Judicial Protection against OLAF's acts: In search of effectiveness

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Judicial access and the existence of effective legal means of judicial protection constitute the cornerstone of the right to effective judicial protection. The present article aims to examine the possibilities of judicial protection enjoyed by the
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  JUDICIAL PROTECTION AGAINST OLAF’S ACTS: IN SEARCH OF EFFECTIVENESS M ICHAIL  R ODOPOULOS * , K ATERINA  P ANTAZATOU ** I. INTRODUCTION The Union’s nancial interests are harmed by irregularities in the funds’ management of the EU budget at a threatening high rate. This misman - agement might result either from fraudulent behaviour or from other ir - regularities. The need to combat these harmful behaviours, following the nancial scandal that led to the resignation of the Santer commission 1 , led to the establishment of the European Anti-Fraud O fce (OLAF) 2 . OLAF’s legal nature is hybrid, in the sense that it constitutes, on the one hand, an in - dependent authority; while on the other hand, it forms an executing branch (Service Directorate General) of the European Commission 3 . ∗    Attorney-at-Law, LL.M, Researcher at the Centre of European and International Euro- pean Law ∗∗   PhD European University Institute (EUI) 1. V. PUJAS, The European Anti-Fraud Ofce (OLAF): A European policy to ght against economic and nancial fraud, Journal of European Public Policy, 2003, p. 792; J.A. VAR - VAELE, Towards an independent European agency to ght fraud and corruption in the EU?, European Journal of Crime, Criminal law and criminal Justice, 1999, pp. 331-346; P. CRAIG, The fall and renewal of the Commission: Accountability, contract and admin - istrative organization, ELJ, 2000, pp. 981-116. See Commission Decision 1999/352/EC, ECSC, Euratom of 28 April 1999 establishing OLAF.2. From its French name: Ofce de Lutte Anti-Fraude.3. Although OLAF belongs administratively to the Commission, it enjoys full operational independence. OLAF’s Director-General has a right of action against the Commission before the CJEU, for every measure the Commission adopts that might jeopardise this independence.  134 HREL 2013  Rodopoulos / Pantazatou: Judicial Protection OLAF’s mission is threefold. It consists in a) protecting the nancial inter - ests of the European Union by investigating fraud and other illegal activi - ties, b) detecting and investigating serious matters relating to the discharge of professional duties by staff of the EU institutions that could result in disciplinary or criminal proceedings and c) supporting in general the EU in the development and implementation of anti-fraud legislation and poli - cies 4 . While OLAF is not a prosecuting authority, it is empowered to conduct internal investigations, i.e. inside any European institution or body funded by the EU budget, and external investigations, i.e. at national level, wher - ever and whenever the EU budget is at stake. For this purposes, OLAF may conduct on-the-spot checks and inspections on the premises of economic operators, in close cooperation with the member state at issue. OLAF may acquire access to condential information, to photocopy documents, to in - vite employees to testify and in general, to conduct all the investigatory acts, similar to those that national authorities are allowed to conduct 5 . On completion of an investigation carried out by OLAF, the latter com - pletes a report, under the authority of the Director, containing, in particular, the ndings of the investigation, including the recommendations of the Director on the action that should be taken. The report that follows the internal investigation and the related documents is then sent to the institu - tion, body, ofce or agency concerned, which is responsible to take, where appropriate, any disciplinary or legal actions based on the results and rec - ommendations of the investigation.The perfectly legitimate goal of the investigation of fraudulent behaviours might, however, undermine the protection of human rights and fundamen - tal freedoms. According to Art. 2 TEU, “ the Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities ”. It is, thus, necessary that the relevant legal framework on the combat of fraud achieves a fair and proportionate balance between the 4.   C. STEFANOU / S. WHITE / H. XANTHAKI, OLAF at the crossroads – action against EU fraud, Hart publishing, 2011.5.   Regulations No 1073/1999 and No 1074/1999 of 25 May 1999 concerning investiga - tions conducted by the European Anti-Fraud Ofce (OLAF) dene the Ofce’s main role and set the framework for OLAF’s administrative investigations, especially arts 9 and 10 of Regulation No 1073/99.  135 HREL 2013 against OLAF’S Acts public interest of safeguarding the Union’s nancial interests and the rights of the suspect who is accused of nancial crime 6 . Judicial access and the existence of effective legal means of judicial pro - tection constitute the cornerstone of the right to effective judicial protec - tion 7 . The present article aims to examine the possibilities of judicial pro - tection enjoyed by the suspects who are investigated by OLAF 8 . The article will attempt to show that the Court’s case-law concerning the admissibil - ity conditions for actions for annulment deprives in practice the applicant from effectively challenging any illegal activities of OLAF. The rst part will deal with the remote possibility of an action for annulment (I), while the second part will demonstrate that the legal remedy of the action for damages can only tackle a minor part of OLAF’s activities, rendering its actions practically free from judicial control (II) 9 . The expectation of “a complete system of legal remedies and procedures” 10  in the case of OLAF is proven to be particularly ambitious. The goal of this article is to shed some light in the lacuna of the judicial control of OLAF’s actions and to identify appropriate ways to ensure that the rights of the persons under investigation are being fully respected. II. ACTION FOR ANNULMENT: A REMOTE POSSIBILITY TO CHALLENGE OLAF’S ACTIONS a) The general jurisprudential framework 6. M. RODOPOULOS in V. Christianos, TEU and TFEU, Interpretation by Article, ed. Nomiki Bibliothiki, 2012, p. 1292 [in Greek].7. Case C-50/00 P, Unión de Pequeños Agricultores v. Council , 25.07.2002, ECR I-6677, paras 38-39. See further K. LENAERTS, The rule of law and the coherence of the judi - cial system, CML Rev., 2007, p. 1625 et seq.8. The legal means of the administrative appeal – in the course of a purely administrative procedure – or the complaints to the European Ombudsman do not fall under the scope of the present study. It should, however, be noted that, in practice, a positive decision by the Ombudsman could prove to be much more efcacious than the judicial protection, because of the great political signicance the Ombudsman’s decision bear. In this re - spect, see A. TSADIRAS, The position of the European Ombudsman in the community system of judicial remedies, EL.Rev., 2007, pp. 607-626.9. EU ofcials must follow an administrative procedure before introducing an action in Court. See articles 90 and 91 of the Staff Regulation. See also K. LENAERTS / D. ART / I. MASELIS, Procedural Law of the European Union, Sweet & Maxwell, 2006, Chapter 4.10.   Case C-294/83,  Les Verts v. Parliament  , 23.04.1986, ECR 1339, para. 23.  136 HREL 2013  Rodopoulos / Pantazatou: Judicial Protection Article 263 TFEU constitutes the legal basis of the Court’s competence to review the legality of acts by the European Union’s institutions. One major condition for the admissibility of the actions brought before the CJEU is that the act at issue produces legal results against third parties. It should, therefore, be enforceable and not merely a simple recommendation or opinion. The srcins of the concept of the enforceable administrative act are found in the French theory and jurisprudence. Accordingly, a “décision faisant grief” (decision exécutoire) is dened as a decision that can be en - forceable and is subject to judicial review 11 . Consequently, if the contested act is not enforceable, the relevant legal remedy will not even meet the admissibility requirement. Indeed, it is settled case-law that only measures with binding legal effects and capable of affecting the interests of the applicant, by bringing about a distinct change in his legal position, are acts or decisions which may be the subject of an action for annulment 12 . According to the same case-law, regarding the admissibility of actions for annulment, it is necessary to look into the substance of the contested acts, as well as the intention of those who drafted them, in order to classify those acts. In that regard, it is in principle those measures that denitively determine the position of the Commission upon the conclusion of an administrative procedure and are intended to have legal effects capable of affecting the interests of the com - plainant, which are open to challenge. In contrast, intermediate measures that serve as preparatory means towards the nal decision, do not have those effects 13 . Consequently, any measure of a preparatory nature falls outside the scope of the judicial review provided for in article 263 TFEU.b) OLAF’s acts as preparatory measuresOLAF’s investigations end with the production of a conclusion on the case at issue, which is embodied in the nal report. It follows that if there is evidence that a criminal offence may have occurred in a Member State, OLAF forwards the data it has collected to the national authorities, so that 11.   E. LAFERRIERE, Traité de la juridiction administrative et des recours contentieux, 1896, t. 2, p. 427. 12.   Case C-117/91,  Bosman v. Commission , 04.10.1991, ECR I-4837, para. 13; Case C-123/03 P, Commission v. Greencore , 09.12.2004, ECR I-11647, para 44; Case 60/81,  IBM v. Commission , 11.11.1981, ECR-2639. 13.   Case C-521/06 P,  Athinaiki Techniki v. Commission , 17.07.2008, ECR I-5829, para. 42.  137 HREL 2013 against OLAF’S Acts they initiate the relevant procedures, in accordance with their national law, as provided in Art. 10(2) Reg. 1073/1999. At the same time, it forwards this data to the competent EU organization, so that it initiates the relevant disciplinary procedures. Thus, the question arising in this framework is, whether the nal report drawn up by OLAF and OLAF’s forwarding of the nal report prescribing an internal investigation to an EU institution or to the national prosecuting authorities constitute acts that are subject to an - nulment according to Article 263 TFEU. The Court dealt with this issue for the rst time in the Gomez-Reino  case and, since then, it has been consistently rejecting applications for annul - ment against these acts, by reason of that the contested acts do not bring about a distinct change in the applicant’s legal position 14 . The act by which OLAF forwards the relevant information to national ju - dicial authorities, in accordance with the obligation laid down in Article 10(2) of Regulation No 1073/1999, represents a preparatory act which, in itself, does not change the legal position of the applicant. It is for the national judicial authorities alone to decide what it is to be done with the forwarded information and to decide, in accordance with their national law, whether or not to initiate a judicial inquiry, to carry out investigative measures and to commence criminal proceedings. Thereafter, the national court is competent to decide whether the person concerned is guilty or not. Consequently, both the ndings of the nal report as well as the forward - ing information are considered by the Court as simple internal measures, unable to have any legal effect 15 . The Court, furthermore, considers that the duty of cooperation has no bind - ing legal effect on the national legal authorities or the applicant. The duty of cooperation provides that the national judicial authorities only have to examine the forwarded information carefully in order to comply with Union’s law. The initiation of any further legal proceedings is left exclu - sively to the wide discretionary power of the competent national authori - ties. Νational judicial authorities remain free, in the context of their own powers, to assess the content and signicance of that information and the actions to be taken, if necessary. Consequently, the possible initiation of 14.   Case T-215/02, Gomez-Reino v. Commission , 18.12.2003, ECR-345, paras 50-56 and Case C-471/02 P, Gomez-Reino v. Commission , 08.04.2003, ECR I-3207.15.   Case T-193/04, Tillack v. Commission , 04.10.2006, ECR II-3995, paras 66-70.
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