case T-261/09 P, Commission v Antonello Violetti and Nadine Schmit.

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Franchet and Byk

A person requesting access is not required to demonstrate any interest in having access to the documents requested. The beneficiaries of the right of access are ‘[a]ny citizen of the Union, and any natural or legal person residing or having its registered office in a Member State’. The purpose of the regulation is to guarantee access for everyone to public documents and not merely access for the requesting party to documents concerning him. A particular interest cannot be taken into account30.

OLAF is under no obliation to grant an EU official who is alleged to be concerned by an internal investigation – before his appointing authority adopts a final decision adversely affecting him – access to the documents forming the subject-matter of such an investigation or to those drawn up by OLAF itself on flat occasion; otherwise, the effectiveness and confidentiality of the mission entrusted to OLAF and OLAF’s independence could be undermined31.

Exceptions from article 4 of Regulation N° 1049/2001

Exceptions are to be interpreted and applied strictly32. They should be applied if the document could specifically and effectively undermine the protected interest33. However, this risk must be reasonably foreseeable and not purely hypothetical34.

The mere fact that a document concerns an interest protected by an exception is insufficient to refuse access to documents35. OLAF has to complete a concrete and individual examination of each of the documents, in order to assess whether a partial access could be given36. This examination 30 Ibid, paragraph 82. 31 Judgement of the General Court of 8 July 2008 in Case T-48/05, Franchet and Byk v Commission,

p.255.

32 Judgement of the Court of Justice of 1 July 2008 in Joined Cases C-39/05 P and C-52/05 P, Sweden and Turco v Council, p. 36.

33 Ibid, p. 49.

34 Judgement of the General Court of 13 April 2005 in Case T-2/03, Verein für Konsumenteninformation v Commission, p. 69 and Judgement of the General Court of 6 July 2006 in Joined Cases T-391/03 and T-70/04, Franchet and Byk, p. 115.

35 Judgement of the General Court of 13 September 2000 in Case T-20/99, Denkavit Nederland v Commission, p. 45 and Judgement of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 123.

36 Judgement of the General Court of 13 April 2005 in Case T-2/03, Verein für Konsumenteninformation v Commission, p. 75; Judgement of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-

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should remain specific in nature37. It may not be necessary only if it is obvious that access must be refused or, on the contrary, granted. Such could be the case if certain documents were either, first manifestly covered in their entirety by an exception to the right of access or, conversely, manifestly accessible in their entirety, or, finally had already been the subject of a concrete, individual assessment by OLAF in similar circumstances38.

The assessment carried out by reference to categories, rather than on the basis of actual information contained in those documents, is insufficient39. On the contrary, in same cases, the assessment can be done on the basis of general considerations concerning the documents of the same nature40.

Co-Frutta

Actions taken by OLAF, like preparing a detailed list of the documents in question, grouping them regarding the type of an exception under each they fall or granting the access to some of the documents, can not prejudge that a concrete and individual examination of each of the documents has been done41.

JT’s Corporation

OLAF’s refusal of access to the documents can be based only and exclusively on the exceptions laid down in Article 4 of Regulation N° 1049/200142, with the result that OLAF cannot justify its refusal to grant

Frutta v Commission, p. 124; Judgement of the Genereal Court of 7 July 2010 in Case T-111/07, Agrofert Holding v Commission, p. 79.

37 Judgement of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p.123.

38 Judgement of the General Court of 7 July 2010 in Case T-111/07, Agrofert Holding v Commission, p.79.

39 Judgement of the General Court of 12 October 2000 in Case T-123/99, JT’s Corporation v Commission, p. 46; Judgement of the General Court of 13 April 2005 in Case T-2/03, Verein für Konsumenteninformation v Commission, p. 73; Judgement of the General Court of 6 July 2006 in Joined Cases T-391/03 and T-70/04, Franchet and Byk, p. 117 and Judgement of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 124.

40 Judgement of the Court of Justice of 1 July 2008 in Joined Cases C-39/05 P and C-52/05 P, Sweden and Turco v Council, p. 50 and Judgement of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 130.

41 Judgement of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 84.

42 Judgement of the General Court of 7 July 2010 in Case T-111/07, Agrofert Holding a.s. v Commission, p. 85.

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access to the documents referring to Regulation No 515/97, which lays down the principle that information obtained in customs investigations is confidential43.

• Exception related to a purpose of investigations

Franchet and Byk

This exception applies only if the documents in question may endanger the completion of inspections, investigations or audits. The risk of a protected interest being undermined must be reasonably foreseeable and not purely hypothetical.

Various documents can remain protected by this exception as long as the investigations or inspections continue, even if a particular investigation or inspection which gave rise to the report to which access is sought is completed.

On the other hand, the objective of guaranteeing public access to documents, oblige OLAF not to cover those documents by the exception till the follow-up actions, as they are future, uncertain and possibly distant44.

• Exception related to the legal advice

Sweden and Turco

This exception intend to protect OLAF’s interest in seeking legal advice and receiving frank, objective and comprehensive advice45.

Agrofert Holding

Legal advice should not be released if it could put Legal Service in a delicate position, later on, before the Court of Justice, while supporting OLAF’s actions which were not taken in a compliance with this document46.

43 Judgement of the General Court of 12 October 200 in Case T-123/99, JT’s Corporation v Commission,

p. 50.

44 Judgement of the General Court of 6 July 2006 in Joined Cases T-391/03 and T-70/04, Franchet and Byk v Commission, p. 109-112.

45 Judgement of the Court of Justice of 1 July 2008 in Joined Cases C-39/05 P and C-52/05 P, Sweden and Turco v Council, p. 42-43.

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Access to this legal advice could harm the principle of equality of parties in court proceedings.

• Exception related to the court proceedings

Franchet and Byk

The exception concerning ‘court proceedings’ covers only documents drawn up solely for the purposes of specific court proceedings: the pleadings or other documents lodged, internal documents concerning the investigation of the case and correspondence concerning the case between the Directorate-General concerned and the Legal Service or a lawyers’ office. It cannot enable the Commission to escape from its obligation to disclose documents which were drawn up in connection with a purely administrative matter.

Compliance with national procedural rules is sufficiently safeguarded if the institution ensures that disclosure of the documents does not constitute an infringement of national law. A procedure whereby the institution consults the national court in the event of doubt avoids the applicant’s having to make a request first to the competent national court and then to the Commission.

Before rejecting a request for access to investigation documents sent to a national judicial authority, Olaf must consult that authority and may refuse access only if the authority opposes disclosure of the documents47.

Exception related to the amount of work involved in carrying out a concrete and individual examination

Verein für Konsumenteninformation

In order to safeguard the principle of good administration, in exceptional cases, where a concrete and individual examination of the documents in question would entail an unreasonable amount of administrative work, OLAF may avoid carrying it out.

The burden of proof concerning the unreasonableness and the scale of the task in question relies on OLAF.

46 Judgement of the General Court of 9 June 2010 in Case T-237/05, Éditions Odile Jacob SAS v

Commission, p. 160.

47 Ibid, p. 90-101.

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If OLAF wants to refer to this exception, it is obliged to consult first with the applicant in order, on one hand, to ask to specify his interest in obtaining those documents and, on the other hand, to consider whether and how it may adopt a measure less onerous than a concrete and individual examination of those documents.

Applying this exception is possible only after genuine investigation of all other conceivable options and a detailed explanation of its reasons included in the decision48.

Notion of an overriding public interest

OLAF is still obliged to give access to documents, even if one of the exceptions from Article 4 of Regulation N° 1049/2001 applies, when there is an overriding public interest in their disclosure.

This interest should have an objective and common character and it cannot be mistaken with an individual or private interest. Most often this interest is resulting from the reasons prevailing when the Regulation N° 1049/2001 was adopted49.

Statement of reasons – as a way to present OLAF’s motivation in its decisions

Terezakis

The statement of reasons must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution responsible for authorship of the measure, in such a way as to enable the persons concerned to ascertain the reasons for it and to enable the competent court to exercise its power of review50.

48 Judgement of the General Court of 13 April 2005 in Case T-2/03, Verein für Konsumenteninformation

v Commission, p. 102-103, 113-115 and Judgement of the General Court of 9 June 2010 in Case T-237/05, Éditions Odile Jacob SAS v Commission, p. 170-173.

49 Judgement of the General Court of 9 June 2010 in Case T-237/05, Éditions Odile Jacob SAS v Commission, p. 190-191.

50 Judgment of the General Court of 30 January 2008 in Case T-380/04, Terezakis v Commission, p. 70 and Judgment of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-466/04, Co-Frutta v Commission, p. 99.

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Those requirements should be met not only with regard to its wording but also to its context and to all the legal rules governing the matter in question51.

When OLAF refuses access to documents it must demonstrate in each individual case that the documents to which access is sought do indeed fall within the exceptions listed in Regulation No 1049/2001.

Sison

Brevity and formulaic character of the statement of reasons provided do not have to be indicative of failure to carry out a concrete examination. In some cases it must be taken into account that it may be impossible to give the reasons justifying the refusal of access to each document or in this instance to each piece of information in the documents, without disclosing the content of the document or an essential aspect of it and thereby depriving the exception of its very purpose52.

Éditions Odile Jacob SAS

The same statement of reasons can be used to a group of documents falling into the same category, which can happen especially if those documents contain information of the same type53.

Procedural time-limits laid down in the Regulation No 1049/2001

OLAF must reply to the confirmatory application within fifteen working days from its registration. This period, in the event of a complex application,

51 Judgment of the Court of Justice of 6 March 2003 in Case C-41/00 P Interporc v Commission, p. 55;

Judgment of the General Court of 30 January 2008 in Case T-380/04, Terezakis v Commission, p. 70 and Judgment of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-466/04, Co-Frutta v Commission, p. 100.

52 Judgment of the General Court of 26 April 2005 in Joined Cases T-110/03, T-150/03 and T-405/03, Sison v Council, p. 84; Judgement of the General Court of 5 March 1997 in Case T-105/95, WWF UK v Commission, p. 65 and Judgement of the General Court of 9 June 2010 in Case T-237/05, Éditions Odile Jacob SAS v Commission, p. 46.

53 Judgement of the General Court of 9 June 2010 in Case T-237/05, Éditions Odile Jacob SAS v Commission, p. 47.

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can be extended. Factors to be taken into the account are “number of documents requested and diversity of their authors”54.

JT’s Corporation

Not responding to a request within the prescribed period is considered as an implicit negative decision.

Co-Frutta

None the less, failure to comply with this time-limit does not lead automatically to the annulment of the decision adopted after the deadline55. In any event, compensation for any loss resulting from the lateness of the Commission’s response may be sought through an action for damages.

Objection of the Member States to disclosure the documents

IFAW

Member State may request OLAF not to disclose a document originating from that Member State without its prior agreement. However, this sole objection can not be the only reason to refuse an access to those documents.

OLAF cannot accept a Member State’s objection to disclosure of a document originating from that State if the objection gives no reasons at all or if the reasons are not put forward in terms of the exceptions listed in Article 4 (1) to (3) of Regulation No 1049/2001. Despite an express objection of a Member State, OLAF must, if it considers that none of those exceptions applies, give access to the document originating from the Member State56.

Accordingly, where the opposition by one or more Member States to disclosure of a document does not fulfil requirement to state reasons, OLAF may decide, independently, that one or more of the exceptions applies to the documents covered by an application for access.

Subject to an action for annulment 54 Judgment of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-466/04, Co-Frutta

v Commission, p. 72.

55 Ibid, p. 59 and 71 and Judgment of General Court of 3 April 2003 in Joined Cases T-44/01, T-119/01 and T-126/01, p. 167 and 170.

56 Judgment of the Court of Justice of 18 December 2007 in Case C-64/05 P, Sweden v Commission (IFAW), p. 88 and Judgement of the General Court of 19 January 2010 in Joint Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 81.

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Franchet and Byk

The response to the initial application constitutes simply an initial statement of position. In consequence, only a measure adopted by the Director-General of OLAF, after the confirmatory stage of procedure, is capable to produce legal effects for the applicant and therefore capable of being a subject of an action for annulment57.

Brink’s Security Luxembourg SA

If OLAF omits to inform the applicant about its right to make a confirmatory application, the action for annulment brought against the response to the initial application can be, exceptionally, admissible58.

Court can not order OLAF to give access to documents

Olli Mattila

Court cannot order OLAF to give access to the documents in its judgement, as it exercises only a judicial review of legality of the decisions refusing it59.

However, OLAF is required to take the measures necessary to comply with its judgment60.

A presumption concerning the non-existence of a document

Terezakis

There is a presumption of legality attached to any statement made by the institutions relating to the non-existence of documents requested. That is,

57 Judgement of the General Court of 6 July 2006 in Joined Cases T-391/03 and T-70/04, Franchet and

Byk, p. 47 and 70 and Judgement of the General Court of 5 June 2008 in Case T-141/05, Internationaler Hilfsfonds v Commission, p. 56 and 109.

58 Judgement of the General Court of 9 September 2009 in Case T-437/05, Brink’s Security Luxembourg SA, p. 69-71, 74-75.

59 Judgement of the General Court of 12 July 2001 in Case T-204/99, Olli Mattila v Council and Commission, p. 26 and Judgement of the Court of Justice of 22 January 2004 in Case C-353/01 P, Olli Mattila v Council and Commission, p. 15.

60 Judgement of the Court of Justice of 6 March 2003 in Case C-41/00 P, Interporc v Commission, p. 28 and Judgement of the General Court of 7 July 2010 in Case T-111/07, Agrofert Holding a.s. v Commission, p. 40.

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however, a simple presumption which the applicant may rebut in any way on the basis of relevant and consistent evidence61.

That presumption must be applied by analogy where the institution declares that it is not in possession of the documents requested62.

3.4.2. MEP’s access rights

Stauner

The aim of the Framework Agreement between the Parliament and the Commission is not to limit the right of individual MEPs to put questions to the Commission, but merely to enable the Parliament to exercise wider powers of scrutiny over the Commission's activities by obtaining from that institution confidential information. In that respect, the Commission's discretion in deciding whether to communicate confidential information in its reply to a question put by an MEP acting individually, pursuant to the second paragraph of Article 230 TFUE and in accordance with the relevant provisions of the Parliament's Rules of Procedure, is not governed, even indirectly, by the Framework Agreement. The Framework Agreement provides for an additional mechanism, which permits, contrary to what would have been the case before the adoption of the Framework Agreement, the forwarding of confidential information to certain parliamentary bodies.63

3.4.3. Transparency towards the public

In presence of serious allegations affecting the good reputation of an official, the administration must avoid the publication of any allegations which are not strictly necessary. On the one hand, the administration must avoid giving to the press information which could damage the official and, on the other hand, take all the necessary steps to prevent, within the institution, any form of divulgation of the information which could have a defamatory effect. OLAF violates the rights of defence, in particular the presumption of innocence, when confirming the veracity of certain facts which had already been exposed in the press.64

61 Judgement of the General Court of 26 April 2005 in Joined Cases T-110/03, T-150/03 and T-405/03,

Sison v Council, p. 29 and Judgement of the General Court of 30 January 2008 in Case T-380/04, Terezakis v Commission, p. 155.

62 Judgement of the General Court of 19 January 2010 in Joined Cases T-355/04 and T-446/04, Co-Frutta v Commission, p. 155.

63 Order of the the General Court of 17 January 2002 in Case T-236/00, Stauener and Others v Parliament and Commission, p. 60 to 62.

64 Judgment of the General Court of 12 September 2007 in Case T-259/03, Nikolaou v Commission, p.227 to 234.

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Within the Community institutions a culture has developed to react on the concerns of the public to be informed on and ensured of the fact that fraud and other irregularities are identified and, if necessary, eliminated and sanctioned. This challenge implies that the officials holding positions of responsibility within the Commission must take into account the existence of a justified need to communicate certain information to the public.65

65 Judgment of the Civil Service Tribunal of 2 May 2007 in Case F-23/05, Jean-Louis Giraudy v

Commission, p. 164 and 165.

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4. FOLLOW-UP TO IRREGULARITIES AND FRAUD

4.1. Sanctions

4.1.1. Institutional principles

Standards

Member States must ensure that infringements of Community law are penalised under conditions, both procedural and substantive, which are analogous to those applicable to infringements of national law and which, in any event, make the penalty effective, proportionate and dissuasive.66 That obligation also extends to the initiation of any proceedings under administrative, penal, fiscal or civil law for the collection or recovery of duties or charges which have been fraudulently evaded.67 In this context Member States and the Community institutions have mutual duties of sincere cooperation.68

Community competence

Administrative sanctions: The Community has the power to provide for administrative penalties such as exclusions, surcharges etc., which are necessary in order to combat irregularities; those penalties come within the implementing powers which the Council may delegate to the Commission.69

A measure, of which the consequences are the same whether there was unlawful conduct or not, does not seek to penalise an irregularity and thus cannot be classified as a penalty within the meaning of Regulation No 2988/95.70

Notwithstanding the Community competence, there is nothing to prevent a Member State from adopting measures beyond those set out in a Community regulation where it may deem them necessary and if the measures set out in the Community regulation are merely minimum requirements. However, 66 Judgment of the Court of Justice of 21 September 1989 in Case 68/88, Commission v Greece, p. 24

and 25. 67 Judgment of the Court of Justice of 14 July 1994 in Case C-352/92, Milchwerke Köln/Wuppertal v

Hauptzollamt Köln-Rheinau, p. 23. 68 Order of the Court of Justice of 13 July 1990 in Case C-2/88, Zwartveld and Others, p. 17. 69 Judgment of the Court of Justice of 27 October 1992 in Case C-240/90, Germany v Commission, p. 22

and 39. 70 Judgment of the Court of Justice of 24 October 2007 in Case C-375/05, Geuting v Director der

Landwirtschaftskammer Nordhein-Westfalen für den Bereich Landwirtschaft, p. 39.

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national authorities must exercise their discretion in compliance with the general principles of Community law, which include the principles of proportionality, legal certainty and the protection of legitimate expectations.71

Criminal sanctions: When the application of effective, proportionate and dissuasive criminal penalties by the competent national authorities is an essential measure for enforcing a Community policy (or at least certain Community policies), the Community may take measures which relate to the criminal law of the Member States which it considers necessary.72

By contrast, the determination of the type and level of the criminal penalties to be applied does not fall within the Community’s sphere of competence. It follows that the Community legislature may not adopt provisions, which relate to the type and level of the applicable criminal penalties.73

4.1.2. Administrative sanctions

Administrative penalties

Penalties imposed irrespective of fault are not of a criminal nature.74 These administrative penalties, however, cannot be imposed unless they rest on a clear and unambiguous legal basis.75

They can not be imposed on the basis of the provisions of articles 5 and 7 of Regulation No 2988/95 alone since, if, in connection with the protection of the European Union’s financial interests, an administrative penalty is to be applied to a category of persons, a necessary precondition is that, prior to commission of the irregularity in question, either the European Union legislature has adopted sectoral rules laying down such a penalty and the conditions for its application to that category of persons or, where such rules have not yet been adopted at European Union level, the law of the Member

71 Judgment of the Court of Justice of 14 September 2006 in Case C-496/04, J. Slob v Productschap

Zuivel, p. 39 to 41.

72 Judgment of the Court of Justice of 13 September 2005 in Case C-176/03, Commission v Council, p.48.

73 Judgment of the Court of Justice of 23 October 2007 in Case C-440/05, Commission v Council, p. 70 and 71.

74 Judgment of the Court of Justice of 18 November 1987 in Case 137/85, Maizena v BALM, p. 12 to 14; judgment of the Court of Justice of 11 July 2002 in Case C-210/00, Käserei Champignon Hofmeister, p. 35 to 44.

75 Judgment of the Court of Justice of 17 July 1997 in Case C-354/95, National Farmers' Union and Others, p. 57; judgment of the Court of Justice of 12 February 2004 in Case C-236/02, Slob, p.37; judgment of the Court of Justice of 6 April 2006 in Case C-274/04, ED & F Man Sugar, p. 15; judgment of the Court of Justice of 16 March 2006 in Case C-94/05 Emsland-Stärke, p. 43.

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State where the irregularity was committed has provided for the imposition of an administrative penalty on that category of persons76.

The application of deterrent and effective penalties in respect of irregularities in applications for aid concerning the years before that in which those irregularities came to light, subject to limitation periods, cannot be considered to be unjustified or disproportionate.77

Non-retroactivity

The withdrawal of granted funds constitutes an administrative penalty and leads to the retroactive application of a less stringent provision under Art. 2(2) of Regulation 2988/95.78 This principle does not apply insofar as a provision does not impose a penalty but provides for a basis of calculation for the amounts due.79

Equally, there is no retroactive application of a less severe penalty in case of a CAP reform, which is not adopted with the aim of penalising less severely certain irregularities committed under the previous system, but is aimed at adapting those penalties to the new regulatory context resulting from the CAP reform and maintaining the coherence of the system of penalties in the light of the principles underlying the reform. 80

Proportionality

Given the difficulties involved in proving fraudulent intent, it cannot be considered unjustified or disproportionate to impose a dissuasive and effective penalty or hold someone liable even if the irregularity was committed by error, or in good faith and without fraudulent intent.81

76 Judgement of the Court of Justice of 28 October 2010, Belgisch Interventie-en Restitutiebureau v SGS

Belgium, p. 43.

77 Judgment of the Court of Justice of 19 November 2002 in Case C-304/00 Strawson and Gagg & Sons, p. 52.

78 Judgment of the Court of Justice of 1 July 2004 in Case C-295/02, Gerken, p. 61; judgment of the Court of Justice of 19 November 2002 in Case C-45/06, Campina GmbH, p. 33.

79 Judgment of the Court of Justice of 4 May 2006 in Case C-286/05, Haug, p. 24. 80 Judgment of the Court of Justice of 11 March 2008 in Case C-420/06, Jager, p. 60 to 70.

81 Judgment of the Court of Justice of 17 July 1997 in Case C-354/95, National Farmers' Union and Others, p. 53; judgment of the Court of Justice of 16 May 2002 in Case C-63/00, Schilling and Nehring, p. 40; judgment of the Court of Justice of 11 July 2002 in Case C-210/00, Käserei Champignon Hofmeister, p. 59 to 68; judgment of the Court of Justice of 16 March 2006 in Case C-94/05, Emsland-Stärke, p. 53; judgment of the Court of Justice of 24 April 2008 in Case C-143/07, A.O.B. Reuter & Co., p. 17 to 19 and 35; judgment of the Court of Justice of 3 April 2008 in Case C-230/06, Militzer & Munch GmbH, p. 48, 49 and 51.

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4.1.3. Penal sanctions

Ne bis in idem

Relation of criminal penalties among the Member States: The ne bis in idem principle applies also between the Member States in respect of a penal offences even if the accused is acquitted finally because prosecution is time-barred; that principle does not apply to persons other than those whose trial has been finally disposed of.82 That principle is applicable between the Member States even for acts committed before the entry into force of international ne bis in idem rules.83

Relation of Community and national penalties: The same facts may lead to a penalty imposed at Community and at national level provided one takes into account the other penalty.84

Misuse of funds, criminal proceedings

Even where Community legislation provides for only civil or administrative penalties for conduct harmful to the financial interests of the Community, the Member States have to take all effective measures including criminal penalties.85

4.2. Recovery

4.2.1. Institutional aspects, third-country legal action by the EC

Reynolds Tobacco

On a series of actions for annulment of Commission decisions to commence, on behalf of the Community, a number of civil actions in a U.S. District Court (NY) against the cigarette manufacturers for their participation in a system of smuggling and distributing contraband cigarettes in the territory of the EC, the CFI decided to dismiss as inadmissible the manufacturers’ applications for annulment of the Commission’s decisions. A decision to commence legal proceedings, whether inside the EC or in a third State, does not in itself alter the legal position of the cigarette manufacturer defendants

82 Judgment of the Court of Justice of 28 September 2006 in Case C-467/04, Gasparini and Others, p. 28,

29 and 37. 83 Judgment of the Court of Justice of 9 March 2006 in Case C-436/04, Van Esbroeck, p. 24. 84 Judgment of the General Court of 26 September 2002 in Case T-199/99, Sgaravatti Mediterranea v

Commission, p. 138. 85 Judgment of the Court of Justice of 8 July 1999 in Case C-186/98, Nunes and de Matos, paragraph 14.

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since the contested decisions to launch the action do not produce any binding legal effect.86

4.2.2. Irregularities and abuse of law

Abuse of law is regulated by Article 4(3) of Regulation 2988/95. A finding that there is an abuse presupposes: first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the Community rules, the purpose of those rules has not been achieved, and, second, a subjective element consisting in the intention to obtain an advantage from the Community rules by creating artificially the conditions laid down for obtaining it; it is for the national court to verify the existence of an alleged abuse of law in accordance with the rules of evidence of national law. An abuse entails the obligation to reimbursement and is not in conflict with the principle of lawfulness.87

4.2.3. Limitation period

The limitation period of Article 3(1) of Regulation 2988/95 is applicable to the irregularities leading to both administrative measures and penalties.88 It starts from the end of the irregularity.89

A notification to the concerned economic operator interrupts the limitation period only if the suspected irregularities are sufficiently precisely defined.90 This is the case in a Commission (OLAF) letter seeking to investigate irregularities.91 An irregularity is continuous or repeated where it is committed by a Community operator who derives economic advantages from a body of similar transactions which infringe the same provision of Community law. The fact that the irregularity relates to a relatively small proportion of all the transactions carried out in a given period and that the

86 Judgment of the General Court of 15 January 2003 in Joined cases T-377/00, T-379/00, T-380/00, T-

260/01 and T-272/01, Philip Morris International v Commission, upheld on this point by the judgment of the Court of Justice of 12 September 2006 in Case C-131/03 P, Reynolds Tobacco and Others v Commission.

87 Judgment of the Court of Justice of 14 December 2000 in Case C-110/99, Emsland-Stärke, p. 52 and 53; judgment of the Court of Justice of 21 July 2005 in Case C-515/03, Eichsfelder Schlachtbetrieb, p. 39.

88 Judgment of the Court of Justice of 24 June 2004 in Case C-278/02, Handlbauer, p. 30 to 34. 89 Judgment of the Court of Justice of 2 December 2004 in Case C-226/03 P, José Martí Peix v

Commission, p. 18. 90 Judgment of the Court of Justice of 24 June 2004 in Case C-278/02, Handlbauer, p. 41 to 43. 91 Judgment of the Court of Justice of 2 December 2004 in Case C-226/03 P, José Martí Peix v

Commission, p. 93 and 94.

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transactions in which the irregularity has been detected always concern different consignments is immaterial in this respect.92

The classification of an act as ‘an act that could give rise to criminal court proceedings’ which allows the post-clearance recovery of import duties even beyond the limitation period set out in the Customs legislation, falls within the competence of the customs authorities required to determine the exact amount of the import duties or export duties in question.93

Par ailleurs, le principe général de droit communautaire du délai raisonnable doit être respecté dans le cadre des procédures administratives. Subordonner la prescription de l'instruction ou des poursuites, par la Commission, d'une irrégularité affectant l'exécution d'un projet à la clôture définitive, par cette même institution, du programme pluriannuel concerné, conduirait à la prorogation du délai de prescription en violation du principe général du délai raisonnable. 94

Under the derogation provided for in Article 3(3) of Regulation No 2988/95, Member States retain wide discretion in fixing longer limitation periods which they intend to apply in cases involving an irregularity that is detrimental to the European Union’s financial interests95. Although, this Regulation does not provide for any information or notification process relating to the use made by Member States of their possibility of providing for longer limitation periods. Thus, no form of monitoring has been provided for at European Union level as regards either the limitation periods applied by way of exception by Member States under that provision or the sectors in which Member States have decided to apply those periods96.

4.2.4. Legality principle

Gerken

92 Judgment of the Court of Justice of 11 January 2007 in Case C-279/05, Vonk Dairy Products, p. 44. 93 Judgment of the Court of Justice of 18 December 2007 in Case C-62/06, Fazenda Pública – Director

Geral des Alfândegas/ZF Zefeser, p. 26.

94 Judgment of the General Court of 15 October 2008 in Case T-375/05, Le Canne v Commission, p. 79 and 82.

95 Judgement of the Court of Justice of 22 December 2010 in Case C-131/10, Corman SA v Bureau d’intervention et de restitution belge (BIRB), p. 54-55.

96 Judgement of the Court of Justice of 29 January 2009 in Joined Cases C-278/07 and C-280/07, Hauptzollamt Hamburg-Jonas v Josef Vosding Schacht-, Kühl- und Zerlegebetrieb GmbH & Co., p. 45.

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In Regulation (EC/Euratom) No 2988/95, the Community legislator set out some general principles that all the sectoral regulations must comply with. One of these is the principle of the retroactive application of less severe administrative penalties.97

Stichting ROM-projecten

Where the conditions for the grant of financial assistance by the Community to a Member State are set out in the grant decision but that Member State has neither published them nor made them known to the ultimate beneficiary of the assistance, it is not contrary to Community law to apply the principle of legal certainty so as to preclude repayment by that beneficiary of the amounts wrongly paid, provided that it is possible to establish the beneficiary’s good faith. In such a case, the Member State concerned may be held financially liable for the amounts not recovered in order to give effect to the Community’s right to obtain repayment of the amount of the assistance.98

Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening

In the area of Structural Funds Article 23(1) of Regulation No 4253/88 is the relevant legal basis for the obligation to recover and not Regulation 2988/95 which merely lays down general rules. The exercise of any discretion to decide whether or not it would be expedient to demand repayment of Community funds unduly or irregularly granted would be inconsistent with the duty imposed on national administrations by Article 23(1) of Regulation No 4253/88.99

4.2.5. Non-performance of contractual obligations

Forum des Migrants

Applicants for and beneficiaries of Community financial aid have an obligation to provide information and to act in good faith, and are thus required to satisfy themselves that they are submitting reliable information to the Commission. The Commission can terminate a grant agreement if the

97 Judgment of the Court of Justice of 1 July 2004 in Case C-205/02 Gerken, p. 56. 98 Judgment of the Court of Justice of 21 June 2007 in Case C-158/06, Stichting ROM-projecten v

Staatssecretaris van Economische Zaken, p.34.

99 Judgment of the Court of Justice of 13 March 2008 in Joined Cases C-383/06 to 385/06, Vereniging Nationaal Overlegorgaan Sociale Werkvoorziening, p. 38 to 40.

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beneficiary gives incomplete information in order to obtain payment of the grant.100

GEF

The jurisdiction of the Court of First Instance to deal with an action based on an arbitration clause necessarily implies jurisdiction to deal with a counterclaim made by an institution in the context of the same action which derives from the contractual relationship or the situation on which the main application is based or has a direct link with the obligations deriving there from.101

4.2.6. Sectoral aspects: Customs, Mutual assistance obligations, Tax fraud

In general

The protection of the financial interests of the Community does not follow from the establishment of the customs union, but constitutes an independent objective which, under the scheme of the Treaty, is placed in Title II (financial provisions) of Part V relating to the Community institutions and not in Part III on Community policies, which includes the customs union and agriculture.102

Acceptance of third countries' decisions under a customs protocol

Customs authorities of an EC Member State need to accept and to comply with the decisions (e.g. on the validity of an EUR 1 certificate) taken by the authorities of a third country on the basis of a protocol on administrative cooperation between customs authorities; provided that the cooperation under the protocol is founded both on the division of responsibilities (between MS and 3rd countries authorities) and on mutual trust between the authorities concerned.103

The EC Member States' authorities also have to accept the results of an inquiry by the 3rd country’s authority into the validity of a EUR 1 certificate undertaken on the request of the Member State’s authorities. This means that the 3rd country’s decision can only be challenged if the customs authorities

100 Judgment of the General Court of 9 April 2003 in Case T-217/01, Forum des migrants v Commission,

p. 44 and 58. 101 Judgement of the General Court of 15 March 2005 in Case T-29/02, GEF v Commission, p.73. 102 Judgment of the Court of Justice of 18 November 1999 in Case C-209/97, Commission v Council,

p.29. 103 Judgment of the Court of Justice of 9 February 2006 in Joined cases C-23/04 to C-25/04, Sfakianakis,

p. 21.

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of the 3rd state have not been in a position to carry out the subsequent verification properly and it has then been carried out by the importing Member State.104

The obligation of acceptance of third countries' decisions is not limited to administrative acts but also includes judicial decisions on the legality of administrative decisions delivered by the 3rd country authorities.

The failure to accept judicial decisions would affect the exporter’s right to an effective judicial remedy which is a general principle of EC law.105

It is the task of the Commission to satisfy itself, in the supervising and monitoring the proper implementation of the Association Agreement, that the 3rd country’s authorities correctly classify the certificates (A.TR.1) as either irregular or inauthentic. 106

Results of a Community enquiry to third countries / Recognition of third country decisions under a unilateral regime

In the case of preferential treatment of goods originating in a third country on the basis of a unilateral Community measure such as a regulation, decisions taken by the authorities of the non-member State cannot bind the Community and its Member States in their interpretation of the Community legislation. Determinations made by the Commission as to the origin of goods in the light of a mission of enquiry must take precedence over the determinations of the customs authorities of the exporting non-member State.107

TAX fraud (VAT)

In the case of business transactions that are part of a chain of supply, economic operators may only be held liable for tax fraud if they had knowledge or means of knowledge of their direct or indirect involvement in the fraud scheme. Member States’ tax authorities may not refuse businesses reimbursement/deduction of input tax following transactions which are preceded by VAT fraud when the taxable person effected the relevant

104 Judgment of the Court Of Justice of 7 December 1993 in Case C-12/92, Huygen and Others, p.27. 105 Judgment of the Court of Justice of 15 May 1986 in Case 222/84, Johnston, p. 18. 106 Judgment of the Court of Justice of 25 July 2008 in Case C-204/07 P, C.A.S. SpA v Commission, p. 95

and 106 to 111.

107 Judgment of the Court of Justice of 14 May 1996 in Joined Cases C-153/94 and C-204/94, Faroe Seafood, p. 24 and 25.

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transactions without knowing or having any means of knowledge of the fraudulent nature of another transaction in the supply chain.108

A taxable person to whom a supply of goods or services has been made and who knew, or had reasonable grounds to suspect, that some or all of the value added tax payable in respect of that supply, or of any previous or subsequent supply, would go unpaid may be made jointly and severally liable for the tax losses. However, national rules containing this liability rule have to comply with the principles of legal certainty and proportionality.109

4.2.7. Sectoral aspects: Strucural funds, Regulation 4253/88

Under Article 24 of Regulation 4253/88, the Commission must request the Member State concerned to submit comments.110 The beneficiary must also be given the opportunity to submit comments, but the Commission has no obligation to inform the applicant of the fact that it had given the Member State the opportunity to submit comments.111 It is legitimate for the Commission to repeat its checks where fresh evidence becomes available.112 Regulations 2988/95 and 2185/96 are designed to apply on a supplementary basis to sectoral legal bases.113

108 Judgment of the Court of Justice of 12 January 2006 in Joined Cases C-354/03, C-355/03 and C-

484/03, Optigen, p. 55. 109 Judgment of the Court of Justice of 11 May 2006 in Case C-384/04, Federation of Technological

Industries and Others, p. 26. 110 Judgment of the Court of Justice of 12 February 2004 in Case C-330/01 P, Hortiplant v Commission,

p. 33. 111 Judgment of the General Court of 28 January 2004 in Case T-180/01, Euroagri v Commission, p. 56. 112 Judgment of the General Court of 28 January 2004 in Case T-180/01, Euroagri v Commission, p. 57 to

59. 113 Judgment of the General Court of 7 November 2002 in Joined Cases T-141/99, T-142/99, T-150/99

and T-151/99, Vela v Commission, p. 113.

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5. ACTION FOR DAMAGES AGAINST OLAF’S ACTIONS

5.1. General conditions

European Union shall make good any damage caused by OLAF or by its servants in the performance of their duties114. Although, for the non-contractual liability of the EU to arise, three conditions must be met: OLAF’s conduct must be unlawful, actual damage must have been suffered and there must be a causal link between the two115.

In case if it is a legal measure that is relied on the basis for an action of the damages, it must constitute, in order to incur non-contractual liability, a sufficiently serious breach of a rule of law intended to confer rights on individuals116.

The decisive criterion for establishing that a breach of EU law was sufficiently serious is whether OLAF manifestly and gravely disregarded the limits of its discretion117. However, in all cases where OLAF has only considerably reduced or even no, discretion, the mere infringement of EU law may be sufficient to establish the existence of a sufficiently serious breach118.

Finding of an error or irregularity on the part of OLAF is not sufficient in itself to attract the non-contractual liability of the EU unless that error or irregularity is characterised by a lack of diligence or care119. Due diligence would be breached if OLAF or its servants committed a mistake which would not have been committed in similar circumstances by an administrative authority exercising ordinary care and diligence120. However, the complexity of the situations to be regulated, difficulties in the application or interpretation of the legislation and the margin of discretion

114 340 (2) TFUE

115 Judgement of the Court of Justice of 28 April 1971 in Case 4/69, Lütticke v Commission, p. 10.

116 Judgement of the Court of Justice of 2 December 1971 in Case 5/71, Aktien-Zuckerfabrik Schöppenstedt v Council, p. 11.

117 Judgement of the Court of Justice of 19 April 2007 in Case C-282/05 P, Holcim (Deutschland) AG v Commission, p. 47.

118 Judgement of the Court of Justice of 4 July 2000 in Case C-352/98 P, Bergaderm SA v Commission, p.44.

119 Judgement of the General Court of 12 July 2001 in Joined cases T-198/95, T-171/96, T-230/97, T-174/98 and T-255/99, Comafrika SpA v Commission, p. 144.

120 Ibid, p. 138.

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available to the author of the act in question should always be taken into account121.

It is for the party seeking to establish the EU liability to prove the existence and extent of the damage and a sufficiently direct causal link between that damage and the conduct of the Community's institution122. All three main conditions have to be satisfied otherwise the action for damages will be rejected123. However, strict application of the rule, that it is for the applicant to establish that all the conditions are satisfied, may me mitigated, where a harmful event may have been the result of a number of different causes and where OLAF has adduced no evidence enabling it to be established to which of those causes the event was imputable, although it was best placed to provide evidence in that respect, so that the uncertainty which remains must be construed against it124. The period of limitation

The possibility to bring an action for damages is limited by a period of five years, which begins with the occurrence of the event that gives rise to the liability of the EU125. However, it cannot begin until all the requirements governing an obligation to provide compensation for damage are satisfied and, in particular, until the damage to be made good has materialised126. Therefore, where the liability has its origin in a legislative measure, that period of limitation does not begin until the damaging effects of that measure have arisen127.

121 Judgement of the Court of Justice of 4 July 2000 in Case C-352/98 P, Bergaderm SA v Commission,

p.41.

122 Judgement of the Court of Justice of 24 October 2000 in Case T-178/98, Fresh Marine Company SA v Commission, p. 118.

123 Judgement of the Court of Justice of 15 September 1994 in Case C-146/91, KYDEP v Council, p. 81.

124 Judgement of the General Court of 8 July 2008 in the Case T-48/05, Franchet and Byk v Commission, p. 182-183.

125 Article 46 of the Statute of the Court of Justice

126 Judgement of the Court of Justice of 19 April 2007 in Case C-282/05 P, Holcim (Deutschland) AG v Commission, p. 29.

127 Ibid, p. 30-33.

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This period will be interrupted if proceedings are instituted before the Court of Justice or if prior to them an application is made before OLAF128.

Conditions regarding the application

Asia Motors France

An application seeking compensation for damage caused by OLAF must state the evidence, from which the conduct alleged against it can be identified, the reasons for which the applicant considers that there is a causal link between the conduct and the damage it claims to have suffered, and the nature and extent of that damage129. In order to ensure legal certainty and the sound administration of justice, if an action is to be admissible the essential points of fact and law on which it is based must be apparent from the text of the application itself, even if only stated briefly, provided the statement is coherent and comprehensible130.

Organisation des Modjahedines du people d’Iran

In the absence of any indication from the applicant, it is not for the Court to make

assumptions and ascertain whether there is a causal link between the conduct complained of the injury alleged131.

Automec

The Court has accepted that, in special circumstances, it was not essential to specify the exact extent of the damage in the application and to state the amount of compensation sought132. At the same time it has been held that the applicant had to establish, or at least indicate, the existence of any such circumstances in the application133.

128 Article 46 of the Statute of the Court of Justice

129 Judgement of the General Court of 18 September 1996 in Case T-387/94, Asia Motor France v Commission, p. 107.

130 Order of the General Court of 29 November 1993 in Case T-56/92, Koelman v Commission, p.21.

131 Judgement of the General Court of 12 December 2006 in Case T-228/02, Organisations des Mpdjahedines du people d’Iran v Council, p. 179.

132 Judgement of the General Court of 10 July 1990 in Case T-64/89, Automec Srl v Commission, p. 76.

133 Judgement of the General Court of 28 January 2009 in Case T-125/06, Centro Studi Antonio Manieri Srl v Council, p. 100.

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Damage caused by OLAF’s servants in the performance of their duties

Sayag and Zurich

EU can be liable for only those acts of OLAF’s servants which by virtue of an internal or direct relationship are the necessary extension of the tasks entrusted to OLAF134.

5.2. Specific case law regarding OLAF

Camós Grau

The continuing presence and substantial involvement in the investigation of one of OLAF's investigative officers, who was found to have had a conflict of interests, constitutes a serious and manifest breach of the requirement of impartiality. This is a fault capable of giving rise to non-contractual liability on the part of the Community.

The undue accusations made by OLAF against the official in its final report on the investigation, attributing to him wrongful acts that would have rendered him liable to criminal and disciplinary action, seriously impairing his honour and reputation, constitute non-pecuniary damage justifying pecuniary compensation135.

CPEM

The fact that the enquiry by the European Anti-Fraud Office uncovered irregularities which had not been detected during an audit carried out by the Commission’s Directorate-General for Employment, Social Affairs and Equal Opportunities does not in any way constitute inconsistency and cannot affect the lawfulness of a decision based on the results of that enquiry136.

Inalca SpA 134 Judgement of the Court of Justice of 10 July 1969 in Case 9/69, Sayag and Zurish, p. 7.

135 Judgement of the General Court of 6 April 2006 in Case T-309/03, Camós Grau v Commission, p. 113, 126, 141, 157 and 162.

136 Judgement of the General Court of 30 June 2009 in Case T-444/07, CPEM v Commission, p. 135.

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Raising a bank guarantee by the applicant

The damage caused to the applicant by providing by it the bank guarantees cannot be the direct consequence of OLAF’s letter communicating to Italian authorities the results of its investigation137.

The applicant cannot validly maintain that the bank guarantee charges which it incurred are the direct consequence of the unlawfulness of any decision. The damage which it alleges in that regard is the consequence of its own decision not to comply with the obligation to pay the fine138.

Commercial reputation of the applicant

Harming a commercial reputation of the applicant is a non-material damage, which has to be sufficiently specified in the application in order to cause the non-contractual liability of the EU. The simple indication that the commercial reputation of the applicant has been harmed by being involved in administrative, civil and criminal procedures – is not sufficient139.

Centre de promotion de l’emploi par la micro-entreprise (CPEM)

Rights of defence

Rights of the defence can be infringed by reason of a procedural irregularity only in so far as the irregularity has a concrete effect on the ability of the undertakings to defend themselves. Consequently, non-compliance with rules in force whose purpose is to protect the rights of the defence can vitiate the administrative procedure only if it is shown that the latter could have had a different outcome if the rules had been observed140.

Principle of the protection of legitimate expectations

Three conditions must be satisfied in order to claim entitlement to the protection of legitimate expectations. First, precise, unconditional and consistent assurances originating from authorised and reliable sources must have been given to the person concerned by OLAF. Second, those assurances must be such as to give rise to a legitimate expectation on the

137 Order of the General Court of 4 September 2009 in Case T-174/0, Inalca SpA v Commission, p. 90.

138 Judgement of the General Court of 21 April 2005 in Case T-28/03, Holcim v Commission, p. 123.

139 Order of the General Court of 4 September 2009 in Case T-174/0, Inalca SpA v Commission, p. 79.

140 Judgement of the General Court of 30 June 2009 in Case T-444/07, Centre de promotion de l’emploi par la micro-entreprise (CPEM) v Commission, p. 53 and of 14 December 2005 in Case T-210/01, General Electric v Commission, p. 632.

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part of the person to whom they are addressed. Third, the assurances given must comply with the applicable rules141.

A and G

Excessive duration of the proceedings

It must be noted that all disciplinary proceedings place the official concerned in a situation of uncertainty about his professional future, inevitably causing him some degree of stress and anxiety. If that uncertainty persists for an inordinate period, the intensity of the stress and anxiety caused to the official goes beyond the level of what may be considered justifiable. Hence, the excessive duration of disciplinary proceedings is to be taken as giving rise to a presumption that the person concerned has suffered non-material damage142.

It is necessary to distinguish between on the one hand the non-material damage caused to any official or member of staff, irrespective of any illness, and on the other hand the harm that may have been caused by mental illness – or the aggravation of such an illness – as a consequence of the excessive length of those proceedings. Claim for compensation for the first type of damage is admissible irrespective of the state of any other procedure whereas on the other hand an official’s claim for compensation for the material damage and non-material harm caused to him by an occupational disease is not generally admissible until the procedure commenced under Article 73 of the Staff Regulations has been concluded143. Moreover, the case-law makes clear that it is only in circumstances where the staff insurance scheme does not permit appropriate compensation for the injury suffered that the official is entitled to seek additional compensation144.

Although, it could not automatically be deduced from the fact that the medical procedure had not been concluded that an action for damages and interest on account of a wrongful act committed by OLAF was premature, it should be always supported by the reasons of economy of procedure145.

141 Judgement of the General Court of 30 June 2009 in Case T-444/07, Centre de promotion de l’emploi

par la micro-entreprise (CPEM) v Commission, p. 126.

142 Judgement of the Civil Service Tribunal of 12 January 2010 in Joined cases F-124/05 and F-96/06, A and G v Commission, p. 147.

143 Ibid, p. 149-151.

144 Judgement of the Court of Justice of 9 September 1999 in Case C-257/98 P, Lucaccioni v Commission, p. 22.

145 Judgement of the General Court of 10 December 2008 in Case T-57/99, Nardone v Commission, p. 56.

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Implication in a case (according to the applicant – unjustified)

OLAF enjoys a wide margin of discretion with regard to the opening and conduct of administrative investigations, subject to there being reasonable suspicion of the commission of a disciplinary offence. It is therefore legitimate for OLAF to investigate in the course of its inquiries whether the applicant had played a role in the unlawful acts that had been discovered and, if so, what that role was146.

Rights of defence

The argument that some officials were not the subject of administrative investigations is not such as to establish the deficiencies or the violations of the rights of the defence.

The right of an official to comment on facts concerning him does not mean that the investigators are obliged to amend the conclusions of a report on the basis of the requests made by the official who has been interviewed147.

Principle of confidentiality of OLAF investigations

It is regrettable if during a popular television programme the document presented in the commentary accompanying the programme’s images, as being the minutes of OLAF’s interview with the applicant, was broadcast.

Although, Commission itself and OLAF are not the only bodies in possession of the minutes of OLAF’s interviews with the applicants and this is why OLAF cannot be best placed to provide evidence enabling the cause of the leak to be established. Consequently, the exception settled in the case Franchet and Byk148 does not apply in this case and it remains for the applicant to establish that all the conditions of non-contractual liability of the EU, in the consequence of OLAF’s actions, have been satisfied149.

Duty to provide assistance

In principle, it is for the applicant to apply for assistance under Article 24 of Staff Regulations. Only exceptional circumstances may oblige the institution 146 Judgement of the Civil Service Tribunal of 12 January 2010 in Joined cases F-124/05 and F-96/06, A

and G v Commission, p. 173-175.

147 Ibid, p. 191.

148 Judgement of the General Court of 8 July 2008 in the Case T-48/05, Franchet and Byk v Commission, p. 182-183.

149 Judgement of the Civil Service Tribunal of 12 January 2010 in Joined cases F-124/05 and F-96/06, A and G v Commission, p. 214-215.

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to provide specific assistance not in response to a request from the individual concerned but on its own initiative150.

The duty to provide assistance is concerned with the defence of officials against acts of third parties and of colleagues or hierarchical superiors in their personal capacity and not against acts of the institutions themselves, the review of which falls under other provisions of the Staff Regulations. OLAF, on the other hand, cannot be held to be a third party in relation to the institution151.

Principle of the protection of legitimate expectations

The right to rely on the principle of the protection of legitimate expectations extends to any individual in a situation in which it appears that the administration has led him to entertain reasonable expectations, an official may not plead a breach of that principle unless the administration has given him precise assurances152.

Principle of sound administration

It follows from the principle of sound administration that disciplinary authorities are under an obligation to conduct disciplinary proceedings with due diligence and to ensure that each procedural step is taken within a reasonable time following the previous step. Even in the absence of a limitation period, disciplinary authorities are under an obligation to ensure that proceedings liable to result in a disciplinary measure are instituted within a reasonable period. OLAF may also be liable of the unreasonable duration of disciplinary proceedings as it may be the result both of the conduct of prior administrative investigations and of the disciplinary proceedings themselves.

The reasonableness of the duration of the proceedings must be assessed in the light of the circumstances specific to each case and, in particular, the importance of the case for the person concerned, its complexity and the conduct of the applicant and of the competent authorities153.

150 Judgement of the Court of Justice of 12 June 1986 in Case 229/84, Sommerlatte v Commission, p. 20.

151 Judgement of the Civil Service Tribunal of 12 January 2010 in Joined cases F-124/05 and F-96/06, A and G v Commission, p. 380-381.

152 Judgement of the Civil Service Tribunal of 12 January 2010 in Joined cases F-124/05 and F-96/06, A and G v Commission, p. 390-395.

153 Ibid, p. 390-393.