As I am writing this piece, fires are raging across Australia, all while the world is, once again, facing serious threats and geopolitical instability. It is easy therefore to be pessimistic about our world in 2020. But I am not one to succumb to dread. In a way, I am in a very privileged position. As Director-General of the European Anti-Fraud Office (OLAF) my colleagues and I have an important role to play in making the world a better place.
At OLAF, we work to protect EU taxpayers’ money, as well as the environment, health and wellbeing of Europeans. We do so through our investigations into fraud affecting EU funds and our role in fighting the smuggling of counterfeit and dangerous products.
Over the past 20 years, OLAF has accumulated a wealth of expertise in anti-fraud matters. With its unique position in the cross-border fight against fraud, OLAF has delivered concrete results, concluding thousands of investigations and contributing to the recovery of billions of Euros to the EU budget. For me, it is important that OLAF delivers on the expectations of European citizens, while at the same time supporting the priorities of the European Commission.
These priorities both focus and depend on the protection of the EU financial interests. The European Green Deal, the Commission’s flagship initiative, will require a substantial budget, so every euro will count and will need to be accounted for. OLAF’s administrative investigations allow EU institutions to take immediate action to recover any misused funds, without waiting for the result of complex and often lengthy criminal procedures. With the health of European citizens and our environment high on the agenda of the European Commission, protecting our industry and the single market from counterfeit, low quality and possibly dangerous goods, which find their way into our homes and our shops, will also be of utmost importance.
OLAF’s role in fighting the improper use of funds provided by the EU budget is well known. The evasion of the taxes, duties and levies, which fund the EU budget, directly harms European citizens and prejudices the entire European project. But let us not forget that for years, OLAF has been fighting fraudsters attempting to import fake or harmful goods into the EU. For example, OLAF obtained intelligence about a Chinese company exporting expired chocolate milk powder to the EU. The products were “re-conditioned” in the Philippines, put into counterfeit packaging bearing a new and fake expiry date and re-exported by sea containers towards Europe via the United Arab Emirates and Saudi Arabia. OLAF managed to intercept six containers of these products, with over 100 tonnes of chocolate milk powder. We alerted the customs authorities in the Member States to make sure that these containers would not be allowed into the EU. By cooperating with national authorities, OLAF arranged the seizure of the containers before they reached Europe. The goods were then destroyed under the supervision of the Emirati and Saudi authorities.
OLAF is also focusing on cases with an environmental dimension. In several areas such as the illegal disposal of waste or wildlife crimes, there are increased calls for enforcement at EU level and cooperation between Member States and with third countries.
Pesticides are subject to strict controls when they are placed on the EU market. However, significant quantities of counterfeit pesticides are smuggled into the EU from China. OLAF is working to create an alert system with the customs offices of the third countries involved that would facilitate tracking down these undeclared pesticides entering the EU illegally. Counterfeit pesticides arrive in Europe without customs duties and VAT being paid, and without safety and sanitary checks. They contaminate soil, air, and water. To understand the magnitude of this illicit trade, in just one operation OLAF was involved in, 360 tons of pesticides were seized, a quantity large enough to spray a territory as big as the United Kingdom.
The previous examples show our capacity to get fast and reliable access to the right data, to analyse it and to exploit it for operational purposes as well as for strategic analysis. Through better, increased use of Artificial Intelligence and machine learning, we believe we could also further strengthen our fraud prevention and analysis work, and more efficiently detect deficiencies in the Member States’ systems that manage and protect EU taxpayers’ money. Through our financial recommendations, we have a role to play in the Rule of Law mechanisms. By reinforcing our role as a centre of knowledge on fraud, we can further contribute to prevention, identifying problems in managing risks related to the EU financial interests at an early stage. This could be used to issue warnings to Member States when problematic patterns start to emerge, such as slow and limited follow-up to OLAF recommendations, a lack of cooperation with the European Public Prosecutor’s Office, or insufficient control structures at the national level.
Our analysis work could also help us support the customs community in improving the speed and service delivery of customs formalities while maintaining systematic and effective intervention controls. In the context of global commerce, and particularly of e-commerce, this is a momentous task.
It is my view that we shape the world we live in. Yes, there are events outside our control, and yes, our powers are limited. But at OLAF, we are doers. We are helpers. If we can help fight environmental or food fraud, we will do it. If our cases can help protect the world we live in, we will put our heart and soul into them. This is why the future does not scare me. In a world that is literally burning, I am fortunate to be surrounded by people who would help put out the fire!