European Public Prosecutor’s Office (EUC Report)

Baroness Corston Excerpts

Thursday 19th March 2015 Lords Chamber

Moved by

[Baroness Corston]

That this House takes note of the report of the European Union Committee on the impact of the European Public Prosecutor’s Office on the United Kingdom (4th Report, HL Paper 53).

[Baroness Corston (Lab)]

My Lords, it was my pleasure to serve as both a member and the chair of the Sub-Committee on Justice, Institutions and Consumer Protection. At the outset I thank my colleagues who served as members of that committee, who all brought extraordinary expertise and diligence to their work, and pay tribute to our staff. We were very fortunate in the clerks who served when I was on the committee and in our legal advisers, who were second to none. Having served for 13 years as a Member of another place, I think I can say without contradiction that the scrutiny role of the House of Lords in its European work is second to none and is recognised as such throughout the European Union.

On 17 July 2013, the European Commission published its long-awaited proposal for a European public prosecutor’s office. It is subject to the UK’s opt-in protocol, but the coalition agreement had already ruled out participation by the United Kingdom. I interject a personal note here. It seems to me to be quite a discourtesy in parliamentary terms to start a consultation process on 17 July in any year as Parliament has either risen for the Summer Recess or is about to do so. In order for us to do our scrutiny work properly, not only did it involve holiday time for staff, it meant that the committee had to come back when the House was not sitting to be able to fulfil its role. I hope that the European Commission will not persist with that kind of timetable in future.

Under the Commission’s proposal, the prosecutor would be made,

“responsible for investigating, prosecuting and bringing to judgment … the perpetrators of … offences against the Union’s financial interest”,

and would be empowered to,

“exercise the functions of prosecutor in the competent courts of the Member States”.

This organisation was going to be responsible for all fraud in the European Union. At its meeting on 11 September 2013, the Sub-Committee on Justice, Institutions and Consumer Protection, which at the time I chaired, considered the Commission’s proposal for the first time and decided to issue a reasoned opinion, challenging it on the grounds of subsidiarity. In October of the same year, this House approved the sub-committee’s proposed reasoned opinion and because the number of reasoned opinions submitted by the national parliaments reached the “yellow card” threshold, the Commission was obliged to review the proposal. It is important to point out that this was only the second time that sufficient national parliaments had ever forced the Commission to undertake such a review.

We were consequently very disappointed when shortly thereafter, in November, following its review, the Commission produced a communication in which it decided to maintain its proposed European prosecutor as originally brought forward. There was not much in the way of a reasoned argument. Following this news, in January 2014, the sub-committee agreed to launch an inquiry into the ramifications of the proposed European public prosecutor’s office for non-participating states such as the United Kingdom—but of course, the United Kingdom is not the only one. While we had our doubts about the proposal, we were also very concerned about the impact it would have on the non-participating member states, of which the UK is one, and on the ongoing relationship with the European Union’s current anti-fraud body, OLAF, and Eurojust.

We began taking evidence in March 2014. We heard from leading academics in the field, representatives of the legal profession, the current president of Eurojust and one former holder of that position, and the current director-general of OLAF. The sessions concluded with evidence from the Home Secretary. We are grateful to all those who submitted evidence to our inquiry. Unfortunately, the committee’s planned timetable was somewhat frustrated in that while the evidence sessions were well under way, following the member states’ initial discussion of the Commission’s proposal, the then Greek presidency of the Council brought forward an alternative prosecutor’s proposal, addressing some of the member states’ key concerns. The Government submitted an Explanatory Memorandum on this alternative text in June 2014.

We took the decision to postpone publication to allow all those who gave evidence to the inquiry an opportunity to consider the rival text. The committee’s subsequent report was published on 3 November 2014. My committee found a number of very significant problems with the Commission’s proposal. We were worried about the principle that the prosecutor would be responsible for investigating and prosecuting all EU fraud crimes, to the exclusion of the national bodies responsible—what is referred to in the jargon as exclusive competence. This in turn would run the risk of the prosecutor being overwhelmed from birth by an excessive workload. We also expressed doubts about the proposed centralised structure.

Unfortunately, we did not see the presidency’s text as a panacea. The committee found that the rival text raised more questions than answers. There was a lack of clarity about sharing competence for these crimes between the member states and the relevant national authorities. We also thought that the attempt to mimic Eurojust’s collegiate structure was overly complicated. As for the position of the non-participating member states, neither of the texts considered during the inquiry addressed their position at all. However, the report warned that the proposed European prosecutor could seriously undermine the UK’s relationship with the European Union’s current anti-fraud body, OLAF, and with Eurojust.

Unsurprisingly, given their long-standing opposition to the European public prosecutor’s office, the Government shared many of the committee’s concerns. There is a great deal of common ground between the committee and the Government and, as we know, that is not always the case.

[Lord Spicer (Con)]

I do not quite see why the committee was so surprised that it was all or nothing. As it is all going to be conducted under a different form of law from ours, it has to be, in the interests of fairness, all or nothing, does it not?

[Baroness Corston]

The main problem, as we saw it, was not only that the prosecutor would be completely overwhelmed but that no consideration at all was given to countries that, from the outset, would not play any part. I think that formed the basis of both our concern and the concern of the Government.

Given that there was a great deal of common ground between the Government and the committee, the Government agreed with nearly all our conclusions and recommendations. The only point of disagreement relates to the Home Secretary’s suggestion during her evidence that the United Kingdom might not be legally obliged to respond to requests for assistance from the European public prosecutor’s office. Given her doubts, the committee called for an urgent consultation by the Home Office on this matter. Sadly, our call was rejected by the Government. They cited as a reason the current lack of clarity over the prosecutor’s potential role. I accept, of course, that a lack of clarity pervades any discussion of the proposed public prosecutor’s office—indeed, this theme runs throughout the report—but I would suggest that the issue of co-operation between the European public prosecutor in whatever form and the relevant UK authorities—for example, in relation to European arrest warrants—is not going to go away.

Witnesses to the inquiry were quite clear that any weakness or failure by the UK authorities to co-operate with the European public prosecutor in this regard risked the UK being seen as a safe-haven for those suspected of committing offences against the European Union’s financial interests and for illegally obtained EU funds. The members of my former committee would not want to see the UK become, as one witness warned, the Costa del Sol of the 1980s for those who perpetrate criminal frauds against the European Union’s finances.

I again thank those who contributed to the inquiry and my former colleagues on the sub-committee, whose company I very much appreciated. No doubt we all agree that it is essential that the European Union and the UK consider the full implications of the establishment of the European public prosecutor, not only for those states that will not participate but for bringing to justice those people who commit fraud against the interests of the European Union. I beg to move.

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[Baroness Corston]

Can I point out to the Minister that evidence given to the EU Justice, Institutions and Consumer Protection Sub-Committee before this inquiry was that the dimension of fraud against the European Union budget was probably about €5 billion a year?

[Lord Bates]

Yes. They are extraordinarily large and very worrying sums of money, and this Government remain absolutely committed to tackling that. We continue to support efforts by the EU anti-fraud office to tackle EU fraud, we value the role of OLAF and Eurojust, and we want to minimise disruption to current and future anti-fraud cases if an EPPO is created.

We understand that the EPPO-to-Eurojust relationship and the EPPO’s impact on OLAF will not be discussed until later in the negotiations. We also have no further information from the Commission on any plan for reform of OLAF. I appreciate that this lack of clarity makes assessment of the impact of an EPPO difficult at this stage. The Luxembourg presidency may be in a position in the latter half of this year to begin constructive discussions on EPPO interactions with other EU bodies, third countries and non-participating member states, but that is highly likely to depend on where things stand in June. As soon as there are significant developments, we will update noble Lords in the normal way.

--- Later in debate ---

[Baroness Corston]

My Lords, I am very grateful to all noble Lords who have taken part in this debate. While it has been a short debate, it has been an excellent one. I am very grateful to my noble friend Lady O’Loan for drawing your Lordships’ attention to the possible dimensions of fraud against the European Union, particularly so-called carousel fraud. We all take that terribly seriously and want it to be addressed, except that we do not think that the EPPO is the remedy.

I also want to reassure the noble and learned Lord, Lord Hope of Craighead, that no discourtesy at all was intended in not referring more comprehensively to the evidence submitted to us by the Lord Advocate for Scotland, Frank Mulholland QC; we found his contribution to be both cogent and persuasive and based very much on practical experience. I also want to thank the Minister for his thoughtful response.

Motion agreed.