As the sole prosecuting authority in Scotland, the Crown Office and Procurator Fiscal Service (COPFS) has focused its answers to the questions asked by the Committee on the effect the establishment of a European Public Prosecutor’s Office (EPPO) would have on the investigation and prosecution of offences in Scotland and on the day to day business of COPFS.
It is firstly recognised that fraud is one of the key activities of organised crime groups and that such offences often feature cross border activity which create complex problems for prosecution authorities. Many of our criminal investigations in Scotland contain an international dimension and it is appreciated that in order to combat such international crime it is necessary to ensure there is effective co-operation among all the investigative and prosecution agencies. This applies as much to combating fraud against the finances of the EU as to any other type of criminal investigation.
The concept of an EPPO is of course not new. However, the European Commission only formally published its proposals for establishment of the EPPO on 17 July 2013.
The Commission views the creation of an EPPO as necessary to tackle fraud against the EU budget because it considers that the potential damage of such offences is significant and that there are deficiencies in the current enforcement system, which is based on investigations and prosecutions at national level. It considers that national law enforcement efforts are often fragmented as law enforcement resources are limited and therefore the cross border dimension of these offences escapes the attention of the authorities.
It is proposed that the EPPO would have exclusive competence to investigate, prosecute and bring to judgement those connected to offences against the EU’s financial interests (PIF offences). To do this, it would exercise the functions of prosecutor in the competent courts of the participating Member States in relation to offences against the Union’s financial interests. These powers would not be limited solely to offences against the EU’s financial interests but could also be extended to include other offences inextricably linked to the PIF offence. The investigative powers and measures proposed would be extensive and include search and seizure powers, obtaining data, sealing premises, freezing property and evidence, interception, surveillance, monitoring financial transactions and summoning witnesses and any investigative activity could be directed at national level. The functions of EPPO would be exercised through the relevant national courts.
It is envisaged therefore that the powers of the EPPO would be extensive and far reaching.
COPFS does not consider there is a need for the creation of such a supranational European office and for the reasons set out below does not support this proposal.
There are many challenges to overcome where criminal jurisdiction is potentially viable in different Member States and the diverse rules of evidence within Europe bring their own barriers. Whilst it is recognised that organised crime is not necessarily related to a specific Member State and that the fight against crime needs to be addressed Europe wide, without an evidence based assessment relating to why existing measures and national procedures and practices are not sufficient it is difficult to come to the conclusion that a European Public Prosecutor’s Office would be able to prosecute cases more effectively than individual Member States. Domestic prosecutors are uniquely placed to deal with offences which are committed in their own jurisdictions and in Scotland the offences available are sufficiently robust to protect the interests of the European Union. We have a wide range of criminal offences which are available at statutory and common law and in addition, criminal and civil sanctions are available under the Proceeds of Crime Act 2002.
In Scotland a number of specialist resources are already dedicated to tackling fraud. Within COPFS there exists the Serious and Organised Crime Division (SOCD) which has an Economic Crime unit dedicated to the investigation of serious fraud and financial crime. This unit deals with the investigation of any major fraud against EU interests. SOCD also supervises all money laundering investigations in Scotland and the recovery of proceeds of crime.
It might be helpful to give you an example of a Scottish case which demonstrates that COPFS is committed to tackling major frauds and has the relevant expertise and mechanisms in place to successfully investigate and prosecute this type of offence.
Operation Trawler concerned the illegal landing of huge quantities of mackerel and herring at Lerwick and Peterhead in Scotland in contravention of EU regulations and fishing quotas allocated to Member States as a key element of the EC Common Fisheries Policy.
This was an extremely complex investigation involving a number of agencies including the Scottish Fisheries Protection Agency (SFPA), now Marine Scotland, the police and specialist assistance and resources were provided by the Scottish Crime and Drug Enforcement Agency and the Scottish Money Laundering Unit.
The Serious and Organised Crime Division within COPFS was involved at the initial stages of the investigation framing and obtaining the necessary search warrants and providing advice to investigators and the investigation was also overseen by Crown Counsel.
Investigations showed that a sophisticated system had been devised by masters of vessels and fish processing factories to manipulate figures and falsely record quantities of fish landed and that factories had diverted fish away from weighing equipment to ensure the weight of fish recorded as being processed corresponded with paperwork produced.
Over 20,000 Productions were seized by the enquiry teams involved all of which required to be meticulously collated, documented and evidenced for court purposes. Electronic scanning was utilised at an early juncture to allow for electronic display and cataloguing of all documentary productions and in order for the Crown to present, in a user friendly way to potential jurors, the chain of evidence and how the crimes had been committed.
A very important aspect of the investigation was the financial investigation carried out under Proceeds of Crime legislation to identify assets from the accused through their criminal conduct. This was extremely complex involving enquiries across the length and breadth of the United Kingdom and in Norway. Between June 2011 and February 2012 accountants worked more than 1,700 hours on this investigation.
The investigation established that mackerel and herring to the value of approximately £82 million had been landed in Lerwick and Peterhead between 2002 and 2005 and that these landings were all in contravention of European Community Control Measures.
The outcome was that 31 skippers of vessels were convicted as well as 3 processing factories. Confiscation orders of over £8.1 million have been made and fines of over £1.6 million have been imposed.
In addition to the Serious and Organised Crime Division COPFS has an International Cooperation Unit (ICU) which regularly liaises with colleagues abroad and has extensive experience of cooperation in gathering evidence from abroad in relation to investigations and prosecutions in Scotland as well as providing assistance to colleagues from other jurisdictions with their own investigations. The unit also processes all applications for assistance and arranges for the submission of international letters of request. It works with collaborative bodies within the EU such as Eurojust and the European Anti-Fraud Office (OLAF).
The COPFS International Cooperation Unit participates fully in the work of Eurojust and the work that Eurojust does in coordination of investigations of the different Member States when dealing with cross border crime is extremely valuable. It plays a number of useful roles, such as its ability to arrange multi-jurisdictional meetings to shape investigations and prosecutions, the coordination of arrests and/or searches in different jurisdictions, and providing other assistance. COPFS has successfully utilised the assistance of Eurojust in a number of serious and high profile cases including a number of highly complicated VAT fraud cases in which coordination meetings were held to ensure that the appropriate Letters of Request and witness interviews were obtained at the case preparation stage.
In addition SOCD has experience of working with the European Anti-Fraud Office (OLAF). This organisation also carries out valuable work although difficulties have arisen at times when OLAF has not engaged at a sufficiently early stage of an investigation with Scottish law enforcement and Scottish prosecutors, for instance in the assessment of whether there is jurisdiction to take proceedings in Scotland or in the way statements and productions have been engathered which does not accord with Scots Law. This experience perhaps highlights that there is scope to improve liaison between OLAF and domestic law enforcement agencies and prosecutors to improve the investigation and prosecution of this type of offence. OLAF has previously indicated a willingness to listen to criticisms from Member States and to improve working arrangements.
Accordingly COPFS considers there is scope for further improvements to be made in the investigation and prosecution of frauds against EU interests through better use of Eurojust and OLAF and by improving working practices between Member States and these organisations, including the use of Joint investigation teams (JITs) where appropriate. It is logical that Member States use the current structures available to their full extent before consideration is given to establishing a new body with such far reaching powers.
COPFS is of the view that the creation of an EPPO is not required and that it cannot be said that sufficiently robust evidence has been produced to demonstrate the need for such an office. It is incumbent on the Commission to provide such evidence before seeking to introduce such a measure.
Question 1
Is the proposed structure of the EPPO, as a supranational authority, the right one? Are there other models which would be more appropriate, for example the collegiate model followed by Eurojust?
The effect of the introduction of the supranational body proposed by the Commission would be to remove national prosecutorial discretion. Without a free standing criminal procedure code for cases falling within the EPPO competence it is hard to see how any evidential difficulties that currently exist will be overcome and therefore how prosecution of such cases will be improved.
The collegiate approach suggested as an alternative model would only duplicate Eurojust and ignore the currently available cross working mechanisms such as JITs and coordination meetings and therefore it is not clear what value would be added by the introduction of such a model.
Insufficient information has been provided as to how the EPPO would work with both participating and non-participating Member States and therefore it is difficult to assess which model is the most appropriate one, or indeed whether an alternative model would be more suitable.
Question 2
Should the EPPO have exclusive competence in matters affecting the EU’s budget? Or should the competence be shared with Member States?
Whether the Commission’s model for the EPPO is based on exclusive competence for PIF offences and other ancillary offences or on primary competence with the right of evocation of any case handled by national authorities within the scope of its general competence there would be the removal of cases from national control which would encroach on the role of national prosecutors. The difficulties this would give rise to are explored further in the answer to question 3 below.
A system of concurrent competence of national authorities and the EPPO could go some way to addressing the difficulties of tackling fraud against the EU budget whilst allowing a degree of prosecutorial discretion to be retained at national level. However, conflicts of competence or jurisdiction would still arise between the EPPO and national authorities.
A differentiated system, where the EPPO has exclusive competence for certain offences and a concurrent competence with national authorities in other cases would result in confusion for investigators and practitioners as to who is dealing with which offence which would be highly undesirable.
Question 3
What effect would the EPPO as proposed have on the UK’s investigative, prosecuting and judicial systems?
The structure of the EPPO model currently proposed would be a small team of centralised European Public Prosecutors (EPPs) and deputies working through a system of European Delegated Prosecutors (EDPs) in each participating Member State and the central EPPO team would be able to direct the competent investigative and prosecution authorities within the participating Member States through the EDP network. The effect would be to create a distinct, domestically unaccountable prosecution structure with unrestrictive powers of investigation within a field of limited competence. The EDP would be under the guidance and with ultimate responsibility to an EPP outwith the national system and while the EPP may ultimately be held accountable to the EU parliament, the post holder would not be held to account by any national body in contrast to the statutory framework provided in the Scotland Act which secures the independence of the Lord Advocate as well as the basis upon which the Lord Advocate can be appointed and removed. Therefore a constitutional deficit would exist.
The Lord Advocate is the head of the system of prosecution in Scotland with power to direct the Chief Constable in relation to investigations into offences. The Lord Advocate makes decisions independently of any other person and that independence is set out in section 48(5) of the Scotland Act 1998. The proposals for an EPPO and for the reform of Eurojust whereby the EPPO office would have exclusive competence to investigate and prosecute not only PIF offences but those inextricably linked to PIF offences would undoubtedly encroach on the role of national prosecutors and could cause confusion and potential conflict for UK agencies in tasking and coordinating domestic investigations.
Question 4
What would be the effect of establishing the EPPO as proposed on Eurojust, OLAF, Europol and other EU agencies?
The proposed reform of Eurojust is linked to the EPPO proposal in that EPPO would operate from within Eurojust and that proposal includes measures to ensure Eurojust can support EPPO. The Eurojust proposal also moves from the position of National Members being able to order investigative measures in agreement with the competent national authorities to an ability to order such investigations in undefined urgent cases, without those authorities’ agreement.
This would override national prosecutors and would encroach on the role of and independence of the Lord Advocate. Thus if the EPPO were established and Eurojust were reformed as proposed Eurojust would become a coordinating and initiating centre for cross border enquiry with national members and delegated EDPs directing investigations in the UK within the area of EPPO competence.
The effect the proposal would have on OLAF is not clear but it is understood it is proposed OLAF staff will be transferred to the EPPO.
Question 5
How would the operation of the EPPO as proposed affect the relationship of the UK’s investigation, prosecuting and judicial authorities with those of:
a. participating Member States;
b. non-participating Member States; and
c. third countries?
The Commission’s proposal provides no information on how the EPPO will work with non-participating Member States such as the UK therefore it is hard to predict the effect the operation the EPPO would have on the relationship of the UK’s investigation, prosecuting and judicial authorities with other Member States (either participating or non-participating) and third countries. In addition it is difficult to gauge the effect without also considering the proposals to reform Eurojust. Were the functions of Eurojust to remain as they presently are then the introduction of an EPPO office would be unlikely to significantly affect those relationships in so far as Scottish investigations are concerned as Scottish prosecutors would still have access to all of those institutions to assist in tackling cross border crime.
Should you require any further information COPFS would be happy to assist.
24 March 2014