Article 1—Fraud in the Community budget

  1.  A number of witnesses drew attention to the broad overlap between the offences in Part 1 of the Corpus Juris and existing criminal laws in the United Kingdom. Particular concern was, however, expressed at the notion of penalising conduct that was merely reckless or grossly negligent (p56). Witnesses pointed to the need to prove "dishonest intent" under English law. The Criminal Bar Association pointed out the significant change the Corpus would make (p49). The London Criminal Courts Solicitors' Association (LCCSA) had reservations about the inclusion of recklessness and was opposed to the inclusion of gross negligence as the basis of criminal liability in this context (p127). Scots law probably does not recognise that fraud (a crime of intent) can be committed negligently and possibly not recklessly. The Law Society of Scotland said that in practice prosecutions for fraud are not brought unless the authorities are satisfied that the accused acted deliberately (p53). The Faculty of Advocates drew no comfort from the adverb "grossly". In the context of the Civil Law it had proved difficult in practice to discern any difference between "gross negligence" and "negligence" (p52).

  2.  Liberty expressed concern at the over-broad definition of certain of the offences, in particular those in Article 1(1)(a) and (b) where there were requirements to provide information. Their concerns were increased by the fact that recklessness and/or gross negligence would be sufficient to establish mens rea, both of which were excluded from the defence of mistake in Article 11 (p124). The Association of Lawyers for the Protection of the Financial Interest of the European Community (ALPFIEC), however, said that there were many statutory offences in the United Kingdom whereby it is an offence recklessly to provide to a public authority information which is false in a material particular. ALPFIEC saw advantages in Article 1 as drafted: "In so far as the aspect of gross negligence will give the offence wider application this may assist to widen the opportunity for extradition and availability of bank information from third countries" (p111).

  3.  ALPFIEC observed that Article 1(1)(c) might not be covered completely by any of the chief indictable offences in English law. The case in question related to the conversion of funds obtained for one purpose when the intention to divert to another purpose was conceived after the funds had been legitimately acquired (p111).

  4.  The Bar European Group (BEG) had concerns about Article 1(2) (no offence where timely rectification is made). This would appear to permit criminals to conspire or attempt to commit fraud with impunity in the event that they decided not to pursue their criminal enterprise. As Article 8 (conspiracy) showed, this was not the intention of Article 1(2) but Article 8(2) would not cover attempts to defraud by individuals acting alone. Referring also to Article 16, BEG said that there appeared to be a lacuna for attempted crimes against the Corpus Juris (p46). The Law Society of Scotland considered Article 1(2) to be completely at odds with Scots law and attempted crime. Moreover the lenient approach of Article 1(2) was inconsistent with the strict liability imposed by Article 1(1) (p53).

Article 2—Market-rigging

  5.  The Government commented that Article 2 would extend the criminal law to conduct which in the UK is mainly subject to civil penalties (p96).

Article 3—Corruption

  6.  Article 3(2) makes acts of passive or active corruption (as defined) criminal offences if "they harm or might harm the financial interests of the European Communities". In the absence of an express test of foreseeability, LCCSA considered the words "might harm" to be unacceptably wide (p128).

Article 4—Abuse of office

  7.  The Government said that Articles 4-6 were drafted in broad terms, which could make them difficult to apply in practice (p96). BEG also expressed concern at the width and lack of precision in the definition of the offences in Articles 4 and 6 (p44). Liberty had a particular problem with Article 4(1)(b) (p124).

Article 5—Misappropriation of funds

  8.  LCCSA did not favour making breach of trust a criminal offence, especially when combined with a wide definition of abusing powers "by harming those interests entrusted" (p128).

Article 6—Disclosure of secrets pertaining to one's office

  9.  The Faculty of Advocates said that the scope of the offence in Article 6 was a matter of concern. The Faculty questioned the need for the imposition at Community level of such all-embracing rules on secrecy (p52). LCCSA feared that Article 6 might prevent rather than aid the detection of fraud (p128). Liberty was also critical of the text of Article 6 and the apparent failure of the Corpus Juris to provide any protection for "whistle-blowers" (p124).

Article 8—Conspiracy

  10.  ALPFIEC was critical of Article 8 because it defined "conspiracy" too restrictively. The need to prove an organisation rather than an agreement might make the offence incapable of successful prosecution. ALPFIEC also queried the effect of Article 22(2) on this offence (p111).

Article 10—Mens rea

  11.  Article 10 makes provision that the offences set out in Articles 1-8 all require intention or fraud. The Law Society of Scotland said that this made little sense in terms of Scots law as intention was a prerequisite of fraud (p53). LCCSA suggested that Article 10 should define "intention", "fraud", "recklessness" and "gross negligence" (p128).

Article 11—Error

  12.  Article 11 provides that a mistake as to the essential elements of the offence excludes fraud. Mistake about the existence of a legal prohibition or its interpretation excludes liability if the mistake was unavoidable. If avoidable the penalty would be reduced. The Law Society of Scotland said that this contrasted with the Scottish position where a mistake as to the law would not normally constitute a defence or lead to an automatic reduction of the penalty but might, if bona fide, be taken into account in assessing the penalty. A bona fide misunderstanding as to the facts might constitute a defence (p53). Justice said that Articles 10 and 11 were "very worrying as they appear to extend criminal liability far too far and to leave virtually no room for a defence of innocent involvement to succeed" (p122).

Article 13—Criminal liability of the head of a business

  13.  Both Justice and Liberty were critical of the scope of Article 13 (pp122, 124). The Criminal Bar Association said that Article 13 seemed to exclude any element of mens rea to the extent that an individual might be criminally liable merely because he failed to supervise a dishonest subordinate properly, even though he had not himself behaved dishonestly (p49). BEG thought that Article 13 (which extends criminal liability to the head of a business) was contrary to the established rule that crimes carrying substantial terms of imprisonment were not to be attributed to individuals without proof of complicity. Further, Article 13 extended criminal liability to "any other person with powers of decision or control within the business". That could encompass any individual, no matter how junior the managerial level (p44). The Law Society of Scotland expressed concern that Article 13 might have an adverse effect on the operation of many businesses. The defence provided was very limited (p54). Justice said that Article 13(2) "would seem to contemplate making a personnel director liable for recruiting someone who commits a fraud on the Community budget!" (p122).

Article 16—Aggravating circumstances

  14.  Article 16 specifies certain aggravating circumstances which make manadatory a custodial sentence. The Law Society of Scotland was critical of the appropriateness of such a draconian rule at a time when Scotland was trying to move away from mandatory penalties (p54).

Article 18—Status and structure of the European Public Prosecutor (EPP)

  15.  Article 18(5) imposes a duty on national public prosecutors to assist the EPP. The Law Society of Scotland wanted to know what implications such a duty would have on the prosecutorial independence of the Lord Advocate and the Crown Office and the operational effectiveness of the Procurator Fiscal Service (p54).

Article 19—Seisin of the EPP and opening of proceedings

  16.  The Law Society expressed concern at the powers given to the EPP to close cases by way of a settlement. Though the Inland Revenue and Customs and Excise had similar powers in relation to tax and VAT offences, such offences were different from those in Articles 1-8 of the Corpus and it was nevertheless the policy of those bodies always to prosecute offences involving professionals. The Law Society said: "There must be a danger that the fraudster will be attracted towards defrauding the Community budget rather than other victims if he thinks that he will be able to `buy his way out of trouble'". There was also the risk of disparity of treatment of those accused of non-Community fraud, which it would be impossible to justify (p57). The Association of Chief Police Officers in Scotland expressed similar concerns about the EPP's discretion under Article 19.4(b) (p116).

Article 20—Powers of investigation of the EPP

  17.  The Law Society of Scotland drew attention to the apparent inconsistency between Article 20(3)(g) and Article 1(2) (p54). The Association of Chief Police Officers in Scotland noted that the investigatory powers conferred on the EPP were not dissimilar to those already enjoyed by the police in Scotland. The powers were, however, stated in rather general terms in Article 20(3)(a)-(g). There were instances where they should be stated with greater precision and certainty, in particular the powers for telephone interception (p116). The Government noted that interception of telecommunications would be authorised by the judge of freedoms. This would be a significant departure from the current position where interceptions are authorised by the Secretary of State (p97). The Law Society expressed concern at this and at the possibility that intercepted material might be misused (p57).

Article 21—Closure of the preparatory stage

  18.  The Faculty of Advocates drew attention to an apparent overlap between Article 25(3) and Article 21(3), the functions of the judge of freedoms and the competent national legal authority in relation to checking the lawfulness of proceedings and "seising" the Court (p51).

Article 22—Bringing and terminating a prosecution

  19.  BEG noted that Article 22 referred to a prosecution being extinguished on the death of the defendant and that once a prosecution has been extinguished a defendant cannot be pardoned or granted an amnesty. BEG considered this to be incongruous given the fact that if a defendant dies before a successful prosecution no guilt has been proven and he would benefit from the presumption of innocence (Article 31) (p47). The Law Society of Scotland was critical of the five year time bar imposed by Article 22. The limitation is calculated from the day when the offence is committed. But Article 22 made no provision for continuing offences or for complicated frauds which may not come to light until many years after they are perpetrated. The Law Society of Scotland also queried what the effect of the settlement of the case (under Article 22(2)(b)) was. The perpetrator of the fraud has to admit his guilt but it was not clear whether a settlement counted as a conviction (p54).

Article 24—Competence ratione loci

  20.  ALPFIEC pointed out the EPP's powers to collect evidence and arrest were restricted to the European area (ie the territories of the Member States). Articles 20 and 24 (1)(1) did not apply to witnesses and evidence in third States. Existing rules on mutual assistance and extradition would apply (Article 24(2)). ALPFIEC queried whether the Community had the necessary competence to negotiate to conclude its own mutual legal assistance treaties with third States. Moreover the EPP could not offer reciprocity. ALPFIEC queried whether Member States could use existing mutual assistance arrangements with third States when the investigation in question was not one which they were undertaking in their own right (p113).

  21.  The Criminal Bar Association noted that Article 24(1)(b) made reference to Article 20(2)(e), a subsection which did not exist (p49).

Article 25—Preparatory stage

  22.  The Law Society said that it was not clear whether safeguards under national law (such as those under the Police and Criminal Evidence Act) would apply in relation to the exercise of coercive powers, search and seizure, by the EPP. The Law Society was concerned that the EPP might only be bound to apply ECHR rules (p58).

Article 26—Trial

  23.  ALPFIEC was concerned lest Article 26 might produce delays in proceedings, because parties might contest the jurisdiction and seek a ruling for the European Court of Justice. They were also concerned that it might lead to forum shopping and discrimination, proof under a civil law system being easier and quicker to achieve than those in the United Kingdom. ALPFIEC believed that judges in the United Kingdom would invoke Article 35 in order to ensure that all national safeguards (such as the exclusion of evidence containing unacceptable hearsay or opinion) unstated in the Corpus Juris were available to the defence (p113). The Faculty of Advocates said that the Corpus Juris appeared to have been drafted with reference to States having a single legal system. It did not make specific provision for the allocation of jurisdiction within the United Kingdom. The Faculty believed it to be inappropriate for the accused to be tried anywhere else if the criteria in Article 26(2) pointed towards Scotland (p51).

Article 27—Appeal to national courts

  24.  Article 27 provides for appeals and speaks of the case "being retried, in law and in fact, by a higher court of the State where the conviction was pronounced at first instance". Professor Spencer said that what the draftsman had in mind was something more than simply an appeal on points of law. What was envisaged was a rehearing of the case on the merits rather in the way that the Court of Appeal Civil Division hears an appeal in this country (Q 47). BEG assumed that in England and Wales appeals would go to the High Court. Otherwise, there would be serious difficulties and delays were the Court of Appeal bound to hear both argument and evidence on automatic retrials (p46). The Faculty of Advocates queried whether there should be an extensive right of appeal on points of fact. The Faculty could see no justification for altering the nature and structure of appeals for a limited category of case (p52). Justice questioned the point of setting up a framework of separate first instance courts to deal with Corpus Juris cases if the right of appeal was for a full rehearing to a national court (p123).

  25.  Article 27 provides that the prosecution will have a right of appeal. The Government pointed out that English law does not, with certain limited exceptions, enable the prosecution to ask a higher court to review a decision of the trial judge. The Government recognised that it was important that the conduct of trials is seen to be both fair and balanced. It was currently examining the law in England and Wales on prosecution rights of appeal against stays of proceedings and judge directed acquittals. (p97).

Article 28—Appeal to the European Court of Justice (ECJ)

  26.  Liberty welcomed the express provision, in Article 28, for the jurisdiction of the European Court of Justice (p124). LCCSA thought the Article could go further and contended that the defence should have rights of appeal on the application of the Corpus or conflicts of jurisdiction to the European Court of Justice (p128).

Article 29—Rights of the accused

  27.  The Government pointed out that Article 29 established the rights of the accused to remain silent and the right to a lawyer of his choice but does not state whether inferences could be drawn from silence(p97). As regards Article 29(3), LCCSA queried whether the effect would be to change the English rule that a defendant should not be questioned from the time he is charged (p128).

Article 30—Rights of the Commission as partie civile

  28.  Article 30 would give rights to the Commission as partie civile. BEG said that this would be a procedural innovation which it was not difficult to see could be viewed as highly political in some respects (p45). The Law Society of Scotland feared that the result would be that there would be a number of different parties to the proceedings with competing and different interests. Both the Society and the Faculty of Advocates took the view that there would potentially be a very long and cumbersome procedure. The Faculty said that there was no reason why the Commission should not simply liaise with the prosecutor in any case where a compensation order was thought appropriate to ensure that the full facts were placed before the Court (pp55, 52).

Article 31—Burden of proof

  29.  A number of witnesses criticised Article 31. While it made clear that the prosecution bore the burden of proof it gave no guidance as to the standard of proof (p128). The Law Society of Scotland said that one consequence was that an individual might evade responsibility in one country while he would be jailed in another for exactly the same offence (p55). ALPFIEC thought that, applying Article 35, the United Kingdom standard would apply. The offence would have to be proved beyond reasonable doubt (p113). Liberty considered it essential that the standard of proof be expressly stated in the Corpus Juris to be "beyond reasonable doubt" (p125).

Article 32—Admissible evidence

  30.  Article 32 sets out rules on the admissibility of evidence. LCCSA was critical of Article 32(1)(a) because it made no provision for the presence of the defendant at the examination of witnesses. That was desirable if the defendant has legal representation and essential if unrepresented (p128). Article 32(1)(d) makes provision for written evidence from an accountant appointed by the court. The Government pointed out that such evidence would not normally be admissible in courts in the UK. The Government took the view that creating different rules of evidence for different types of case, depending on the offence involved, would complicate the investigation and prosecution of fraud (p98). The Law Society and the Faculty of Advocates were critical of the notion of a court-appointed accountant (QQ 198, 201). LCCSA said that the Corpus should provide that the defendant should be able to challenge such written evidence, if necessary by obtaining expert advice of his own (p128). Liberty was concerned that Article 32(2) might lead to "forum shopping" by the prosecution to the detriment of the interests and fundamental rights of the accused (p125).

Article 33—Exclusion of evidence illegally obtained

  31.  Under Article 33 evidence illegally obtained must be excluded. Both the Criminal Bar Association and the Law Society pointed out that this would be at variance with English law. The Association considered that the Article might impose an unacceptable fetter on judicial discretion (p49). The Society said that any conflict between the admissibility of evidence in the prosecution of non-Community budget offences and under the Corpus Juris would bring criticisms of the national system (p58). Mr Brown (Crown Office) queried whether Article 33 properly reflected the jurisprudence on Article 8 ECHR—a breach of the latter did not mean exclusion of the evidence in question (Q 153).

Article 34—Publicity and secrecy

  32.  Liberty was concerned at the apparent reversal of the presumption for a public hearing before the judge of freedoms contained in Article 34(2), making publicity subject to the consent of all parties, and in Article 34(3), which referred to the giving of "judgment". Liberty said that it was of vital importance that there is a presumption for public hearing covering the whole of the judicial process subject to limitations permissible under Article 6 of the ECHR (p125).