REPORT on the proposal for a Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, to counter fraud and all other illegal activities affecting their financial interests
28.1.2005 - (COM(2004)0559 – C6‑0176/2004 – 2004/0187(CNS)) - *
Committee on Budgetary Control
Rapporteur: Herbert Bösch
DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
on the proposal for a Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, to counter fraud and all other illegal activities affecting their financial interests
(COM(2004)0559 – C6‑0176/2004 – 2004/0187(CNS))
(Consultation procedure)
The European Parliament,
– having regard to the proposal for a Council decision (COM(2004)0559)[1],
– having regard to Article 280 and Article 300(2), first subparagraph, first sentence of the EC Treaty,
– having regard to Article 300(3), first subparagraph, of the EC Treaty, pursuant to which the Council consulted Parliament (C6‑0176/2004),
– having regard to Rules 51 and 83(7) of its Rules of Procedure,
– having regard to the report of the Committee on Budgetary Control and the opinion of the Committee on Civil Liberties, Justice and Home Affairs (A6‑0013/2005),
1. Approves conclusion of the agreement;
2. Instructs its President to forward its position to the Council and the Commission, and the governments and parliaments of the Member States and the Swiss Confederation.
- [1] Not yet published in OJ.
EXPLANATORY STATEMENT
The European Parliament has called repeatedly for Switzerland to co-operate with the European Union to combat international organised smuggling, provide mutual administrative and legal assistance in the field of tax and customs offences and punish the perpetrators of these offences and those laundering the profits of these offences[1]. The Agreement between the European Community and its Member States and the Swiss Confederation to counter fraud and all other illegal activities affecting their financial interests is to be welcomed as a significant step forward in this field.
The Agreement provides for administrative and judicial co-operation and co-operation on matters of money laundering for the protection of the Communities' financial interests and certain financial interests of the member States. It covers indirect tax (VAT and excise duties) and customs offences (including smuggling), corruption, bribery, laundering of the proceeds of activities covered by the Agreement and money laundering, including in particular tax fraud and professional smuggling. However direct taxes are excluded from the scope of the Agreement.
The Agreement provides for investigation, freezing and confiscation of assets. Parties to the Agreement are obliged to co-operate in investigations and in the provision of information related to the areas covered by the Agreement, including banking and financial information, either on request or spontaneously. Simplified procedures apply to requests for legal assistance, allowing the judicial authorities in any party to the Agreement to directly contact the judicial authorities in any other without going through diplomatic channels. Obstacles placed in the way of investigators by Swiss bank secrecy laws are removed: banking secrecy may not be invoked as grounds for refusing a request for mutual assistance. Mutual recognition of criminal procedures triggers co-operation.
The Commission should report annually to Parliament on co-operation with the Swiss in the implementation of this Agreement. Parliament must also be kept fully informed about the activities of the Joint Committee set up to implement the Agreement, in line with article 7 of the 1998 Comitology decision concerning the implementation of policy in areas subject to the co-decision procedure.
But more still needs to be done to help protect the Communities' financial interests.
Further steps
The provisions of the Agreement cover many of the aspects contained in the second protocol of the Convention on the protection of the Communities' financial interests, in particular providing for mutual assistance, search, seizure and confiscation. This protocol, dating back to 1997, has still not been ratified by three old Member States: Austria, Italy and Luxembourg.
To push forward the fight against fraud, on 23 May 2001 the Commission proposed a directive on the criminal-law protection of the Community's financial interests. This proposal took over the provisions from the Convention on the protection of the Communities' financial interests and its protocols not relating to the application of national criminal law or the national administration of justice, and included further provisions on co-operation with the Commission. The European Parliament adopted a resolution on this directive on 29 November 2001 and the Commission adopted a revised proposal taking account of the amendments adopted by Parliament on 16 October 2002. However the Council has still not adopted a common position on this directive.
Council should adopt a common position on the directive on the criminal-law protection of the Community's financial interests as soon as possible. And to benefit from the provisions not taken over by the directive, it still remains in the Member States' interest to complete ratification of the second protocol of the Convention on the protection of the Communities' financial interests as promptly as possible. Equally, new Member States should accede without delay.
The 1997 Temporary Committee of Inquiry into the Community Transit System recommended introduction of a system of mutual recognition of evidence, whereby evidence originating in another Member state should be deemed admissible if it meets the national requirements in its country of origin. It also recommended extending this requirement to agreements with third countries, notably Switzerland. Council rejected a Commission proposal to introduce this notion in a protocol to the Convention of the protection of the Communities' financial interests in 1996. The Commission again proposed introduction of a system of mutual recognition of evidence in the 2003 framework decision on the European evidence warrant. Parliament approved the proposal for a European evidence warrant on 31 March 2004. Council should approve the proposal for a European evidence warrant as soon as possible and provisions introducing a system of mutual recognition of evidence should be included in further negotiations with the Swiss Confederation.
The fight against fraud and organised international crime affecting the Community budget will also be aided significantly by the creation of the European Public Prosecutor, enhancing the European Union's ability to detect, investigate and prosecute these crimes both within the European Union and in co-operation with the Swiss Confederation. However it would not seem appropriate to allow the Swiss to join this organisation, or other relevant bodies such as Eurojust or Europol before accession to the European Union. The benefits of participating in these European Union bodies should be reserved exclusively to the Members of the European Union.
However enhanced co-operation between the European Union and the Swiss Confederation in this field should certainly be encouraged, particular concerning the trade in high-risk goods such as tobacco and alcohol. Enhanced co-operation in these areas could take the form of an exchange of officials between OLAF and the Swiss customs and prosecuting authorities.
The European Union should extend the fight against fraud by drawing up co-operation agreements with other third countries, in particular Andorra, Monaco, Liechtenstein, Turkey, San Marino and Norway. These countries must join the standard of the Savings Tax Directive and they wish to join the Community Acquis. However partnership in the fight against fraud should not be forgotten. The Agreement between the European Community and its Member States and the Swiss Confederation to counter fraud and all other illegal activities affecting their financial interests should serve as model for conclusion of agreements with other third countries, provided that scope is left for further enhancements in the future along the lines set out above.
- [1] See, for example, the Report of the Committee of Inquiry into the Community Transit System, PE 220.895 of 20.2.97, pp 165-166, 174 and 177; the Report on the Commission annual report 2000 on the protection of the Communities' financial interests and the fight against fraud and on the Commission communication on protecting the Communities' financial interests, Fight against fraud, Action Plan for 2001-2003, OJ C153E of 27.6.2002, p. 331; and the Report on the protection of the financial interests of the Communities and fight against fraud - Annual report 2002, A5-0135/2004 of 10.3.97, p.14.
OPINION of the Committee on Civil Liberties, Justice and Home Affairs (18.1.2005)
for the Committee on Budgetary Control
on the proposal for a Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, to counter fraud and all other illegal activities affecting their financial interests
(COM(2004)0559 – C6‑0176/2004 – 2004/0187(CNS))
Draftsman: Timothy Kirkhope
SHORT JUSTIFICATION
I. Background
Relations between Switzerland and the European Union (EU) are particularly close as demonstrated by the large number of agreements which are in place between them.[1]
Following Switzerland’s rejection of accession to the European Economic Area (EEA) Agreement in 1992, a series of bilateral agreements (the so called Bilateral Agreements I) were negotiated in order to minimise the negative consequences of that rejection. They covered free movement of persons, overland transport, air transport, agriculture, research, as well as technical barriers to trade and public procurement, and entered into force on 1 June 2002.
A second package of agreements (Bilateral Agreements II) have been negotiated since June 2002. This package contains nine different agreements which concern the taxation of savings; the co-operation in the fight against fraud; the association of Switzerland to the Schengen acquis; participation of Switzerland in the “Dublin” and “Eurodac” regulations; trade in processed agricultural products; Swiss participation in the European Environment Agency and European Environment Information & Observation Network (EIONET); statistical co-operation; the Swiss participation in the Media plus and Media training programs, and for the avoidance of double taxation for pensioners of Community institutions.
There were nine agreements signed on 26 October 2004. The Parliament is now being consulted on the conclusions.
II. The present agreement
The present agreement covers cooperation to counter fraud and other illegal activities affecting the financial interests of the partners of the agreement. Negotiations were started mainly on the initiative of the EU which had a series of concerns. Due to Switzerland's geographic location, in the middle of the EU landmass, Swiss entities - both personal and corporate - cannot avoid being involved in cases which involve EU member states like cigarette smuggling, VAT and customs fraud, or other types of white collar crime which are essentially cross-border by nature. These cases required cooperation and assistance which was difficult to obtain in the absence of a bilateral agreement. As a result, letters rogatory or other requests for evidence for example often took too much time to combat this type of crime effectively.
The agreement negotiated contains two main parts: first, provisions relating to administrative assistance for the protection of financial interests (Title II of the agreement) and secondly, provisions relating to mutual legal assistance in criminal matters for the protection of financial interests (Title III of the agreement). Within the scope of the agreement are tax (VAT and excise duties) and customs offences (including smuggling), corruption, bribery and money laundering of the proceeds of the activities covered by the agreement. Direct taxes are excluded from the scope of the agreement. In principle, the application of this agreement is not subject to the dual criminality rule, except for judicial cooperation by means of coercive measures (search and seizure).
III. Evaluation of the present agreement
The agreement will be helpful in the cooperative effort require to fight crime. It addresses a well defined set of concerns and provides clarification of the rules. The purpose of the agreement is limited to specific areas and it contains no unnecessarily burdensome requirements. The interests of both sides are well balanced.
The draftsman therefore recommends that the committee supports this agreement.
CONCLUSION
The Committee on Civil Liberties, Justice and Home Affairs hereby delivers to the Committee on Budgetary Control, the committee responsible, an opinion recommending that the European Parliament approves the conclusion by the Council of the Agreement between the European Community and its Member States, on the one hand, and the Swiss Confederation, on the other, to counter fraud and all other illegal activities affecting their joint and respective financial interests.
PROCEDURE
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Title |
Proposal for a Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, to counter fraud and all other illegal activities affecting their financial interests | |||||
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References |
COM(2004)0559 – C6‑0176/2004 – 2004/0187(CNS) | |||||
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Committee responsible |
CONT | |||||
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Committee asked for its opinion |
LIBE | |||||
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Enhanced cooperation |
| |||||
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Draftsman |
Timothy Kirkhope | |||||
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Discussed in committee |
13.12.2004 |
18.1.2005 |
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Date amendments adopted |
18.1.2005 | |||||
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Result of final vote |
for: against: abstentions: |
43 0 0 | ||||
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Members present for the final vote |
Roberta Angelilli, Edit Bauer, Johannes Blokland, Mario Borghezio, Jean-Louis Bourlanges, Mihael Brejc, Kathalijne Maria Buitenweg, Michael Cashman, Giusto Catania, Charlotte Cederschiöld, António Costa, Agustín Díaz de Mera García Consuegra, Rosa Díez González, Antoine Duquesne, Lívia Járóka, Timothy Kirkhope, Ewa Klamt, Wolfgang Kreissl-Dörfler, Barbara Kudrycka, Stavros Lambrinidis, Romano Maria La Russa, Sarah Ludford, Edith Mastenbroek, Athanasios Pafilis, Lapo Pistelli, Martine Roure, Amalia Sartori, Inger Segelström, Ioannis Varvitsiotis, Manfred Weber, Tatjana Ždanoka | |||||
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Substitutes present for the final vote |
Camiel Eurlings, Giovanni Claudio Fava, Ignasi Guardans Cambó, Jeanine Hennis-Plasschaert, Luis Francisco Herrero-Tejedor, Antonio Masip Hidalgo, Herbert Reul, Marie-Line Reynaud, Bogusław Sonik, Kyriacos Triantaphyllides, Johannes Voggenhuber | |||||
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Substitutes under Rule 178(2) present for the final vote |
Marta Vincenzi | |||||
PROCEDURE
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Title |
Proposal for a Council decision on the conclusion of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other part, to counter fraud and all other illegal activities affecting their financial interests | ||||||
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References |
COM(2004)0559 – C6‑0176/2004 – 2004/0187(CNS) | ||||||
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Legal basis |
Article 280 and Article 300(2), first subparagraph, first sentence and Article 300(3), first subparagraph, EC | ||||||
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Basis in Rules of Procedure |
Rules 51 and 83(7) | ||||||
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Date of consulting Parliament |
5.11.2004 | ||||||
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Committee responsible |
CONT | ||||||
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Committee asked for opinion |
LIBE |
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Enhanced cooperation |
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Rapporteur |
Herbert Bösch |
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Simplified procedure |
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Financial endowment amended |
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Discussed in committee |
31.8.2004 |
14.12.2004 |
19.1.2005 |
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Date adopted |
19.1.2005 | ||||||
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Result of final vote |
for: against: abstentions: |
12 0 0 | |||||
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Members present for the final vote |
Herbert Bösch, Paulo Casaca, Szabolcs Fazakas, Ingeborg Gräßle, Nils Lundgren, Hans-Peter Martin, Jan Mulder, José Javier Pomés Ruiz, Kyösti Tapio Virrankoski, Terence Wynn | ||||||
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Substitutes present for the final vote |
Simon Busuttil, Daniel Caspary | ||||||
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Substitutes under Rule 178(2) present for the final vote |
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Date tabled – A6 |
28.1.2005 |
A6-0013/2005 | |||||