Boost likely for fraud fighters

Date: 04/07/1996

By Thomas Klau

HOPES are rising that disputes over two conventions aimed at bolstering the EU's ability to fight fraud could be unblocked in the wake of the compromise struck by Union leaders to end the battle over Europol.

Officials believe that the UK opt-out from an agreement to place reponsibility for the judicial supervision of Europol's activities in the hands of the European Court of Justice has created a precedent which is likely to serve as model for breaking the deadlock over other European conventions.

At last month's summit in Florence, EU leaders instructed officials to examine whether the formula devised to end the Europol dispute might be applicable to two other agreements: a convention on the protection of financial interests and another on the use of information technology by customs officials.

Both conventions are part of the Union's efforts to step up the fight against fraud. The first aims to trigger stiffer common penal sanctions against fraudsters, while the second would create the legal basis for a EU-wide computer system which officials hope would dramatically improve cooperation between national customs authorities.

They were formally agreed in July 1995, at the same time as the Europol Convention, but could not be ratified because of the disagreement over their judicial supervision.

Officials say the formula devised to end the Europol dispute should provide a way out of the impasse, as long as London drops its objection to reinforcing the ECJ's position.

“From our point of view, a negative answer would be inconceivable,” said a German official. “The UK is defending the position that this is indeed an open question, but all other EU countries insist a solution must be found.”

The outgoing Italian presidency has already submitted two draft agreements to Council of Ministers working groups spelling out how the ECJ solution found for Europol could be adapted to both the financial interest and information technology conventions.

But the legal status of the draft documents, which would become protocols attached to the convention texts, means that they cannot be approved without the consent of the UK.

“We cannot press ahead without the British,” stressed one official. “Effectively, this gives them a right of veto.”

However, a large majority of Union members now expect an agreement to be reached well before the end of the year.

Officials insist that in the cases of both the financial interests and the customs information technology conventions, the arguments for giving national courts the right to leave it up to the ECJ to interprete them are even more compelling than in the case of Europol.

“You can't have 15 different interpretations of fraud against community interests,” explained one official. “The British have absolutely no argument of substance.”

As in the case of Europol, the UK opt-out would apply only to 'prejudicial' questions, in which a national court refers cases involving the convention's interpretation to the judges in Luxembourg and then bases its own judgment on the ECJ's pronouncement.

In cases of conflicts about a convention's scope arising between Union countries themselves, or between member states and the Commission, the UK has accepted the Court's overall responsibility to act as arbitrator.

Any member state can take a dispute with another Union government to the European Court if the Council of Ministers fails to resolve it within six months.

With protocol drafts already submitted for the financial interests and the customs information agreements, officials cite several other conventions where a Europol-type solution might pave the way for a compromise between the UK and its partners.

Among these, they say, are the convention on external borders and the Brussels convention on international private law.

But sources stress that a solution might not be found for these accords before 1997 or even later.

“It really depends on how the Irish play it,” says one official. “Perhaps it is better not to tackle all the problems at once.”