Local view for "http://purl.org/linkedpolitics/eu/plenary/2007-10-10-Speech-3-230"
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"en.20071010.23.3-230"2
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"Mr President, Commissioner, ladies and gentlemen, the reports by the Committee on Budgetary Control often contain fairly bad news – it is the EP’s anti-fraud committee, after all. This often concerns weaknesses, irregularities, trickery – sometimes even fraud and deception. I am glad, ladies and gentlemen, that today I have something positive to report, a success story, a story that demonstrates how the cooperation between the European Commission, the European Parliament and the Member States can ensure the resolution of problems.
To recap, Mr President, this is indeed a success story, one that it may well be possible to apply to other products, such as alcohol and certain agricultural products. I also hope that this report has added a positive note to the important work being carried out by the Mr Kallas and the Commission and also our Parliament in the fight against fraud.
What is the context? At the start of the 1990s, fraud involving cigarette smuggling was found to be big business. Hundreds of millions of ECU – in those days we still spoke in terms of ECU rather than euro – disappeared into the pockets of criminals at the expense of the budgets of the European Union and the Member States. Back in 1994 the then UCLAF – the predecessor of OLAF – set up a Cigarettes Task Force. In 1996 and 1997 an EP Committee of Inquiry – which, incidentally, was the very first Committee of Inquiry launched under the Treaty on European Union – examined all aspects of transit fraud.
The Committee of Inquiry found that the monitoring system in the transit sector was archaic. Lorries in transit had to have a document stamped at the customs office where the goods entered the Union, then drive through the Union and have the same document stamped again at the customs office where the goods left the Union. The document then had to be sent back to the customs office of import. A great many problems arose in this connection. The documents arrived back much too late: sometimes three or four months. There was the problem of forged documents, and also of forged stamps. Consequently, one of the most important recommendations of the Committee of Inquiry was the replacement of this whole archaic system, based on paper and stamps, with a computerised system.
This New Computerised Transit System (NCTS) was gradually introduced and is now operational in all Member States. It helps the customs services detect in real time whether goods are illegally escaping customs supervision – and thus represents tremendous progress. This does not, of course, rule out false declarations still being made, and that is why we are asking the Commission to set up a system for this, too, to prevent the false declaration of goods. We also ask that OLAF be given direct access to this computerised system.
As has been said, the Committee of Inquiry concentrated on the problem of cigarettes. Cigarettes were transported across the territory from one border point to another, but very often those goods, those cigarettes, ended up on the black market. In addition, those goods were very often smuggled back into the Union. This led to immense problems, even sometimes to violence. In Italy, for example, two agents from the financial police were even murdered.
The overall investigation also revealed that some tobacco companies were in league with the smugglers, and on the basis of that information the Commission, together with a number of Member States, brought an action against Philip Morris before a court in New York. It gradually became clear that Philip Morris would find it particularly difficult to win the action, and in 2004 a deal was struck with the company. In exchange for USD 1.25 billion, to be spread over a 12-year period, the Commission and the Member States refrained from proceeding with the action before the New York court.
In fact, the second part of the agreement with Philip Morris was perhaps even more important. It comprised provisions on cooperation between Philip Morris and the European Union in tracking and tracing cigarettes. If the customs services found cargoes of cigarettes, and the provisions of this agreement had not been followed, Philip Morris was bound to pay the evaded customs duties immediately – and the figure in question can be up to EUR 1.5 million per container of cigarettes.
To reiterate, this is a success story: it demonstrates how Parliament and the Commission can work together. I do have a few criticisms, however. When the USD 1.25 billion was distributed among the Commission and Member States, only 9.7% went to the Commission, and the lion’s share to the Member States. I do not think this fair, particularly as OLAF and the Commission do the lion’s share of the work.
A second criticism is that, according to the spirit of the agreement, this money was to be used in the fight against fraud. The Commission has done its work. It has spent a proportion of that money on the Hercules II programme. The Member States, on the other hand, have simply let the money flow into their treasuries, when they should really have been using it better to equip their investigative services, for example their customs services, and to step up the fight against this kind of fraud."@en1
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