C-15/00

Provisions of the EC Treaty 1-7293

Provisions of the Euratom Treaty I - 7295

Provisions of the Statute of the EIB I - 7296

The decision establishing the European Anti-fraud Office I - 7300

The regulations concerning investigations carried out by the European Anti-fraud Office 1-7302 The Interinstitutional agreement concerning internal investigations by the European Anti-fraud Office I - 7306

The contested decision I - 7307

— Admissibility of the submissions relating to Regulation No 1074/1999 I-7318

— Does the Commission's action seek to establish a failure to act? 1-7319

Do Regulation No 1073/1999 and Regulation No 1074/1999 apply to the EIB? 1-7319

Is the contested decision contrary to Regulation No 1073/1999 and Regulation No 1074/1999? I-7320

1 — Original language: English.

I - 7290

Introduction N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 inapplicable pursuant to Article 241 EC and Article 156 EA for (i) lack of legal basis, (ii) violation of the independence conferred upon the EIB by 1. In this case the Commission seeks the the EC Treaty, (iii) infringement of the annulment of the Decision of 10 November principle of proportionality and (iv) 1999 of the Management Committee of the infringement of the duty to give reasons European Investment Bank ('the EIB') con- laid down in Article 253 EC and Article 162 cerning cooperation with the European EA. Anti-Fraud Office (OLAF).2 The Commis- sion — supported by the Council, the European Parliament and the Netherlands Government — submits that that decision is c o n t r a r y to R e g u l a t i o n (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 3and Council Regulation (Euratom) No 1074/1999 of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF).4 The EIB sub- mits, principally, that the case is inadmiss- ible since the Court is not competent under Articles 230 and 237 EC to review, at the instigation of the Commission, the legality of measures adopted by the Management 2. The case raises a number of important Committee of the EIB. In the Regulation issues concerning, in particular, the scope of the Court's competence to review meas- ures adopted by the organs of the EIB, the 2 — The Decision has not been published in the Official Journal, scope of Community competence to adopt but was communicated to tne Commission, the Council and the European Parliament by letter dated 16 November measures under Article 280 EC and 1999. A document summarising the main features of the Article 203 EA aimed at combating fraud provisions and procedures relevant to the investigation of suspected fraud within the EIB was attached to that letter. and other illegal activities affecting the 3 — OJ 1999 L 136, p. 1. Hereinafter 'Regulation financial interests of the Community, and No 1073/1999'. the relationship between the EIB and the 4 — OJ 1999 L 136, p. 8. Hereinafter 'Regulation No 1074/1999'. European Communities.

5. For present purposes, the initiatives taken by the Commission and the EIB are particularly relevant. The Commission first Background created a specific anti-fraud unit (Unité de Coordination de la Lutte Anti-Fraude (UCLAF)) in 1987. In 1995 that unit was given responsibility for all Commission anti-fraud activity, including investigation of fraud and other irregularities committed by Commission staff. In order to strengthen the protection of the Community's finan­ cial interests and, perhaps, in response to 4. For a detailed description of the factual criticisms levelled at UCLAF 11 the Com­ and legal background to the adoption of mission proposed in 1998 to create a new the regulations in issue, I refer to my and independent anti-fraud service to be Opinion in Commission v European Cen­ known as the Anti-Fraud Office or Office tral Bank.7 Here it may suffice to recall de Lutte Anti-Fraude (OLAF). 12 While the that substantial amounts of Community Commission initially proposed to establish funds are lost each year as a result of fraud OLAF — and to lay down detailed provi- and other irregularities committed by physical and legal persons, and that the Community institutions and the Member 10 — Council Regulation No 2988/95 of 18 December 1995 on States have (i) granted the Community a the protection of the European Communities financial interests, OJ 1995 L 312, p. 1, and the more detailed specific legal basis for action in the field of provisions contained in Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot fraud prevention, 8(ii) established adminis­ checks and inspections carried out by the Commission in trative structures 9and (iii) adopted legis­ order to protect the European Communities' financial interests against fraud and other irregularities, OJ 1996 lative measures aimed at prevention of L 292, p. 2. Those measures are complemented by, in particular, the Convention drawn up on the basis of Article K.3 of the Treaty on European Union, on the protection of the European Communities' financial interests, OĪ 1995 C 316, p. 49. 5 —Case C-11/00. 11—See, in particular, Court of Auditors Special Report 6 — Opinion of 3 October 2002. No 8/98 on the Commission's services specifically involved 7 — Cited in note 6, paragraphs 3 to 7. in the fight against fraud, notably the 'Unité de Coor­ dination de la Lutte Anti-Fraude' (UCLAF) together with 8 — Article 280 EC. the Commission's replies, OJ 1998 C 230, p. 1. 9 — For an overview of the initiatives taken, see Protecting the 12 — Proposal for a Council regulation (EC, Euratom) estab­ Communities' financial interests, fight against fraud, Action lishing a European Fraud Investigation Office, Plan for 2001-2003, COM(2001) 254 Final. C0M(1998) 717 Final.

'A European Investment Bank is hereby established, which shall act within the 6. Within the EIB, responsibility for fraud limits of the powers conferred upon it by prevention lies primarily with the Internal this Treaty and the Statute annexed Audit service. According to the explanation thereto.' of the EIB, the primary task of that service is to examine and evaluate the adequacy and effectiveness of the internal services and procedures of the EIB. 16 It may, moreover, carry out special missions 8. Article 230 EC, as far as relevant, provides: 13 — Commission Decision of 28 April 1999 establishing the European Anti-fraud Office (OLAF), OJ 1999 L 136, p. 20. 14 — Regulation No 1073/1999, cited in note 3. Identical provisions were laid down with effect for the Euratom C o m m u n i t y by C o u n c i l R e g u l a t i o n ( E u r a t o m ) No 1074/1999 of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (0[L|AF), 'The Court of Justice shall review the OJ 1999 L 136, p. 8. legality of acts adopted jointly by the 15 — Interinstitutional agreement of 25 May 1999 between the European Parliament, the Council of the European Union European Parliament and the Council, of and the Commission of the European Communities con- cerning internal investigations by the European Anti-fraud acts of the Council, of the Commission and Office (OLAF), OJ 1999 L 136, p. 15. 16 — The EIB refers in that regard to the Internal Audit Charter [Charte Je l\mdtt mterueì. That document has not been published. I 7 — That document has not been published.

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COMMISSION v EIB

they take to counter fraud affecting their the Council or the Commission, shall state own financial interests. the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained pur- suant to this Treaty.'

3. Without prejudice to other provisions of this Treaty, the Member States shall coor- dinate their action aimed at protecting the financial interests of the Community against fraud. To this end they shall organise, together with the Commission, Provisions of the Euratom Treaty close and regular cooperation between the competent authorities. 12. Article 183a EA provides:

The Member States shall be liable only up to the amount of their share of the capital subscribed and not paid up.'

14. According to Article 162 EA:

16. Article 5 of the Statute provides: 'Regulations, directives and decisions of the Council and of the Commission shall state the reasons on which they are based and shall refer to any proposals or opinions which were required to be obtained pur- suant to this Treaty.' '1. The subscribed capital shall be paid in by Member States to the extent of 7.50162895% on average of the amounts laid down in Article 4(1).

Provisions of the Statute of the EIB 18

2. In the event of an increase in the subscribed capital, the Board of Governors, 15. Article 4 of the Statute, as far as acting unanimously, shall fix the percen- relevant, provides: tage to be paid up and the arrangements for payment.

'1. The capital of the Bank shall be ECU 62 013 million, subscribed by the Member States as follows: 3. The Board of Directors may require payment of the balance of the subscribed capital, to such extent as may be required 18 — Protocol on the Statute of the European Investment Bank for the Bank to meet its obligations annexed to the Treaty establishing the European Commu- nity. towards those who have made loans to it.'

The Board of Governors shall ensure that 2. The Board of Directors shall consist of these directives are implemented. 25 directors and 13 alternates.

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OPINION OF MR JACOBS — CASE C-15/00

The directors shall be appointed by the Board of Governors for five years as shown below:

3. The Management Committee shall be responsible for the current business of the Bank, under the authority of the President and the supervision of the Board of Direc- tors.

— one director nominated by the Commis- sion. It shall prepare the decisions of the Board of Directors, in particular decisions on the raising of loans and the granting of loans and guarantees; it shall ensure that these decisions are implemented. The alternates shall be appointed by the Board of Governors for five years as shown below:

(b) where the execution of the project contributes to an increase in economic productivity in general and promotes the attainment of the common market.' 'At the request of a Member State or of the Commission, or on its own initiative, the Board of Governors shall, in accordance with the same provisions as governed their adoption, interpret or supplement the directives laid down by it under Article 9 24. Article 21, as far as relevant, provides: of this Statute.'

'1. Applications for loans or guarantees 23. Article 20, as far as relevant, provides: may be made to the Bank either through the Commission or through the Member State in whose territory the project will be carried out. An undertaking may also apply direct to the Bank for a loan or guarantee.

'In its loan and guarantee operations, the Bank shall observe the following principles:

2. Applications made through the Commis- sion shall be submitted for an opinion to the Member State in whose territory the project will be carried out. Applications 1. It shall ensure that its funds are made through a Member State shall be employed as rationally as possible in the submitted to the Commission for an interests of the Community. opinion. Applications made direct by an

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OPINION OF MR JACOBS — CASE C-15/00

4. The Management Committee shall 'The Bank shall borrow on the inter- examine whether applications for loans or national capital markets the funds necess- guarantees submitted to it comply with the ary for the performance of its tasks.' provisions of this Statute, in particular with Article 20. Where the Management Com- mittee is in favour of granting the loan or guarantee, it shall submit the draft contract to the Board of Directors; the Committee may make its favourable opinion subject to such conditions as it considers essential. Where the Management Committee is The decision establishing the European against granting the loan or guarantee, it Anti-fraud Office shall submit the relevant documents together with its opinion to the Board of Directors. 26. The European Anti-fraud Office (OLAF) was established by Commission Decision No 1999/352 of 28 April 1999 (Decision No 1999/352), 19 adopted on the basis of Article 162 of the EC Treaty (now Article 218 EC), Article 16 of the ECSC 5. Where the Management Committee Treaty and Article 131 of the Euratom delivers an unfavourable opinion, the Treaty. Board of Directors may not grant the loan or guarantee concerned unless its decision is unanimous. 19 — Cited in note 13.

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COMMISSION v EIB

27. With regard to the 'Tasks of the the Staff Regulations of Officials of the Office', Article 2 of Decision No 1999/352 European Communities and the Con- provides, in so far as relevant: ditions of Employment of Other Ser- vants of the Communities.

'1. The Office shall exercise the Commis- sion's powers to carry out external admin- The Office shall exercise the Commission's istrative investigations for the purpose of powers as they are defined in the provisions strengthening the fight against fraud, cor- established in the framework of the ruption and any other illegal activity Treaties, and subject to the limits and adversely affecting the Community's finan- conditions laid down therein. cial interests, as well as any other act or activity by operators in breach of Commu- nity provisions.

29. Article 6(4) of Decision No 1999/352 provides: 32. Article 1 of Regulation No 1073/1999 and Regulation No 1074/1999, entitled Objectives and tasks', provides:

'Commission decisions concerning its inter- nal organisation shall apply to the Office in so far as they are compatible with the provisions concerning the Office adopted by the Community legislator, with this '1. In order to step up the fight against Decision and with the detailed rules imple- fraud, corruption and any other illegal menting it.' activity affecting the financial interests of the European Community, the European Anti-Fraud Office established by Commis- sion Decision 1999/352/EC, ECSC, Eura- tom (hereinafter "the Office") shall exer- 30. Under Article 7, Decision No 1999/352 cise the powers of investigation conferred was to 'take effect on the date of the entry on the Commission by the Community into force of the European Parliament and rules and Regulations and agreements in Council Regulation (EC) concerning inves- force in those areas. tigations carried out by the European Anti- fraud Office'.

2. The Office shall provide the Member The regulations concerning investigations States with assistance from the Commission carried out by the European Anti-fraud Office in organising close and regular cooperation between their competent authorities in order to coordinate their activities for the purpose of protecting the European Com- 31. Regulation No 1073/1999 20 and Regu- munity's financial interests against fraud. lation No 1074/1999 21 were adopted The Office shall contribute to the design and development of methods of fighting fraud and any other illegal activity affecting 20 — Cited in note 3. the financial interests of the European 21 — Cited in note 4. Community.

3. Within the institutions, bodies, offices tigations within the institutions, bodies, and agencies established by, or on the basis offices and agencies (hereinafter "internal of, the Treaties (hereinafter "the institu- investigations"). tions, bodies, offices and agencies"), the Office shall conduct administrative investi- gations for the purpose of: These internal investigations shall be car- ried out subject to the rules of the Treaties, in particular the Protocol on privileges and — fighting fraud, corruption and any immunities of the European Communities, other illegal activity affecting the finan- and with due regard for the Staff Regu- cial interests of the European Commu- lations under the conditions and in accord- nity, ance with the procedures provided for in this Regulation and in decisions adopted by each institution, body, office and agency. The institutions shall consult each other on the rules to be laid down by such decisions. — investigating to that end serious matters relating to the discharge of professional duties such as to constitute a dereliction of the obligations of officials and other servants of the 2. Provided that the provisions referred to Communities liable to result in disci- in paragraph 1 are complied with: plinary or, as the case may be, criminal proceedings, or an equivalent failure to discharge obligations on the part of members of institutions and bodies, — the Office shall have the right of heads of offices and agencies or immediate and unannounced access to members of the staff of institutions, any information held by the institu- bodies, offices or agencies not subject tions, bodies, offices and agencies, and to the Staff Regulations of officials and to their premises. The Office shall be the Conditions of employment of other empowered to inspect the accounts of servants of the European Communities the institutions, bodies, offices and ("the Staff Regulations").' agencies. The Office may take a copy of and obtain extracts from any docu- ment or the contents of any data medium held by the institutions, bodies, offices and agencies and, if 33. Article 4 of Regulation No 1073/1999 necessary, assume custody of such and Regulation No 1074/1999, entitled documents or data to ensure that there 'Internal investigations', so far as is rel- is no danger of their disappearing, evant provides:

34. According to Article 5 of Regulation 5. Where investigations reveal that a No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n member, manager, official or other servant No 1074/1999, 'internal investigations may be personally involved, the institution, shall be opened by a decision of the body, office or agency to which he belongs Director of the Office, acting on his own shall be informed. In cases requiring abso- initiative or following a request from the lute secrecy for the purposes of the inves- institution, body, office or agency within tigation or requiring recourse to means of which the investigation is to be conducted'. investigation falling within the competence of a national judicial authority, the provi- sion of such information may be deferred.

35. Article 6 of Regulation No 1073/1999 and Regulation No 1074/1999, entitled 'Investigations procedure', provides:

6. Without prejudice to the rules laid down by the Treaties, in particular the Protocol on privileges and immunities of the Euro- pean Communities, and to the provisions of '1. The Director of the Office shall direct the Staff Regulations, the decision to be the conduct of investigations. I - 7304

COMMISSION v EIB

2. The Office's employees shall carry out 36. Under Article 7 of Regulation their tasks on production of a written No 1 0 7 3 / 1 9 9 9 and Regulation authorisation showing their identity and No 1074/1999, entitled 'Duty to inform their capacity. the Office':

3. The Office's employees shall be '1. The institutions, bodies, offices and equipped for each intervention with a agencies shall forward to the Office with- written authority issued by the Director out delay any information relating to poss- indicating the subject matter of the inves- ible cases of fraud or corruption or any tigation. other illegal activity.

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OPINION OF MR JACOBS — CASE C-15/00

37. Article 8 of Regulation No 1073/1999 and Regulation No 1074/1999 lays down rules aimed at protecting the confidentiality of information and protection of data obtained in the course of investigations.

4. Reports drawn up following an internal investigation and any useful related docu- ments shall be sent to the institution, body, office or agency concerned. The institution, body, office or agency shall take such action, in particular disciplinary or legal, on the internal investigations, as the results of those investigations warrant, and shall 38. Article 9 of Regulation No 1073/1999 report thereon to the Director of the Office, and Regulation No 1074/1999, so far as is within a deadline laid down by him in the relevant, provides: findings of his report.'

39. Articles 11, 12 and 14 of Regulation No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 lay down rules concerning the tasks of the Supervisory Committee, the '1. On completion of an investigation car- tasks of the Director and the right to ried out by the Office, the latter shall draw complain against acts adversely affecting up a report, under the authority of the officials or other servants of the Commu- Director, specifying the facts established, nities adopted by the Office in the course of the financial loss, if any, and the findings of internal investigations. the investigation, including the recommen- dations of the Director of the Office on the action that should be taken.

The Interinstitutional agreement concern- ing internal investigations by the European Anti-fraud Office

42. The Agreement states moreover that 45. The contested decision is divided into '[t]he other institutions, and the bodies and two parts. Part I, entitled 'Investigations offices and agencies established by or on relating to fraudulent activity in connection the basis of the EC Treaty or the Euratom with operations managed by the EIB under Treaty, are hereby invited to accede to this mandate and involving expenditure of Agreement by forwarding a declaration Community budget funds', applies 'in addressed jointly to the Presidents of the respect of operations that are carried out signatory institutions'. by the [EIB] under mandate from the Community and have given, or will, in the normal course of events, give rise to expenditure of Community budget funds' 24 and 'to operations carried out by The contested decision the [EIB] with resources from the European Development Fund, subject to satisfactory confirmation being provided to the [EIB] 43. On 10 November 1999 the Manage- that the Fund is within the remit of ment Committee of the EIB adopted a OLAF' 25 (hereinafter: 'category I oper- decision concerning cooperation with the ations'). Part II applies to investigations European Anti-fraud Office (OLAF) ('the relating to fraudulent activity 'in connec- contested decision').23 tion with EIB operation other than those

22 — CiU'd in nole i 5. 24 — Point 1 or Part I or the contested decision. 23 — See note 2. 25 — Point 2 of Part I or the contested decision.

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OPINION OF MR JACOBS — CASE C-15/00

covered by Part I '26 (hereinafter: 'category of OLAF notifies the President of a suspi- II operations'). cion relating to a member of EIB staff or governing body and concerning alleged fraudulent activity in connection with a relevant operation, specifying the circum- stances giving rise to the suspicion, the President will promptly forward the matter 46. With regard to category I operations, to the Head of Internal Audit for investi- Points 4 to 11 of Part I of the contested gation.' decision lay down the following provisions.

51. Point 8 of Part I provides: 'Measures. Depending on the request, and on the circumstances of each case, the President will

'Reporting to the Commission. In cases under paragraph 4, where evidence of fraudulent activity has been detected, the — authorise the provision of specified report on the results of the investigation documents or other information by and on action taken shall be transmitted to the Bank's services; and/or the Commission, in its role as principal under the mandate in question.'

— order the Head of Internal Audit to conduct an inquiry and to provide a 52. Point 9 of Part I provides: report to OLAF; or

'Handling of request for cooperation. — authorise the Bank's services to give Where, in the course of its own investi- OLAF access to specific documents or gations relating to relevant operations, other information, subject to necessary OLAF requires access to information held conditions and/or other safeguards to by the Bank, and where the Director of be defined.

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'1. The established framework, as cur- rently set out in the EIB procedures for the investigation of cases of sus- 58. The European Parliament, the Council pected fraud involving EIB staff or and the Netherlands Government have members of its governing bodies shall intervened in support of the Commission. continue to apply. They put forward arguments substantially I - 7310

COMMISSION v EIB

similar to those of the Commission. In the whether Regulation No 1073/1999 and following the interventions will be men- Regulation No 1074/1999 must be inter- tioned only where relevant and, in par- preted as applying to the EIB, since the ticular, in so far as they differ from the Commission's application can in any event Commission's arguments. succeed only if that question is to be answered in the affirmative.

Identification of the issues Admissibility

59. In the light of the arguments of the parties and the interveners, the following main issues fall to be considered: Summary of the arguments

— Is the application admissible under 61. The parties have submitted detailed Article 237 EC or, in the alternative, observations on the issue of admissibility Article 230 EC? which may be summarised as follows.

decision must, therefore, be considered to 64. In response to those arguments, the EIB be imputable to the Board of Governors. notes, first of all, that although the Com- Moreover, to hold that the contested mission relies on Regulation No 1074/1999 decision cannot be reviewed would enable in its application, it does not explain which the EIB to evade the jurisdiction of the provisions of the Euratom Treaty give it Court of Justice under Article 237 EC by competence to challenge the contested manipulating its internal decision-making decision before the Court of Justice. Since procedure. there is no equivalent to Article 237 EC in that Treaty, the EIB considers that the Commission must be relying on Article 146 EA which is similar to Article 230 EC. However, neither that provision nor any other provision of the Euratom Treaty mentions the EIB. 63. With regard to Article 230 EC, the Commission emphasises that the Court of Justice must — under Article 220 EC — ensure that the law is observed in the interpretation and application of the Treaty, that according to the Court's case- law the EIB forms an integral part of the 65. The EIB submits, secondly, that the Community legal order, 2 7 and that contested decision cannot be challenged by Article 237 EC does not exhaustively list the Commission pursuant to Article 237 the circumstances in which the Court of EC. Stressing that the Court of Justice Justice is competent to review measures must, according to Article 7(1) EC, act adopted by the EIB. 28 Given that the within the powers conferred upon it by the present case raises issues of a 'quasi-con- Treaty, the EIB contends that Article 237 stitutional' nature, and that there is thus an EC must be interpreted as listing exhaus- evident need for judicial protection, it tively the circumstances in which the Court would be incompatible with the nature of is competent to review measures of the EIB. the Community as a legal order governed By omitting to refer to decisions of the by the rule of law, which the Court Management Committee — a body estab- recognised in Les Verts,29 if the matter lished and granted specific powers by the could not be brought before the Court of Statute 3 0 — the Treaty deliberately Justice. It would, according to the Com- excluded them from the scope of the mission, be unacceptable if the EIB could Court's competence. undermine the intentions of the Commu- nity legislature in an area as important as that of fraud prevention without any judi- cial supervision by the Court of Justice.

Statute, which provide that the Manage- which concerns the competence of the ment Committee 'shall be responsible for Court of Justice to rule on the non-con- the current business of the Bank, under the tractual liability of the EIB 32 and on authority of the President and the super- disputes between the EIB and members of vision of the Board of Directors' and that its staff, 33 does not support the proposition '[t]he Management Committee and the that Article 237 EC is not exhaustive with staff of the Bank shall be responsible only regard to review of decisions adopted by to the Bank and shall be completely inde- the EIB. Nor is the reasoning of the Court pendent in the performance of their duties'. in Les Verts, 34 relied upon by the Com- In that context, the EIB explains that the mission, applicable to the EIB. In that case Board of Governors was regularly informed the Court of Justice acknowledged the by the President of the EIB of the work possibility of review of measures adopted undertaken by the Management Committee by the European Parliament essentially to to prepare the adoption of measures con- ensure that the extension of the powers of cerning fraud prevention. The members of one of the institutions of the Community, the Governing Board did not, however, ask which was not mentioned at all in for the Board to be convened or for the Article 230 EC, did not undermine the contested decision to be debated during one need for judicial protection. However, the of its ordinary meetings. 31 Thus, the Com- EIB is not an institution, it has maintained mission cannot — in the absence of any its original tasks, which is to grant loans proof, or even allegation, of an abuse of and guarantees, and the possibility of procedure — claim that the EIB has sought review of the decisions of (some of) its to evade the system of judicial protection bodies was always envisaged by Article 237 laid down by the Treaty. EC. 35

70. Article 237(b) and (c) EC provide for review by the Court of Justice of measures adopted by the Board of Governors and the Board of Directors of the EIB, but makes no reference to the Management Commit- tee. It might, as the EIB points out, be Analysis inferred from that wording that decisions adopted by the Management Committee cannot, in principle, be reviewed pursuant to Article 237 EC. 69. In order to determine whether the Commission's application is admissible it is, in the light of the arguments of the parties, necessary to consider the following issues: 71. It would however, as the Commission points out, be unacceptable if the EIB were able — by a creative organisation of its internal decision-making process — to evade the judicial scrutiny intended by — Is the contested decision to be regarded Article 237(b) and (c) EC. Decisions for- as a measure of the Board of Governors mally adopted by the Management Com- which may be reviewed pursuant to mittee must, therefore, be reviewable if an Article 230 EC and/or 237(b) EC? analysis of the circumstances leading to their adoption and of their substance reveals that they are imputable to the Board of Governors or the Board of Directors. — If so, is the Commission's action inad- missible to the extent that it alleges a violation of Regulation No 1074/1999 which is a measure adopted under the Euratom Treaty? 72. In that context, it may be noted that when the Court was asked to consider whether acts adopted by representatives of the Member States acting, not in their capacity as members of the Council of — Is the Commission's action inadmiss- Ministers, but as representatives of their ible to the extent that it seeks to governments, are subject to judicial review establish a failure to act by the EIB? by the Court, it held that although such I - 7314

74. I disagree. A decision of the Manage- ment Committee which has legal effect may, in my view, be attributed to the Board of Governors where the Board has been informed of the work undertaken to pre- pare the decision and of its final content without raising any objections. The absence of a formal delegation of power or explicit 76. It emerges from those provisions that endorsement during a meeting of the Gov- the essential task of the Management erning Board cannot be decisive. Committee under the Treaty and the Stat- ute is to prepare and implement the decisions about loans and guarantees which 36 — Joined cases C-181/91 and C-248/91 European Parliament are adopted by the Board of Directors in v Council and Commission [1993] ECR I-3685, paragraph 14 of the judgment. accordance with the general directives of

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the Board of Governors. 37 While the 78. If however the Management Commit- Statute does not entirely preclude the tee adopts a decision having legal effect possibility that the Management Commit- that underlying assumption no longer tee might, as part of the current business of applies. Such a decision must therefore be the EIB, take legally binding decisions with open to review. 40 That is so especially effect for third parties, 38 it clearly envis- where, as in the present case, the Manage- ages that such decisions are normally to be ment Committee adopts a decision the adopted by either the Board of Governors content of which can only with great or the Board of Directors. difficulty, if at all, be fitted within the notion of 'current business' and which is evidently liable to undermine the effective- ness of one or more Community regu- lations.

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82. I am encouraged in that view by the 42 — C a s e 22/70 Commission v Caunai [1971] UCR 263, Court's case-law concerning the types of paragraphs 39 to 42 or the judgment. acts which are susceptible to review under 43 — The European Road Transport Agreement. Article 230 EC. Under the first paragraph 44 — For an application or that principle to a Commission Communication, sec Case C-57/95 France v Commission of Article 173 of the EEC Treaty, the Court [ 1997] LCR I-1627. See also Commission v Council, cited in note 39, paragraph 29 of the iiidgment. was originally competent to review 'acts of 45 — Cited in note 29. the Council and the Commission other than 46 — Paragraph 23 of the judgment.

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to permit the Court of Justice to review the 84. In the light of that conclusion, it is not legality of measures adopted by the Insti- necessary to consider the Commission's tutions', 47 and it held that while subsidiary argument that decisions of the 'Article 173 refers only to acts of the Management Committee may be reviewed Council and the Commission... an inter- pursuant to Article 230 EC. pretation of [that provision] which excluded measures adopted by the Euro- pean Parliament from those which could be contested would lead to a result contrary to both the spirit of the Treaty as expressed in Article 164 [now Article 220 EC] and to its system'. 48 — Admissibility of the submissions relating to Regulation No 1074/1999

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COMMISSION v EIB

infringement of a rule of the [Euratom] or — Does the Commission's action seek to ECSC Treaties'. 50 The present case is establish a failure to act? essentially similar: the contested decision was adopted pursuant to the EC Treaty, and it was therefore appropriate for the Commission to challenge it under 89. The EIB's last objection to admissibil- Article 237 EC. Since the provisions of ity — that the Commission seeks in sub- the Euratom Treaty conferring jurisdiction stance a ruling for a failure to act — upon the Court of Justice do not mention should not, in my view, be upheld either. the EIB, it would seem that the contested It appears from the Commission's argu- decision could not be reviewed directly ments, as clarified by its reply, that its under that Treaty. The need for a complete essential submission is that the contested system of judicial review therefore requires decision is contrary to Regulation Articles 230 and 237 EC to be interpreted No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n so as to allow the Court to consider No 1074/1999 in that it establishes a submissions concerning the compatibility parallel system of fraud prevention and of the contested decision with provisions of excludes OLAF from carrying out internal the Euratom Treaty. The same applies, in investigations in accordance with, in par- my view, to submissions concerning ticular, Article 4 of the Regulations. Thus, infringement of a regulation adopted pur- as I understand the Commission's reply, it suant to the Euratom Treaty. The need for does not make any separate allegation that a complete system of judicial review is the by failing to adopt a decision pursuant to same, and a violation of a regulation is by Article 4(1) and (6) of Regulation definition also a Treaty violation, since the N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n EC and Euratom Treaties provide that No 1074/1999 the EIB acted contrary to regulations are binding in their entirety Community law. and directly applicable in all Member States.51

clear from the wording and drafting history to Regulation No 1073/1999 and Regu- of Regulation No 1073/1999 that it is lation No 1074/1999. intended to apply to the ECB. The same applies to the EIB which must be regarded as one of the 'bodies... established by' the EC Treaty to which the Regulation applies according to the seventh recital of the preamble, Articles 1(3), 4(1) 4(6), 6(6), 7(1), (2) and (3), 9(4), 10(3), the second paragraph of Article 5 and the second 94. According to the Commission, the paragraph of Article 14. contested decision is contrary to Regulation No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 in several respects. It recalls that the contested decision is divided into two parts: Part I which applies to oper- ations carried out by the EIB under man- date from the Community and giving rise 9 1 . The w o r d i n g of R e g u l a t i o n to expenditure of Community budget funds No 1074/1999 is substantially identical to or resources from the European Develop- that of Regulation No 1073/1999, and the ment Fund, and Part II which applies to all legislative history does not give any other EIB operations. The Commission grounds for interpreting its scope ratione considers Part I to be contrary to Regu- personae differently. lation No 1073/1999 and Regulation No 1074/1999 in three respects.

92. I thus consider that Regulation No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 apply to the EIB. 95. First, the Commission recalls that Article 4(1) of Regulation No 1073/1999 and Regulation No 1074/1999 provides that '[i]n the areas referred to in Article 1, the Office shall carry out administrative investigations within the institutions, bodies, offices and agencies'.53 However, according to point 4 of Part I of the contested decision, '[s]uspicions of fraudu- Is the contested decision contrary to Regu- lent activity relating to members of EIB lation No 1073/1999 and Regulation staff or governing bodies in connection No 1074/1999? with [category I operations] shall be dealt with in accordance with the general pro- cedures and rules applicable in the Bank'.

100. The EIB has not specifically denied 97. Third, under points 9 and 10 of Part I, that the contested decision is contrary to access to information held by the EIB is Regulation No 1073/1999 and Regulation subject, in each case, to the authorisation of No 1074/1999, its argument being rather the President of the EIB. That is incom- that the Regulations do not apply to it. I patible with Article 4(2) of Regulation therefore consider it to be common ground N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n that the contested decision is contrary to, in No 1074/1999 according to which OLAF particular, Article 4 of Regulation has a right of immediate and unannounced N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n access to any information held by the No 1074/1999 institutions, bodies, offices and agencies, and to their premises, subject only to a requirement of notification.

Should Regulation No 1073/1999 and Regulation No 1074/1999 be declared 98. Part II of the contested decision is, inapplicable? according to the Commission, even more clearly contrary to the provisions of Regu- lation No 1073/1999 and Regulation No 1074/1999. Part II merely envisages 101. In the light of that conclusion, it is that the EIB may have recourse to the necessary to consider the EIB's plea that

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103. It might be thought that the EIB cannot invoke Article 156 EA since its status is governed only by the EC Treaty. However if, as I have argued above, 54acts 106. In that regard, it first sets out briefly of the EIB adopted under the EC Treaty the legislative history of the EEC Treaty must comply with acts adopted under the and the events which led to the establish- Euratom Treaty, it is clear that the EIB ment of the EIB. According to its expla- must be able to defend itself by invoking nations, which are essentially consonant the unlawfulness of such acts pursuant to with the relevant literature, 56 the Member Article 156 EA or the 'general principle of States rejected the idea — which had law' to which Articles 241 EC and 156 E A 'give expression'. 55 56 — See, in particular, R. Henrion, 'La Banque européenne d'investissement', in Droit des Communautées euro- péennes, Les Nouvelles (1969), Chapter 11, No 2427 to 54 — Paragraph 87. 2429; D. Dunnett, cited in note 37, at pp. 723 to 725; G. Marchegiani, cited in note 38, pp. 430 to 433; see also 55 — See Case 92/78 Simmenthal v Commission [1979] ECR the Opinion of Advocate General Mancini in Case 85/86, 777, paragraph 39 of the judgment. cited in note 27, paragraph 11.

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(v) and that the Court of Auditors is 107. Against that background, the EIB competent to examine the accounts of argues that the Treaty draftsmen clearly the EIB only in respect of its activity in intended it to be independent of the Com- managing Community revenue and munity institutions, and it recalls that expenditure. 65 according to the case-law, 'the [EIB] must

60 — Case 85/86, cited in note 27, paragraph 28 of the 57 — Sec Rapport des chefs de délégation aux ministres des ludgment. affaires étrangères. Comité intergouvememental créé par 61 — Article 266 EC and Article 28(1) of the Statute. la Conférence de Messine, of 21 April 1956 (the Spaak Report), at pp. 76 to 82. 62 — The Coverning Board, the Board of Directors and the 58 — The Bank was intended to open up "fresh resources' Management Committee, see Article 8 of the Statute. according to Article 3(j) of the EEC Treaty. (The Treaty on 63 — Article 9(f) of the Statute. European Union deleted and partially replaced that 64 — Article 4 and 5 of the Statute. provision by Article 4b of the EC Treaty, winch is now 65 — Article 248(3) EC. The practical arrangements governing Article 9 EC.) the relationship between the Court of Auditors and the LIB 59 — According to the EIB, the Member States were also are laid down in an agreement between the parties and the motivated by a desire to prevent vicarious liability from Commission. Under that agreement, which was concluded arising out of the activities of the fund. It is however not 19 March 1999, the Court of Auditors may also examine clear from the legislative history that this concern played activities of the EIB in respect of operations carried out on an important role. a mandate from the European Social Fund.

(iii) that according to the Statute the EIB is (ii) that although the activities of the to 'ensure that its funds are employed Management Committee of the EIB as rationally as possible in the interests are subject to internal controls by the of the Community' 68 and that it may Board of Directors72 and the Audit grant loans or guarantees only where 'the execution of the project... pro- 69 — Article 20(1)(b) of the Statute. 70 — Article 21(2) of the Statute. 71 — Article 21(6) of the Statute. 66 — Article 9 EC, inserted into the Treaty by the Treaty on European Union. 72 — According to Article 11(1) of the Statute, the Board of Directors is to 'ensure that the Bank is managed in 67 — Chapter 5 of Title I ('Provisions governing the institutions') accordance with the provisions of this Treaty and of this of Part Five ('Institutions of the Community'). Statute and with the general directives laid down by the 68 — Article 20(1) of the Statute. Board of Governors'.

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Committee of the EIB,73 the Court of which may constitute fraud, and that has Auditors has certain powers in respect nothing to do with the banking operations of the EIB under Article 248(3) EC; (iii) of the EIB. Thus, OLAF is no more capable that the EIB is subject to the jurisdic- of interfering with the activities of the EIB tion of the European Court of Justice than its own Internal Audit service,75 the under, inter aha, Article 237 EC; and Audit Committee of the EIB or the Court of (v) that there is legislative practice for Auditors. laying down provisions of general application with effect for the EIB. 74

75 — On the role of internal audit within the EIB, see above 7.1 — See Article 14 of the Statute. paragraph 6 and lielow paragraph 148. 74 — T h e C o m m i s s i o n refers t o C o u n c i l R e g u l a t i o n No 1260/1999 of 21 June 1999 laying down general 76 — Case 85/86, cited in note 2". provisions on the Structural Funds, OJ 1999 L 161, p. 1. 7 — Paragraph 2 " of the judgment.

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the financial markets. Lastly, the Bank case the issue was whether the EIB must be draws up annual accounts and a profit regarded, for the purposes of Articles 235 and loss account which are audited and 288 EC, as one of the Community annually by a committee appointed by the institutions in respect of which the Com- Board of Governors. Nevertheless, the fact munity can incur non-contractual liability. that the Bank has that degree of oper- The Court held that 'the Bank constitutes a ational and institutional autonomy does Community body established by the Treaty not mean that it is totally separated from (Case 110/75 Mills v EIB [1976] ECR 955, the Communities and exempt from every paragraph 14). [ 80] It is intended to con- rule of Community law. It is clear in tribute towards the attainment of the particular from Article 130 of the Treaty Community's objectives and thus by virtue that the Bank is intended to contribute of the Treaty forms part of the framework towards the attainment of the Community' of the Community (Case 85/86 Commis- s objectives and thus by virtue of the Treaty sion v EIB [1988] ECR 1281, paragraph forms part of the framework of the Com- 29). It follows that any acts and omissions

This is true in particular of the rule that the tax in question is collected for the benefit of the Communities' budget. Contrary to the 116. The reasoning of the Court in those contentions of the Board of Governors, cases demonstrate, in my view, two things. the fact that the tax is allotted to that purpose is not liable to undermine the operational autonomy and reputation of 78 — Paragraphs 28 to 30 of the judgment. 79 — Case C-370/89, cited in note 27. the Bank as an independent institution on 80 — In the English version of the judgment in Mills, the French expression 'organisme' was incorrectly translated as 'in- stitution' rather than 'body'.

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And even then, OLAF does not have the power to take legal action where an internal investigation reveals the existence of fraud or other irregularities. The essential func- tions of OLAF are, as the Commission stresses, (i) to investigate suspicions of 122. Moreover, the EIB might, as the fraud and irregularities by, inter alia, Commission and the Netherlands Govern- analysing information transmitted to it by ment point out, exclude access to infor- institutions, bodies and individuals, 86 mation which is particularly important for carrying out on-the-spot checks, 87 inspec- its ability to carry out its tasks indepen- ting files and accounts,8S and requesting dently in the decision to be adopted under oral information from members and man- Article 4(1) and (6) of Regulation agers of the institutions and bodies of the No 1073/1999.93 In that context, it may Community; 89 (ii) to draw up reports be noted that while the Commission, the specifying the facts established, the finan- Council and the European Parliament have cial loss, if any, and the findings of the adopted decisions pursuant to Article 4 investigations including the recommen- without providing for any such excep- dation of the Director of OLAF on the tions, 94 the Court of Justice has adopted action to be taken; and (iii) to forward those reports together with other relevant information to the institution, body, office 91 — Article 10(2) of Regulation No 1073/1999 and Regulation or agency concerned 90 and — where No 1074/1999. matters liable to result in criminal proceed- 92 — Article 9(4) of Regulation No 1073/1999 and Regulation No 1074/1999. ings are at stake — to the judicial auth- 93 — See further below at paragraph 155. 94 — Commission Decision of 2 June 1999 concerning the terms and conditions for internal investigations in relation to the prevention of fraud, corruption and any illegal activity detrimental to the Communities' interests, OJ 1999 L 149, 86 — Under Article 7 of Regulation No 1073/1999 and Regu- p. 57; Council Decision of 25 May 1999 concerning the

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a decision 95 which — by reference to its 125. In the absence of more detailed expla- tasks, its independence and the secrecy of nations, that argument cannot be upheld. its deliberations 96 as set out in the Treaties In any event, I am not convinced that the and the Statute of the Court 97 — excludes submission of the EIB to the same system of from the scope of internal investigations external, specialised and independent con- documents and information held or created trol of its financial dealings as other in the course of legal proceedings. 98 Community institutions and bodies would reduce its standing or reputation on the financial markets. Indeed, it would seem to me that the reputation of the EIB might suffer considerable damage if accusations of fraud directed at members of its manage- ment or staff could not be dispelled through an investigation carried out by a body outside the EIB itself. 123. The question remains whether the application to the EIB of Regulation N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 would damage its repu- tation and thus its credit rating and ability to raise funds at attractive rates on the international capital markets. 99 126. In the light of those considerations, I conclude that the application to the activ- ities of the EIB of Regulation No 1073/1999 and Regulation No 1074/1999 is not contrary to its independence as envisaged by the Treaty and the Statute and recog- nised by the Court's case-law.

128. First, the EIB submits that the notion the power only to take 'the necessary of 'the financial interests of the Commu- measures' to combat fraud 'in the Member nity' in Article 280 EC must be understood States' and that according to Article 280(4) essentially as equivalent to that of the EC measures adopted by the Community notion of 'the budget' of the European must not concern 'national criminal law'. Community mentioned in Article 268 EC. Regulation No 1073/1999 is therefore It follows that Article 280 EC enables the invalid in so far as it extends the powers Community to take measures aimed only at of OLAF to the institutions and bodies of protecting the Community against fraud the European Community. and other illegal activities which entail a loss of revenue or an increase in expenses occurring on the budget of the Community. The capital and budget of the EIB are, however, separate from the budget of the Community. Article 280 EC cannot there- fore be a valid legal basis for measures aimed at combating fraud within the EIB. 130. Those arguments —· which are essen- According to the EIB, that view is borne tially similar to the arguments raised by the out by Article 248(3) EC under which the defendant in Commission v European Cen- Court of Auditors is competent to audit the tral Bank — cannot be accepted. activities of the EIB only in respect of 'Community expenditure and revenue man- aged by the Bank', and by legislative prac- tice. 100

131. As explained in my Opinion in that case, 101 a detailed analysis of the wording, structure and history of Article 280 EC shows

135. First, measures adopted under the 132. The EIB is, as recalled above, 102 a Euratom Treaty cannot apply to the EIB, body which forms an integral part of the since the EIB is not mentioned at all in that Community framework. As a Community Treaty and has no organic relationship with body, the financial interests of the EIB are the Euratom Community. In that context, in my view part and parcel of the financial the EIB stresses that there is no provision interests of the Community. The fact that equivalent to Article 237 EC (which, it will there is, as the EIB stresses, a degree of be recalled, confers on the Court of Justice separation between the finances of the EIB jurisdiction to review measures of the EIB) and those of the rest of the Community in the Euratom Treaty, and that Article 146 institutions and bodies, and that its capital EC (which is essentially similar to is not derived from the budget of the Article 230 EC) does not refer to measures Community, is therefore not decisive. adopted by the EIB. The fact that the EIB manages, on a mandate from the Commis- sion, certain loans contracted in the name of Euratom cannot be equated with an organic relationship with the Euratom Community. 133. I accordingly conclude that the valid- ity of Regulation No 1073/1999 is not affected by the fact that it was adopted pursuant to Article 280(4) EC. 136. Second, it submits that Article 203 EA is not a correct legal basis for Regulation No 1074/1999. Given that Regulation No 1073/1999 was adopted on the basis of Article 280 EC, and that it was con- sidered necessary to insert Article 280(4) EC in the EC Treaty in order to give the The legal basis of Regulation No 1074/1999 Council the necessary powers to adopt that regulation, it follows that the legislature could not have adopted it on the basis of Article 308 EC. The legislature could not, t h e n , have a d o p t e d R e g u l a t i o n 134. According to the EIB, Regulation No 1074/1999 on the basis of Article 203 No 1074/1999 is invalid in so far as it EA which is the equivalent of Article 308 EC. Measures can moreover be adopted on the basis of Article 203 EA only if they are 102 — See note 27 and above paragraphs 113 to 118. 'necessary to attain one of the objectives of

137. The Commission resists those sub- missions. It points out that Regulation 139. I cannot accept the EIB's first sub- No 1074/1999 is relevant for the present mission. The fact that a body is not case only because the EIB carries out explicitly mentioned in, or does not have operations, acting on a mandate from the organic links with, the Euratom Treaty Commission, which fall within the scope of cannot by itself exclude the legislature from the Euratom Treaty. 104 "When acting in adopting measures under that Treaty with that sphere, the EIB is obliged to comply effect for the body in question. In that context, it may be noted that the legislature may regulate the behaviour not only of 103 — The EIB refers, in particular, to the second paragraph of Article 1 EA which provides: 'It shall be the task of the Member States, but of bodies within Community to contribute to the raising of the standard of living in the Member States and to the development of Member States and private individuals relations with the other countries by creating the con- although none of those is explicitly men- ditions necessary for the speedy establishment and growth of nuclear industries.' tioned in the Treaty or has organic links 104 — The Commission refers in that regard to Council Decision with it. There are, of course, limits to the No 77/270 of 29 March 1977 empowering the Commis- exercise of that power in so far as measures sion to issue Euratom loans for the purpose of con- tributing to the financing of nuclear power stations, OJ 1977 L 88, p. 9, and Council Decision No 94/179 of adopted under the Euratom Treaty must 21 March 1994 amending Decision 77/270/Euratom, to not be contrary to provisions of that authorise the Commission to contract Euratom borrow- ings in order to contribute to the financing required for Treaty, or any of the other Community improving the degree of safety and efficiency of nuclear power stations in certain non- member countries, OJ 1994 Treaties, such as provisions which grant the L 84, p. 41. body certain privileges (e.g., a right to be

140. The EIB's second submission, that Article 203 EA was not a correct legal basis for Regulation No 1074/1999, cannot 142. Second, the Court has acknowl- in my view be accepted either. edged 108 by reference to Article 209a of the EC Treaty that 'the protection of the financial interests of the Community... constitutes an independent objective which, under the scheme of the [EC] Treaty, is placed in Title II (financial provisions) of Part V relating to the Community institu- tions'. 109 On that basis the Court held that 141. First, the fact that Regulation 'since Article 209a of the Treaty, in the N o 1 0 7 3 / 1 9 9 9 w a s b a s e d on version applicable when [Council Regu- Article 280(4) EC is not relevant for deter- lation No 515/97 of 13 March 1997 on mining the scope of Article 203 EA. There mutual assistance between the adminis- is no evidence in the documents before the trative authorities of the Member States Court, in the travaux préparatoires to the and cooperation between the latter and the Treaty of Amsterdam, or in the drafting Commission to ensure the correct appli- history of Regulation No 1073/1999 to cation of the law on customs and agricul- suggest that it was, as the EIB asserts, tural matters 110] was adopted, indicated considered necessary to insert Article 280(4) the objective to be attained but did not EC in the EC Treaty in order to give the confer on the Community competence to Council the necessary powers to adopt that set up a system of the kind at issue, regulation. In that context, it may be recourse to Article 235 of the Treaty was recalled that the Commission proposed to justified'. 111Article 183a EA is, as the EIB establish OLAF and to lay down detailed provisions for its operation by a regulation based on Article 308 EC. 105 While the 106 — COMI1998) 717 Final, paragraph 16 of the explanatory memorandum. Commission stated in the explanatory 1 0 7 — C a s e 45/86 Commission v Council |1987] ECR 1493, memorandum that it intended to present paragraph 13 of the judgment, subsequently reaffirmed on several occasions. 108 — C a s e C-209/97 Commission v Council ) 1999] ECR 1-8067. 109 — Paragraph 29 of the judgment. 105 — Proposal for a Council regulation (EC, Euratom) estab- lishing a E u r o p e a n Erand Investigation Office. 110 — O J 1997 L 82, p. 1. C0M(1998) 717 Final. See further above, paragraph 5. 111 — Paragraph 33 of the judgment.

145. It states that the Regulations confer upon OLAF extensive powers of investi- gation and oblige the institutions, bodies and staff of the Community to inform and cooperate actively with OLAF. Thus, under Article 5(2) the Director of OLAF may decide to open an investigation at his own 147. The powers of OLAF exceed, more- imitative without, according to the EIB, over, what is necessary since appropriate

I - 7334

COMMISSION v EIB

148. Second, the EIB has since 1984 had an Internal Audit service which examines and evaluates the adequacy and effectiveness of

112 — Article 24 of the Rules of Procedure. That provision is 149. Third, the activities of the EIB in placed in Chapter V (Articles 22 to 27) entitled 'Audit Committee'. The Rules of Procedure were approved on managing Community expenditure and 4 December 1958 and have since undergone a number of amendments. When the contested decision was adopted on 10 November 1999, the version of the Rules of Procedure in force was dated 9 June 1997. Those Rules have since then been amended and replaced by a new 114 — The EIB refers in that regard to the Internal Audit Charter version dated 5 June 2000. The wording of Article 24 is {Chorie de l'audit interne). That document has not been identical in the two versions of the Rules. The Rules of published. Procedure have not been published m the Official 115 — The LIB refers in that regard to the Interna! Audit Journal, but the relevant texts were provided to the Procedures Manual. That document has not been pub- Court by the EIB. lished. 113 — Article 25 of the Rules of the Procedure. 116 — That document has not been published.

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152. According to the Commission, the 117 — See note 65. independence of the EIB and its status of 118 — Article 29 of the Rules of Procedure of the EIB provides a bank do not render the application of that the Staff Regulations of the Bank are to be fixed by the Board of Directors. The Staff Regulations of the Bank Regulation No 1073/1999 disproportion- were approved on 20 April 1960 and then amended on a number of occasions. The Staff Regulations have not been ate either. Those are issues which can and published in the Official Journal. should be resolved in the decision to be 119 — Article 7 of the Staff Regulations, unofficial translation from the French text as cited by the EIB. 120 — Article 38 of the Staff Regulations. 121 — Adopted by the Management Committee on 27 March 122 — Article 1.4 of the Code of Conduct. 1997. 123 — Article 1.5 of the Code of Conduct.

I - 7336

COMMISSION v EIB

124 — Hmphasis added. 125 — Article 10 EC.

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OPINION OF MR JACOBS — CASE C-15/00

157. The application to the activities of the 159. The same applies, in my view, to the EIB of the general scheme laid down by powers conferred in particular by Article 4 Regulation No 1073/1999 and Regulation of the Regulations. If OLAF were not No 1074/1999 is not, in my view, dispro- empowered to access documents and data, portionate in that sense. While the rules, take copies, ensure that documents and internal codes and procedures to which the data are secured where necessary, and ask EIB refers may provide some protection for oral information, its ability to uncover against fraud and other irregularities, the fraud and other irregularities would be legislature could in my view properly severely limited. And Regulation consider that control by an external and No 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n independent body would be more effective No 1074/1999 seek to prevent those and, perhaps as importantly, would be seen powers from being exercised in an unreas- to be more effective. In that context, it may onable manner; according to Article 4(1) be noted that the task of auditing differs and the 10th recital of the preamble to the fundamentally in its nature from the task Regulations, the powers of OLAF must be and controls to be carried out by OLAF. It exercised in compliance with the Treaty, therefore cannot be argued that the scheme human rights and fundamental freedoms, envisaged by Regulation No 1073/1999 the Protocol on the privileges and immun- and Regulation No 1074/1999 is unnecess- ities of the European Community and the ary merely because the accounts of the EIB Staff Regulations. 126 Moreover, OLAF are audited by external auditors, verified by will, as the Council points out, be obliged the Audit Committee and examined by the to conduct its investigations in accordance Court of Auditors. with the general principles of Community law including the principle of proportion- ality.

163. The Commission contests that sub- mission. The various internal rules and 161. I accordingly conclude that Regu- codes referred to by the EIB in the present lation No 1073/1999 and Regulation case were not presented to the legislature in No 1074/1999 are not contrary to the the course of the procedure leading to the principle of proportionality in so far as they adoption of Regulation No 1073/1999 and apply to the EIB. Regulation No 1074/1999. It is difficult to see, then, how the legislature could have taken account of them or even referred to them in the preamble. In any event, the omission of such a reference cannot amount to a violation of Articles 253 EC and 162 EA. The obligation to state reasons under Articles 253 EC and 162 EA

nature of the reasons given and the interest forward. Nor can the legislature be which the addressees of the measure, or required to give detailed reasons with other parties to whom it is of direct and regard to each of the specific powers individual concern, may have in obtaining granted to an office or agency in order to explanations'. 129 However, 'it is not achieve the purpose of a regulation. A clear necessary for the reasoning to go into all indication of the overall purpose to be the relevant facts and points of law, since achieved, a statement setting out the gen- the question whether the statement of eral situation which led to its adoption 132 reasons meets the requirements of Article and, perhaps, an explanation of the essen- [253 EC] must be assessed with regard not tial content of its provisions will generally only to its wording but also to its context suffice. and to all the legal rules governing the matter in question'. 13° More specifically, the Court has held that although regu- lations must clearly indicate the purpose pursued, the legislature is not required to specify the often very numerous and com- plex matters of fact and law dealt with or to give a specific statement of reasons for each of the technical choices made. 131 166. The preambles to Regulation N o 1 0 7 3 / 1 9 9 9 and R e g u l a t i o n No 1074/1999 state clearly what is the purpose to be achieved, 133 indicate the scope ratione materiae 134 and ratione per- sonae135 of the powers of investigation conferred on OLAF, sum up the essential content of the adopted provisions, 136 and point out the legal limitations to which the 165. It seems clear from that case-law that exercise of those powers is subject. 137 when the legislature adopts a regulation to Moreover, in the last recital of the pre- achieve a certain purpose, it is not required ambles, the legislature stated that 'the to refer in detail to the different measures operation of the Office is likely to step up which may already have been adopted by the fight against fraud, corruption and any the affected institutions and bodies, or to other illegal activities affecting the Com- explain in detail why those measures are munities' financial interests and is therefore deemed less effective or suitable. The fact compatible with the proportionality prin- that an institution or body affected by a ciple'. There is therefore, in my view, no regulation has objected during the legis- doubt that the Regulations fulfil the lative procedure does not moreover entail requirement to state reasons laid down in an obligation to respond, in the adopted Articles 253 EC and 162 EA. measure, to all of the arguments put

(2) order the EIB to pay the costs of the Commission;

(3) order the European Parliament, the Council and the Kingdom of the Netherlands to bear their own costs.

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