EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 15.7.2009 
SEC(2009) 1003 final 
  
COMMISSION STAFF WORKING DOCUMENT 
Annex to the 2008 Report from the Commissio n on the protection of the European 
Communities’ financial interests  and the fight against fraud 
STATISTICAL EVALUATION OF I RREGULARITIES- OWN RESOURCES, 
AGRICULTURE, STRUCTURAL MEASUR ES, PRE-ACCESSION FUNDS AND 
DIRECT EXPENDITURE -YEAR 2008 
 
{COM(2009) 372} {SEC(2009) 1002} 
 
EN    EN  
TABLE OF CONTENTS 
1. The situation in 2008.................................................................................................... 6 
1.1. Introduction.............................................................................................................. .... 6 
1.2. Key Facts................................................................................................................. ..... 9 
1.2.1. Traditional Own Resources.......................................................................................... 9 1.2.2. Agriculture ............................................................................................................. ...... 9 
1.2.3. European Fishery Fund .............................................................................................. 10 1.2.4. Structural Measures.................................................................................................... 1 0 
1.2.5. Pre-accession Funds................................................................................................... 10  
2. TRADITIONAL OWN RESOURCES (ANNEXES 1-10) ....................................... 11 2.1. Management of Traditional Own Resources (TOR).................................................. 11 2.1.1. Monitoring of establishment and recovery of TOR ................................................... 11 2.1.2. Procedure for managing Member States’ requests for write-off................................ 12 
2.1.3. Particular cases of Member St ate failure to recover TOR ......................................... 14 
2.2. Reporting discipline ................................................................................................... 14 2.2.1. Year of discovery versus year reported...................................................................... 15 2.3. General trends ............................................................................................................ 15 
2.3.1. Method of detection ................................................................................................... 16  
2.3.2. Types of irregularity and fraud .................................................................................. 17 2.3.3. Data main sectors TOR .............................................................................................. 18 2.4. Specific analysis......................................................................................................... 18 
2.4.1. TOR and cigarettes..................................................................................................... 1 8 
2.4.2. Classification of irregularitie s and fraud by Member States...................................... 18 
2.5. Recovery .................................................................................................................. .. 18 
2.5.1. Corrections to established amounts............................................................................ 19 2.5.2. Recovery rates.......................................................................................................... .. 19 
2.5.2.1. Recovery rate (RR) .................................................................................................... 19 
2.5.2.2. Historical recovery rate (HRR) .................................................................................. 20 
 
EN    EN 2.5.3. Recovery indicators.................................................................................................... 2 1 
2.5.3.1. Recovery rates in case of fraud .................................................................................. 21 2.5.3.2. Recovery rates in case of MA communications......................................................... 22 2.5.3.3. Recovery rates by method of detection...................................................................... 23 2.5.3.4. Recovery rates by category of amount....................................................................... 23 2.5.3.5. Recovery rates by origin ............................................................................................ 24  
2.5.4. Write-down and write-off of established amounts..................................................... 24 2.5.4.1. Written down when recovery is unlikely ................................................................... 24 2.5.4.2. Written off when the debt is deemed irrecoverable ................................................... 24 2.5.4.3. Estimation of the recovery of established amounts.................................................... 25 2.5.5. Impact on the budget.................................................................................................. 25  
2.6. Conclusions............................................................................................................... . 27 
3. AGRICULTURAL EXPENDITU RE (Annexes 11-12) ............................................ 29 
3.1. Reporting discipline ................................................................................................... 30 3.1.1. Timely reporting (Art . 3(1) Reg. 1848/2006) ............................................................ 32 
3.1.2. Budget year, budget line and product aff ected (Art. 3(1) (a) Reg. 1848/2006)......... 32 
3.1.3. The moment at which the irregularity was committed (Art. 3(1) (i) Reg. 1848/2006)
............................................................................................................................... ..... 33 
3.1.4. Practices employed and classificati on (Art. 3 (1) (e) (f) Reg. 1848/2006)................ 33 
3.1.5. Legal/natural persons identifica tion (Art. 3 (1) (l) Reg. 1848/2006)......................... 34 
3.1.6. Financial impact (Art. 3 (1) (n) Reg. 1848/2006) ...................................................... 35 3.2. General Trends........................................................................................................... 3 6 
3.2.1. Amounts affected ....................................................................................................... 3 6 
3.2.2. Impact on the budget.................................................................................................. 38  
3.2.3. Method of detection ................................................................................................... 40  
3.2.4. Types of irregularity................................................................................................... 44 
3.3. Specific Analysis........................................................................................................ 4 8 
3.3.1. Analysis of support measures..................................................................................... 48 3.3.2. Irregularity versus suspected fraud ............................................................................ 52 3.4. Recovery and sanctions.............................................................................................. 54 3.4.1. Recovery ................................................................................................................ .... 54 
 
EN    EN 3.4.2. Sanctions ............................................................................................................... ..... 56 
3.5. Conclusions............................................................................................................... . 58 
4. European Fishery Fund .............................................................................................. 61 5. Structural measures (Annexes 13-17) ........................................................................ 62 5.1. Reporting Discipline .................................................................................................. 62 5.2. General Trends........................................................................................................... 6 5 
5.2.1. Overall trends.......................................................................................................... ... 65 
5.2.1.1. Trends related to the Funds........................................................................................ 66 5.2.1.2. Trends related to Member States................................................................................ 67 5.2.2. Amounts involved ...................................................................................................... 68  
5.2.2.1. The four Structural Funds .......................................................................................... 70 5.2.2.2. The Cohesion Fund .................................................................................................... 7 2 
5.2.3. Impact on budget........................................................................................................ 72 
5.2.4. Detection methods...................................................................................................... 7 3 
5.2.5. Types of irregularity................................................................................................... 74 
5.2.6. Suspected frauds........................................................................................................ . 75 
5.3. Specific analysis – Irreg ularities related to the programming period 2000-2006...... 78 
5.3.1. Irregularities affecti ng the different funds ................................................................. 80 
5.3.2. Irregularities by Objective.......................................................................................... 81 
5.3.3. Suspected frauds........................................................................................................ . 83 
5.3.4. Irregularities detected before payment....................................................................... 84 5.4. Recovery .................................................................................................................. .. 85 
5.5. Conclusions............................................................................................................... . 86 
6. PRE-ACCESSION FUNDS (Annexes 18-21)........................................................... 89 6.1. Reporting discipline ................................................................................................... 90 6.1.1. Timely reporting........................................................................................................ . 90 
6.1.2. Time gaps............................................................................................................... .... 91 
6.1.3. Classification of irregularity ...................................................................................... 91 6.1.4. Summary ................................................................................................................. ... 92 
6.2. General Trends........................................................................................................... 9 3 
 
EN    EN 6.2.1. Overall trend........................................................................................................... .... 93 
6.2.2. Trend related to Member Stat es and Candidate countries ......................................... 94 
6.2.3. Amounts involved ...................................................................................................... 95  
6.2.4. Impact on the budget.................................................................................................. 97  
6.2.5. Method of detection ................................................................................................... 98  
6.2.6. Types of irregularities .............................................................................................. 100  
6.3. Specific analysis....................................................................................................... 10 1 
6.3.1. Irregularities affecting different funds ..................................................................... 101 6.3.2. Irregularity vs suspected fraud................................................................................. 103 6.3.3. Recovery ................................................................................................................ .. 106 
6.4. Conclusions.............................................................................................................. 1 08 
7. Direct Expenditure – Centralised direct Management............................................. 110 7.1. Methodology and scope ........................................................................................... 110 7.2. General analysis ....................................................................................................... 111  
7.2.1. Financial amounts involved ..................................................................................... 111 7.2.2. Financial amounts involved by geog raphical area and Member State..................... 113 
7.2.3. Method of detection ................................................................................................. 116 7.2.4. Types of irregularity................................................................................................. 11 7 
7.3. Specific analysis....................................................................................................... 12 0 
7.3.1. Irregularity versus Suspected Fraud......................................................................... 120 7.3.2. Time delay.............................................................................................................. .. 120 
7.4. Recovery .................................................................................................................. 121 
7.5. Conclusions.............................................................................................................. 1 22 
 
EN 6   EN  
1. THE SITUATION IN 2008 
1.1. Introduction 
According to article 274 of the Treaty on the European Community, the European 
Commission shall implement the budget. Council Regulation (EC, Euratom) No 
1605/20021 of 25 June 2002 on the Financial Re gulation (FR) applicable to the 
general budget of the European Comm unities indicates that the Commission 
implements the budget: 
• on a centralised basis: implementation task s are performed either directly by its 
departments or indirectly by executiv e agencies created by the Commission, 
bodies set up by the Communities - provided that this is compatible with the tasks set out in the basic act - and, subject to  certain conditions, national public-sector 
bodies or bodies governed by private law with a public-service mission; 
• on a shared or decentralised basis: im plementation tasks are delegated to the 
Member States (shared management) or third countries (decentralised 
management); the Commission applies cl earance-of-accounts procedures or 
financial correction mechanisms enabling it  to assume final re sponsibility for the 
implementation of the budget; 
• by joint management with international organisations: certai n implementation 
tasks are entrusted to in ternational organisations. 
Community legislation provides for the pr otection of the Community’s financial 
interests in all areas of activity
2. The FR sets the principles and rules for the correct 
implementation of the budget. Member Stat es are required to no tify the Commission 
of evidence of fraud and other irregularities. This need is particularly evident in those 
sectors of the Community budget where the main responsibility for management is 
with the Member States, namely, in the fi elds of Agriculture and Structural Funds 
(on the expenditure side) and Own Resources  (on the revenue side). In these areas, 
Member States must inform the Commission of all irregularities involving more than 
€10,000 of community finances. This applies at all stages in the procedure for 
recovering monies unduly pa id or not received. 
                                                 
1 Official Journal L 248 of 16.09.2002 
2 See in particular Article 3(1) of Council Regulation (EEC) No 595/91 of 4 March 1991 (OJ L 67, 
14.3.1997), Commission Regulation (EC) No 1681/94 of 11 July 1994 (OJ L 178 of 12.7.1994), as 
amended by Regulation (EC) No 2035/2005 of 12 December 2005 (OJ L 328 of 15.12.2005), and No 
1831/94 of 26 July 1994 (OJ L 191, 27.7.1994), as amended by Regulation (EC) No 2168/2005 of 23 
December 2005 (OJ L 345 of 28.12.2 005), for expenditure, and Article 6(5) of Council Regulation (EC, 
Euratom) No 1150/2000 for traditional own resources. 
 
EN 7   EN Regulation No. 1848/20063 specifies the requirement for the agriculture sector, 
Regulations Nos. 1681/944 and 1831/945, as amended, respectiv ely by Regulations 
Nos. 2035/2005 and 2168/2005, for structural measures and Regulation No. 1150/2000 for own resources. In the case of pre-accession funds the obligation to 
report irregularities is specified in Comm unity legislation and in the Pre-Accession 
and Accession Agreements the European  Community and the Candidate and 
Acceding States.  
The European Parliament and the Counc il adopted a series of Regulations 
introducing a new system for the Structural Funds for the new 2007-2013 programming period
6. The rules on reporting irregular ities to the Commission have 
been retained, but the communication pro cedure is now part of the implementing 
Regulations7 rather than a separate Regulation, as was previously the case. The old 
Regulations have been repealed, but will continue to apply with reference to former programming periods. 
The provisions to be followed are mostly  based on the Commission Regulation (EC) 
No 1681/1994. Member States ar e required to report irregul arities under Article 3 of 
these regulations (for own re sources the relevant provision s are contained in Article 
6, paragraph 5. For agriculture , the relevant provisions ar e contained in article 3) 
within two months of the end of each qua rter. Under Article 5 (again, Article 6, 
paragraph 5 for own resources) they ha ve to submit updates of the cases 
communicated and relevant information a bout the financial, administrative and 
judicial follow-up.  
                                                
 
3 As of 1st January 2007, also the threshold for the agriculture sector has been increased to €10,000 
following the provisions contained in article 6(1) of Regulation (E C) 1848/2006 of 14 December 2006 
(OJ L 355 of 15.12.2006). 
4 Regulation 1681/94 applies to the Structural Funds, that is to say European Regional Development 
Fund (ERDF), European Social Fund (ESF), European Agriculture Guidance and Guarantee Fund 
(EAGGF) – Section Guidance and Financial Instrument for Fishery Guidance (FIFG). 
5 Regulation 1831/94 applies to the Cohesion Fund. 
6 Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the 
European Regional Development Fund and repealing Regulation (EC) No 1783/1999; Regulation (EC) 
No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social Fund and repealing Regulation (EC) No 1784/1999; Council Regulation (EC) No 1083/2006 of 11 July 
2006 laying down general provisions on the European Regional Development Fund, the European 
Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 
1164/94, OJ L 210, 31.7.2006. 
7 Commission Regulation (EC) No  1828/2006 of 8 December 2006 setting out rules for the 
implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the 
European Regional Development Fund, the European Social Fund and the Cohesion Fund and of 
Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European Regional Development Fund, OJ L 371, 27.12.2006. This repeals Regulations (EC) No 1681/94 and 
(EC) No 1831/94. Commission Regulation (EC) No 498/2007 of 26 March 2007 laying down detailed 
rules for the implementation of Council Regulation (EC) No 1198/2006 on the European Fisheries 
Fund.  
 
EN 8   EN The distinction between irregularities and fraud is that fraud8 is a criminal act that 
can only be determined by the outcome of j udicial proceedings. As  such, it is only 
when the judicial procedure has come to an  end that the actual  amount of fraud can 
be determined. While awaiting the results, the Commission works on the basis of the information supplied by Member States c oncerning cases of irregularities some of 
which, in the opinion of the reporting Member  States, give rise to suspicions of 
fraud. The Commission's statistical asse ssment of and abil ity to respond to, 
irregularities are influenced by the accuracy  and timeliness of the notifications made 
by the Member States.  
The practices of the national administrati ons still vary, though improvements have 
been achieved thanks to the efforts made to harmonise their approaches. The data 
communicated by Member States is sometimes incomplete. Furthermore, the distinction between “suspected frauds” and other irregularities is not consistent as 
Member States do not always have th e same definition of criminal risk. 
Consequently, a significant proportion of communications received by the 
Commission do not distinguish between  suspected fraud and irregularity. 
The Commission works in close cooperation with the Member States to improve the 
notification system for irregularities, in part icular to clarify the concepts of “fraud” 
and “irregularity”
9 and as a result of th is, attempts to measure the possible economic 
impact of fraud in certain sectors have b een made. However, for the reasons outlined 
above, the figures presented below should be interpreted with caution. It would be 
particularly inappropriate to draw simple conclusi ons about the geographical 
distribution of fraud or on th e efficiency of the services which contribute to the 
protection of financial interests.  
The present document is divided in two parts.  
                                                 
8 According to the definition provided for in Article 1 of the Convention on the protection of the 
Community’s financial interests of 26 July 1995 (OJ C No 316 of 27.11.1995), which entered into force 
on 17 October 2002, “[…] fraud affecting the European Communities' financial interests shall consist 
of: 
 a) in respect of expenditure, any intentional act or omission relating to: 
 - the use or presentation of false, incorrect or incomplete statements or documents, which has as its 
effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities; 
 - non-disclosure of information in violation of a specific obligation, with the same effect; 
 - the misapplication of such funds for purposes other than those for which they were originally granted;  b) in respect of revenue, any intentional act or omission relating to: 
 - the use or presentation of false, incorrect or incomplete statements or documents, which has as its 
effect the illegal diminution of the resources of the general budget of the European Communities or 
budgets managed by, or on behalf of, the European Communities; 
 - non-disclosure of information in violation of a specific obligation, with the same effect; 
 - misapplication of a legally obtained benefit, with the same effect.” 
9 The Commission opened a dialogue with the representatives of the Member States to clarify basic 
concepts and to re-assure Member States that the communication of irregularities in no way prejudices 
the outcome of criminal judicial proceedings. A working document on the practical modalities for the 
communication of irregularities was established. Disc ussions are continuing in the Advisory Committee 
on the Coordination of Fraud Prevention. 
 
EN 9   EN The first is dedicated to the analysis of i rregularities reported in the area of the 
Traditional Own Resources (Revenues). The implementation mode for this part of 
the budget is that described under letter b. – shared management. 
The second is composed of 5 chapters dedicated, respectivel y, to Agricultural 
expenditure, European Fishery Fund, Structural  measures (for these three sectors the 
management mode is that indicated under letter b. – shared management), Pre-accession Assistance (the implementation mode  for this sector is indicated under 
letter b. – decentralised management) and Direct expenditure (whose implementation 
mode is that descri bed under letter a.). 
1.2. Key Facts 
Annex 22 gives an overview of  all irregularities communi cated by Member States 
under Regulation No. 1848/2006 for the agri culture sector, Regulations Nos. 
1681/94, 1831/94 and 1828/2006 for structural  measures and Regulation No. 
1150/2000 for own resources.  
In general, the number of irregularities notified for the year 2008 has decreased by 
2%. 
The following paragraphs will provide details concerning the different sectors of the 
budget analysed in this document. 
The total number of irregularities has in creased for traditiona l own resources and 
structural funds. It has also increased fo r the pre-accession funds. It has decreased for 
the cohesion fund and agriculture. 
However, the total financial amounts affected  by irregularities notified for the year 
2007 has increased/decreased by 23.6%. 
The total amounts affected by irregularit ies have increased for traditional own 
resources and the pre-accession funds. They  have decreased for agriculture, 
structural and cohesion funds. 
1.2.1.  Traditional Own Resources 
In 2008, the number of cases of irregularities communicated by the Member States 
decreased from 6,097 to 5,344. Consistently, the amount of TOR decreased from 
EUR 401 million to EUR 351 million. 
Of all the cases registered in 2008 20% (1,073 out of 5,344 registered cases) are 
categorised as frauds. 
1.2.2.  Agriculture 
Member States reported 1,133 new irregul arities compared with 1,548 in 2007. The 
total amount affected in 2008 was about EUR 102.3 million, as against 
approximately EUR 155 million in 2007. 
 
EN 10   EN Irregularities notified in this sector re present 0.21% of the agricultural budget (see 
annexes 11 and 12). 
1.2.3.  European Fishery Fund 
No irregularities have yet been reported  concerning the European Fishery Fund on 
the basis of Commission Regulation (EC) No 498/2007. 
1.2.4.  Structural Measures 
In 2008 Member States repo rted 3,960 irregularities un der Regulation (EC) No 
1681/94 which covers the four  Structural Funds and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). The total amou nt affected by ir regularities in 2008 
was almost EUR 585 milli on, EUR 528.6 million of which wa s from the Structural 
Funds and EUR 56.3 million from the Cohesi on Fund. Irregularities reported in this 
sector were equivalent to 1.25% of the budge t allocated to struct ural measures in 
2008. 
In 2007, Member States repo rted 3,858 irregularities un der Regulation (EC) No 
1681/94 which covers the four  Structural Funds and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). 9 irregulariti es were reported under Regulation No 
1828/2006, which covers the programmi ng period 2007-2013. The total amount 
affected by irregularities in 2008 was about EUR 585.2 million, EUR 528.9 million 
of which was from the Structural Funds and EUR 56.3 million from the Cohesion 
Fund. Irregularities report ed in this sector were equiva lent to 1.25% of the resource 
allocations for 2008. 
For the first time irregularities relate d to the programming period 2007-2013 (whose 
reporting is disciplin ed by Regulation (EC) No 1828/200 6) were reported to the 
Commission. 
1.2.5.  Pre-accession Funds 
In 2008 the Commission/OLAF received 2,133 reports on pre-accession funds 
(PHARE, SAPARD, ISPA, Tran sition Facility (TF), CARDS, Turkish pre-accession 
instrument (PA)) from the Member states  and Candidate countries. The received 
information consists of 523 new cases det ected by the national authorities in 2008 
and 1,610 follow-up reports on the previously  reported cases. The number of new 
cases received on pre-accession assistan ce is the highest since the reporting 
obligation started to be fulf illed by the reporting countries. 
The total amount affected by irregu larities in 2008 was EUR 60,782,354 where 
PHARE accounts for EUR 26,731,257 (183 cases), SAPARD – EUR 29,046,300 (213 cases), ISPA – EUR 4,055,042 (99 cases ), TF – EUR 545,822 (4 cases), PA – 
EUR 314,763 (18 cases), CARD S – EUR 89,170 (6 cases). 
 
EN 11   EN PART I - REVENUES 
2. TRADITIONAL  OWN  RESOURCES  (ANNEXES  1-10) 
2.1. Management of Traditional Own Resources (TOR)  
The Community must have access to Traditional Own Resources (‘TOR’)10 under the 
best possible conditions. In conformity with Regulation (EC, Euratom) 1150/200011 
Member States are responsible for making available to the Co mmission, within the 
deadlines set, TOR that they  have established. Establ ished amounts of customs or 
agricultural duties that have been recovered and debts that are guaranteed and not 
under appeal are to be made available via the A-account . However, where TOR have 
been established by a Member State but not  yet recovered and where no security has 
been provided or the established amount ha s been disputed Member States may enter 
these TOR amounts in the B-account . These amounts of TOR are not then made 
available until actually recovered. Most fr aud and irregularity cases relate to B-
account items.  
2.1.1.  Monitoring of establishment and recovery of TOR 
In order to get the right pi cture of Member States’ TOR recovery activity it is 
important to keep in mind that over 95%  of all amounts of TOR established are 
subsequently recovered without any part icular problem. These amounts are entered 
in the A-account and made available to the Commission. This covers most of the 
‘normal’ import flows where release for free circulation gives rise to a customs debt. 
The remaining exceptional items are ente red in the B-account. This proportion 
should be borne in mind when evaluati ng Member States’ recovery activity.  
In return for their collecti on task, and to support sound and efficient management of 
public finances, Member States may keep  25% of the amounts involved. In its 
capacity as Authorising Officer respons ible for executing the EU budget, the 
Commission (DG Budget as delegated Author ising Officer) monitors Member State 
activity concerning establis hing and recovering TOR.  
The following three methods are used: 1. Overall monitoring of recovery of  TOR via the write-off procedure; 
2. Regular inspection in Member States of the establishmen t and recovery of 
TOR, and B-account entries; 
3. Specific monitoring of Member States ’ follow-up of recovery in individual 
cases which have a significant financial im pact and involve Mutual Assistance. This 
particular task is performed in close co-operation with the European Anti-Fraud 
                                                
 
10 These are mainly custom s and agricultural duties. 
11 Regulation 1150/2000 of 22 May 2000. 
 
EN 12   EN Office (OLAF) where OLAF has issued the Mutual Assistance message in question 
and/or has an operational inte rest in the case concerned. 
These three methods allow the Commission to monitor Member States’ performance 
without interfering too much in  their day-to-day operations. 
2.1.2.  Procedure for managing Member States’ requests for write-off  
Member States must take all requisi te measures to ensure that amounts 
corresponding to the entitlements establishe d are made available to the Commission. 
This requirement is in Article 17(1) of Regulation 1150/2000. Article 17 also provides that a Member State may only be  released from its obligation where 
established entitlements pr ove irrecoverable either: 
(a) for reasons of force majeure ; or 
(b) for other reasons which cannot be attributed to that Member State. 
Amounts of established entitlements become irrecoverable by one of two routes. The 
first is by a decision of a Member State declaring  that they cannot be recovered — 
this declaration may be made at any time. However, TOR must be deemed  
irrecoverable by a Member State at the late st five years from the date on which the 
amount was established, or in  the event of an administra tive or judicial appeal, the 
final decision was given, or the last part -payment of an established amount was 
made, whichever is the later. Where th e irrecoverable amount of TOR exceeds a 
threshold of €50 000 the write-off must be reported to the Commission. For amounts under €50 000, Member States do not have to communicate the case to the Commission unless the Commission makes a specific request.  
A 2004 amendment to Regulation No 1150/2000
12 introduced the five-year 
timeframe within which a Member Stat e has to provide the Commission with 
information on amounts of established entitlem ents of TOR deemed irrecoverable. In 
2008 the already expected marked increase in  requests by Member States to write off 
established TOR amounts deemed irrecove rable indeed occurred. Compared with 
2007 the number went up from 100 to 589 requests. This effect will probably 
continue in 2009. The increase primarily cons isted of old cases not yet reported to 
the Commission, but meeting the five-year deadline triggering application of the 
write-off procedure.  
A new IT application called WOMIS13 will be introduced in 2009 to support Member 
States and DG Budget in managing write-off requests. 
In 2008 589 write-off requests amounting to €188 760 951.04 were communicated to 
the Commission by 13 Member States. In to tal, 465 requests were processed in 
200814 with the following result15:  
                                                 
12 Regulation No 2028/2004, amending Regulation No 1150/2000. 
13 WOMIS: Write-Off Management and Information System.  
 
EN 13   EN                                                                                                                                                          
14 Origin of the cases: 1 case from Austria, 1 from Belgium, 1 from the Czech Republic, 341 from 
Germany, 13 from Denmark, 18 from Spain, 1 from Finland, 1 from Ireland, 66 from Italy, 108 from 
the Netherlands, 2 from Portugal, 4 from Sweden and 32 from the UK. 
15 The breakdown between the amounts for each of the pos itions is, at present, only an estimate because 
sometimes elements from the same case may be par tly accepted, considered no t suitable or refused. 
Additional information from the Member States (in particular on the proportion covered by guarantee) 
is then needed to provide the final classification and quantification of the amounts concerned. 
 
EN 14   EN TABLE OR 1 
Commission position cases % cases € % amount 
UNSUITABLE EXEMPTION REQUEST 2 0.43% 41,339.05 0.05%
WRITE-OFF ACCEPTED 132 28.39% 17,338,091.14 13.63%
ADDITIONAL INFORMATION REQUIRED 299 64.3% 92,320,654.22 72.61%
WRITE-OFF REFUSED 32 6.88% 17,434,228.42 13.71%
TOTAL 465 100% 127,134,312.83 100%
Examination of Member States’ diligence in  these cases constitutes a very effective 
mechanism for gauging their activity in the fi eld of recovery. It encourages national 
administrations to step up the regularity, efficiency and effectiveness of their 
recovery activity, since any lack of diligence leading to failure to recover results in 
individual Member States having to foot  the bill. During 2008 over €14 million was 
paid by Member States because of refused write-offs. 
2.1.3.  Particular cases of Member State failure to recover TOR  
Where TOR is not established because of an administrative error by a Member State 
the Commission applies the principle of financial liability16. As a result up to 2008 
over €70 million was paid by Member States, aside from interest on late payment17.  
Altogether the cases of financial liability  dealt with by DG Budget up until the end of 
2008 total nearly €260 million. The main objectiv e of this procedure is to encourage 
individual Member States to improve th eir administrations’ performance and to 
address weaknesses leading to a loss of TO R and national taxes. This money is in 
effect transferred back to the Member Stat es in proportion to their contribution to the 
EU budget as it reduces their cont ributions via the GNI resource. 
2.2. Reporting discipline  
Under Article 6(5) of Regulation 1150/ 2000, Member States are required to 
communicate to the Commission, via the OWNRES system18, cases of fraud and 
irregularity where the TOR amount exceeds €10 000. The requirement to report such cases is designed to inform the Budgetary Au thority of the state of play relating to 
fraud and irregularities in TO R. This political dimensi on is a clear signal to all 
stakeholders of the importance of prom pt, accurate and complete reporting. The 
OWNRES database is a key tool for obtaini ng data for global analyses of fraud and 
irregularities, and presents  valuable information to the Budgetary Authority. 
                                                
 
16 Case C-392/02 of 15 November 2005. These cases are identified on the basis of Articles 220(2)(b) 
(administrative errors not detectable by the operat or) and 221(3) (time-barring resulting from Customs’ 
inactivity) of the Community Customs Code; Articles 869 and 889 of the Provisions for application of 
the Code; or on the basis of non-observance, by the customs administration, of articles of the Community Customs Code giving rise to legitimate expectations on the part of an operator. 
17 In such a situation there is no registra tion in OWNRES of the fraud or irregularity. 
18 OWNRES is an abbreviation for Own Resources. 
 
EN 15   EN Because all TOR amounts exceeding €10 000 in the B-account represent an 
irregularity (fraud includ ed) by definition the match between the two from the 
standpoint of the B-account should be 100%19. This match is checked during the 
regular inspections in the Member States ; however, no significant shortcomings have 
been found in recent years. 
OWNRES is not a reliable source of data on fraud alone, isolated  from irregularity. 
This is because (until a cour t judgment is obtained) the di stinction between fraud and 
irregularity is usually made on subj ective grounds. These grounds vary greatly 
between national administrations and so the results cannot be relied upon. Please 
bear these considerations  in mind when looking at the following analysis of 
OWNRES data. 
2.2.1.  Year of discovery versus year reported 
Cases should be included in OWNRES upon th e initial discovery of the irregularity 
or fraud case. As a result the year of th e customs operation and the year of discovery 
of the irregularity or fraud can diverge. Member States are continually adding new cases and updating existing items. So th e information generated by OWNRES 
represents the situation on the date of the query. For instance, the number of irregularities and frauds concerning 2007 in last year’s report was 5 321 cases 
whereas the number of cases now  shown for 2007 is 6 097 cases
20. This continuing 
development is inherent to the system.  
2.3. General trends  
The number of cases communicated to OW NRES for 2008 is currently 12.5% lower 
in comparison with 2007 (from 6 097 to 5 344), and the amount of TOR involved is 
likewise 12.5% smaller (from €401 million to €351 million )21. The trend for the 
number of belatedly disc harged Community Transit operations to decrease 
continued22, and the amount involv ed decreased as well . In the case of Transit 
practice shows that up to 90% of the in itially established debts are ultimately 
cancelled, because of proof of regular discharge after all.  
While the number of comm unications from the ten ne w Member States showed 
continued growth since their accession in 2004 until 2007, in 2008 this growth stopped. 2008 shows 3% less cases when compared with 2007 whereas when 2007 
was compared with 2006, it showed growth  of 16%. If the comparisons are made 
using the amounts of TOR, the rate s are -8% and 28% respectively.  
                                                
 
19 Items registered in OWNRES are not necessarily also  in the B-account. Where a debt has been paid or 
not established (for instance where goods have been seized and confiscated) the amounts should not be entered in the B-account.  
20 The information generated by OWNRES used to pr oduce the figures in this chapter was all obtained 
from queries made on 6 March 2009. 
21 See Annex 1 (table) and Annex 2 (chart). 
22 In 2005 the number of cases of belatedly discharged Transit was 2 374, being 38.3% of the total number 
of cases registered and 28% of the total amount initia lly established. In 2006  there were 1 478 cases 
(24.5% of cases and 19.5% of the total amount) and in  2007 there were 1 390 cases (22.8% of cases and 
16.7% of the amount). In 2008 the figures are respectively 1 048, 19.6% and 14.7%. 
 
EN 16   EN The OWNRES database now contains 51 412 cases in total (1989-2008), showing an 
increase of nearly 14% during 200823. Significant changes in the number of 
registrations in 2008 compared with 2007 can  be seen for Romania (+ 103%), Malta 
(- 70%), Sweden (+ 63%), Greece (- 44%) and Slovakia (- 43%). Significant changes in amounts can be seen in Estonia (+ 221%), Sweden (+ 173%), the Czech Republic (+ 119%), Romania (+ 90%), the Netherlands (+ 82%) and Austria (- 86%)
24.  
2.3.1.  Method of detection 
A variety of detection met hods can reveal irregularity or fraud. Judging from the 
2008 data the most fruitful methods are national post-clearance inspections  and 
primary national inspections  (either physical inspections or inspections of documents 
— the latter category featuring most freque ntly). Post-clearance inspections feature 
in 47% of the cases discovered whereas primary national inspections cover 30%.  
It is clear that the shift which could alr eady be seen in previous years from primary 
to post-clearance inspections continued in  2008. It marks the beginning of a trend 
related to ongoing changes in  declaration and control procedures. The relative 
importance of inspections by anti-fraud se rvices was stable with 6% in 2008 
compared to 7% in 2007. Since the final re sults of such inspections take more time 
than regular inspections, a (slight) increa se in the percenta ge for 2008 may be 
expected in future registrations. 
CHART OR 1: Methods of detection 2006-2008 
Method of detection 2 006-2008
050010001500200025003000
Audit of the
accountsCommunity
inspectionsInspection by
anti-fraud
servicesInspection visit National post-
clearance
inspectionsPrimary
national
inspectionsTax audit Voluntary
admission
METHOD OF DETECTIONNUMBER OF CASES
 2006  2007  2008
 
                                                 
23 This percentage will gradually decrease since th e cumulative number of existing cases in OWNRES 
will exceed the number of new cases added every new reporting year (last year this percentage was 
16%). 
24 Significant changes in amounts involved generally relate to one or a few (very) big cases, e.g. 
Netherlands: 1 case of €15 million;  Romania: 1 case of €2.8 milli on; Czech Republic: 1 case of €1.8 
million. 
 
EN 17   EN 2.3.2.  Types of irregularity and fraud 
A breakdown of frauds and irregularities by customs procedure  and by  mechanism 
type confirms that release for  free circulation  is the procedure most commonly 
specified (67% of cases25). False declarations (misdescri ption, incorrect value, origin 
and preferential arrangeme nts) and formal shortcomings (failure to fulfil obligations 
or commitments) are the mechanisms most  frequently mentioned, but also smuggling 
is highly placed. 
The goods (defined by the first two numbers of the CN code26) most affected by 
fraud and irregularities in 2008, as in previ ous years, are TVs/monitors etc. (CN 85) 
and tobacco products (CN 24). Clothing (C N 61-62) increased in importance when 
compared to 2007 as did machines (CN 84) , plastics (CN 39) and meat (CN 02), 
whereas (parts of) cars and motors (CN 87) remained relatively stable and vegetables 
(specifically garlic) (CN 07) went down27. Footwear (CN 64), first placed in 2007, 
has completely disappeared out of the top 25 in 200828. The variety of goods in the 
top 25 (defined by the first two numbers of the CN code) is stable at 14 to 15 types 
since 2006. 
CHART OR 229: Fraud and irregularities breakdown by goods in 2008 in MEUR 
Fraud and Irregularities breakdown by goods in 2008 in Mio. €
Vehicles etc. 18 (5%)Metals 15 (4%)Animals and products 
thereof 14 (4%)Vegetables 14 (4%)Plastics 11 (3%)Other 42 (12%)
Chemical products 23 (6%)
Food/Drinks/Tobacco 47 
(13%)Textile 54 (15% ) TV's, (computer) 
monitors etc. 114 (32%) 
 
                                                 
25 See Annex 3. In 2005 there was a decrease in im portance of the customs procedure release for free 
circulation (53% of cases) which was linked to an improvement in registering those cases. 
26 Combined nomenclature or CN — nomenclature of the Common Customs Tariff. 
27 See Annexes 4 and 5. 
28 In 2007 MA 2007/015 was communicated signalling risks with textiles and shoes from China. 
29 The product description in the chart is a generic description of the goods involved. See Annexes 4 and 5 
for detailed analyses.  
 
EN 18   EN Analysis of the origin  of goods subject to fraud and irregularity30 reveals that, just as 
in 2007, goods originating from China, Japa n, the US, South Korea, Bangladesh and 
Brazil remain very much affected. The number of cases in the origin category  non-
specified decreased, as in previous years, in pa rallel with the decrease in Transit 
cases. 
2.3.3.  Data main sectors TOR 
See Annexes 1-10. 
2.4. Specific analysis  
2.4.1.  TOR and cigarettes 
In 2008 there were 255 cases registered of  seized and confiscated cigarettes (CN 
code 24 02 20 90) involving estimated31 TOR of over €22 million. In 2007 the 
number of registered cases concerni ng seized and confiscated goods was 188, 
totalling over €16 million. The growth of the number of cases is related to the EUR-
15, of which the UK shows the most signifi cant increase, from 42 cases in 2007 up to 
100 cases in 2008. This is primarily caused by improvements in registration. 
2.4.2.  Classification of irregulariti es and fraud by Member States 
OWNRES cases concern customs operations involving irregularity or fraud. Of all 
the cases registered in 2008 20% (1 073 out of 5 344 registered cases) are categorised 
as frauds, which is a slightly smaller proportion than in 2007 (1 404 out of 6 097 
registered cases)32. However, differences between Me mber States in the proportion 
so categorised are relatively large. For instance, in 2008  the United Kingdom 
categorised 93 out of 1 023 cases as fraud (equivalent to 9.09%) whereas Greece so 
categorised 100% (32 out of 32 cases co mmunicated), Latvia 0.00% (0 out of 40 
cases) and France 39.55% (123 out of 311 cases  notified). For 2007 the figures were 
for the UK 9.70% (104 out of 1 072), for Greece 100% (57 out of 57), for Latvia 
0.00% (0 out of 25 cases) and for France 46.79% (153 out of 327). These figures 
demonstrate that the categorisation of irre gularity and fraud in OWNRES is not fully 
reliable. 
2.5. Recovery 
Member States have to recover establishe d amounts including those they register in 
OWNRES. In OWNRES cases are registered as open or as closed. A case is 
registered as closed when all (legal) proce dures have come to an end and the debt is 
paid or further recovery measures by the Member States’ authorities are deemed 
                                                 
30 See Annex 6. 
31 See Annex 8. The numbers for this y ear differ significantly fro m last year’s report in an effort to correct 
for variations between Member States’ methods of registering these cases. 
32 See Annex 10. 
 
EN 19   EN exhausted. Also cases of smuggled and seized goods (usually cigarettes) are 
registered as closed33.  
A case is registered as ope n when recovery measures are still ongoing. This means 
that either legal procedures (administrat ive and judicial appeal) are still ongoing, 
which may lead to a correction of the estab lished amount, or to success or failure to 
obtain payment of the debt, whether or not after coercive recovery.  
2.5.1.  Corrections to established amounts 
For a variety of reasons an established amount may not be completely recovered, 
despite Member States’ efforts. The proporti on varies from Member State to Member 
State. 
Amounts established may change because of  additional information or judicial 
procedures when, for instance, revision shows that there was no customs debt after all or the value or origin of the goods  is different than  initially thought.  
OWNRES shows — for all closed cases — that approximately 50% of the initial 
establishment amount is corrected (cance lled). For closed cases related to 
Community Transit this may reach up to 90%. As a consequence, Belgium and the 
Netherlands show more corrections than av erage, because establishments related to 
Community Transit likewise occur more. Th is is due to the ports of Antwerp and 
Rotterdam.  
2.5.2.  Recovery rates  
Differences in recovery results arise from  factors such as the type of fraud or 
irregularity or the type of debtor i nvolved. The debt may also be deemed 
irrecoverable because of th e debtor’s financial problems. There are different 
definitions expressing the results of recovery of a debt.  
2.5.2.1.  Recovery rate (RR)  
In previous reports the term Recovery Ra te (RR) was used. It expressed — for all 
cases (open and closed) in OWNRES — the percentage that is recovered by 
obtaining payment. The formula for the RR is: 
The outcome is a snapshot of the average recovery situation at the moment of the 
query. The established amount minus pro cessed corrections can change, because 
further corrections (cancellations) are still possible
34. As a result, when the 
                                                 
33 Cases involving seized and confiscated goods are re gistered as closed, even  though OWNRES indicates 
that an amount is still to be recovered. This method of registration has been agreed for this particular 
situation.  
34 In paragraph 2.5.1. it is explained that OWNRES shows that corrections may be significant.       Recovered amount becau se of payments obtained (all cases) 
RR = ------------------------------------------------------------------------------------          x 100% 
Established amount (all cases ) minus processed corrections (all cases ) 
 
EN 20   EN denominator decreases in value, the pe rcentage of the RR goes up, even without 
having more actual payments. Because r ecovery is ongoing, the RR is constantly 
changing (payments are obtained, new establ ishments are made and corrections are 
taken into account). The RR fo r all years (1989-2008) is 42.8%35.  
The overall RR for 2007 recorded in last  year’s report was 39.9% although it has 
since climbed to 49.7%. At pr esent the RR for 2008 is 37.5%36, which is an average 
starting position, although less good than last  year’s 40%. Over the last decade the 
RR has varied between 40% and 55% (see OR: Chart 3 ). 
The 10 Member States which acceded in 2004 are now carrying out post-clearance 
controls, audits and inspections covering longer periods after their accession. For 
establishments following these controls recovery is generally more problematic. As a result the rates of the EUR-15 and EUR-10 ar e now growing closer to each other.  
The RR for Romania and Bulgar ia is high when corrected for cases of smuggled and 
seized cigarettes. Currently it is significantly above th e average rate of the EUR-27. 
This is primarily the result of recovery in one big case by Romania. It may be 
expected that in time the RR for the EUR-2 will also grow towards the average of the 
other Member States. 
CHART OR 3: Reco very rates 1996-2008 
* For 2001 the average RR is only 28%, because  of the impact of Italy’s RR, which 
is 2.2 % on an established amount of €93 million. 
2.5.2.2.  Historical recove ry rate (HRR) 
The RR mentioned in paragraph 2.5.2.1. does not reflect the percenta ge of the actual 
debt for which payment is obtained by the Member States. For that, the rate of 
                                                
 
35 This calculation is based on 51 412 cases, an esta blished amount of €4 billion (after already processed 
corrections) and a recovered amount of €1.7 billion. 
36 See Annex 7. Recovery Rates 1996-2008
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year% EUR-15 
EUR-10
EUR-2
 
EN 21   EN recovery of the actual amount to be paid after all correct ions (revisions because of 
appeal procedures, requests for repayments or remissions, etc.) should be taken into 
account (hereafter: HRR — hist orical recovery rate).  
To determine the HRR, only closed cases37 should be analysed, since for those the 
Member States have brought all their recove ry efforts to an end. The formula for the 
HRR is: 
The HRR is around 80% according to OWNRES38. In other words, of every €10 000 
of duties operators really and ultimat ely have to pay for OWNRES cases, 
approximately €8 000 is collected. The amou nt not collected re lates to either 
amounts written off or amounts involved in seized and confiscated goods. 
2.5.3.  Recovery indicators 
Success in recovery depends on many fact ors. OWNRES provi des categories of 
information that may be useful as indicat ors to forecast such success by means of 
extrapolation, since the recovery rate by (combination of) indicator(s) appears 
relatively constant over time.  
Useful recovery indicators in OWNRES are fraud, type of customs procedure, the 
presence of an MA communication, method of  detection and origin of the product. 
Combinations of these indicators improve th e accuracy of the pr ognosis further. Of 
course the final outcome of an individual case will always depend on its unique 
particulars. 
2.5.3.1.  Recovery rates in case of fraud 
OWNRES shows that the amount of TOR due  in fraud cases decreased in 2008. As 
part of the overall amount of irregulariti es and fraud cases registered the share of 
fraud was €75 million compared to €131 million in 200739. This amount includes 
duties involved in cases of seized  and confiscated cigarettes.  
The RR for fraud provides insight into th e immediate effect of fraud on today’s 
recovery. The amount recovered in fraud cases was €19 million in 2008, which gives 
a fraud RR of 25.9%. For 2007 the total ha s reached €35 million, which gives an RR 
of 26.6%. The result for 2008 is good compar ed with the previous years. For 
                                                 
37 Closed cases, excluding cases of seized and confiscat ed goods (usually cigarettes) which are registered 
in OWNRES as closed cases with an amount to be recovered, but for which amount no recovery is 
required. This HRR rate should express the recove ry result in complex and easy cases. Established and 
closed cases from 2006 onwards are excluded, becau se these are predominantly easy (complex cases 
generally cannot be closed within 3 years). 
38 This calculation is based on 24 748 cases (app roximately 50% of all OWNRES cases currently 
registered), an established amount  of €1.3 billion (after correctio ns) and a recovered amount of €1 
billion. 
39 See Annex 10. For the delay in registration see the paragraph on reporting discipline.       Recovered amount because of payments obtained (closed cases) 
HRR = ---------------------------------------------------------------- ----------------------------  x 100% 
Established amount (closed cases ) minus processed corrections (closed cases ) 
 
EN 22   EN instance, 2006 currently s hows an RR for fraud cases  of 22.8%. As mentioned 
before, the recovery rates change as time passes (paragraph 2.5.2.1.). The RR in 
fraud cases is clearly much lower than th at for irregularities since the RR in 2008 for 
those cases is 40.7%. The RR for all years (1989-2008) for fraud and irregularity 
combined is 42.8%.  
Also in the long term, the HRR indicates an equally strong relation, showing that 
recovery in fraud cases is generally much less successful than in cases of irregularity 
(see table below). Classification of a case as fraud is thus a strong indicator for 
forecasting short- and long-term recovery results. 
TABLE OR 2: Historical  Recovery Rate 1989-2005 
 HRR 1989 – 2005 
Fraud 43% 
Irregularity 89% 
Total  82% 
2.5.3.2.  Recovery rates in case of MA communications 
Establishments following an MA communi cation display higher recovery rates. 
OWNRES shows that the HRR is over 90% for cases with an MA reference, whereas 
for establishments without such reference th e output is just over  80%. Based on these 
figures it may be concluded that Member St ates are more alerted in the case of such 
communications than in normal situations. 
 
EN 23   EN TABLE OR 3: Historical Recover y Rate for MA communications 
 HRR 1989 – 2005 
No MA reference 81.5% 
With MA reference 92.5% 
Total  82.2% 
2.5.3.3.  Recovery rates by method of detection 
The relation between the recovery rates and the methods of detection may be 
considered significant when there is a voluntary admission / correction by the 
importer, or when the case is discovered during primar y national inspections. In 
those circumstances the HRR is ove r 95% respectively 85.2%. When the 
establishment is the result of  inspections (e.g. by anti-fraud services) the HRR drops 
to 79.7% thus only being slightly lower than  in the case of regular post-clearance 
audits (80.8%). Also when the method of de tection is combined with the types of 
cases discovered (fraud or irregularity), the ratios do not change significantly. 
CHART OR 4: Recovery Rate  by method of detection 
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%
HRR BY  METHOD OF DETECTION
1989-2005Inspections (eg by anti-
fraud services)
Post clearance audits
Primary nationalinspections
Voluntary admission
Total
 
2.5.3.4.  Recovery rates by category of amount 
The RR is strongly influenced by the am ounts involved, whereas for the HRR this 
relationship is no longer significant. The fi gures for the last five years show that 
bigger amounts result in a lower RR. Fo r amounts below €50 000 the RR is up to 
75%, for amounts up to €500 000 the RR of 50% to 60% is normal, whereas for higher amounts the RR falls back to only 30%.  
TABLE OR 4: Recovery Rate  by category of amount 
RR BY AMOUNT - CATEGORY 
Amount (€) 2004 2005 2006 2007 2008 
 0 - 50 000 73.54% 73.94% 74.26% 74.94% 61.44% 
50 001 - 500 000 55.26% 56.59% 53.45% 59.80% 47.24% 
 
EN 24   EN > 500 000 30.22% 24.80% 21.88% 30.52% 15.86% 
Total 48.18% 46.34% 44.41% 49.67% 37.55% 
2.5.3.5.  Recovery rates by origin 
Concerning the origin countries most frequently me ntioned (see paragraph 2.3.2.) the 
RR indicates more success in the case of imports from the US or Japan than for 
China or Bangladesh, irrespective of whet her the case is registered as fraud or 
irregularity40. This relationship is not equally st rong or constant for other countries. 
For the RR changing patterns of irre gularity influence the outcome strongly, 
especially since open cases w ith ongoing judicial procedur es and recovery are also 
included. For the HRR the difference in origin no longer appears to be significant.  
2.5.4.  Write-down and write-off of  established amounts  
Member States inform the Commission about the recovery of established 
entitlements on the basis of two different legal obligations: unde r Article 6(4) of 
Regulation 1150/200041 the Member States annua lly communicate amounts for 
which recovery is unlikely, whereas on th e basis of Article 17(2) of Regulation 
1150/2000 they communicate certain cases where the debt is deemed irrecoverable. 
2.5.4.1.  Written down when recovery is unlikely 
Annually Member States communicate amount s in the separate account (B-account) 
for which recovery has become unlikely. This estimation is used for accounting purposes. The Member States communicate — on average — that recovery of around 
60% to 65% of the establis hed amount is unlikely and may need to be written 
down
42.  
2.5.4.2.  Written off when the debt is deemed irrecoverable 
When part of the debt over €50 000, after all recovery measures are exhausted, is still 
unpaid, the Member State has to communicate their decision to write the amount off 
to the Commission. The Commission will then assess the recovery efforts and decide 
whether the Member State involved has acte d diligently and take n all the necessary 
measures or should be considered res ponsible for the loss and compensate the 
Community budget43.  
                                                 
40 See Annex 6.1. 
41 Article 6(4) of Regulation 1150/2000 of 22 May 2000 as amended by Regulation 2028/2004 of 16 
November 2004. 
42 Annual Accounts of the European Communities. Financial Year 2007. Consolidated Financial 
Statements and Consolidated Reports on Implementation of the Budget (OJ C 287,10.11.2008, p. 1). 
The percentage is based on the average of the years 2006-2008, also using the provisional figures for 
2008. 
43 In paragraph 2.1.2. the procedure for managing Member States’ requests for write-off is explained in 
detail. TOR must be deemed irrecoverable by a Member State at the latest five years from the date, on 
which the amount was established, or in the event of an administrative or judicial appeal, the final 
decision was given, or the last part-payment of an established amount was made, whichever is the later. 
 
EN 25   EN The figures in OWNRES showing written-o ff amounts are not reliable yet. This is 
mainly due to the awaited catch-up effect for cases before 200444 and the related 
differences in Member States’ method of registration. Currently OWNRES indicates 
for cases from 1989 until 2006 that around 20% is written off45. For the EUR-15 the 
figures vary between 0% and 8%, which can be explained by the f act that the five-
year period has not yet elapsed and recovery  of outstanding debts is generally still 
ongoing.  
TABLE OR 5: Average write-o ff rate for closed cases 
AVERAGE WRITE-OFF RATE – CLOSED CASES - 1989-2006 (excluding smuggled/seized goods) 
Initially 
established € Correction € Established after 
correction € Recovery 
rate % Written-off 
amount € Write-off 
rate % 
3 199 840 405 
 -/- 1 578 796 920 
 1 621 043 485 
 79% 334 090 575 
 21% 
2.5.4.3.  Estimation of the recovery of established amounts 
Comparing the annual communication by Memb er States mentioned in paragraph 
2.5.4.1. with the figures in paragraphs 2.5.2. and 2.5.4.1., it appears that the annual estimation of amounts unlikely to be recovered in the separate account (60% to 65%) matches relatively closely the data in OW NRES. For the latter th e amount unlikely to 
be recovered may be defined as the sum of  the average amount corrected (50%) plus 
the percentage written off (around 20%  of the amount after corrections
46). Thus, of a 
random establishment registered in OW NRES around 40% is recovered, in other 
words, of every €10 000 of duties initia lly established approximately €4 000 is 
actually paid. 
2.5.5.  Impact on the budget 
The amounts that were registered in OWNR ES for 2008 have a financial impact of 
€351 million. Over the last decade the value of amounts has ranged from €200 million up to €401 million (year 2007). The amounts change continuously, as the figure is based on established amounts re gistered in OWNRES  which are updated 
with corrections that can be significant
47.  
CHART OR 5: Financ ial impact TOR1998-2008 
                                                 
44 The five-year deadline for sendi ng in such cases — introduced in 2004 — expires in 2009 
45 The period 1989-2006 is selected because write-off s for very recent establishments are not common and 
thus not a representative reference. 
46 This figure has to be corrected by the backlog of old write-off cases which still have to be processed by 
Member States. 
47 E.g. for the year 2007 the maximum impact was initially €541 million. Corrections of over €140 million 
changed it to €401 million at present; 
 
EN 26   EN Financial Impact TOR 1998-2008
0100200300400500600
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
YearMillion
Euro   Total Member States
 
 
EN 27   EN 2.6. Conclusions  
In its capacity as Authorising Officer, th e Commission (DG Budget is the delegated 
Authorising Officer) monitors the estab lishment and recovery of TOR by Member 
States in various ways. The monitoring is carried out in partnership with different 
Commission departments, including the Eu ropean Anti-Fraud Office (OLAF) where 
OLAF has issued an associated Mutual A ssistance message and/or has an operational 
interest in the case concerned.  
Once a debt is established a Member St ate can only be discharged from the 
obligation to make the TOR availa ble to the Commission because of force majeure 
or for reasons which cannot be attribut ed to the Member State concerned. As 
Member States are responsible for making TOR available to the EU Budget, should 
they wish to be released from their obliga tion in a particular instance they need to 
prove that one of these circumstances exists. Where debts are not established 
although they should have been, Member Stat es are held liable for the TOR foregone 
(these cases are not registered in OWNRES). As a result Member States have been held financially liable for over €43 million in 2008 and have made available over €15 
million. Some actions are still ongoing and new cases are being given appropriate 
follow-up.  
Because of the particular interest the Budge tary Authority has in recovery, reliable 
information regarding the number of cases  of irregularity and fraud and their 
development must be entered in OWNR ES. Member States have a special 
responsibility to ensure that appropriate statistical information on irregularity and 
fraud is provided to the Commission. In  2007 Member States were requested to 
address the shortcomings in the registra tion in OWNRES of cases where no debt 
needed to be established (usually smuggl ed cigarettes), resulting in visible 
improvements in 2008. 
Regarding the reliability of information in OWNRES, making a distinction between 
irregularity and fraud or analysing fraud separately is  risky and the outcome is not 
very useful. Only court decisions make it certa in whether a case is one of irregularity 
or fraud, whereas within OWNRES this  distinction is usually based on a 
prognostication made by Member States’ ad ministrations. The figures in OWNRES 
showing marked differences in the propor tions of cases denoted as frauds or 
irregularities between Member States poi nt this out clearly. OWNRES can only be 
used for global analysis and monitoring.  
The goods involved in irregular ities and frauds demanding Member States’ attention 
are very diverse, notably TVs and monitors , clothing and of course tobacco. TVs and 
monitors keep their relevan ce in 2008, being once again (one of the most) important 
goods involved in registered cases of irregul arity (or fraud), just like in previous 
years, whereas vegetables, especially garl ic, went down in impor tance and footwear 
even disappeared.  
The origin of the goods concerned is likewise varied, although some countries 
remain continuously at the top of the ranki ngs (such as China, the US, Japan). When 
irregularity or fraud is discovered by a Me mber State it is mostly in the customs 
 
EN 28   EN procedure of release for free circulation (false d eclarations, formal shortcomings or 
simply smuggling) , as in previous years. 
The amounts of TOR at stake in irregular ity and fraud are, according to OWNRES, 
up to €351 million in 2008. Of the amounts initially established, approximately 50% is later cancelled and in the case of establishments related to Community Transit up to 90% of the established amount may be cancelled later. And payment is required 
only for the part which is not cancelled.  The initial recovery figures for 2008 are 
comparable to those of previous years. 
Analysis shows that certain particulars of  a case may be used as indicators for 
forecasts of recovery. Cases related to fraud decrease the chance of successful 
recovery, whereas for instance cases relate d to MA communications may arrive at 
better results.  
Member States are currently communicati ng an increased number of write-off cases, 
because of a change in legislation intende d to clear the backlog of old cases dating 
back to before 2004. Based on the data availa ble so far, it may be estimated that 
around 10% of the established amounts, equiva lent to 20% of the final debts after all 
corrections, remain unpaid. 
In conclusion, it appears that of the am ounts initially established around 40% is 
actually recovered, 10% is written off and 50% is cancelled. After further 
harmonising the methods of registration and the processing of the backlogs in write-
offs, further fine-tuning of this percentage may be expected.  
The Commission encourages Member States to continue their activities in the field of 
recovery and providing statisti cal information. The Budgetary  Authority is entitled to 
have available the best po ssible information when m onitoring TOR and recovery 
issues. 
 
EN 29   EN PART II - EXPENDITURE 
3. AGRICULTURAL  EXPENDITURE  (ANNEXES 11-12)  
Introduction of a new reporting system 
In 2008, a new irregularity reporting syst em was introduced: Pre-IMS Module 1848. 
The abbreviation IMS stands for Irregular ity Management System. Module 1848 is a 
web based application which implies that  it can be accessed via internet. Member 
States however, still need to use AFIS (Anti Fraud Information System) to get access to Pre-IMS Module 1848. AFIS is a secure d network provided by the Commission. 
Access via internet is foreseen for summ er 2009. Pre-IMS Module 1848 will then be 
renamed into IMS Module 1848. The reporting module itself will not change. 
Germany is already using IMS Module 1848 to submit irregularities. Users in 
Germany get access to Module 1848 via a secured internet connection. It is a pilot which offers the possibility to test all features of the web based application. The 
results of the pilot will be used to improve and fine tune IMS Module 1848 before it will be officially released for all users in all Member States. A pilot is an effort demanding activity for all involved parties but especially for the Member State 
involved. Germany offered great support during 2008. 
In June 2008, trainers of a ll Member States (EU-27) attended a 2-day-training in 
OLAF to get acquainted and familiar with  the new reporting module. The Member 
States' trainers will train the users in th e Member States. A maximum of 4 trainers 
per Member State attended the training. 
Module 1848 was officially launched on 7 November 2008.  The introduction of a new reporting system  leads always to some starting-up 
problems. This counts for the users in the Member States as well as the developers 
and users on the side of the Commission. Th e year 2008 should therefore, be seen as 
a transition year: users needed to get familiar with Module 1848.  
All Member States started to use, directly or indirectly
48, the new reporting module 
and tried to report as complete and detail ed as possible. All Member States had a 
critical but above all positive approach towards the new reporting system. Member 
States were cooperative and provided the developers and managers of the new 
reporting system with the necessary feedb ack to improve the reporting system. This 
willingness to cooperate has to be kept in mind when reading the paragraph on reporting discipline and compliance. 
                                                
 
48 Not all Member States have access to AFIS/CCN-g ateway and used MS Access version of Pre-IMS 
Module 1848. These Member States wait for the introduction of IMS; 
 
EN 30   EN General introduction 
The analysis is a descriptive analysis based on the communications forwarded by 
Member States under Commission Regul ation (EC) No. 1848/2006 in the budget 
year 2008. The budget year 2008 runs from 16 October 2007 – 15 October 2008. 
It should be noted that not  all irregularities have to  be reported. Under Reg. 
1848/2006, Member States must only inform  the Commission of irregularities 
involving more than EUR 10,000.  
The threshold of EUR 10,000 was introdu ced by Reg. 1848/2006 that came into 
force on 1 January 2007. Reg. 1848/2006 re placed Reg. 595/91. Under Reg. 595/91, 
the threshold was EUR 4,000. The increase of the threshold from EUR 4,000 to EUR 10,000 has to be taken into account when this report is compared with reports of years before 2007. The number of reported irregularities in 2008 is approximately 
one-third (1/3) of the number of reported irregularities before 2007. The descriptive 
analysis of this report theref ore, cannot be right away co mpared with the results of 
previous years.  
The expectation is that the number of re ported irregularities will decrease even more 
in the coming years. A rather large amount  of subsidies (per beneficiary and per 
support measure) is below EUR 10,000 therefore,  irregularities for these cases will 
never exceed the threshold of EUR 10,000.  
Member States reported 1,142 new irre gularities under Reg. 1848/2006 compared 
with 1,577 irregularities in 2007. During 2008, Member States reclassified 9 of these 
irregularities as non- irregularities. The tota l number of new irregul arities is therefore 
1,133
49. The total amount affected in 2008 wa s about EUR 102 million, as against 
approximately EUR 155 million in 2007. 
Irregularities notified in this sector repr esent 0.21% of the agricultural budget. Annex 
11 provides an overview of the financ ial impact for the period 2000 - 2008.  
Annex 12 gives an overview per Memb er State, indicating the number of 
irregularities, the amounts i nvolved and the percentage of  agricultural expenditure. 
Cyprus and Romania did not re port any irregularity in 2008.  
3.1. Reporting discipline 
Article 3 and article 5 of Reg. 1848/2006 lay down the reporting obligations of 
Member States. The reporting obligations as  stipulated in arti cle 3, paragraph 1, 
letters a – p of Reg. 1848/2006 are used to determine the reporting discipline and the 
level of compliance of the Member Stat es. The focus however, will be on those 
obligations that are crucial for (strategic) analysis and can be summarised with the 
typical questions that are used in every (fraud) investigation: who, what, when, 
where, why and how. 
                                                 
49 Member States reported in 2006 still 3,249 cases; 
 
EN 31   EN The main purpose of forwarding informati on is to enable the Commission to perform 
risk analyses (see  art. 10 Reg. 1848/200650). For that purpose, OLAF needs to 
receive reliable, consistent and complete da ta and as early as possible (timely!).  
Table AG1 contains an overview of the compliance rate per reporting obligation. 
Member States are ranked in order of compliance. The table focuses on reporting 
obligations that have a high added value for analysis purposes. The letters above the columns refer to the reporting obligations  of Art. 3(1) of Reg. 1848/2006. The third 
column from the right hand side shows the compliance rate per Member State for the 
budget year 2008. The second column from th e right hand side contains the 2007 
compliance rates to make it possible to  make a comparison between 2008 and 2007. 
Cyprus and Romania had no irregularities to re port and are therefore considered to be 
100% compliant. The rates of Cyprus and Ro mania have not been taken into account 
to calculate the EU-27 compliance rate. 
Table AG1: compliance per Member State year 2008 
timely personal measure date practices financial
reporting data affected committed employed impact
(who) (what) (when) (how) (why)
lai e ,  f n 2008 2007
CY 120% 97% CY
RO 110% RO
LV 100% 100% 100% 100% 100% 100% 100% 85% LV
MT 100% 100% 100% 100% 100% 100% 100% MT
SI 100% 100% 100% 100% 100% 100% 100% 96% SI
IE 95% 100% 100% 100% 100% 95% 98% 64% IE
PL 91% 100% 97% 91% 100% 100% 97% 83% PL
PT 80% 100% 100% 100% 100% 99% 97% 72% PT
FR 89% 99% 100% 93% 99% 98% 96% 90% FR
BE 97% 100% 97% 97% 95% 94% 96% 74% BE
ES 95% 85% 100% 100% 93% 100% 96% 49% ES
EE 100% 100% 69% 100% 100% 100% 95% 81% EE
UK 71% 100% 100% 100% 95% 100% 94% 88% UK
BG 100% 100% 67% 100% 100% 100% 94% BG
CZ 73% 100% 98% 100% 98% 95% 94% 90% CZ
IT 83% 94% 95% 95% 84% 99% 92% 77% IT
DK 70% 100% 93% 100% 87% 100% 92% 85% DK
LT 96% 100% 25% 100% 100% 100% 87% 81% LT
NL 70% 100% 68% 97% 84% 100% 86% 63% NL
EL 92% 82% 70% 90% 94% 87% 86% 73% EL
AT 5% 100% 100% 100% 100% 100% 84% 85% AT
SE 20% 98% 100% 100% 87% 100% 84% 83% SE
LU 0% 100% 100% 100% 100% 100% 83% LU
HU 17% 100% 78% 100% 89% 100% 81% 85% HU
DE 96% 2% 93% 99% 86% 99% 79% 39% DE
FI 75% 3% 100% 100% 92% 100% 78% 67% FI
SK 55% 98% 24% 100% 67% 100% 74% 83% SK
total 86% 85% 93% 97% 93% 99% 92% 78% total
Art. 3 (1) a - p Reg. 1848/2006
key elements for (performing) risk analysis
download 19 March 2009 / updated 6 May 2009 (HU-correction)table AG1
COMPLIANCE
budget year 2008
MS compliance
MS 
 
A first conclusion is that th e overall reporting discipline improved. This is thanks to a 
positive attitude of all Member States a nd the introduction of a new reporting system. 
                                                 
50 Art. 10 Reg. 1848/2006: Without prejudice to Article 11, the Commission may use any information of a 
general or operational nature communicated by Memb er States in accordance with this Regulation to 
perform risk analyses , using information technology support, and may, on the basis of the information 
obtained, produce reports and develop systems serving to identify risks more effectively. 
 
EN 32   EN 15 Member States have a compliance rate  above 90%. 7 Member States have a 
compliance rate between 80% and 90% as 3 Member States has a compliance rate below 80%
.. 
Germany and Finland could improve thei r compliance rate by reporting personal 
data. The non-reporting of personal data led to a relatively low compliance rate. 
Slovakia is the Member State with the lo west compliance rate: 74%. Slovakia could 
improve its compliance rate by reporting more timely and by indicating in more detail the support measure aff ected by the irregularity. 
The compliance improved strongly in compar ison with 2007. It went up from 78% to 
92%. Member States that made a big st ep forward are Spain (+47%), Germany 
(+40%), Ireland (+34%), Portugal (+25% ) and the Netherlands (+23%). Some 
Member States had a small setback and need  to pay some extra attention to their 
compliance.  
Overall compliance rate is 92% (2007: 78%). 
3.1.1.  Timely reporting (Art. 3(1) Reg. 1848/2006) 
2008 was a transition year: Module 1848 repl aced Module 595. The reporting format 
changed completely theref ore cases reported via Module 595 needed to be 
transferred into "1848-format". This took place in the period April 2008 – October 
2008. During that period, Member States could not submit communications via the 
electronic reporting system. The latter had to be taken into account when the 
compliance rate for timely reporting was determined. Normally, Member States would have forwarded in 2008 cases discovered in 2008 and late 2007. To determine the level of compliance, all cases discovered (PACA)
51 in 2007 and 2008 were 
considered as being reported on time. Ca ses discovered before 2007 were considered 
as reported too late.  
Member State reported 133 cases (11.7%) too la te. Austria especially is late with the 
reporting of cases. 12 cases (60%) were al ready discovered in 2002. Sweden had also 
difficulties to report timely, only 20% of its cases were reported timely52.  
Member States did not indicate a date of  discovery in 28 cases  (2.5%). The latter 
concerns mainly cases reported by Hungary (33.3%) and Italy (10%).  
The EU-27 compliance rate is 86% (2007: 87%).  
3.1.2.  Budget year, budget line and product affe cted (Art. 3(1) (a) Reg. 1848/2006) 
Member States are obliged to report the common market organizations (CMO) 
affected and the sectors and products concerned.  
                                                 
51 Member States indicate in field 4.5. "Date of discovery (PACA)" of Module 1848 the so called PACA 
(Premier Acte de Constat Administratif). The PA CA is the first written assessment of a competent 
authority, either administrative or judicial, concluding on the basis of actual facts that an irregularity has 
been committed, without prejudice to the possibility that this conclusion may subsequently have to be 
adjusted or withdrawn as a result of developments in the course of the ad ministrative or judicial 
procedure; 
52 Sweden informed the Commission that the non-timely reporting was caused by a backlog. New 
recruited staff took care of the backlog; 
 
EN 33   EN Expenditure is based on the appropriations  for a given year. As far as the EAGF53 
and EAFRD54 are concerned, the budget year doe s not coincide with the calendar 
year. Therefore, Member States should in dicate the budget ye ar as well as the 
appropriation in their comm unications so that the co rrect support measure (budget 
line) affected by the irregul arity can be identified.  
Each support measure is based on a budget lin e therefore it should be no problem to 
indicate the appropriate budget year and budge t line. All paying agencies can provide 
the reporting author ities with the necessary information.  
A large number (12) of Member States co mply fully (100%) with the obligation to 
indicate the common market organisati ons affected, the sectors and products 
concerned. 6 Member States have a complian ce rate higher than 90%. For all other 7 
Member States55, attention needs to be paid to  indicating the budget year and the 
measure affected.  
Member States reported 61 cases (5.4%) in which the expenditure took place before 
2000. It concerns mainly cases from Au stria, Greece and Italy with 19, 11 
respectively 15 cases56. 
Member States with a low compliance rate are Lithuania (25%) and Slovakia (24%).  
The EU-27 compliance rate is 93% (2007: 86%). 
3.1.3.  The moment at which the irregularity was committed (Art. 3(1) (i) Reg. 1848/2006) 
Member States are obliged to indicate the period during which or the moment at 
which the irregularity was committed. Member States indicated in 97% of the cases the date at or period during which the irregularity was committed. A large number (18) of Member States fully complied with  this obligation. All other Member States 
have a compliance rate higher than 90%.  
The EU-27 compliance rate is 97% (2007: 86%). 
3.1.4.  Practices employed and classificati on (Art. 3 (1) (e) (f) Reg. 1848/2006) 
The practices employed (modus operandi) can be  indicated by code as well as with 
text. The codes are in a pick list that c ontains a collection of different types of 
irregularity, clustered by topic as for inst ance "request for aid" and "accounts".  
Member States indicated in 99.7% of the cases the type of irregularity by code.  
Slovenia and Finland reported code 1999 (“other irregulariti es”) in a rather high 
percentage of cases: 100% respectively 63%. The added value of code 1999 ("other 
irregularities") is rather lo w therefore it should only be us ed in case it is impossible 
                                                
 
53 EAGF = European Agri cultural Guarantee Fund; 
54 EAFRD = European Agricultural Fund for Rural Development; 
55 Bulgaria, Estonia, Greece, Hungary, Lithuania, the Netherlands and Slovakia; 
56 Art. 32(5) Reg. 1290/2005: If recovery has not  taken place within four years of the primary 
administrative or judicial finding or within eight years where recovery action is taken in the national 
courts, 50 % of the financial consequences of non-recovery shall be borne by the Member State 
concerned and 50 % by the Community budget. 
 
EN 34   EN to use a code of one of the clusters. Memb er States should use for these cases also 
the text field to explain how the irregular ity was committed. Unfortunately, that was 
not the case for a large number of these cases. 
As already mentioned, Module 1848 offers th e possibility to us e written text to 
describe more precisely the practices employed (modus operandi). The added value 
of describing the modus operandi in words is  rather high. It provi des a more in-depth 
insight. A more precise description of the ir regularity helps to improve the quality of 
the analysis therefore Member States are requested to fo rward more detailed 
information on the modus operandi. Copying th e findings of the aud it report directly 
into the reporting module would already im prove the quality of the reporting. More 
and more Member States make use of this facility and describe in more detail the 
practises employed in committing the irregularity. 
Art. 3 (1) (f) Reg. 1848/2006 obliges Member  States to indicate if the practice 
amounts to a suspected fraud or not. Member States classified approximately 93% of 
the reported cases, of which 7% (78 cases) were  classified as "suspi cion of fraud" or 
"established fraud"57.  
22 Member States classified all cases. Germ any and Spain did not classify cases in 
respectively 36% (40 cases) and 16% (38 cases) of  their cases. The Netherlands did 
not classify 2 cases (7%). 
The EU-27 compliance rate is 93% (2007: 74%). 
3.1.5.  Legal/natural persons identifica tion (Art. 3 (1) (l) Reg. 1848/2006) 
Member States are also required to give detailed information on the identity of the 
natural and legal persons involved.  
The added value of personal data for perfor ming risk analyses is high. Irregularities 
and frauds are committed by persons a nd not by products, support measures or 
budget lines, therefore, it is necessary to know the person behind the irregularity. 
Finland and Germany indicated in respectiv ely 88% and 41% of their cases that no 
personal data could be forwarded. Finland indicated that the forwarding of personal 
data had no added value for the fight against fraud5859 as Germany indicated that due 
to data-protection-reasons no pe rsonal data could be revealed60. Germany provided 
personal data in 2% of its cases.  
The EU-27 compliance rate is 85% (2007: 68%). 
                                                 
57 Fraud level rate is based solely on the classification by Member States. Cases that have not been 
classified have not been taken into account. The average level of (suspected or established) fraud cases (7%) is calculated on the basis of the number of classified cases. 
58 Explanation for non-disclosure of personal data : tiedosta ei ole hyötyä sääntöjenvastaisuuden 
ehkäisyssä; 
59 Finland informed the Commission on 22 April 2009 that due to national (data protection) legislation no 
personal data can be submitted. Finland however, does  report personal data fo r "structural funds"-cases 
(see table SF1: compliance rate of 100%); 
60 Explanation for non-disclosure of personal data: wird aus datenschutzrechtlichen Gründen nicht 
mitgeteilt; 
 
EN 35   EN 3.1.6.  Financial impact (Art. 3 (1) (n) Reg. 1848/2006) 
Member States reported 1,133 cases. The am ount affected by irregularities was 
indicated in 1,118 cases, which is 99%. Only  in a small number of cases, the amounts 
affected by irregularities coul d not (yet) be  indicated.  
Member States do not always indicate the total amount of expenditure on the 
operation at issue and, where appropriate, th e distribution of its co-financing between 
Community, national, private and other cont ributions although a clear obligation to 
report this information can be found in art. 3(1) m Reg. 1848/2006. This obligation 
will be taken into account in next years report. 
The EU-27 compliance rate is 99% (2007: 96%). 
 
EN 36   EN 3.2. General Trends 
This analysis is a descriptive analysis, the aim of which is to pr ovide feedback to the 
Member States on the communications that were received by the Commission in the 
budget year 2008 and to give an overa ll view for the period 1971 - 2008.  
One should bear in mind that Member Stat es must only inform the Commission of 
irregularities involving more than EUR 10,000.  
3.2.1.  Amounts affected 
Table AG2 provides an overview per Member State of the irregularities reported and 
the amounts affected by these irre gularities in the budget year 2008. 
Table AG2: Irregularities reported in the budget year 2008 
reported no irre gularit yirregularit y total amount affected detected detected
(IRQ 0 ) expenditure b y irregularit y before pa yment after pa yment
AT 21 1 20 341,716 311,608 26,548 285,060 AT
BE 31 0 31 3,965,698 1,605,690 11,373 1,605,137 BE
BG 2 0 2 144,336 119,470 119,470 0 BG
CY 0 0 0 0000 CY
CZ 24 2 22 784,573 764,680 0 780,024 CZ
DE 111 0 111 13,071,488 3,816,771 1,129,128 2,699,404 DE
DK 10 0 10 463,671 445,241 246,595 198,646 DK
EE 13 0 13 408,189 278,131 0 278,131 EE
EL 43 4 39 4,010,046 4,010,046 0 4,010,046 EL
ES 245 0 245 34,405,603 14,924,635 695,410 14,229,225 ES
FI 8 0 8 983,842 983,842 863,259 120,583 FI
FR 129 0 129 179,078,475 11,763,441 352,165 11,411,276 FR
HU 6 0 6 255,826 747,522 0 747,522 HU
IE 22 0 22 416,234 397,497 0 397,497 IE
IT 211 0 211 109,105,752 53,969,740 43,795 53,990,037 IT
LT 24 0 24 1,815,034 803,754 680,201 123,553 LT
LU 1 0 1 13,375 13,375 0 13,375 LU
LV 13 0 13 208,144 208,144 0 208,144 LV
MT 1 0 1 37,814 37,814 0 37,814 MT
NL 30 0 30 5,932,786 1,183,639 150,692 1,032,947 NL
PL 46 0 46 1,554,599 1,126,137 778,272 347,863 PL
PT 121 1 120 10,213,256 3,629,928 26,203 3,603,725 PT
RO 0 0 0 0000 RO
SE 11 1 10 693,386 214,065 35,321 178,744 SE
SI 1 0 1 38,808 38,808 0 38,808 SI
SK 11 0 11 1,636,361 639,613 0 0 SK
UK 7 0 7 445,234 225,775 0 225,775 UK
total 1,142 9 1,133 370,024,245 102,259,365 5,158,432 96,563,335 totalTable AG2
irregularities reported and amounts affected
MS MSbudget year 2008
Art. 3(1) m, n Reg. 1848/2006amounts in €
download 19 March 2009 / updated 6 May 2009 (HU-correction)cases
 
Member States reported initially 1,142 cas es. During 2008, 9 cases were reclassified 
as “non-irregularity” (IRQ0). These non-irregu larity-cases are not taken into account 
for the analysis. 
The total number of irregul arities reported in the budget year 2008 was 1,133. These 
1,133 cases amount to approximately EUR 102 million.  
Member States reported 18 cases with an amount affected below the reporting 
threshold of EUR 10,000. It concerns mainly cases reported by France, United Kingdom, Italy and Lithuania. Cases belo w the threshold of EUR 10,000 should only 
be reported if there is a specific reason to report these cases, as for instance fraud or a 
clear link with other cases. For all these cas es counts that no specific reasons were 
given why these cases were reported.  
Member States did not indicate an amount affected by the irregularity in 15 cases. 
 
EN 37   EN Member States which reported the highest number of cases in 2008 were Spain, Italy, 
Portugal and Germany with 245, 211,  120 and 111 cases respectively. 
In monetary terms, Italy reported the highe st amounts affected by irregularities, more 
than EUR 54 million, followed by Spain which reported a total amount of approximately EUR 15 million. Italy reporte d 1 case for the sector "fruits and 
vegetables" in which the total amount a ffected was approximately EUR 25 million. 
The number of reported cases decreased in 2008 by approximately 28% compared 
with 2007. The decrease can be partly explained by the co ming into force of Reg. 
1848/2006 and the introductio n of the new threshold of EUR 10,000. In 2007, the 
decrease was more than 50%
61.  
In 2008, the amounts affected by reported ir regularities decreased with 34% to 
approximately €102 million. It should howev er, be taken into account that the 
amount affected by irregularities is still higher than in the period 2004 – 2006.  
Chart AG1 reflects these tre nds (see also annex 11).  
Chart AG1: Irregularities communica ted by Member States (1971-2008) 
05001,0001,5002,0002,5003,0003,5004,000
1971
1972
1973
1974
1975
1976
1977
1978
19791980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
19981999
2000
2001
2002
2003
2004
2005
2006
2007
2008Cases
050100150200250300350400450500
Amounts in millions €
cases amounts in € amounts in € -/- peak 
The “amounts in EUR” line shows three peaks, one in 1994, a second one in 2000 
and a third one in 2008. These peaks are the result of three Italian cases in 1994, two 
Italian cases in 2000 and 1 Italian case in 2008. Leavi ng aside these exceptional 
cases, since 1994 there has been a clear st eady downward trend in the total amounts 
affected by irregularities. This can be explained by the introduction of the direct 
aid/payment section, the intr oduction of the integrated administration and control 
system (IACS), the move towards dir ect aid and payments decoupled from 
production and the introduction in 2007 of a threshold of EUR 10,000 to report 
irregularities.  
Annex 12 gives an overview for each Member State. 
                                                 
61 The number of reported cases for the years 2006,  2007 and 2008 was respectively 3,249, 1,577 and 
1,133. 
 
EN 38   EN 3.2.2.  Impact on the budget 
The total expenditure is approximately EUR 48.6 billion62. Table AG3 provides an 
overview of the total expenditure  in 2008 per budget chapter.  
Table AG3: Expenditure and irre gularities per budget chapter 
total amount total amount irregularity
expenditure irregularity in % of
in € in € expenditure
050208 Fruit and vegetables 1,144,640,280 39,760,133 3.474%
050405 Rural development (EAGF) (2000 to 2006) 6,094,061,034 18,413,647 0.302%
050404 Rural development (EAGF) (2004-2006) transitional instrument new MS 454,286,155 991,110 0.218%
050401 Rural development (EAFRD) (2007 to 2013) -11,139,905 257,735 -2.314%
050209 Products of the wine-growing sector 1,095,054,040 12,715,832 1.161%
050206 Olive oil 45,144,030 5,182,753 11.480%
050205 Sugar 494,476,319 4,082,708 0.826%
050212 Milk and milk products 147,095,719 3,758,382 2.555%
050201 Cereals 48,982,356 3,708,306 7.571%
050213 Beef and veal 46,975,754 2,893,569 6.160%
050215 Pigmeat, eggs and poultry, bee-keeping and other animal products 258,766,474 2,086,940 0.806%
050211 Other plant products/measures 375,132,868 1,309,853 0.349%
050301 Decoupled direct aids 31,419,056,452 1,206,684 0.004%
050302 Other direct aid 5,631,638,059 905,356 0.016%
050214 Sheepmeat and goatmeat 536,467
050203 Non-Annex 1 products 118,115,879 407,264 0.345%
050204 Food programmes 323,924,980 286,547 0.088%
050210 Promotion 49,411,561 65,223 0.132%
050216 Sugar restructuring fund 1,285,984,432
050303 Additional amounts of aid 532,953,260
050207 Textile plants 20,912,415
050701 Audit - Control of agricultural expenditure 13,376,669
670300 Superlevy from milk producers - Assigned revenue -44,853,191
670200 EAGF irregularities - Assigned revenue -114,874,340
670100 Clearance of EAGF accounts - Assigned revenue -198,483,323
680100 Temporary restructuring amounts -  Assigned revenue -602,030,989
050202 Rice
050402 Completion of the EAGGF Guidance Section, completion of Leader
050702 Audit - Settlement of disputes
680200 revenue
combi combination of different support measues 1,079,798
blank no information provided by Member States 2,611,057
total 48,628,606,986 102,259,365 0.210%
download 19 March 2009
source "total amount of expenditure": CATS-database (31 March 2009)Table AG3
EXPENDITURE AND IRREGULARITIES PER BUDGET CHAPTER
budget year 2008
budget 
chapterdescription
amount irregularity updated 6 May 2009 (HU-correction)
 
The highest expenditure concerned budget chapter 050301: decoupled direct aids. 
Decoupled direct aids (chapter 050301)  were introduced in 2006. The total 
expenditure was about EUR 31.4 billion, which is 65% of the total expenditure in the agricultural sector. Member States re ported for a total amount affected by 
irregularities of approximately EUR 1.2 million. It concerns 65 cases. France 
received the highest sum of approxima tely EUR 5.7 billion, followed by Germany 
that received approximately EUR 5.3 billion. France reported in 2008 no 
irregularities concerning “d ecoupled direct aids”. Germ any reported 17 cases with a 
total amount affected of approximate ly EUR 0.3 million. The low number of 
irregularities for decoupled direct aids (chapter 050301) can  be partly explained by 
the fact that the expenditure per benefi ciary and per support measure does not exceed 
the threshold of EUR 10,000 in a large numbe r of cases. For thes e cases count that 
irregularity reports will never be submitted. 
The highest amount affected by irregularities were reporte d for the budget chapters 
concerning "fruit and vegetables” (050208) , “rural development (EAGF)" (050405) 
                                                
 
62 Expenditure figures are based on CATS-database (download : 31 March 2009 (table 106)) 
 
EN 39   EN and "products of the wine-growing sector (050209) with a total amount affected of 
EUR 39.8 million, EUR 18.4 resp ectively EUR 12.7 million. 
In percentage of the total expenditure per budget chapter, the highest amounts were 
reported for the budget chapter concer ning “olive oil” ( 050206) with 11.5%. 
Table AG4 shows the relationship, in percentages, between the total amount 
allocated per Member State,  the total amount affected by irregularities per Member 
States and the total number of ir regularities per Member State.  
Table AG4: Expenditure and irre gularities per Member State 
in % of total in % of in % of total in % of
total total amount total amount MS' cases total cases
expenditure affected affected expenditure reported
FR 9,715,529,160 20.0% 11,763,441 11.5% 0.12% 129 11.4% FR
DE 6,344,224,320 13.0% 3,816,771 3.7% 0.06% 111 9.8% DE
ES 6,261,663,422 12.9% 14,924,635 14.6% 0.24% 245 21.6% ES
IT 5,603,988,857 11.5% 53,969,740 52.8% 0.96% 211 18.6% IT
UK 3,565,614,301 7.3% 225,775 0.2% 0.01% 7 0.6% UK
EL 2,687,254,393 5.5% 4,010,046 3.9% 0.15% 39 3.4% EL
PL 2,414,751,681 5.0% 1,126,137 1.1% 0.05% 46 4.1% PL
IE 1,786,625,512 3.7% 397,497 0.4% 0.02% 22 1.9% IE
DK 1,123,719,453 2.3% 445,241 0.4% 0.04% 10 0.9% DK
AT 1,114,613,971 2.3% 311,608 0.3% 0.03% 20 1.8% AT
NL 1,035,364,976 2.1% 1,183,639 1.2% 0.11% 30 2.6% NL
PT 974,366,033 2.0% 3,629,928 3.5% 0.37% 120 10.6% PT
SE 941,831,232 1.9% 214,065 0.2% 0.02% 10 0.9% SE
HU 900,016,606 1.9% 747,522 0.7% 0.08% 6 0.5% HU
FI 787,088,826 1.6% 983,842 1.0% 0.12% 8 0.7% FI
BE 756,952,211 1.6% 1,605,690 1.6% 0.21% 31 2.7% BE
CZ 688,544,920 1.4% 764,680 0.7% 0.11% 22 1.9% CZ
RO 474,789,773 1.0% RO
SK 332,392,068 0.7% 639,613 0.6% 0.19% 11 1.0% SK
LT 313,730,455 0.6% 803,754 0.8% 0.26% 24 2.1% LT
BG 231,447,678 0.5% 119,470 0.1% 0.05% 2 0.2% BG
LV 197,702,985 0.4% 208,144 0.2% 0.11% 13 1.1% LV
SI 182,119,725 0.4% 38,808 0.0% 0.02% 1 0.1% SI
EE 89,853,642 0.2% 278,131 0.3% 0.31% 13 1.1% EE
CY 55,603,003 0.1% CY
LU 43,844,738 0.1% 13,375 0.0% 0.03% 1 0.1% LU
MT 4,973,044 0.0% 37,814 0.0% 0.76% 1 0.1% MT
total 48,628,606,986 100.0% 102,259,365 100.0% 0.21% 1,133 100.0% total
download 19 March 2009
source "total amount of expenditure": CATS-database (31 March 2009)total amount affected by irregularities updated on 6 May 2009 (HU-correction)irregularitiesTable AG4
EXPENDITURE AND IRREGULARITIES PER MS
budget year 2008
MSexpenditure
MSirregularities
 
Member States are ranked in order of their budget allocation, starting with the 
Member State receiving the highest amount . France received the highest amount 
(EUR 9.7 billion) whilst Malta received  the lowest amount (EUR 0.5 billion). 
Together France, Germany, Spain, Italy, the United Kingdom, Greece and Poland 
receive more than 75% of the total agricultural budget. These 7 Member States 
receive approximately EUR 36.6 billion (t otal expenditure: EUR 48.6 billion).  
In 2008, France received approximately EU R 9.7 billion, which is approximately 
20% of the total agricultural budget. The re ported French cases we re responsible for 
11,5% of the amounts affected by irregularities,  which is rather low in comparison to 
the expenditure. The same counts for the num ber of reported irre gularities. France 
was only responsible for 11.4% of th e total number of reported cases.  
The rather low percentage of cases reported could be the result of good management 
and control, but could also  indicate u nderreporting.  
 
EN 40   EN Some Member States report (far) more irregularities than others. Portugal for 
instance, reports approximately the same  number of cases as France, 120 cases 
respectively 129 cases. France however, receive s 10 times as much as Portugal from 
the agricultural-budget. France received EU R 9.715 billion as Portugal received EUR 
0.974 billion. 
Also of interest is the level of reported irregularities as a percentage of agricultural-
expenditure per Member State. Italy has th e highest percentage with 0.96%, followed 
by Malta and Portugal with 0.76%, and 0.37%  respectively. Rather low are the 
percentages of United Kingdom, Slovenia,  Ireland and Sweden with 0.01%, 0.02%, 
0.02% respectively 0.02%. Annex 12 gives an overview of these percentages.  
Spain and Portugal reported also in the period 2004-2007 a relatively high number of 
irregularities as well as a relatively high amount aff ected by irregularities.  
3.2.3.  Method of detection 
Controls by national authorities63 
Under the common agricultural policy, acco rding to the principle of shared 
management, the Member States are responsib le for paying the agricultural subsidies 
to the final beneficiar ies through paying agencies64, accredited by the competent 
authorities of the Member States. They are responsible in particular for checking the 
admissibility of claims and complian ce with EU rules before payment. 
For each aid scheme, the relevant sector  regulations lay down detailed rules on 
checks to be carried out by the paying ag encies or by delegated bodies operating 
under their supervision. 
All aid applications are subject to administrative checks before any payment is made. 
On-the-spot checks are carried out on a samp le basis which normally ranges between 
5% and 100%, depending on the risk in the sector concerned. 
The most important control system is th e Integrated Administration and Control 
System (IACS). It covers all direct payments to farmers. IACS includes a computerised database, an identification syst em for farmers, for agricultural parcels 
and for animals in case of payments linked to  animals, and a system for identification 
and registration of payment entitlements a nd aid applications. For aid schemes which 
do not fall under the IACS such as stor age of products or export refunds, 
complementary checks must be carried out after the payment to the beneficiary has 
been made. 
At the end of each financial year, the cer tification body draws up a certificate stating 
whether it has gained reasonable assura nce that the accounts transmitted to the 
Commission are true, complete and accurate an d that the internal control procedures 
have operated satisfactorily. 
                                                
 
63 Text provided by DG AGRI 
64 Regulation (EC) No 1290/2005 (OJ L 209, 11.8.2005) 
 
EN 41   EN Member States must send to the Commission the annual accounts of each paying 
agency, accompanied by a statement of assurance signed by the paying agency's 
director. The statement of assurance may be qualified by reservations, which must 
quantify their financial impact. In that case,  it must include a remedial action plan 
and a precise timetable for its implementa tion. The statement of assurance must be 
based on an effective supervision of the management and control system in place throughout the year. 
Member States with more than one paying agency must also draw up at the end of 
the financial year an annual summary report (synthesis) co vering the statements of 
assurance and certificates i ssued by the certific ation bodies. Coming on the top of the 
statements of assurance and certification, this is designed to strengthen the chain of 
responsibility between the Member States and the Commission. 
Controls by the Commission
65 
The Commission verifies, firstly, the comple teness, accuracy and veracity of the 
paying agencies’ accounts (c learance of accounts) and, s econdly, mostly by means of 
on-the-spot audits, whether the expenditure has been effected by Member States in 
conformity with the Community rules. Wh ere this is not the case, it excludes the 
expenditure concerned from Commu nity financing (financial corrections). This latter 
mechanism, called "conformity clearance", has over the years proven to be a very 
effective means of protecting the Community's financial interest. 
Conformity clearance shields the Commun ity budget from expenditure which should 
not be charged to it. It is not a mechan ism by which irregular payments to final 
beneficiaries are recovered, something which, according to the principle of shared 
management, is the sole responsibility of the Member States. Its purpose is to examine the management and control systems implemented by the Member States and to recover from national authorities a ny expenditure which is not in conformity 
with Community law. Financial corrections are determined on the basis of the nature and gravity of the infringement and the financial damage caused to the Community. 
The amount is calculated on the basis of the loss actually caused or on the basis of an 
extrapolation. Where this is not possible, fl at-rates are used which take account of the 
severity of the deficiencies in order to re flect the financial risk  for the Community. In 
the calendar year 2008 the Commission excluded approximately EUR 1,022 million from Community financing under the EAGF and the EAFRD
66 on grounds of its 
non-compliance with Community rules. 
Where individual irregular payments are or  can be identified as a result of the 
conformity clearance procedures, Member States are required to follow them up by recovery actions against the final benefici aries. However, even where this is not 
possible because the financial correction rela tes exclusively to deficiencies in the 
Member State's management and control sy stem, the correction remains an important 
means of improving the functioning of that  system and thus of preventing or 
detecting and recovering irre gular payments to final bene ficiaries. The conformity 
                                                
 
65 Text provided by DG AGRI 
66 Decisions 2008/321/EC (OJ L 109, 19.4.2008), 2008/582/EC (OJ L 186, 15.7.2008, with corrigendum OJ 
L 194, 23.7.2008 ) and 2008/960/EC (OJ L 340, 19.12.2008). 
 
EN 42   EN clearance thereby contributes to the legality and regularity of transa ctions at the level 
of the final beneficiaries. 
Irregularity reports 
Member States are not only required to follow irregular paym ents up by recovery 
actions but are also obliged to submit irre gularity reports. In these reports, Member 
States are required to indicate the manner in  which the irregularity was discovered. 
Member States provide detailed informa tion on the reason why an audit, check or 
scrutiny was performed and how it was performed.  
Table AG5 gives an overview why a contro l was performed as table AG6 gives an 
overview how the control was performed. 
In the European Union, a ll IACS aid applications are processed and checked 
administratively. These checks are compleme nted by on-the-spot controls, selected 
on the basis of risk analysis. In th e budget year 2008, approximately 87.5% of 
agricultural expenditure  under EAGF was processed through IACS.  
Member States indicated that in 56 cas es (2007: 54 cases) the irregularity was 
discovered thanks to a check or audit performed on basis of IACS. This is approximately 5% of the total number of reported irregularities (1,133).  
In 54 cases, Member States did not indicate the reason why an audit, check or 
scrutiny was performed, which is also ap proximately 5% of the total amount of 
reported irregularities (1,133).  
Member States are also under an obligation to perform certain controls on the basis 
of Council Regulation (EEC) No 485/2008
67 and Council Regulation (EEC) No 
386/90.  
Council Regulation (EEC) No 485/2008 relates to the scrutiny of the commercial 
documents of entities receiving or making paymen ts relating directly or indirectly to 
the system of financing by the EAGF in order to ascertain whether transactions 
forming part of the system of financing by the EAGF have actually been carried out 
and have been executed correctly.  
Member States indicated that  in 173 cases the irregularity was discovered thanks to 
an audit performed on basis of Reg. 485/2008. This is approximately  15% of the total 
number of reported ir regularities (1,133). 
Council Regulation (EEC) No 386/90 lays do wn certain procedures for monitoring 
whether operations conferring entitlement to the payment of refunds on, and all other 
amounts in respect of, export transactions  have been actually carried out and 
executed correctly. Member States indicate d that in 8 cases (2007: 9 cases) the 
irregularity was disc overed thanks to a check perf ormed on basis of Reg. 386/1990. 
This is less than 1% of the total number of reported irregularities (1,133). 
Table AG5: Reasons for perfor ming an audit, control, scrutiny 
                                                 
67 Reg. 485/2008 repealed Reg. 4045/1989 
 
EN 43   EN reason for performing a control, audit, scrutiny etc. alone *)shared **) total in %
administrative enquiry 219 36 255 23%
other occasions (described in field 5.8.) 147 80 227 20%
scrutiny on basis of Reg. 485/2008 (replaced 4045/1989) 145 28 173 15%
routine 103 16 119 11%
judicial enquiry 79 9 88 8%
random check 83 1 84 7%
comparison of data 10 68 78 7%
scrutiny on basis of Reg. 3508/1992 & 1782/2003 (IACS) 49 7 56 5%
risk analysis 31 7 38 3%
information and/or request from EU-body 7 12 19 2%
tip from informant, whistleblower, etc. 13 4 17 2%
chance 12 0 12 1%
review of conditions 10 2 12 1%
spontaneous confession 8 2 10 1%
control on basis of Reg. 386/1990 8 0 8 1%
c o m p l a i n t 235 0 %
probability checks 1 4 5 0%
release of guarantee 5 0 5 0%
refusal to accept controls 2 0 2 0%
existing doubts 2 0 2 0%
payment of balance 1 1 2 0%information published in the media 1 0 1 0%
suspicious conduct 1 0 1 0%
statistical analysis 0 1 1 0%
no information provided by Member States 55 0 55 5%
total 994 281 1275
download 19 March 2009 / updated 6 May 2009 (HU-correction)Table AG5
DETECTION OF THE IRREGULARITY
budget year 2008
Art. 3(1) g Reg. 1848/2006*) alone = only 1 reason for performing a control etc. was indicated
**) shared = more than 1 reason for performing a control etc.was indicated
 
Administrative enquiry was in 255 cases (2 3%), the reason for performing a control, 
audit or scrutiny.  
In 227 cases (20%) Member States indica ted "other occasions". Unfortunately, 
Member States only described in 27 cas es what the other occasion was.  
In 88 cases (2007: 175 cases), the reason to perform a control was based on a judicial 
enquiry. This is approximately 8% of th e total amount of reported irregularities 
(1,133). Member States classi fied 4 of these cases (2007 : 15 cases) as  suspected 
fraud (IRQ3).  
Table AG5 provided an overview of the r eason why a control was performed. On the 
next page provides table AG6 an overview how an audit or check was performed.  
Approximately 60% of the irregularities we re detected via controls of documents 
(24%), ex post controls (20%) and contro ls on the premises of the company (15%). 
Member States did not provide any information on the type of control, audit or 
scrutiny in 157 cases, which is 14% of the total amount of reported irregularities 
(1,133). In more than 8% of the cases, Me mber States indicated "other methods 
(described in field 5.8)". Unfortunately, in a large number of cases there was no description in field 5.8. This means that in more than 20% of the cases no clear 
description is given of the type  and/or method of control.  
Table AG6: type/method of control 
 
EN 44   EN type of control, audit, scrutiny etc. alone *)shared **) total in %
control of documents 214 63 277 24%
ex post control 202 19 221 20%
control on the premises of the company 117 55 172 15%
control of accounts 93 24 117 10%
other methods (described in field 5.8.) 96 0 96 8%analysis of samples 51 6 57 5%
on the spot control of achievement of project or action 54 0 54 5%
face vet / documentary check 33 3 36 3%
initial enquiry 21 1 22 2%
other Customs controls, checks, audits, scrutinies etc. 4 6 10 1%
preventive check 4 0 4 0%
control of production 2 1 3 0%control of products 2 1 3 0%
physical check of goods 2 0 2 0%
control of product in intervention 2 0 2 0%
other controls, checks etc. concerning production or products 1 0 1 0%
control of movement 0 1 1 0%
teledetection 0 0 0 0%
border control 0 0 0 0%no information provided by Member States 157 0 157 14%
total 1,055 180 1,235
**) shared = more than 1 type of control etc.was indicated
Art. 3(1) g Reg. 1848/2006download 19 March 2009 /  updated 6 May 2009 (HU-correction)Table AG6
DETECTION OF THE IRREGULARITY
budget year 2008
*) alone = only 1 type of control etc. was indicated
As in 2007, teledetection did not lead to  the discovery of any irregularities.  
3.2.4.  Types of irregularity 
Member States are also obliged to repor t and to describe the practices employed 
(modus operandi) of the detected irregular ity (see art. 3(1)e Reg. 1848/2006). A clear 
overview of the (most recently used) modus  operandi in committing irregularities 
will support the Member States and the Comm ission in their fight against fraud and 
help to reduce the numbe r of irregularities.  
Member States have improved their reportin g of the type of ir regularity and the 
modus operandi. The EU-27 compliance rate on  type of irregularity is almost 100%, 
as the compliance rate on the practi ces adopted (modus operandi) is 86%.  
Module 1848 introduced 9 main groups of types of irregularity (see table AG7)68. 
Each main group contains specific types of irregularities and a code "other" for each 
group. The latter makes it possible to link the (t ype of) irregularity to a specific main 
group. In case it is not possible to link an  irregularity to a main group, the code 
"other other" can be used (code 1900). A text  field offers the possi bility to describe 
more in detail the practice s adopted (modus operandi). 
Table AG7 gives an overview of the types of  irregularity most frequently reported by 
Member States. The types of irregu larity are clustered by main group.  
Table AG7: Irregularities and frequency of used types of  irregularities 
                                                 
68 Recommendations of the European Court of Auditors have led to revised pick lists; 
 
EN 45   EN number *) in % amount in € *) in %
1100 request for aid 201 18% 12,366,987 12%
1200 beneficiary 47 4% 2,424,332 2%
1300 accounts and records 12 1% 602,939 1%
1400 documentary proof 199 18% 9,511,437 9%
1500 product, species and/or land 247 22% 14,169,356 14%
1600 (non-)action 449 40% 63,553,947 62%
1700 customs - movement of goods 16 1% 1,151,304 1%
1800 bankruptcy / bribes / corruption 2 0% 644,253 1%
1900 other 70 6% 4,457,054 4%
 no information provided by Member States 3 0% 491,696 0%
total *) 1,246 109,373,306
Art. 3(1)g Reg. 1848/2006
download 19 March 2009 / updated 6 May 2009 (HU-correction)Table AG7
TYPE OF IRREGULARITY PER GROUP
budget year 2008
group descriptioncases
*) an irregularity report can contain sometimes more than 1 type of irregularity therefore total amounts can be higher than the  real number 
of cases and real total amount affected by irregularities
 
Only in 3 cases (<1%), no type of irregu larity was indicated. It concerns 2 cases 
reported by Hungary and 1 case reported by Greece. 
In 70 cases, Member States indicated "other  irregularities, to be specified". Finland 
indicated "other irregu larities, to be specified" in mo re than 60% of its cases. In 
2007, Finland reported also in more than 60% of its cases "other irregularities". The 
added value of the indication "other irregular ities, to be specified" is rather low. 
Finland should pay some atten tion to this reporting obligation. 
Group 1100 request for aid 
In 18% of the reported irregu larities it concerned cases in which the irregularity was 
already committed during the request phase. As example, can be mentioned an “incorrect or incomplete request for aid” . These cases could normally be discovered 
before payment.  
Member States indicated in all cases (100%) if an irregularity took place before 
payment or after payment. Discovered before payment means that no payment has been made, therefore, no recovery acti on has to be undertaken. Discovered after 
payment means that the beneficiary receiv ed the subsidy and that the unduly paid 
amount needs to be recovered. 
The overall rate of irregular ities detected before payment is approximately 10%, e.g. 
116 cases out of 1,133.  
Table AG8 focuses on the group "request fo r aid". The table shows per type of 
irregularity if the case was discovered before or after payment. Especially for the 
group "request for aid" counts that the irre gularity can be discovered before payment. 
The table shows that only in 23 cases out of 201 cases (=23+178), the irregularity 
was discovered before payment. This is 11.4%.  
The most frequent type of irregularity was “product, speci es, project and/or activity 
not eligible for aid”. Member States indica ted this type of irregularity in 82 cases. 
Only in 7 cases, the irregularity was di scovered before payment. In 75 cases, 
recovery actions needed to be started. 
Table AG8: Irregularities concerning the request for aid 
 
EN 46   EN cases amounts in € cases amounts in €
1100 incorrect or incomplete request for aid 10 232,593 25 840,593
1101 false or falsified request for aid 2 27,204 10 637,048
1102 product, species, project and/or activity not eligible for aid 7 193,629 75 4,471,922
1103 incompatible cumulation of aid 2 84,015
1104 several requests for the same product, species, project and/or activity 2 43,238
1199 other irregularities concerning the request for aid 4 126,425 64 5,698,946
total *) 23 579,851 178 11,775,762Table AG8
budget year 2008
code descriptionTYPE OF IRREGULARITY - REQUEST FOR AID
Art. 3(1)e Reg. 1848/2006
*) an irregularity report can sometimes contain more than 1 type of irregularity, therefore, total amounts can be higher than t he real number of cases and 
real total amount affected by irregularities
download 19 March 2009 / updated 6 May 2009 (HU-correction)before payment after payment
 
In 35 cases, Member States described the type of irregularity  as “incorrect or 
incomplete request for aid”. Despite the incorrect or incomplete request for aid, 
Member States granted in more than  70% of these cases the subsidy.  
Denmark, Germany, Spain and Italy indicated in respectively 3, 1, 1 and 7 cases that 
the applied modus operandi was “false or falsified request for aid”. Germany 
classified its 2 cases as "established fra ud (IRQ5) as Spain classified its case as 
"suspicion of fraud". All other 9 cases were  classified as irregularity (IRQ2).  
Group 1400 documentary proof 
Table AG7 showed that in 199 cases (18%) the irregularity concerned documentary 
proof. The largest amount (95 cases) c oncerns "documents missing and/or not 
provided". This type of irregularity can norma lly be considered as an error or mistake 
which can be repaired. Almost all of th ese cases are classified as "irregularity" 
(IRQ2). Only for 2 cases count that Member  States classified the irregularity as 
"suspicion of fraud" (IRQ3). In these 2 cas es, more than 1 type of irregularity was 
indicated.  
Member States indicated in 12 cases, w ith a total amount affected of EUR 1.4 
million that it concerned "documents false and/or falsified". 7 of these cases were classified as "suspicion of fraud" (IRQ3) as  4 cases were classified as "irregularity" 
(IRQ2). 1 case was not classified.  
Group 1500 product, species and/or land 
In almost 22% of the cases, representi ng 14% of the total amount affected by 
irregularities, the irregularit y concerned the product, sp ecies (animals) or land for 
which the subsidy was granted. As example,  can be mentioned "over-declaration of 
land" and "declaration of fi ctitious land". Especially  in the sector “rural 
development”, irregularities were committed by an over-declarati on of land. In some 
cases it even concerned the declaration of  fictitious land. Over-declaration can be 
considered as an error or mistake as de claration of fictitious land needs to be 
considered as (suspected) fraud.  
Member States did not always use the co rrect code to describe the type of 
irregularity. The type "inexact  quantity" was used in a rath er large number of cases to 
report an overdeclaration of land for whic h the description "ove rdeclaration and/or 
declaration of fictitious product, species an d/or land" can be used. Member States 
probably still have to get used to the new reporting system.  
 
EN 47   EN Member States reported in 63 cases "incorre ct classification (incl. incorrect tariff 
heading)". These cases concern mainly th e export of pig- and poultry meat. Member 
States classified 61 of these cases as "irregularity" (IRQ2). 2 cases were not classified.  
In 23 cases, Member States classified the cases as "suspicion of fraud" (IRQ3). It 
concerned in 21 cases "overdeclaration a nd/or declaration of fictitious land". 
Group 1600 (non-) action 
In almost 40% of the reported irregular ities it concerned cases in which the 
irregularity was directly linked to an action performed or not performed by the 
involved persons. For most cases counts, that the beneficiary did not make the 
deadline to implement, complete or finalise the action.  
Table AG9: Type of irregularity – (non) action 
number amount in €
1600 action not implemented 37 1,265,776
1601 action not completed 30 1,938,278
1602 operation prohibited during the measure 30 1,173,291
1603 failure to respect deadlines 48 5,928,640
1604 irregular termination, sale or reduction 23 1,225,013
1605 absence of identification, marking, etc. 0 0
1606 refusal of control, audit, scrutiny etc. 3 37,364
1607 control, audit, scrutiny etc. not carried out in accordance with regulations, rules, plan etc. 3 487,776
1608 infringement of rules concerned with public procurement 0 0
1609 infringements with regard to the cofinancing system 3 42,141
1610 other actions not carried out in accordance with regulations, rules, contract conditions, etc. 274 51,455,668
total *) 451 63,553,947
Art. 3(1)e Reg. 1848/2006
download 19 March 2009 / updated 6 May 2009 (HU-correction)Table AG9
TYPE OF IRREGULARITY - (NON-)ACTION
budget year 2008
code descriptioncases
 
In a rather high number of cases (274), Memb er States indicated "other actions not 
carried out in accordance with regulations, rules, contract conditions, etc." The total 
amount affected is EUR 51.5 million. It concerns in 113 cases the rural development sector. The total amount affected is EU R 4.3 million. Member States reported 32 
cases for the fruits and vegetables sector and 23 cases for the wine growing sector. 
The amounts affected for these 2 sector s are respectively EUR 33.2 million and EUR 
8 million. 
Member States classified 35 as fraud (IRQ3 or IRQ5) and 375 as irregularity (IRQ2). 
41 cases were not classified. Germany and Spain were responsible for the reporting of the non-classified cases. The applied modus operandi in 26 of the fraud cases 
(72%) can be summarized as "opera tion prohibited during the measure".  
 
EN 48   EN 3.3. Specific Analysis 
Member States inform the Commission of the common market organisations 
affected, the sectors and products concerne d by irregularities. The new reporting 
Module 1848 offers Member States the possibility to use the official DG AGRI 
nomenclature to indicate the budget li nes affected by the irregularities. 
3.3.1.  Analysis of support measures 
Table AG10 gives an overview of the irre gularities reported per main category of 
support measure. The division into the diffe rent types of measures is based on the 
indications given by Member States of the measures affected, regulations infringed 
and modus operandi. 
Table AG 10: Irregularities per main category of support measure 
average in % of
group description cases amounts in € amounts in € total
050208 Fruits and vegetables 92 39,760,133 432,175 38.9%
050401 Rural development (EAFRD) (2007 to 2013) 12 257,735 21,478 0.3%
050404 Rural development (EAGF) (2004-2006) transi tional instrument new MS 64 1,357,842 21,216 1.3%
050405 Rural development (EAGF) (20 00 to 2006) 361 18,413,647 51,007 18.0%
050209 Products of the wine-growing sector 138 12,715,832 92,144 12.4%
050206 Olive oil 38 5,225,808 137,521 5.1%
050205 Sugar 34 4,391,995 129,176 4.3%
050212 Milk and milk products 59 3,992,477 67,669 3.9%
050201 Cereals 39 3,838,617 98,426 3.8%
050213 Beef and veal 56 3,176,032 56,715 3.1%
050215 Pigmeat, eggs and poultry, bee-keeping and other animal products 63 2,138,052 33,937 2.1%
050301 Direct aids of a horizontal  nature 65 1,585,977 24,400 1.6%
050211 Other plant products/measures 28 1,309,853 46,780 1.3%
050302 Other direct aids 36 1,215,330 33,759 1.2%
050203 Refunds on non-Annex 1 products 12 643,543 53,629 0.6%
050214 Sheepmeat and goatmeat 18 631,915 35,106 0.6%
050204 Food programmes 3 329,602 109,867 0.3%
050303 Additional amounts of aid 2 67,036 33,518 0.1%
050210 Promotion and information measures 2 65,223 32,611 0.1%
blank no information provided by Mem ber States 57 2,611,057 45,808 2.6%
download 19 March 2009 / updated 6 May 2009 (HU-correction)Table AG10
IRREGULARITIES PER BUDGET CHAPTER
BUDGET YEAR 2008
art. 3 (1) a, n Reg. 1848/2006
 
As in 2007, the sector “fruits and vege tables” (group 050208) scores high. Member 
States reported 92 cases involving approxi mately EUR 39.8 million, which is almost 
39% of the total amount affected by irregul arities. Italy reported 1 case in which the 
total amount affected was approximately EUR 25 million. 
The highest number of irregularities report ed related to “rural development”. The 
budget chapters 050401, 050404 and 050405 have been taken together to determine the impact of irregularities for the sect or "rural development". Member States 
reported a total of 437 cases involving rural development measures (group 0504). 
These cases alone amount to approximatel y EUR 20 million, which is almost 20% of 
the total amount affected by irregularities. The vast majority of these cases concern 
the programming period 2000-2006. 
Member States reported also for the wine sector (group 050209) a rather high 
number of irregularities and amounts affect ed by the irregularities: 138 cases and an 
amount affected by irregularities of appr oximately EUR 12.7 million, which is more 
than 12% of the total amount affected by irregularities.  
More than 70% of the total amounts affect ed by irregularities c oncern the sectors: 
• fruits and vegetables 40% 
 
EN 49   EN • rural development 20% 
• wine 12% 
Fruit and vegetables (group 050208) 
Table AG11 shows the measures which we re hit by irregulariti es, indicating the 
number of cases, the total amounts and the average amount per irregularity.  
Table AG 11: Fruit and vegetables: meas ures affected by irregularities 
description cases amounts in € average
Compensation to encourage processing of citrus fruits 22 27,634,043 1,256,093
Compensation and buying-in - lemons 5 5,672,234 1,134,447
Production aid for processed tomato products 12 3,061,956 255,163Operational funds for producer organisations 38 2,347,184 61,768Compensation aid - bananas 6 532,747 88,791
Production aid for fruit-based products 4 337,804 84,451
Aid to producer groups for preliminary recognition 3 89,700 29,900Export refunds - fresh fruits & vegetables 1 52,678 52,678Special measures for nuts 1 31,787 31,787total 92 39,760,133 432,175
download 19 March 2009Table AG11
FRUITS AND VEGETABLES
BUDGET YEAR 2008
art. 3 (1) a, n Reg. 1848/2006
 
Member States reported a total of 92 cases a ffecting measures to support the fruit and 
vegetables sector. These cases alone a dd up to approximately EUR 39.8 million, 
which is approximately 39% of the tota l amount affected by irregularities.  
France and Italy reported 3 cases in wh ich the total amount affected by the 
irregularity was more than EUR 1 million pe r case. Italy reported  2 cases of which 1 
case had a total amount affected of more  than EUR 25 million and concerned the 
support measure "compensation to encour age processing of citrus fruits". 
In recent years, Member States have c onsistently reported a relatively high amount 
affected by irregularities for the measure "compensation to encourage processing of 
citrus fruits". In 2008, Member  States reported fewer irregu larities concer ning citrus 
fruits. The amounts increased but mainly due to 1 Italian case of more than EUR 25 
million. The 22 cases were reported by two (2 ) Member States. Italy reported 2 cases 
with a total amount affected of EUR 25.3 million as Spain reported the other 20 
cases with a total amount affected of EU R 2.3 million. All cases were classified as 
"irregularity" (IRQ2).  
Member States reported 5 cases for the measure “compensation and buying-in 
lemons". The total amount affected is rather high: EUR 5.7 million. In 2 cases, the 
total amount affected was higher than EUR 2 million. It concerned 1 case reported by 
France and 1 case reported by Italy. Greece indicated in 1 case that it concerned 
"suspicion of fraud".  
Cases in which the measure "production aid for processed tomato products" was 
affected by irregularities were repor ted by Spain, Hungary and Italy with 
respectively 1 case, 1 case and 10 cases. All cases were classified as irregularity 
(IRQ2) although in 4 cases th e practices adopted was de scribed as "fictitious 
processing". 
 
EN 50   EN Member States classified in 89 cases (97%) the irregularities as irregularity or as 
(suspected) fraud.  
The reported level of (suspected or  established) fraud is 3.5%.  
Rural development (group 0504) 
Member States reported a total of 437 cas es affecting rural development measures. 
425 cases concerned EAGF69 as 12 cases concerned EAFRD. These cases alone 
amount to approximately EUR 20 million, which is approximately 19.6% of the total amount affected by irregular ities (see table AG10).  
Table AG12 shows the measures that were  mostly affected by irregularities, 
indicating the number of cases, the total amounts and average amount per 
irregularity.  
Table AG 12: Rural development: meas ures affected by irregularities 
description cases amounts in € average
agrienvironment 100 2,460,358 24,604
forestry 79 4,554,850 57,656transitional instrument for the new Member States 64 1,357,842 21,216promoting the adaptation and the development of rural areas 51 2,919,646 57,248improving the processing and marketing of agricultural products 45 5,012,609 111,391setting-up of young farmers 31 341,232 11,007reimbursement not related to irregularities 16 390,289 24,393investments in agricultural holdings 14 1,981,495 141,535EAFRD - rural development 12 257,735 21,478early retirement scheme 11 327,853 29,805less favoured areas 4 142,781 35,695other - not specified 10 282,534 28,253
total 437 20,029,224 45,833
download 19 March 2009Table AG12
RURAL DEVELOPMENT
BUDGET YEAR 2008
art. 3 (1) a, n Reg. 1848/2006
 
The largest number of irregularities rela ted to “agrienvironment". Member States 
reported 100 cases in which the support measure "agrienv ironment" was affected by 
irregularities. The aver age amounts affected per case are rather low.  
The highest amount affected by irregularit ies is reported for the support measure 
“improving the processing and marketing of  agricultural products ". Member States 
reported 45 cases with a total amount affect ed of more than EUR 5 million. Member 
States classified 96% of the cases. All th ese cases were classi fied as "irregularity" 
(IRQ2). Spain did not classify 2 cases. Mo st frequently type of irregularity is 
"product, species, project and/or activity no t eligible for aid" a nd occurred already in 
the request phase. France described in 1 cas e the practices adopted as "documents 
false and/or falsified". This case was al so classified as "irregularity" (IRQ2). 
As in 2007, the support measure "forestry"  has a rather high amount affected by 
irregularities. Member States reported 79 cases with a total amount affected of 
approximately EUR 4.5 million. Most frequently occurring type of irregularity is "failure to respect deadlines". In almost 29% of the reported cases, beneficiaries are 
                                                
 
69 EAGF – rural development concerns the programming period 2000-2006 and the transitional instrument 
for new Member States (see table AG10); 
 
EN 51   EN not able to make the deadlines. It concer ns in all cases Spanish beneficiaries. 
Member States classified more than 91% (7 2) of the forestry cases as "irregularity" 
or "suspicion of fraud". Spai n did not classify 6 cases as Germany did not classify 1 
case. Spain classified 2 cases as "suspici on of fraud". The practices adopted for these 
2 cases can be summarized as "false and/or  falsified request fo r aid" and "operation 
prohibited during the measure". 
The support measure "promoting the adaptation and the development of rural areas" 
has also a rather high total amount aff ected by irregularities. The total amount 
affected is approximately EUR 2.9 million. The total number of reported cases is 51. 
Most frequently applied modus operandi is  "over declaration" and/or "fictitious 
declaration" of land. Member States classified 3 cases as  "suspicion of fraud" (IRQ3) 
as all other cases were classi fied as "irregularity" (IRQ2). 
Member States reported 14 cases for the support measure "investments in 
agricultural holdings". The total amount a ffected was rather high: EUR 2 million. 
The latter was caused by 1 Italian case in which the total amount affected was more 
than EUR 1.5 million. Member States classi fied 10 of these cases as "irregularity" 
(IRQ2), 1 case as "suspicion of fraud" (IRQ 3) and 1 case as "established fraud" 
(IRQ5). 2 cases were not classified. It concerns Spanish cases. The modus operandi 
in the "suspicion of fraud" case concerns "false and/or falsified documents". The 
"established fraud" case concerned actions that were not carried out in accordance 
with the regulations and conditions u nder which the subsidy was granted. 
The reported level of (suspected or  established) fraud is 8.5%.  
Wine (group 050209) 
Member States reported a total of 138 cas es affecting wine measures. These cases 
amount to approximately EUR 12.7 million. It concerns cases reported by Spain, 
Portugal, Italy, Greece and France with respectively 58, 44, 20, 11 and 5 cases. Table AG13 shows the measures that were mostly affected by irregularities, indicating the number of cases, the total amounts and average amount per irregularity.  
Italy reported 1 case in which the total amount affected by the irregularity was more 
than EUR 7.2 million. It concerned the support measure "permanent abandonment 
premiums for areas under vines. The case wa s classified as "irregularity" (IRQ2). 
The amounts affected for all other cases vary between EUR 0 and EUR 0.8 million. 
The highest number of cases were repor ted for the support measure "restructuring 
and conversion of vineyards" . Member States reported 115 cases with a total amount 
affected of more than EUR 3 million. Member  States classified 102 cases out of 115 
as "irregularity" or "suspicion  of fraud". Spain classified 25 cases as "suspicion of 
fraud" (IRQ3). All other cases were classified as "irregularity" (77) or were not classified (13). The modus operandi of the fraud cases can be described as "operation 
prohibited during the measure". Unfortunatel y, Member States did not describe in 
more detail the applied modus operandi. description cases amounts in € average
permanent abandonment premiums 1 7,245,007 7,245,007
restructuring and conversion of vine yards 115 3,048,474 26,508distillation 12 1,999,327 166,611storage 5 289,282 57,856aid for the use of must 4 81,818 20,455export refund 1 51,924 51,924
total 138 12,715,832 92,144
download 19 March 2009Table AG13
WINE
BUDGET YEAR 2008
art. 3 (1) a, n Reg. 1848/2006
 
EN 52   EN Member States reported 12 cases for the support measure "distillation". The total 
amount affected is approximately EUR 2 million. The applied modus operandi differs per case which makes it difficult to  indicate a modus operandi that is 
occurring more frequently. None of these cas es was classified as "suspicion of fraud" 
(IRQ3) or "established fraud" (IRQ5).  
The reported level of (suspected or  established) fraud is 18.1%.  
3.3.2.  Irregularity versus suspected fraud 
With the introduction of the electronic re porting system in mid-2001, Member States 
were asked to classify the irregularities re ported. To assist them, an extra field was 
added to the module offering four possibili ties: mistake, irregularity, (suspected) 
fraud and organised crime. The field was modified in  2004 and 2006 and now offers 
four possibilities:  
• IRQ 0 = no irregularity 
• IRQ 2 = irregularity 
• IRQ 3 = suspicion of fraud  
• IRQ 5 = established fraud 
Reg. 1848/2006 introduced the obligation to identify fraud cases. Member States 
comply rather well with this  obligation; the overall compliance rate is 93%. Germany 
and Spain should pay some extr a attention to this obligation. The Netherlands did not 
classify 2 of its cases (7%). Table AG14 gi ves an overview of the classification of 
irregularities by Member States and by OLAF.  
Table AG 14: Classification of ir regularities by Member States 
MS total IRQ2 IRQ3 IRQ5 blank compliance 2008 by OLAF 2007 MS 
AT 20 20 100% 0% 0% 0% AT
BE 31 26 5 100% 16% 16% 0% BE
BG 2 2 100% 100% 100% BG
CY 0% CY
CZ 22 22 100% 0% 0% 0% CZ
DE 111 67 3 1 40 64% 6% 5% DE
DK 10 10 100% 0% 30% 0% DK
EE 13 12 1 100% 8% 8% 0% EE
EL 39 38 1 100% 3% 5% 5% EL
ES 245 180 27 38 84% 13% 13% ES
FI 8 8 1 0 0 % 0 %0 %0 % FI
FR 129 125 4 100% 3% 6% 3% FR
HU 6 6 1 0 0 % 0 %0 %8 % HU
IE 22 22 100% 0% 0% 0% IE
IT 211 209 1 1 100% 1% 7% 6% IT
LT 24 24 100% 0% 0% 0% LT
LU 1 1 100% 0% 0% LU
LV 13 13 100% 0% 0% 64% LV
MT 1 1 100% 0% 100% MT
NL 30 27 1 2 93% 4% 3% 22% NL
PL 46 17 29 100% 63% 63% 90% PL
PT 120 118 2 100% 2% 2% 2% PT
RO RO
SE 10 10 100% 0% 0% 0% SE
SI 1 1 1 0 0 % 0 %0 %0 % SI
SK 11 11 100% 0% 0% 0% SK
UK 7 7 100% 0% 14% 12% UK
total 1,133 975 76 2 80 93% 7% 9% 10% total
fraud = (IRQ3 + IRQ5) / total
art. 3 (1) f Reg. 1848/2006download 19 March 2009 / updated 6 May 2009 (HU-correction)Table AG14
CLASSIFICATION OF THE IRREGULARITY
budget year 2008
blank = not classified by Member StateIRQ2 = irregularity
IRQ3 = suspicion of fraudIRQ5 = established fraudfraud in %
 
Classification of irregula rities by Member States 
 
EN 53   EN Fraud as a percentage of the total number of reported cases invol ved in irregularities 
is about 7%. The term fraud includes “suspi cion of fraud” (IRQ3) and “established 
fraud” (IRQ5). The non-irregularities (IRQ0 ) have not been taken into account for 
the analysis. As mentioned earlier, Module 1848 was introduced in 2008 which 
implies that Member States needed to get used to the new reporting system, therefore the figures shown in the table should be treated with caution. 
Fraud as a percentage of the total amount of  reported cases aff ected by irregularities 
is about 4%. 
Classification of irregularities by OLAF 
In the period 2000 – 2007 the percentage of irregularities classifi ed as “suspected 
frauds” varied between 10% and 13% of the total number of irregularities reported.  
In case OLAF would classify the 2008-irre gularities by applying the same method as 
used for the period 2000 - 2007, the irregularities to be classified as “suspected 
frauds” would be 9% of the total number of reported irregularities and 10% of the 
total amount affected by irregularities.  
The classification by OLAF is based on the classification by Member States, the 
types of irregularities  (codes) as indicated by Member  States, the modus operandi as 
described by the Member St ates, sanctions imposed (adm inistrative or penal) and 
additional comments made  by Member States.  
The higher fraud rate can be explained by th e reclassification of cases from Member 
States that did not classify any cases as "suspicion of fraud". The latter concerns 
mainly cases reported by Denmark and th e United Kingdom. Some of the Danish, 
French, Italian and United Kingdom cases w ould be reclassified from “irregularity” 
(IRQ2) into “suspicion of fraud” (IRQ3) , based on the modus operandi applied in 
these cases. The practices employed for a large number of these cases can be summarised as “false and/or  falsified request for aid” , "false and/or falsified 
documents", "fictitious use or processing" or "refusal of inspection". OLAF would 
classify these cases as “suspicion of fraud” (IRQ3). The Maltese case was also reclassified in to "suspicion of fra ud" now a penal sanction was imposed.  
The classification of the non-classified Germ an and Spanish cases did not lead to an 
increase of the fraud percentage. Germa ny did not classify 40 cases. OLAF would 
classify only 1 of these cases as "suspici on of fraud" (IRQ3). For Spain counts that 
all non-classified cases w ould be classified as "irregularity" (IRQ2). 
As said, table AG14 and the OLAF-rate s hould be treated with caution. Member 
States still need to improve their repor ting due to the introduction of the new 
reporting system. 
Estimated level of fraud 
On the basis of the irregul arities reported in the pe riod 2000-2008 an attempt has 
been made to estimate the level of “susp ected fraud” in the agricultural sector. Chart 
AG2 reflects the results of this analysis and shows the percenta ge of irregularities 
which can be classified as “suspected fra ud” and/or “established fraud” cases, both in 
terms of the number of cases and the amounts affected by th e irregularities. 
One early conclusion is that, as a per centage of the total number of reported 
irregularities, “suspected fraud” is approximately 10%  in the period 2000–2008. The 
 
EN 54   EN chart shows that the level of “suspected fraud” cases, as a percentage of the total 
number of irregularities repor ted, is relatively stable.  
“Suspected fraud” as a per centage of the total amounts af fected by the irregularities 
reported varied between approximately 3% and 45% during the period 2000–2008. A 
greater difference between the percentage of “suspected fraud” cases based on the amounts and the percentage based on the number of “suspected fraud” cases was to be expected; amounts vary more and diffe r per irregularity reported. The amounts 
affected of one single fraud case can alrea dy give a complete different and often a 
distorted picture. 
Chart AG 2: Irregulari ties and “suspected fraud” 
0%10%20%30%40%50%60%
2000 2001 2002 2003 2004 2005 2006 2007 2008cases calculated by OLAF cases calculated by MS
amounts calculated by OLAF amounts calculated by MS 
It should be reiterated that the obligation to indicate “fraud” was introduced by Reg. 
1848/2006, which came into force on 1 Janua ry 2007. The figures therefore, should 
be interpreted cautiously. 
3.4. Recovery and sanctions70 
3.4.1.  Recovery 
Article 32 of Council Regulation (EC) No 1290/2005 provides for an automatic 
clearance mechanism for unsuccessful r ecoveries of unduly paid amounts. If a 
Member State fails to rec over an unduly paid amount from the beneficiary within 
four years of the primary administrative or judicial finding (or, in the case of 
proceedings before national courts, within  eight years), 50% of the non-recovered 
amount is charged to the budget of the Member State concerned within the 
framework of the annual financial clea rance of the EAGF and EAFRD accounts. 
Even after the application of this mechanis m, Member States are obliged to pursue 
their recovery procedures a nd to credit 50% of the amount s effectively recovered to 
the Community budget. If they fail to do  so with the necessa ry diligence, the 
                                                 
70 The analysis, text and table concerning recovery are provided by DG AGRI. Under Reg. 1848/2006 
Member States are not required to indicate the amounts to recover to OLAF. 
 
EN 55   EN Commission may decide to charge the en tire outstanding amounts to the Member 
State concerned. 
As of financial year 2008, where the undue payments are the result of administrative 
errors committed by the national authorities,  the entire amount involved is deducted 
from the annual accounts of the paying agen cies concerned and, thus, excluded from 
Community financing. 
For EAGF, this mechanism was applied for the second time by the financial 
clearance decision for the financial year 200771 which cleared all pending non-
recovered cases dating from 2003 or 1999 (cas es which were four or eight years old 
respectively) by charging €131.4 million to the Member States. For those paying 
agencies for which the 2007 accounts were disjoined from the financial clearance 
decision, a further €0.05 million was charged by a subsequent decision72, and a 
further €6.2 million still remains to be charged. 
Table AG15 provides an overview of the rec overy, the irrecovera ble declared cases 
and the outstanding amounts at the end of 2008.  
Regarding the financial year 2008, the Me mber States recovered €108 million , €32.2 
million was declared irrecoverable and the outstanding amount still to be recovered 
from the beneficiaries at the end of that  financial year was €1 246 million for EAGF. 
The financial consequences of non recove ry for cases dating from 2004 or 2000 were 
determined according to the "50-50 rule" mentioned above by charging €31.4 million to the Member States in the financial clearance decision for the financial year 2008 
adopted by the Commission on 29 April 2009
73. A further €0.8 million will be 
charged by subsequent decisions. Due to th is "50-50" clearance mechanism that was 
applied in the last years by charging so me of the non-recovered amounts to the 
Member States the outstanding amount towards the EU budget was reduced to 
around €900 million. 
Regarding the EAFRD and the Transitional rural development instrument the 
clearance mechanism set out above did not  apply yet. For these funds the amount 
outstanding at the end of the financ ial year 2008 was €7.9 million. €17.2 million was 
recovered and €0.2 million was declared ir recoverable during the financial year 
2008.
                                                 
71 Decision 2008/396/EC (OJ L 139, 29.5.2008) 
72 Decision 2009/87/EC (OJ L 31, 3.2.2009) 
73 Decision 2009/367/EC, (OJ L 111, 5.5.2009) 
 
EN 56   EN  
Table AG15: financial informati on on recovery (EAGF, EAFRD, TRDI) 
recovered declared irrecoverable
MS during FY 2008 during FY2008 at the end of FY 2008 in % of total
AT 5,811,335 400,234 5,037,038 0.40%
BE 5,052,848 2,202 60,042,515 4.79%
BG 0 0 0 0.00%
CY 33,677 0 0 0.00%
CZ 886,067 0 220,386 0.02%
DE 15,811,493 899,459 58,125,985 4.63%
DK 3,673,520 37,704 11,330,845 0.90%
EE 829,704 34,599 304,072 0.02%
EL 1,276,545 56,056 50,239,133 4.01%
ES 25,581,930 25,070,499 177,283,110 14.13%
FI 929,786 0 737,319 0.06%
FR 19,173,737 3,919,214 146,586,954 11.69%
HU 2,909,026 0 1,613,141 0.13%
IE 4,310,922 62,967 10,149,974 0.81%
IT 11,858,824 876,018 622,054,576 49.60%
LT 632,473 33 1,053,585 0.08%
LU 83,610 1,948 69,900 0.01%
LV 1,451,180 26,227 557,504 0.04%
MT 48,390 6,570 39,737 0.00%
NL 4,684,273 60,073 19,924,025 1.59%
PL 4,678,701 466 2,298,822 0.18%
PT 8,791,585 365,679 51,569,720 4.11%
RO 0 0 0 0.00%
SE 2,033,769 21,858 1,218,498 0.10%
SI 1,862,283 3,636 888,093 0.07%
SK 104,416 141,697 1,972,812 0.16%
UK 2,550,844 424,970 30,902,485 2.46%
Total 125,060,937 32,412,108 1,254,220,230 100.00%outstanding
data provided by DG AGRI on 31 March 2009Table AG15
Tables 1-4 of Annex III of Regulation (EC) No 885/2006
Financial year 2008Financial information on recovery cases
 
3.4.2.  Sanctions 
The agricultural sector is  renowned for its severe penalty system. Community 
legislation provides a mandatory system  for imposing penalties. Reg. 1848/2006 
obliges Member States to report details c oncerning the initiation or abandonment of 
any procedures for imposing administrative or  criminal sanctions as well as the main 
results of such procedures.  
Module 1848 offers the possibility to report more in detail if sanctions are imposed 
and, if positive, which kind of sanctions are imposed. As already indicated, Module 
1848 was introduced in 2008 therefore Member St ates still need to  get used to the 
new way of reporting. The figur es concerning sanctions th erefore need to be read 
with the necessary caution.  
In 2008, Member States reported 1,133 cases. In 220 cases, Member States indicated 
that for: 
• 14 cases a decision still needed to be taken (pending); 
• 49 cases no sanctions would be imposed; 
• 33 cases a sanction would be imposed but the sanction itself still needs to be 
determined; 
 
EN 57   EN • 121 cases an administrative sanction had been imposed; 
• 3 cases a penal sanction had been imposed. 
In all other 913 cases (81%),  no information was received from Member States. 
Member States indicated in 188 cases the type of sanctions im posed. Member States 
indicated that in 130 cases a "community administrative sanction" was imposed. In 
11 cases, penal sanctions were  imposed. It concerns 2 cas es in which imprisonment 
less than 1 year was imposed and 9 cases in which a financial sanction was imposed.  
The total amount of penalties imposed is  1.4% of the total amount affected by 
irregularities reported. The percentage is ra ther low despite the fact that Austria and 
Poland reported a relatively high per centage of financia l penalties, 28.4% 
respectively 38.4%. All other Me mber States reported a ze ro or a rather low amount 
of penalties imposed.  
Member States report only in a very limite d number of cases the sanctions applied 
and penalties imposed, therefore, these fi gures should be read with the necessary 
caution.  
 
EN 58   EN 3.5. Conclusions 
Introduction 
• a new reporting system was introduced in 2008: Module 1848; 
• successful IMS-pilot Germany thanks to the efforts of all involved parties; 
Reporting discipline: 
• reporting discipline of Member States improved in 2008 (78% Ö 92%); 
• all Member States used the electronic 1848-format74 to submit irregularities; 
• timely reporting should be improved by Austria, Sweden and Slovakia; 
• reporting of personal data is an atte ntion point for Germany and Finland; 
• budget lines (DG AGRI nomenclature) need  to be indicated in full detail, 
especially by Lithuania and Slovakia; 
• practices employed should be descri bed in more detail by Slovakia; 
• date on which the irregularity was co mmitted should be better indicated, 
especially by Hungary; 
• the compliance rate per key-elemen t for performing risk analysis: 
– timely reporting: 86% (2007: 87%) 
– personal data: 85% (2007: 68%) 
– measure affected: 93% (2007: 86%) 
– date irregularity committed: 97% (2007: 86%) 
– practices employed: 93% (2007: 47%) 
– financial impact: 99% (2007: 96%) 
• the EU-27 compliance rate is 92% (2007: 78%) 
General trends: 
• total expenditure in 2008 was about € 48.6 billion; 
• Member States reported 1,133 new irregularities in 2008; 
• total amount affected by irregula rities was about EUR 102 million; 
• introduction of a threshold of € 10,000 has led to a decrease of more than 65% of 
the total number of cases re ported in 2008 compared to 2006; 
• the number of cases and the amounts aff ected are not equally spread over all 
Member States: 
                                                 
74 Pre-IMS Module 1848, IMS Mo dule 1848, access database 18 48 or excel format 1848 
 
EN 59   EN – Belgium, Spain, Italy and Portugal re ported a relatively high amount of 
irregularities and/or a relativel y high total amount affected by 
irregularities; 
– Germany, France, Ireland and United  Kingdom reported a relatively 
low amount of irregularities and/or  a relatively low total amount 
affected by irregularities; 
• 18% of the irregularities c oncern the request for aid; 
• Most frequently occurring type of irre gularity (40%) concerned the action or non-
action of a beneficiary; 
• 10% of the irregularities were  detected before payment; 
Specific analysis: 
• the three main categories most affected by irregularities are: 
– fruit and vegetables: 92 cases involving EUR 40 million 
– rural development: 437 cases involving EUR 20 million 
– wine sector: 138 cases involving EUR 12 million; 
• the budget lines most affect ed by irregularities are: 
– fruit and vegetables: compensation to  encourage processing of citrus 
fruits 
– rural development:  
• improving the processing and marketing of agricultural products 
• investments in agricultural holdings 
– wine: restructuring and c onversion of vine yards 
Irregularity vs suspected fraud: 
• “suspected fraud” and “established fraud” cases, as a percentage of the total 
number of irregularities reported, vary be tween 7% (classification by MS) and 9% 
(classification by OLAF). 
Recovery75: 
• € 125 million was recovered during 2008 by the Member States from 
beneficiaries; 
• € 32 million was declared "i rrecoverable" during 2008; 
• € 1,254 million is outstanding at  the end of 2008 at the leve l of the beneficiaries; 
                                                 
75 Information is based on the financial information tr ansmitted by the Member St ates to DG AGRI in the 
context of Annex III of Reg. 885/2006 
 
EN 60   EN Penalties: 
• 188 cases (17%) in which sanctions were imposed; 
• 11 penal sanctions were imposed, including 2 cases of imprisonment; 
• Austria and Poland reported more financia l penalties than other Member States.  
 
EN 61   EN 4. EUROPEAN FISHERY FUND 
Commission Regulation (EC) No 498/2007 of 26 March 200776 lays down detailed 
rules for the implementation of Council Regulation (EC) No 1198/2006 which establishes the European Fisheries Fund (EFF) and defines the framework for Community support for the sustainable devel opment of the fisheries sector, fisheries 
areas and inland fishing. 
Chapter VIII of Regulation (EC) 498/2007 co ntains the relevant provisions for the 
reporting of irregulariti es to the Commission, establishing a set of rules that are very 
similar to those foreseen for the Structural Funds. 
During 2008, no irregularities have been repo rted by the Member States concerning 
this Fund. 
                                                
 
76 OJ L120, 10.05.2007. 
 
EN 62   EN 5. STRUCTURAL MEASURES (ANNEXES 13-17) 
In 2007, Member States repo rted 3,858 irregularities un der Regulation (EC) No 
1681/94 which covers the four Structural Funds77 and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). 9 irregulariti es were reported under Regulation No 
1828/2006, which covers the programming period 2007-201378.  
The total amount affected by irregula rities in 2008 was about EUR 585.2 million, 
EUR 528.9 million of which was from the Structural Funds and EUR 56.3 million from the Cohesion Fund. Irregularities reporte d in this sector were equivalent to 
1.25% of the resource allocations for 2008. 
Since the information system of irregularit ies was established, Member States have 
reported 28,627 irregularities, of which 27,619 related to the Structural Funds and 
1,008 to the Cohesion Fund. 
5.1. Reporting Discipline 
In 2008, the Commission received 8,401 communications
79 under Regulations (EC) 
Nos 1681/9480, 1831/9481, and 1828/2006 of which 4,331 were updates of cases that 
                                                 
77 For the programming period 2000-2006, the four Structural Funds are: 
a) The European Regional Development Fund (ERDF), supporting primarily productive investment, 
infrastructure and development of SMEs; 
b) The European Social Fund (ESF), supporting measures to promote employment (education 
systems, vocational training and recruitment aids); 
c) The Guidance Section of the European Agricultural Guidance and Guarantee Fund (EAGGF-
Guidance), supporting measures for the adjust ment of agricultural structures and rural 
development; 
d) The Financial Instrument for Fishery Guidance (FIF G), supporting measures for the adjustment of 
the fisheries sector and the ‘accompanying  measures’ of the co mmon fishery policy. 
78 For the programming period 2007-2013, the Structural Funds are: 
 a) the ERDF; 
 b) the ESF; 
 c) the European Fishery Fund (EFF - see chapter 4). 
79 Commission Regulations foresee four different types of communications:  
 a) initial communication: this is the communication w ith which a new irregularity is reported to the 
Commission services. The legal basis for these communications is contained in articles 3 of Regulations 1681/94 and 1831/94; article 28 of Commission Regulation 1828/2006; 
 b) update communication: with this type of communication, Member States update, integrate, modify 
the irregularities notified with the communication under a). The legal basis for this type of 
communications is contained in articles 5§1 of Regulations 1681/94 and 1831/94 and article 30§1 of 
Regulation 1828/2006; 
 c) urgent cases: this type of communication is (very seldom) used by Member States when they want to 
inform, without any delay, the Commission and othe r Member States of new malpractices that they 
have detected or about irregularities which may affect other Member States. The legal basis for this 
communications are articles 4 of Regulations 16 81/94 and 1831/94 and article 29 of Regulation 
1828/2006; 
 d) special report: more than a different type of communication this is a special report that may integrate 
some of the communications described under b). Where a Member State considers that an amount 
cannot be recovered or is not expected to be rec overed, it shall inform the Commission, in a special 
report, of the amount not recovered and of the facts relevant to the decision on apportionment of the 
 
EN 63   EN had been previously reported. For the firs t time, irregularities concerning the new 
programming period 2007-2013 were received from Bulg aria, the Czech Republic 
and Slovenia. 
During 2008 the use of the electronic facility put at disposal of the Member States 
has seen a further increase; as a result, almost 78% of the communications has been 
reported through electronic means as showed in Chart 1. 
Chart SF 1: Reporting of irregularities – used formats 
69.2%
8.6%22.2%
electronic electronic file paper 
The increased use of the electronic reporting system led to an improvement in data 
quality and in timeliness of reporting. It  also reduces different understanding and 
interpretations of the reporting system and, th erefore, improves the consistency of the 
information submitted to the Commission. 
Though not all Member States have been  using the electronic facility provided 
through the AFIS-ECR platform, all of them have been trained for the new reporting 
system IMS and showed their willingness to use it as soon as it will become operational in the course of 2009. 
In relation to 2007 the situation has been improving under almost all respects. Table 
SF1 shows a summary of the major elements  that have been taken into account for 
evaluating the compliance of Member States  with the reporting obligations. Member 
States are ranked in decreasing order of ove rall compliance. The elements that have 
been examined for producing this table are the following: 
(1) timely reporting: it calculates the percentage of the communications that has 
been transmitted within the foreseen deadlines; 
(2) time gap: indicates the percentage of irregularities that has been 
communicated within 24 m onths following detection; 
                                                                                                                                                        
 
loss. The legal basis is contained in articles 5§2 of Regulations 1681/94 and 1831/94 and article 30§2 of 
Regulation 1828/2006. 
80 As amended by Regulation (EC) No 2035/2005. 
81 As amended by Regulation (EC) No 2168/2005. 
 
EN 64   EN (3) programme number: indicates the percenta ge of irregularities for which the 
indication of the numbers identifying the programme interested by the irregularity is provided; 
(4) practises adopted: shows the percentage  of irregularities for which the 
description of the practises adopted has been indicated; 
(5) classification: indicates the percentage of the irregularities for which Member 
States indicated whether they constituted an "administrative irregularity", a "suspected fraud" or an "established fraud"; 
(6) date established: shows th e percentage of the irregularities for which the date 
in which the irregularity has been  established has been provided; 
(7) personal data: indicates the percentage of  the reported irregularities for which 
the data identifying the legal entities or  natural persons have been provided; 
(8) compliance: is calculated as  the average of all the values indicated in columns 
from a) to g). 
Table SF1: compliance per Member State year 2008 
MStimely 
reportingtime gapprogramme 
numberpractises 
employedclassificationdate 
establishedpersonal data compliance MS
SE 30% 58% 100% 99% 10% 99% 99% 71% SE
FR 97% 73% 100% 100% 0% 100% 99% 81% FR
ES 100% 83% 100% 100% 0% 98% 100% 83% ES
SK 52% 86% 86% 92% 73% 98% 100% 84% SK
DK 100% 100% 100% 100% 0% 100% 100% 86% DK
EL 30% 86% 96% 100% 91% 97% 100% 86% EL
IE 100% 100% 100% 100% 0% 100% 100% 86% IE
DE 100% 93% 100% 100% 100% 100% 23% 88% DE
AT 35% 89% 100% 100% 100% 95% 100% 88% AT
IT 99% 49% 100% 99% 99% 99% 100% 92% IT
HU 77% 92% 100% 100% 100% 90% 100% 94% HU
PT 75% 92% 100% 100% 100% 100% 100% 95% PT
FI 100% 75% 100% 96% 96% 100% 100% 95% FI
PL 72% 99% 100% 100% 100% 100% 99% 96% PLCZ 94% 99% 100% 100% 93% 100% 100% 98% CZ
BE 100% 94% 100% 100% 100% 91% 100% 98% BE
UK 98% 98% 100% 99% 99% 93% 100% 98% UK
LT 91% 100% 100% 100% 100% 100% 100% 99% LT
NL 99% 93% 100% 100% 100% 100% 100% 99% NL
CY 100% 100% 100% 100% 100% 100% 100% 100% CY
EE 100% 100% 100% 100% 100% 100% 100% 100% EE
LV 100% 100% 100% 100% 100% 100% 100% 100% LV
MT 100% 100% 100% 100% 100% 100% 100% 100% MT
SI 100% 100% 100% 100% 100% 100% 100% 100% SI
BG 100% 100% 0% 100% 100% 100% 100% 86% BG
L U --- -- --- L U
R O --- -- --- R O
total 86% 90% 95% 99% 78% 98% 97% 92% total
 
The average compliance level has incr eased from 84% of 2007 to 92% of 2008, 
underlying the commitment undertaken by th e Commission and th e Member States 
for improving the situation. It also confirms that the increase of use of the electronic 
reporting facilities had a positive effect on the quality of the information submitted. 
Only two elements of the communications of irregularity still present a level of 
compliance which deserves some further attention:  
 
EN 65   EN (9) classification: though the compliance w ith this obligation is increasing in 
relation to 2007 (from 67% to 73%), this remains th e weakest element in the 
implementation of the regulation82; 
(10) time gap: still 18% of the irregularities are reported with a time gap greater 
than 2 years from the moment of de tection. 16% of the irregularities are 
reported between 12 and 24 months after detection. 
Apart from these two elements, the situation can be considered satisfactory, with a 
compliance rate of 92%. 
5.2. General Trends 
5.2.1.  Overall trends 
In 2008 the number of irre gularities reported increased  by around 6.7% as compared 
to the year before. However, the relate d irregular amounts decr eased of about 27.2%, 
from EUR 804.1 million (including the Cohe sion Fund) to EUR 585.2 million. As far 
as the number of irregularities communicated is concerned, it has reached its peak in 
2002 with more than 4,500 irregularities not ified. This situati on was due to the 
closure of the programming period 1994-1999. As shown in Chart SF2, since then 
the number of reported irregularities has be en increasing with the only exception of 
2006. 
Chart SF 2: 1998-2007 trend concerning number of reported irregularities for the Structural 
Funds, the Cohesion Fund and in total 
01,0002,0003,0004,0005,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
YearIrregularities
Structural Funds Cohesion Fund Total
 
In 2008, the number of irregularities ke pt on rising, up to  4,007 (including the 
Cohesion Fund). The number of irregularitie s reported from the new Member States 
(EU10) increased by 52.4%, while those reported by the old Member States 
decreased by 1%; Bulgaria reported its first irregularities in 2008. 
                                                 
82 With the introduction of the new reporting system, the problem will be entirely solved, as the field will 
become compulsory. 
 
EN 66   EN Among the EU10, with the sole exceptions of Malta (-67%) and Estonia (-12%), the 
increases varied between +25% (Poland) and +386% (Lithuania). 
Among the EU15, the most significant decr eases were those of Luxembourg (no 
reported irregularities) and Ire land (-85%), while the most significant increases were 
those of Sweden (+97%) a nd the Netherlands (+75%). 
5.2.1.1.  Trends related to the Funds 
Irregularities affecting projects finan ced through the ERDF remain the most 
frequently reported, as showed in Chart SF 3. 
Chart SF 3: Distribution of i rregularities am ong the Funds - 2008 
CF
3%EAGGF - Guid.
10%
ERDF
56%ESF
30%FIFG
1%
 
The trend per Fund showed in Chart SF 4 confirms the overall increase of 
irregularities related to the ERDF in the last years with the exception of the years 
2003 and 2006. 
Chart SF 4: Overall trend by Fund – 1998-2008 
 
EN 67   EN 05001,0001,5002,0002,5003,0003,5004,0004,5005,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008CF EAGGF - Guid. ESF FIFG ERDFControl Obj (All)no irregularity (All)
Count of Affected €
Year Funds 
 
Since 2003, the other three Structural Funds  remain quite stable. In comparison to 
2007, irregularities referred to the Cohe sion Fund and the ERDF increased by 63% 
and 18% respectively. Those related to the ESF, EAGGF – Guidance and FIFG 
decreased by 4%, 17%and 17% respectively. 
5.2.1.2.  Trends related to Member States 
Like in previous years, the irregularitie s are not distributed equally among Member 
States.  
Taking into consideration how the irre gularities are distributed among Member 
States, like in previous years the biggest countries and those with the highest overall 
funding from the Cohesion policy report the mo st irregularities. In 2008, the highest 
number of irregularities wa s reported by Italy (802, +24%),  Spain (552, -14%), the 
United Kingdom (483, -3%), Portugal ( 425, -22%), and Poland (337, +25%).  
In the analysis of the particular funds, the irregularities are split differently among 
the Member States than in the total number of cases.  
For example, in the European  Social Fund (ESF) irregulari ties, the Netherlands is the 
country having reported the highest numb er of irregularities (208), followed by 
Portugal (162), Germany (157), Sweden and Spain (121).  
In the European Regional Development Fund (ERDF) the countries reporting the 
most irregularities are Italy (589), th e United Kingdom (348) , Spain (307) and 
Poland (197).  
In the European Agriculture Guarant ee and Guidance Fund – Guidance section 
(EAGGF-Guidance), Italy reported the hi ghest number of irre gularities (102), 
followed by Poland (73), Portugal (61), and Spain (54).  
 
EN 68   EN In the Financial Instrument for Fishery Gu idance (FIFG), irregularities from Greece 
and Italy (12), and the Unite d Kingdom (9) account for more  than 67% of the total 
number of reported irregular ities affecting this Fund. 
Finally, concerning the Cohesion Fund, Spain reported almost 47% of the received 
irregularities (64) for this  fund, followed by Portugal (22) and Hungary (13). Greece, 
which in the previous years had reported the greatest share of the irregularities 
affecting this Fund, comes in fourth pl ace (12) Concerning this Fund a certain 
concern remains as to the reliability of the reported information, as the number of 
reported irregularities appears too low in relation to the other funds and the allocated 
resources. 
5.2.2.  Amounts involved 
The irregular amounts decreased significantly (-27.2%). It is difficult to explain this 
variation also in relation to the increased  number of reported i rregularities. It can 
happen, however, that in ce rtain years some irregulari ties involving great amounts 
are detected and that can greatly influence the overall situation.  
Chart SF5 shows the trend of the ir regular financial amounts since 1998. 
Chart SF 5: 1998-2008 trend concerning irregul ar financial amounts for the Structural 
Funds, the Cohesion Fund and in total 
0100,000,000200,000,000300,000,000400,000,000500,000,000600,000,000700,000,000800,000,000900,000,000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008YearEUR
Structural Funds Cohesion Fund Total
 
The irregular financial amounts related to  the reported irregularities increased by 
165.3% for the EU10 and decreased by 35.1% for the EU15.  
The possible explanation for the differe nce between the EU10 and EU15 could be 
that the implementation of the programme s financed under the Cohesion policy only 
started in 2004 for the new Member States and, consequently, they  needed some time 
for a full implementation of the system  and an improved compliance with the 
reporting obligations. 
 
EN 69   EN It seems also premature to indicate whether the decrease in terms of irregular 
financial amounts represents an inversion of the general tendency th at for the last ten 
years (1998-2007) has seen an upward trend.  
It should also be stressed that, as of 2007, the new programming period 2007-2013 
comes into relevance. The first irregularities related to the new programmes have been reported in 2008. 
Only a part of these irregular ities have real financial c onsequences and constitute a 
specific potential loss to the European budget. In fact , some irregularities are 
detected before any payment is made and the question of recove ry does not arise; 
others are corrected at the closure of th e relevant programming period (for more 
details see infra paragraph 5.3.3). 
Moreover, the majority of irregularities having a real financial impact are not 
fraudulent and, once an irregular situation has been identified, corrective measures 
are adopted and recovery pro cedures started. These may take some time. In cases of 
suspected fraud, however, penal or judicial  procedures are activated and longer 
delays can be expected. 
As far as amounts per country are concerned, Spain has reported th e highest irregular 
amounts (EUR 165.5 million; -22% in relati on to 2007), followed by the United 
Kingdom (EUR 123.3 million; -24%), Italy (EUR 75 million; -52%) and Poland 
(EUR 35.6 million; +91%). This "ranking" follo ws the same pattern as last year, with 
the exception of Poland.  
Table SF2 summarises the number of irre gularities and related amounts reported by 
each Member State. 
The huge differences between Member States  in terms of number of irregularities 
and amounts affected do not necessarily m ean that one country is more fraudulent 
than another. The reason for the high numb er of irregularities in the given country 
could be as well a higher number of controls  carried out in the analysed year, while 
the reason for a lower number in another co uld be also relate d to a restrictive 
interpretation of th e reporting obligation. 
Table SF2: Number of cases and amounts affect ed by irregularities per Member State
83  
                                                 
83 Number of irregularities and related irregular financial amounts may vary in relation to those published 
in the Statistical Annex to the 2 007 Report. This is the result of updates received in 2008, which may 
have altered the implicated financial amounts or specifi ed that, at the end of the relevant procedures, it 
was decided that a previously reported case did not constitute an irregularity. 
 
EN 70   EN 2007 2008 Variation 2007 2008 Variation
NN% E U R E U R %
AT 28 37 32% 4,693,512 2,862,186 -39%
BE 28 35 25% 1,509,381 1,543,157 2%
BG 0 4 #DIV/0! 0 804,317 #DIV/0!
CY 1 4 300% 1,924 172,298 8855%
CZ 36 82 128% 4,843,686 14,016,754 189%
DE 398 372 -7% 39,981,097 20,985,235 -48%
DK 8 7 -13% 174,560 678,343 289%
EE 33 30 -9% 1,301,384 2,182,511 68%
EL 88 108 23% 94,431,569 24,692,137 -74%
ES 643 552 -14% 211,547,204 165,579,427 -22%
FI 41 28 -32% 2,482,502 1,813,410 -27%
FR 140 98 -30% 6,179,164 4,998,359 -19%
HU 37 52 41% 3,319,853 4,698,975 42%
IE 33 5 -85% 8,720,548 14,801,190 70%
IT 646 802 24% 156,459,194 74,918,714 -52%
LT 7 34 386% 439,974 11,528,487 2520%
LU 8 0 -100% 248,458 0 -100%
LV 9 27 200% 1,915,523 944,019 -51%
MT 3 1 -67% 138,032 410,761 198%
NL 150 262 75% 26,553,667 28,722,509 8%
PL 269 336 25% 18,631,502 35,558,898 91%
PT 542 425 -22% 52,386,787 35,124,176 -33%
SE 74 146 97% 3,399,715 3,718,729 9%
SI 4 13 225% 128,793 430,933 235%
SK 30 64 113% 2,251,790 10,742,355 377%
UK 500 483 -3% 162,362,258 123,321,443 -24%
TOTAL 3,756 4,007 7% 804,102,077 585,249,322 -27%MS N° of irregularities Irregular amounts (in EUR)
 
5.2.2.1.  The four Structural Funds 
As not all Member States benefit of th e resources coming from the Cohesion Fund, 
Table SF3 presents the same information as  in Table SF2, but limiting it to the four 
Structural Funds. 
 
EN 71   EN Table SF3: Number of cases and amounts affected by irregularities per Member State limited 
to the four Structural Funds 
2007 2008 Variatio n 2007 2008 Variation
NN % E U R E U R %
AT 28 37 32% 4,693,512 2,862,186 -39%
BE 28 35 25% 1,509,381 1,543,157 2%
BG 0 4 #DIV/0! 0 804,317 #DIV/0!
CY 1 4 300% 1,924 172,298 8855%
CZ 34 80 135% 4,843,686 13,928,544 188%
DE 398 372 -7% 39,981,097 20,985,235 -48%
DK 8 7 -13% 174,560 678,343 289%
EE 31 28 -10% 1,234,469 2,052,897 66%
EL 63 96 52% 27,172,119 19,754,366 -27%
ES 609 488 -20% 178,961,878 140,751,472 -21%
FI 41 28 -32% 2,482,502 1,813,410 -27%
FR 140 98 -30% 6,179,164 4,998,359 -19%
HU 34 39 15% 2,688,597 3,298,037 23%
IE 32 2 -94% 2,082,358 5,303,050 155%
IT 646 802 24% 156,459,194 74,918,714 -52%
LT 4 26 550% 110,823 3,247,919 2831%
LU 8 0 -100% 248,458 0 -100%
LV 8 22 175% 1,869,769 857,740 -54%
MT 3 1 -67% 138,032 410,761 198%
NL 150 262 75% 26,553,667 28,722,509 8%
PL 261 329 26% 18,040,864 35,344,144 96%
PT 538 403 -25% 51,521,352 29,468,297 -43%
SE 74 146 97% 3,399,715 3,718,729 9%
SI 4 13 225% 128,793 430,933 235%
SK 27 62 130% 1,524,686 9,533,552 525%
UK 500 483 -3% 162,362,258 123,321,443 -24%
TOTAL 3,670 3,867 5% 694,362,858 528,920,411 -24%MS N° of irregularities Irregular amounts (in EUR)
 
The overall picture varies on ly partly in relation to Table SF2, with Spain still 
reporting the highest irregular  financial amounts (140 MEUR, -21% in relation to the 
year 2007), followed by the United Ki ngdom (123 MEUR, -24%%), Italy (75 
MEUR, -52%) and Poland (35 MEUR, +96%). 
Concerning the ERDF, Spain, the United Kingd om and Italy are the countries which 
reported the highest irregular fina ncial amounts, followed by Portugal. 
In the ESF, the United Kingdom and the Netherlands are followed by Italy and 
Portugal like in 2007. The firs t of the EU10 is Poland. 
In the EAGGF section Guidance, the highest  irregular financial amounts have been 
reported by Italy, Portugal and Spain. Pola nd is the Member State of the EU10 group 
with the highest report ed irregular amounts. 
In the FIFG, Italy is the country having reported the highest amounts, followed by 
Greece. 
The details of the irregular financial amounts reported by each Member State by 
Fund are showed in Annex 15, Part 2. 
 
EN 72   EN 5.2.2.2.  The Cohesion Fund 
For the Cohesion Fund, Spain is the Member State having reported the highest 
irregular amounts (almost 25 ME UR), though with a signifi cant decrease in relation 
to 2007 (-24%); it is followed by Ireland (9.5 MEUR; +43%) and Lithuania (8.2 MEUR; +2,416%). Table SF4 shows the deta ils for this Fund by Member State. 
Table SF4: Number of cases and amounts affect ed by irregularities per Member State – 
Cohesion Fund  
2007 2008 Variatio n 2007 2008 Variation
NN % E U R E U R %
CZ 2 2 0% 0 88,210 #DIV/0!
EE 2 2 0% 66,915 129,614 94%
EL 25 12 -52% 67,259,450 4,937,771 -93%
ES 34 64 88% 32,585,326 24,827,955 -24%
HU 3 13 333% 631,256 1,400,938 122%
IE 1 3 200% 6,638,190 9,498,140 43%
LT 3 8 167% 329,151 8,280,568 2416%
LV 1 5 400% 45,754 86,279 89%
PL 8 7 -13% 590,638 214,754 -64%
PT 4 22 450% 865,435 5,655,879 554%
SK 3 2 -33% 727,104 1,208,803 66%
TOTAL 86 140 63% 109,739,219 56,328,911 -49%MS N° of irregularities Irregular amounts (in EUR)
 
Values related to the Cohesion Fund sti ll appear to be unreliable to allow a 
convincing analysis of the related trends. 
Further information concerning the irregula rities related to the Cohesion Fund by 
Member State is showed in Annexes 14 and 17. 
5.2.3.  Impact on budget 
Since 2002, the impact of re ported irregularities on the Structural measures budget 
has been oscillating between 1.9% (in 2002) and 1.25% (in 2008), as showed in chart 
SF6. 
Chart SF 6: Impact of irregularities on SF budget84 
                                                 
84 Figures may vary in relation to those published in the Statistical Annex to the 2007 Report. This is the 
result of updates received in 2008, which may ha ve altered the implicated financial amounts or 
specified that, at the end of the re levant procedures, it was decided that a previously reported case did 
not constitute an irregularity. 
 
EN 73   EN 0.00%0.20%0.40%0.60%0.80%1.00%1.20%1.40%1.60%1.80%2.00%
IMPACT ON BUDGET 1.25 1.77 1.69 1.56 1.73 1.44 1.89 0.71 0.38 0.38 0.282008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
 
In particular, in the period between 2003 and 2007, the impact on the budget of the 
reported irregularities has re mained rather stable.  
On the one hand, this supports the conc lusion that a certain consistency and 
continuity have been achieved in the re porting of irregularities by Member States. 
However, on the other hand, there is a grea t difficulty in analys ing correctly this 
information. The reported irregularities refe r to programmes and projects that are of a 
multi-annual nature and, furthermore, a part of the reported irregularities refers to a 
different programming period (for mo re details see paragraph 5.3 below). 
Furthermore, the budget for the year 2008, on which the impact  of irregularities 
reported by the Member States has been calculated, is indicating the resources 
allocated to the second y ear of the programming peri od 2007-2013, while only a very 
limited number of the reported irre gularities are referred to it. 
This implies that a correct estimation of the impact of irregular ities and suspected 
frauds on the part of the European budge t dedicated to the Cohesion policy is 
possible only by analysing irregularities by programming period. Paragraph 5.3 will deal with these specific issues.  
5.2.4.  Detection methods 
Table SF5 shows the most frequent det ection methods and the related detected 
amounts. 
Table SF5: detection methods 
 
EN 74   EN FrequencyDetected 
amountsAverage 
detected 
amounts
NE U R E U R
206 Control of documents 992 101,897,516 102,719
101National administrative or financial control 596 98,899,271 165,938
999 Other facts 480 154,813,939 322,529
161Additional control on request by the 
Commission 352 16,060,958 45,628
230On the spot control of achievement of project 
or action 265 21,824,978 82,358
209 Control on the premises of the company 238 21,772,159 91,480
208 Documentary check 159 13,228,962 83,201
199 Other controls 154 24,751,604 160,725
307 Routine 144 26,045,849 180,874
320 Ex post control 133 9,556,766 71,855Code Description
 
The amounts indicated are indicative insofa r as several detection methods may be 
reported in connection with a single irregularity and ther efore be double counted in 
the table. 
The main two types of controls emerging from the table are documentary checks and 
on-the-spot controls. 
Particularly significant is the high number of detecti ons that followed “Additional 
control on request of the Commission”. This “source” of detection is observed 
exclusively in Italy (341 cas es) and the Czech Republic. 
It should also be emphasised the excessive us e of generic codes such as "Other facts" 
and “Other controls”. Th e lack of further information on these methods is 
particularly regrettable, as these "cat egories" presents high average detected 
amounts. 
Contrary to previous years, documentary checks present a higher average detected 
amount than on-the-spot controls. 
The highest average detected amounts, howev er, are not displayed in Table SF5, as 
they refer to “methods of de tection” that have been re ported less frequently, namely: 
“control by police” (EUR 524,565 as average detection on 15 occurre nces); “initial 
enquiry” (EUR 468,628 in average on 37 occu rrences); and “Community control” 
(with an average of EU R 335,239 on 20 occurrences). 
5.2.5.  Types of irregularity 
Differences remain among Member States as  to the types of i rregularities reported 
and, for a great part, these are consistent with  last year. The majority of cases involve 
irregularities of an “administrative” nature that are normally detected in the course of 
the routine documentary checks which are conducted before any payment of 
European money is made. To demonstrate this, among the most frequent types of 
irregularity reported by Member States are the “not eligible expenditure” and 
“missing or incomplete supporting documents”.  
 
EN 75   EN Falsifications of documents were detected in Italy, Poland, Germany, the United 
Kingdom, Portugal, Latvia, Lithuania, Greece, Estonia, France and Cyprus. 
Table SF6 shows the most frequent types of  irregularities togeth er with the amounts 
involved and the indicative average amount85:  
Table SF6: Most frequent types of ir regularities reported by Member States 
FrequencyIrregular 
amountsAverage 
irregular 
amounts
NE U R E U R
325 Not eligible expenditure 1186 208,040,494 175,414
614 Infringement of rules concerned with public procurement 534 169,461,168 317,343
999 Other irregularities 510 54,499,725 106,862
210 Missing or incomplete supporting documents 356 51,077,689 143,477
201 Missing or incomplete documents 341 32,564,153 95,496
612 Failure to respect other regulations / contract provisions 215 34,221,421 159,169
812 Action not carried out in accordance with rules 175 34,673,676 198,135
601 Failure to respect deadlines 123 12,834,889 104,349
811 Action not completed 107 8,094,489 75,649
741 Failure to fulfill commitments entered into 107 8,919,288 83,358Code Description
 
It is important to underline that the most frequent types of irre gularities are almost 
the same as in the last four years confirming a certain consistency in patterns and trends relating to structural measures a nd consistency in repor ting by the Member 
States.  
The consistent pattern across all the funds is that the “not eligible  expenditure” is the 
most reported typology. In th e second place, “infringement of rules concerned with 
public procurement” is the second most reported typology for the ERDF and the 
Cohesion Fund. 
“Missing or incomplete supporting documents”  is the second most reported typology 
for the ESF and FIFG. 
It should be underlined that the generic code  “other irregularities ” is still the third 
most used typology. 
5.2.6.  Suspected frauds 
First estimations of which proportion of th e reported irregularities could be defined 
as “suspected frauds” were presente d in the Annual Reports since 2004. These 
attempts were mainly based on specific analyses of the information reported by the Member States concerning the modus operandi , the type of irregularity, the 
administrative state of an irregularity a nd the additional inform ation given in text 
fields. 
                                                
 
85 Both the irregular amounts and the average irregular amounts are to be considered only as indicative, in 
consideration of the fact that more than one typolo gy of irregularity may be reported in the same 
communication of irregularity. This may lead to do uble or triple counting of the same communication 
in the column frequency and irregular amounts. 
 
EN 76   EN After the modifications introduced by Regulations Nos 2035/2005 and 2168/2005 to 
the basic Regulations Nos 1681/94 and 1831/94, as of January 1st 2006, Member States have to “qualify” the reported irregularity, indicating whether the reported 
irregularity is a “suspected fraud” or not. The concept of “suspected fraud” is 
necessary, because a given situation can be defined as fraudulent only after a 
sentence is issued by a competent court.  
As already indicated in Table SF1, Member  States classified 78% of the reported 
irregularities (that is to say that they indicated whether the reported situation was evaluated as an administrative irregularity or a suspected fraud). It is an encouraging 
progress in relation to the previous year , when 67% of the reported cases provided 
for this indication, but it also  shows that there is sti ll room for improvement, in 
particular from certain Member States (4 Member States have still not provided any 
qualification at all; another could provide  the classification only for 10% of the 
reported irregularities. For more details, see supra par. 5.1). 
About 8.3% of the 2,916 irregularities fo r which qualification has been provided, 
were qualified as “suspected frauds”. This re sult is lower than last years’ estimations.  
Furthermore, by applying the same analyt ical techniques of the previous years
86 to 
the data set classified by the Member States , the results obtained ar e rather consistent 
with those obtained on the portion of information received from the Member States 
as indicated in table SF7. In fact, the results differ in onl y 1.47% of the cases. 
However, all these differences are related to  cases that according to the analysis by 
the Commission should have been classi fied as cases of suspected frauds. 
Table SF7: Comparison between Commissi on and Member State classification of 
irregularities 
Classification Different Same TotalDiffrence as % 
of total
suspected fraud 43 243 286 15.03%
irregularit y 2,630 2,630 0.00%
Total 43 2,873 2,916 1.47% 
It should be also highlighted that from a very detailed analysis of the cases where 
differences exist, elements provided by the Member States induce to consider correct 
the re-classification ope rated by the Commission87. 
                                                 
86 The estimation method has remained basically the same, with some minor variations, following the 
lessons “learned” in analysing the cases directly classified by the Member States. This slightly 
“revised” method has been applied again to the entir e database of reported irregularities for the years 
2000-2007 in order to produce Chart SF15. The different method used explains the different values 
showed on that chart in comparison with similar char ts appeared on the statistical annexes to the annual 
reports for the years 2005 and 2006. 
87 The descriptions provided by the Member States of the modus operandi linked to these communications 
of irregularity show that falsified documents, d eclarations of certificates were used. Under these 
circumstances, the Commission believes that those communications of irregularities should have been 
classified as “suspicion of fraud”. 
 
EN 77   EN Despite the consistent and positive results showed above in terms of comparability 
and compatibility of the two appro aches (the Member States’ and the 
Commission’s), still some cau tion is recommended in asse ssing the meaning of these 
figures. A 100% qualification from the Me mber States would remove this caution, 
but these results are, indeed, encouraging.  
Chart SF788 presents the trend of the percentage of suspected frauds on the total 
reported irregularities in the last eight years calculated according to Commission’s 
estimations and Member States' classifications. 
Table SF 8 shows the values represented on the chart. 
Chart SF 7: Level of “suspected frauds” on total reported irregularities from 2000 to 2008  
0.00%5.00%10.00%15.00%20.00%25.00%
2001 2002 2003 2004 2005 2006 2007 2008
Year% on total
Cases classified by COMM. Amounts linked to cases class. COMM
Cases classified by MS Amounts linked to cases class. MS 
Table SF 8: Level of "suspected frauds" on total reported irregularities from 2000 to 2008 
                                     Year
Classification2001 2002 2003 2004 2005 2006 2007 2008
Cases classified by EC 4.9% 2.2% 6.9% 10.3% 10.0% 14.1% 12.1% 7.4%
Cases classified by MS 4.9% 2.2% 6.9% 10.3% 10.0% 13.7% 15.0% 8.3%
Amounts linked to cases class. EC 5.3% 3.5% 9.3% 17.2% 20.1% 22.2% 16.7% 9.8%
Amounts linked to cases class. MS 5.3% 3.5% 9.3% 17.2% 20.1% 21.1% 23.7% 15.0% 
Chart SF7 also witnesses the caution undertaken by the Commission to provide a 
classification of the irregularities compa tible with that provided by the Member 
States. 
The percentage of suspicions of fraud on th e total reported irregularities, according to 
Commission's estimations was about 7.4%. As  percentage of the irregular amounts, 
this share raises to 9.8%. According to  Member States' classifications, these 
percentages are, resp ectively 8.3% and 15%. 
                                                 
88 As data referred to the Cohesion fund are considered  not entirely reliable for this type of estimation, 
they have been excluded from this chart. See also footnote 51 for more details about data showed on 
this chart. 
 
EN 78   EN The different results between the two analyses depend almost exclusively on the fact 
that the analysis by the Comm ission makes use of the entire  data set of irregularities, 
while that based on the classification by the Member States uses a smaller data set 
(due to not complete compliance with th e reporting obligations as explained under 
paragraph 5.1). 
The analysis of the Commission highlights a decreasing tendency of the reported 
suspicion of frauds and related amounts (expressed as percen tage of the total 
reported irregularities and ir regular amounts) from 2006 to 2008. It is premature to 
conclude about a diminution of fraud in the sector, as results may be easily influenced by the detection of  cases of suspicion of fraud with bigger or smaller 
amounts involved, but it is worth mon itoring it in the coming years. 
On the basis of this estimation, in 2008, re ported “suspected frauds’ affect about 
0.11% of the annual budget for the Cohesion Policy. 
However, this does not mean that this amount  turns out into a lo ss for the European 
budget. In fact, these amounts relate to suspected fraudul ent behaviours that have 
been detected by national authorities and for which recovery procedures are ongoing. 
Moreover, when these situations were detect ed in early stages of the process, the 
“potential” loss is even decreased, because  no payments or only interim payments 
have been granted. 
By analysing only the cases estimated to be considered as “suspected frauds”, the 
amounts still to be recovered related to  them impacts on the EU budget for 0.07%. 
5.3. Specific analysis – Irregularities re lated to the programming period 2000-2006 
The specific analysis focu ses on the programming period  2000-2006; the data set is 
composed of all the irregular ities related to it reported until the four th quarter 2008. 
In order to improve the comparability among the different Member States, the irregularities referred to the Cohesion Fund are not included. 
Chart SF8 shows the trend of  reported irregularities (bot h in terms of numbers and 
financial amounts involved) referred to the programming period 2000-2006 as from 
the year 2000. 
Chart SF8: 1998-2008 trend concerning number of  reported irregularities and irregular 
amounts – Programming Period 2000-2006 
 
EN 79   EN 05001000150020002500300035004000
2000 2001 2002 2003 2004 2005 2006 2007 20080100,000,000200,000,000300,000,000400,000,000500,000,000600,000,000700,000,000
N° of irregularities Irregular financial amounts 
Irregularities related to this programming period have been steadily increasing year 
after year. This is due to the fact that cont rols on the projects also progressed with the 
advancing of the financed operations. It is worth remembering that the projects 
financed through the Structural Funds are implemented during several years. 
Table SF 9 shows the data displayed on Ch art SF 8 and also includes the amounts of 
annual payments from the Commission to th e Member States indicating the related 
irregularity rate. 
The irregularity rate is calc ulated by dividing the irre gular financial amounts by the 
payments. 
Table SF 9: number of reported irregularitie s, irregular amounts, payments and irregularity 
rate – Programming Period 2000-2006 
N° of 
irregularitiesIrregular 
financial 
amountsPaymentsIrregularity 
rate
Year N in € in € %
2000 5,896,617,764 0.00%
2001 28 2,555,203 14,637,640,421 0.02%
2002 215 17,380,656 19,012,125,217 0.09%
2003 872 97,224,524 22,614,405,912 0.43%
2004 1,784 269,104,738 27,843,965,869 0.97%
2005 2,736 352,331,283 29,492,375,271 1.19%
2006 2,601 394,036,559 29,006,976,704 1.36%
2007 3,547 655,384,790 31,253,098,906 2.10%
2008 3,791 516,308,646 23,777,411,214 2.17%
TOTAL 15,574 2,304,326,399 203,534,617,279 1.13% 
The irregularity rate is con tinuously increasing and it is expected to increase even 
more in the coming years when the pa yments for the programming period 2000-2006 
will be over but irregularities will keep on been reported. 
 
EN 80   EN Chart SF9 puts in comparison the trend related to the programming period 2000-
2006 with that of the previous  round in terms of numbers of  reported irregularities, in 
order to show that even af ter the year of closure of  the period 1994-1999 (Year 9), 
irregularities keep on being communicated. 
Chart SF 9: 1998-2006 trend concerning number of reported irregularities and irregular 
amounts – Programming Period 2000-2006 
050010001500200025003000350040004500
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15
PP1994-1999 PP2000-2006
 
The chart clearly shows that the number of  irregularities related to the current 
programming period reported in the first 8 years from its be ginning are many more 
than those related to the previous. 
This is due to a number of reasons. The incr eased resources allocated to the structural 
measures, the higher number of Member St ates that benefit from them, a better 
understanding of the reporting obligations  from national authorities, but also, 
probably, a growing atten tion to this sector. 
5.3.1.  Irregularities affecti ng the different funds 
Table SF10 summarises, in relation to each  of the Structural Funds, the number of 
irregularities, the relate d irregular financial amount s, the payments and the 
irregularity rate calculat ed as the ratio between irregular financial amounts and 
payments. Please note that the irregularity rate results slightly lower in Table SF9 
than in Table SF8 as also payments from 2009 are included. 
Table SF10: Irregularities, payme nts and irregular rate by Fund  
N° of 
irregularitiesIrregular 
financial 
amountsPayments% of total 
paymentsIrregularity 
rate
FUNDS Ni n  € i n  € % %
ERDF 7,821 1,650,637,971 118,209 ,399,770 57.65% 1.40%
ESF 5,723 489,173,068 62,361 ,452,725 30.41% 0.78%
EAGGF - Guid. 1,783 142,012,561 20,933 ,544,318 10.21% 0.68%
FIFG 247 22,502,800 3,534,788,108 1.72% 0.64%
TOTAL 15,574 2,304,326,399 205,039,184,921 100.00% 1.12% 
 
EN 81   EN Charts SF10 and SF11 show the distribut ion of the 15,495 irre gularities and the 
related irregular financial am ounts among the different Funds. 
Chart SF10 (left): Distribution of irregularities by Fund  
Chart SF 11 (right): Distribution of irregular financial amounts by Fund 
ERDF
50%
ESF
37%EA GGF - Guid.
11%FIFG
2%
 ERDF
72%ESF
21%EA GGF - Guid.
6%FIFG
1%
 
While in terms of number of reported ir regularities the ERDF seems slightly under-
represented in comparison with its share of  the payments (58%), the irregularities 
financial amounts related to Regional De velopment Fund have a higher relative 
weight that is greatly exceeding its share of the payments (72% of the total irregular amounts against 58% of the total payments).  This difference may be justified by the 
fact that the ERDF finances projects of  a higher value and therefore irregularities 
tend also to have a greater amount. 
It is interesting to note that in Table SF 9, the other three funds have an ‘Irregularity 
rate’ that is very similar (between 0.64% and 0. 78%), wh ile that of the ERDF is 
almost double than that of the ESF. 
5.3.2.  Irregularities by Objective  
The Cohesion policy aims at supporting the economy of regions lagging behind or in 
a difficult contingent economic situation. The European support;  which is always 
accompanied by a national support, varies acco rding to the fact that a region falls 
within the area of  a given objective
89.  
Table SF11 summarises, in relation to each  of the Objective, the number of 
irregularities, the relate d irregular financial amount s, the payments and the 
                                                 
89 Three general objectives are foreseen for the programming period 2000-2006: 
a) Objective 1: promote the development and structural adjustment of regions whose development is 
lagging behind; 
b) Objective 2: supporting the economic and social conversion of areas experiencing structural 
difficulties; 
c) Objective 3: supporting the adaptation and modernisation of education, training and employment 
policies and systems in regions not eligible under Objective 1. 
Furthermore, through the Funds are also financed the so called “Community Initiatives” , aimed at intervening 
on specific aspects such as, for example, st imulating interregional cooperation (INTERREG); 
promoting the design and implementation of innovative models of development for the economic and 
social regeneration of troubled urban areas (URBAN).  
 
EN 82   EN irregularity rate calculat ed as the ratio between irregular financial amounts and 
payments. Please note that the irregularity rate results slightly lower in Table SF10 
than in Table SF8 as also payments from 2009 are included. 
Table SF11: Irregularities, payment s and irregular rate by Objective 
N° of 
irregularitiesIrregular 
financial 
amountsPayments% of total 
paymentsIrregularity 
rate
OBJECTIVES N in € in € % %
Objective 1 9,637 1,635,632,923 148,0 48,550,689 72.21% 1.10%
Objective 2 2,486 386,877,753 22,175,231,947 10.82% 1.74%
Objective 3 2,556 207,304,061 23,564,856,681 11.49% 0.88%
Interre g 362 48,027,039 4,924,646,802 2.40% 0.98%
Equal 168 10,583,590 2,802,619,938 1.37% 0.38%
Urban 84 6,143,461 663,482,240 0.32% 0.93%
Fisheries out Ob j.1 91 4,341,821 925,275,673 0.45% 0.47%
Leader+ 151 4,007,210 1,934,533,899 0.94% 0.21%
Innovative actions 26 735,174 N/A N/A N/A
Not indicated 13 673,367 N/A N/A N/A
TOTAL 15,574 2,304,326,399 205,039,197,869 100.00% 1.12% 
Charts SF12 and SF13 show how the irregula rities related to the programming period 
2000-2006 were distributed among the different objectives. 
 
EN 83   EN Chart SF 12 (left): distribution of irregularities (number) by objective 
Chart SF 13 (right): distribution of financial irregular amounts by objective 2%
1%1%
16%1
%1
%0
%
16% 62%
Objective 1 Objective 2 Objective 3
Interreg Equal Urban
Fisheries out Obj.1 Leader+ Innovative actions2%0%9%
17%
72%
Objective 1 Objective 2 Objective 3
Interreg Equal Urban
Fisheries out Obj.1 Leader+ Innovative actions 
The distribution of the irregulari ties is to a certain extent in  line with the allocation of 
the financial resources among the different objectives, with an over representation of 
irregularities related to  objective 2 programmes and an under representation of 
irregularities affecting objective 3 programmes. 
Furthermore, the irregularity rate for the Objective 2 programmes is the highest 
(1.74% of the payments). The irregularity rate for the Objective 1 programmes is 
almost equal to the overall irregularity rate (1.10% against 1.12%), while that for 
Objective 3 programmes, Fisheries out of Objective 1 regions, the Equal community 
initiative, and Leader+ ar e lower or signifi cantly lower (respectively 0.88%, 0.47%, 
0.38% and 0.20%). 
These elements may imply some under-re porting in relation to programmes / 
initiatives presenting a very low irregu larity rate. The interpretation of the 
irregularity rate of Objective 2 programmes  is more difficult as it may indicate a 
greater effectiveness of the control syst ems of these programmes in detecting the 
irregularities or denote some problematic  aspects in the implementation of these 
programmes. Information currently availabl e does not allow solving this dilemma. 
5.3.3.  Suspected frauds 
On the basis of the method used for cl assifying the reported irregularities as 
illustrated in paragraph 4.2.6, it is possible to give an attempt of identifying the impact on the programming period 200-2006 of the suspicion of fraud calculated on the basis of the irregularities reported until the 4
th quarter 2008. 
Table SF12 shows an overview of the am ounts related to suspicion of frauds 
indicated by Objective or Community Init iative (on the rows) and Fund (Columns). 
These financial irregular amounts have been then divided by the corresponding 
overall payments to obtain a “fraud rate” per objective and fund. The overall result is 
a fraud rate of 0.19% on the total payments. 
 
EN 84   EN Table SF12: Fraud rate by Objective and Fund 
ERDF ESF EAGGF - Guid. FIFG TOTAL Payments Fraud rate
EUR EUR EUR EUR EUR EUR %
Objective 1EU R 237,693,651 58,966,377 30,320,842 2,379,813 329,360,683 148,048,550,689 0.22%
Objective 2EU R 13,700,075 668,295 14,368,370 22,175,231,947 0.06%
Objective 3EU R 33,347,889 33,347,889 23,564,856,681 0.14%
InterregEU R 1,721,666 1,721,666 4,924,646,802 0.03%
EqualEU R 2,422,431 2,422,431 2,802,619,938 0.09%
UrbanEU R 222,840 222,840 663,482,240 0.03%
Fisheries out Ob j.1EU R 1,061,206 1,061,206 925,275,673 0.11%
Leader+EU R 355,985 355,985 1,934,533,899 0.02%
TOTAL EUR 253,338,232 95,404,992 30,676,827 3,441,01 9 382,861,070 205,039,197,869 0.19 %
Payments (EUR) EUR 118,209,399,770 62,361,452,725 20,933,544,318 3,534,788,108 205,039,184,921
Fraud rate (%) % 0.21% 0.15% 0.15% 0.10% 0.19%FUND
OBJECTIVE
Among the Objectives, programmes referred to the Objective 1 regions present a 
higher rate (0.22%) than the others. Objective 2 programme s present a very low rate 
(0.06%). Only the Leader+ initia tive shows a lowe r rate (0.02%). 
Among the Funds, the ERDF presents a rate of 0.21%, with ESF and EAGGF – 
Guidance on the same level (0.15%) and the FIFG just lower (0.10%). 
5.3.4.  Irregularities detected before payment 
An interesting aspect to examine in the framework of the protection of the 
Communities’ financial interests is what proportion of irregularities is detected 
before any payment is effectively made to the beneficiaries. 
This aspect can provide some concrete elements also concerning Member States’ 
capabilities to prevent irregularities. 
Table SF12 shows the total number of irre gularities reported by each Member State 
on the whole programming period 2000- 2006 (column A); the number of 
irregularities detected befo re any payment is made (column B); what percentage B 
represents on A (column C); the financial amounts reported as irregular (column D) 
and those related to the irregularities de tected before payment (column E); and 
finally what percentage of the total irregular financia l amounts reported have been 
identified before payment (column F). 
 
EN 85   EN Table SF 13: irregularities detected before payments per Member States - 2006 
 
A BC = B / A DE F = E / D
Reported 
irregularitiesIrregularities 
detected before 
paymentdetected before 
payment on totalReported 
irregular amountsrelated to 
irregularities 
detected 
before before 
payment 
on total 
reported
NN% E U R E U R %
AT 220 7 3.18% 25,120,138 721,630 2.87%
BE 123 13 10.57% 7,095,377 229,697 3.24%
CY 5 1 20.00% 174,222 273 0.16%
CZ 138 25 18.12% 25,412,375 10,306,978 40.56%
DE 3,184 119 3.74% 306,393,525 23,854,795 7.79%
DK 72 14 19.44% 3,611,554 557,370 15.43%
EE 81 15 18.52% 4,822,674 428,598 8.89%
EL 530 3 0.57% 221,118,650 244,540 0.11%
ES 2,081 8 0.38% 474,336,026 2,224,042 0.47%
FI 211 61 28.91% 9,688,513 1,710,772 17.66%
FR 531 32 6.03% 21,915,505 571,970 2.61%
HU 180 108 60.00% 12,998,773 8,371,901 64.41%
IE 55 1 1.82% 9,052,241 5,515 0.06%
IT 2,389 294 12.31% 419,599,478 148,055,552 35.28%
LT 49 26 53.06% 3,934,905 1,104,986 28.08%
LU 17 0.00% 572,506 0.00%
LV 43 10 23.26% 4,358,129 1,466,302 33.65%
MT 6 0.00% 933,543 0.00%
NL 700 559 79.86% 84,880,049 64,288,422 75.74%
PL 771 424 54.99% 110,507,373 30,270,361 27.39%
PT 1,698 6 0.35% 141,020,124 187,618 0.13%
SE 680 445 65.44% 16,778,012 9,714,484 57.90%
SI 20 1 5.00% 3,069,791 7,033 0.23%
SK 97 10 10.31% 11,616,842 1,188,085 10.23%
UK 1,693 119 7.03% 385,316,075 20,927,186 5.43%
TOTAL 15,574 2,301 14.77% 2,304,326,399 326,438,110 14.17%MS 
 
Looking at column F, very high rates of de tection before payment emerge especially 
in some of the EU10 (namely Hungary, th e Czech Republic, Latvia, Lithuania, and 
Poland) and, among the EU15, in Sw eden, the Netherlands and Italy. 
Some caution is needed on these data, becau se some Member States may have not 
reported the irregularities they  detected before payment. 
5.4. Recovery 
In 2008, Member States communicated, pursuant to Regulation No. 1681/94, 3,858 
irregularities were reported for a total financial amount of EUR 528,019,117.  
The situation as regards recovery in 2008 (see Annex 16) is as follows:  
– Member States recovered EUR 109,902,839; 
– the sum to be recovered was EUR 329,174,994;  
– in the same period, the amount declared  irrecoverable pursuant to Article 5, 
par. 2 of Regulation No. 1681/94, and whic h is awaiting a formal decision is 
EUR 16,805,607. 
These figures indicate that 62% of th e reported irregular amounts are to be 
recovered. In 2007 these amounts represente d 67% of the total reported irregular 
 
EN 86   EN amounts. Member States are showing an increased capability  of reacting to 
irregularities by recovering or  securing the Community’s financial interests in a more 
effective manner. It should be, however, be  kept in mind that recovery procedures, 
especially in cases of suspicions of fraud, may take a few years before they are completed. 
Pursuant to Regulation No. 1828/2006, 9 irre gularities were reported for a total 
financial amount of EUR 901,294; of whic h EUR 12,864 remain to be recovered. 
Pursuant to Regulation No.1831/94, Member St ates reported 140 irregularities for a 
total amount of EUR 56,328,911 (see anne x 17), of which EUR 19,768,042 remain 
to be recovered. The amounts to  be recovered are declini ng in relation to previous 
years. 
5.5. Conclusions 
Introduction 
• Member States reported 4,007 irregularities in 2008; 
• The total financial amount a ffected in 2008 was EUR 585.2 million. 
Reporting discipline 
• The number of irregularities reported  through the Electronic modules AFIS/ECR 
has been increasing and represent now almost 80% of the total; the overall 
compliance of Member States has increased accordingly; 
• Member States need to pay more attent ion to submit the irregularities within 
deadlines established by re gulations, but the situation is improving in relation to 
the past; 
• The time gap between detection and repor ting is satisfactory for 90% of the 
irregularities; 
• The classification of the irregularity (i ndicating whether or not it is a case of 
“suspected’ fraud) is an element of the re porting that needs to be strengthened. In 
2007, the classification was provided in 73% of the irregularitie s, increasing in 
comparison with 2007; 
• Despite the clarifications and simplifications introduced with Regulations Nos 
2035/2005 and 2168/2005, there is  still need for further harmonisation of 
reporting between Member States. 
General trends 
• The number of irregularities reported to the Commission increased by 6.7% in 
relation to 2007; 
• The irregular financial amounts related to  those irregularities  decreased by 27.2%; 
 
EN 87   EN • The impact of irregularities on the tota l Structural actions  budget decreased in 
relation to the previous  year (down to 1.25%); 
• Italy, Spain, the United Kingdom, Portuga l and Poland are th e countries that 
reported the highest number of  irregularities in 2008; 
• Spain, the United Kingdom, It aly and Poland are the countries that reported the 
highest amounts; 
• High irregular financial amounts reported do not necessary imply that in country 
occur more frauds and irregularities than  in the other. Th e reason could be a 
higher number of controls; 
• The most frequent method for detecti ng irregularities is the ‘control of 
documents’, while ‘control by police’ pr oved the method with the highest average 
irregular amounts detected;  
• ‘Not eligible expenditure’ is the most fr equently reported type  of irregularity. The 
other typologies reported are in  line with previous years; 
• ERDF remains the fund to which the highe st number of irre gularities and the 
highest amounts are related. This is normal c onsidering that it is the Fund with the 
largest resources available.  
• In 2008 “suspected frauds”, as a percen tage of the total number of reported 
irregularities, represent around 7.4%. This  share increases to 9.8% on the total 
irregular amounts. 
Specific analysis 
• The greatest majority of irregularit ies related to the programming period 2000-
2006 are referred to Objective 1 regions which are also the regions benefiting 
from the greatest support. In general, there is a certain balance among the budget 
allocated and the irre gularities reported; 
• Objective 2 programmes present the highest  irregularity rate, while Objective 1 
programmes have the highest fraud rate; 
• High rates of detection before payment em erge especially in some of the EU10 
(namely Hungary, the Czech Republic, Latvia, Lithuania, and Poland) and, among 
EU15, in Sweden, the Netherlands and Italy. 
Recovery 
• In 2008, the irregular financial amounts d ecreased and so did the amounts to be 
recovered; 
• 62% of the irregular amounts reported  under regulation 1681/94 are to be 
recovered, while they represented 67% of  the total reported irregular amounts in 
2007. Member States are showin g a better capability of reacting to the detection 
 
EN 88   EN of irregularities by recovering or securing the European financial resources in a 
more effective manner; 
• The amounts to be recovered are declining for the Cohesion Fund. 
 
EN 89   EN 6. PRE-ACCESSION FUNDS  (ANNEXES 18-21) 
Descriptive statistical analysis presente d hereinafter relates to the enlargement 
context and deals with different groups of beneficiary countries benefitting from pre-
accession assistance and varied periods of allocations.  
Agenda 200090 strengthened the pre-a ccession strategy by set ting up two financial 
mechanisms: a pre-accession structural instrument (ISPA) to support improved transport and environmental protection infrastructures and a pre-accession 
agricultural instrument (SAPARD) to facilitate the long-term adjustment of agriculture and the rural areas of the applicant countries. ISPA
91 and SAPARD92 
complement the actions of the PHARE93 programme, which has been the EU aid 
programme for the current EU-12 since 1990. 
The 10 Member States that jo ined the EU in 2004 received  a Transition Facility in 
2004-2006. Bulgaria and Romania received a Transition Facility in 2007.  
Croatia received PHARE and ISPA (2005-2006), SAPARD (2006), CARDS (2001-
2004) and is the only country reporting CARDS94 irregularities since 200695. Turkey 
received pre-accession assistan ce via similar but separate  instruments, budget lines 
and procedures. 
Since 1 January 2007 EU pre-accession a ssistance has been channeled through a 
single Instrument for Pre-acc ession Assistance (IPA)96 designed to deliver support 
for candidate and potential ca ndidate countries. The prelim inary allocation for IPA in 
the period 2007-2013 is EUR 11.5 billi on (in 2008 – EUR 1.4 billion). 
General overview 
In 2008 the Commission/OLAF received 2,133 reports on pre-accession funds 
(PHARE, SAPARD, ISPA, Tran sition Facility (TF), CARDS, Turkish pre-accession 
instrument (PA)) from the Member states  and Candidate countries. The received 
information consists of 523 new cases det ected by the national authorities in 2008 
and 1,610 follow-up reports on the previously  reported cases. The number of new 
cases received on pre-accession assistan ce is the highest since the reporting 
obligation started to be fulf illed by the reporting countries. 
                                                 
90 On 26 March 1999, at the Berlin European Council, the Heads of Government or States concluded a 
political agreement on Agenda 2000. 
91 ISPA programme dealt with large-scale environmen t and transport investment support in candidate 
countries. 
92 SAPARD programme has supported agricultural and rural development in candidate countries. 
93 PHARE programme applied to candidate countries, principally involving institution building measures 
(and associated investment) as well as measures designed to promote economic and social cohesion, 
including cross–border co–operation.  
94 Community Assistance for Reconstruction, Development and Stabilisation applied to Western Balkan 
countries   
95 Commission Decision PE/2006/148 of 07/02/2006 conferring management of aid provided under 
PHARE and CARDS to an Implementing Agency in Croatia 
96 Council Regulation (EC) No 1085/2006 
 
EN 90   EN The total amount affected by irregu larities in 2008 was EUR 60,782,354 where 
PHARE accounts for EUR 26,731,257 (183 cases), SAPARD – EUR 29,046,300 (213 cases), ISPA – EUR 4,055,042 (99 cases ), TF – EUR 545,822 (4 cases), PA – 
EUR 314,763 (18 cases), CARD S – EUR 89,170 (6 cases). 
6.1. Reporting discipline 
The obligation to report irregularities in the area of pre-accession assistance is 
established in the Financing Agreements /Memoranda signed between the acceding 
countries, Candidate countries and the Eu ropean Community and is in accordance 
with the provisions of Comm ission Regulation (EC) 1681/1994
97. This obligation is 
yet enhanced by Commission decision gran ting conferral of management on 
extended decentralised basis (EDIS). 
Pre-accession assistance related irregular ities are reported using a standard paper 
template. The submitted information is processed and registered in the data base managed by OLAF.  
In general, the quality of provided info rmation is getting better and reporting 
countries are cooperative. However, insuffi cient or obscure re ported information 
remains to be a challenge. 
Inconsistencies and even  contradictions in di fferent sections of the same report still 
occur. In absolute numbers Romania ha s the highest number of notifications 
containing one or more content mistakes ( 44), followed by Bulgaria (32). In relative 
terms Slovenian notifications are the least reliable. These estimations are heavily influenced by the number of communica tions sent by the respective countries. 
Currently Romania and Bulgaria are the coun tries from which the highest numbers of 
notifications are received; th erefore the number of mistakes  is yet acceptable. More 
efforts could be put into the initial quali ty checks on a national level to avoid the 
inconsistencies. 
Most common mistakes are incorrect or inco mplete financial aspects of the reports, 
missing practices employed in committing irregularities, missing types of irregularities. The incorrect numbering re mains to be a technical obstacle in 
cooperation with MSs’ author ities on follow up related issues. Bulgaria has achieved 
significant improvements on that issue while  Romania needs to pay more attention. 
6.1.1.  Timely reporting 
Late reporting of irregularities poses problems for OLAF when working with 
analysis of the reported  information. In 2008 4 countries out of 14 missed the 
reporting deadline
98 for at least one of the pre-ac cession funds. Some special cases 
are worth to be mentioned. Hungary faile d to report on time th roughout the year but 
improvements occurred in the last quarter. Slovakia was very late to report first and 
                                                 
97 As amended by Regulation (EC) No 2035/2005 
98 Following the two months at the end of each qua rter, Member states and Candidate Countries are 
obliged to report to the Commission any irregularities which have been the subject of initial 
administrative or judicial investigations. 
 
EN 91   EN second quarters and several reminders were  sent. Bulgaria missed the reporting 
deadline for SAPARD in 4th quarter, so 17 new cases and last updates of previous 
reports could not be included in this anal ysis. Turkey does not follow the reporting 
schedule and experiences very big delays. 
Table PA 1: Timely reporting 
Reported 
too lateReported 
on time Total
BG 103 385 488
HU 20 1 21
PL 46 364 410
SK 34 21 55 
Failure to respect reporting deadlines by th e Member States and Candidate Countries 
makes the preparation of a thorough analytic al overview of dete cted irregular cases 
rather difficult. Since pre-accession assistan ce related irregularities are reported in 
paper some time is needed to process them.  
6.1.2.  Time gaps 
In accordance with the Regulation 1681/94 ther e are some compulsory dates to be 
filled in (date of first information, the period of irregularity, date when the 
irregularity was established). The calculations in Table PA 3 estimating compliance are based on the dates presented in the fi rst notifications sent  in 2008. Failure to 
indicate at least one of the required date s affects the compliance. Some reporting 
countries tend to leave out the dates; theref ore, more attention should be concentrated 
on this aspect.  
The average time span for relevant authoritie s to detect an irregularity is 24 months. 
However, for Poland and Est onia it took 3 years, for Ro mania and Malta – 2 years. 
This time period also signals th e end of the project cycle. 
It takes almost 4 months on average to report the detected irregularities
99. Turkey, 
Slovakia, Slovenia, Hungary, and Czech Republic were late to submit the information on the detection to the Commission. 
6.1.3.  Classification of irregularity 
Reporting countries are obliged to indicate whether the reported irregularity can be 
considered as ‘suspected fraud’ or not. Wh en the reporting countries  fail to classify 
the reported cases OLAF does it on the ba sis of the overall information provided in 
the report. Table PA 2 provides a rate of co mpliance with respect to classification of 
irregularity. 
                                                
 
99 A maximum period of 5 months (3 months + 2 months) to report a detected irregularity is established 
by the Commission regulation 1681/1994. 
 
EN 92   EN Table PA 2: Compliance in 2008 - cla ssification of irregularities  
Country BlankSuspected 
fraud Irregularity Total% 
Compliance
EE 55 100.00%
HR 21 5 1 8 100.00%
BG 2 29 109 140 98.57%
HU 19 1 1 90.91%
SK 18 9 88.89%
TR 521 11 8 72.22%
RO 72 10 164 246 70.73%
LV 32 5 40.00%
LT 51 6 16.67%
CZ 16 1 17 5.88%
PL 45 1 46 2.17%
MT 11 0.00%
SI 11 0.00%
Total 152 44 325 523 70.94%Classification of cases by reporting countries
 
Estonia and Croatia fully complied. Malta and Slovenia did not classify any of the 
reported irregularities in 2008, but they reported very few. On average 71% of cases 
were classified. There is a visible increas e in compliance with reference to 2008 so 
reporting countries are putting more efforts in fulfilling the necessary obligations.  
6.1.4.  Summary  
Table PA 3 makes a summary of different aspects of compliance rate, namely dates 
required by the legislation, data on natural and legal persons involved, classification 
of cases, reporting deadlines. The countries ar e listed in order of compliance with the 
requirements established by the Regulati on 1681/94. Inconsistencies for each country 
are more precisely seen by an alysing separate columns.  
The summary reveals that countries repor ting few cases like Slovenia, Malta and 
Estonia get lower positions in the list because the mistakes get high weighting. They become 'victims of statistics' and shoul d not be over judged. Slovakia experienced 
difficulties in reporting due to internal institutional changes.  
Summary compliance of 91.6% has improved in comparison to 2007 (82.4%). Even 
so, it manifests some limitations with refere nce to further analysis carried out in the 
report. Low compliance with the reporti ng obligation might imply some weaknesses 
in the administrative set up of the reporting mechanism.  
Table PA 3: Compliance pe r reporting country 2008 
 
EN 93   EN CountryDates 
compliancePersonal 
data 
compliance Classification 
of casesTimely 
reportingSummary 
compliance
HR 100.00% 100.00% 100.00% 100.00% 100.00%
BG 86.43% 100.00% 98.57% 78.89% 90.97%
RO 88.62% 99.19% 70.73% 100.00% 89.63%
EE 40.00% 100.00% 100.00% 100.00% 85.00%
LV 100.00% 100.00% 40.00% 100.00% 85.00%
LT 100.00% 100.00% 16.67% 100.00% 79.17%
SK 77.78% 100.00% 88.89% 38.18% 76.21%
MT 100.00% 100.00% 0.00% 100.00% 75.00%
PL 100.00% 100.00% 2.17% 88.78% 72.74%
TR 11.11% 94.44% 72.22% 100.00% 69.44%
HU 81.82% 90.91% 90.91% 4.76% 67.10%
CZ 58.82% 100.00% 5.88% 100.00% 66.18%
SI 100.00% 0.00% 0.00% 100.00% 50.00%
Total 85.28% 99.04% 70,94% 90.48% 91.60% 
6.2. General Trends 
The intention of this descriptive analysis is to provide an overview of the reported 
irregularities in 2008 and to compare the reporting trends observed during the period 
2002-2007.  
One should take into account  that Member States and Candidate Countries must 
report to the Commission cases exceeding the established thresholds. Reports below 
the threshold are included in the overall analysis (see Annex 19). Since the reporting 
countries decided to report such cases to the Commission it  is possible that irregular 
amounts are only indicative and will be specified. Therefor e, they are likely to get 
higher by means of the coming follow up reports. 
6.2.1.  Overall trend 
The number of cases reported (first communications) in 2008 increased by 58%, 
while the number of follow-up reports increased by 25% in comparison to 2007.  
2008 was the year when the new cases reported to OLAF reached the peak. This 
could be explained by the fact that more  countries benefitting from pre-accession 
assistance started active reporti ng of irregularities. Previously only 'nil reports' were 
received. Moreover, a wider variety of pre-accession inst ruments is covered due to 
different programming periods and phases of enlargement process. 
The high number of updates illustrates th at beneficiary countries are actively 
proceeding with administrative or judicial  measures concerning the cases detected 
previously. However, the high number of up dates is not characteristic to all the 
reporting countries. Some EU-10 countri es are clearly phasing out. They are 
finalising pre-accession funded projects and the last remaining procedures. EU-2 
reports very high numbers of updates as they are still in the middle of the project cycle. Turkey, however, sent vey few follo w-up reports and such a situation raises 
concerns. 
 
EN 94   EN Chart PA 1: Irregularities communicated by reporting countries (2002-2007)  
10,373,94217,987,11831,856,32860,782,354
16,770,995
5,320,607
6,122104227398523
6341335
010,000,00020,000,00030,000,00040,000,00050,000,00060,000,00070,000,000
2002 2003 2004 2005 2006 2007 20080100200300400500600
Amounts Cases
 
6.2.2.  Trend related to Member St ates and Candidate countries 
Irregularities are not dist ributed equally among the re porting countries due to 
different periods of eligibility of expe nditure. Three groups of  reporting countries 
can be distinguished, namely 2004 acces sion Member States, 2007 accession 
Member States, and Candidate countries  – Croatia and Turkey. In 2008 EU-10 
account for 19%, Bulgaria and Romania – 73%,  Croatia and Turkey – 7% of the total 
number of cases. Talking about the total irregular amount reported EU-10 make 
11%, Bulgaria and Romania - 83%, Croatia and Turkey – 6%. 
This grouping is well reflected provid ing a breakdown in Chart PA 2: 
Chart PA 2: Reporting trend EU-10 and EU-2 
Irregular amounts 2008
83.13%10.70%6.17%
EU-2 EU-10 HR,TRNo of cases 2008
73.80%19.31%6.88%
EU-2 EU-10 HR, TR 
 
EN 95   EN 6.2.3.  Amounts involved 
For the purposes of this report the term  eligible amount stands for the amount 
committed to be paid when the contract is concluded under the condition that the expenditure incurred is justified and eligible.  
With regard to the amounts involved in the irregularities reported to the Commission, 
the total irregular amounts went up while total eligible amount went down in 2008. 
In 2008 the eligible amount decreased by 43% in comparison to 2007. This was 
caused by figures on ISPA expenditure; howev er, there are certai n doubts if these 
figures were reported correctly both in 2007 and 2008. 
EU-10 does not report ISPA irregularities any longer due to the transfer of 
expenditure into the Cohesion Fund. Conse quently, mainly Bulgaria and Romania 
sent communications for ISPA in 2008 (s ee Annex 18) and the first ISPA case was 
received from Croatia.  
There is still a striking difference between  both the number of cases and irregular 
amounts reported by Bulgaria and Romania. The number of ISPA cases reported by 
Bulgarian authorities has increased five tim es combined with three time increase in 
the irregular amounts. A sharp in crease was observed during 4
th quarter 2008 when 
the number of new cases report ed (15) is 36% hi gher than the total number of ISPA 
cases (11) reported since 2004 by Bulgaria. Th is is a direct outcome of Commission 
audits. As for Romania the number of cases remained on the same level but the irregular amount decreased by 40%. Clearly, there is a diffe rence in the approach to 
irregularity reporting betw een those two countries.  
Irregular amount reported in 2008 went up by 90% and reached roughly EUR 61 
million for all funds in total. The irre gular amounts went up sharply for PHARE 
(74%) and SAPARD (180%); for PA and CA RDS a small increase is seen; for ISPA, 
on the contrary, the irregular  amount decreased by 31%.  
 
EN 96   EN Chart PA 3: Irregular amounts by fund 
05000000100000001500000020000000250000003000000035000000
2002 2003 2004 2005 2006 2007 2008 CARDS ISPA PHARE PA SAPARD TF
 
The chart has to be interpreted with some  caution. The number of reporting countries 
is growing; therefore the affected amount s are gradually increas ing. What is more, 
pre-accession assistance funded projects r un over several years while the affected 
amounts are calculated with refe rence to the reporting year . So the closing years are 
becoming peak years. 
To be more precise, however, it is wort h looking at the breakdown by groups of 
reporting countries. Since the greater part of  the data set analysed originates from 
Romania and Bulgaria (see Chart PA 2), th e trends are influenced by their reporting 
patterns.  
The total irregular amount reported by EU -10 in 2008 rose by 8%. The percentage 
went down for PHARE (76%) and increas ed significantly fo r SAPARD (167%). 
There are several reasons be hind it. For EU-10 many project s which did not get into 
the audit samples before, are being checked only when the final payment claims are 
submitted. SAPARD irregularities in 2008 were  mostly detected by ex-post controls 
after the final payments had been made. 
The situation for EU-2 has changed signifi cantly. The total irregu lar amount reported 
increased by 152%; PHARE increase make s 135% and SAPARD – 173%. Enhanced 
Community controls in Bulgaria triggered hi gher detection of irre gularities and it is 
well seen in the statistic s. Big irregular amounts manifest that procurement 
rules/procedures were infringed, eligibility  rules not followed, a number of projects 
failed to be implemented or contract conditions were not fulfilled, therefore, the whole value of the contra ct becomes irregular.  
Furthermore, it is very important to di fferentiate between cases with potential 
financial impact detected before the paymen ts and real financial impact resulting in 
recoveries (see 6.3.3). 
 
EN 97   EN The major part of irregular cases is not  fraudulent and corrective measures are 
undertaken (see 6.3.2). 
The highest number of cases in 2008 was reported by Romania, Bulgaria, and Poland 
(respectively 246, 140, and 46). The pattern, howe ver, is different with reference to 
the irregular amounts. Bulgaria, Romania,  Croatia, and Lithuania reported the 
highest irregular amounts. Annex 18 presents  all the figures in detail per each 
reporting country. 
6.2.4.  Impact on the budget 
Estimation of the impact on the budget is based on the information provided in the 
irregularity reports and is totally linke d to countries’ approa ch to reporting and 
cooperation with the Commission. 
While estimating the impact of pre-accession assistance ir regularities on the budget 
one needs to take into account different gr oups of beneficiary c ountries benefitting 
from pre-accession assistance and varied periods of allocations. 
After the accession of EU-10 in 2004 no new expenditure was committed (except for 
SAPARD where some commitments were  made up at the end of 2004). PHARE,  
ISPA, SAPARD, the Turkish pre-accession instrument, and CARDS projects will be 
gradually completed by around 2010. 
As an extension of financial assistan ce provided under PHARE before the accession, 
Transition Facility was employed in  2004-2006. 2006 was the final programming 
year for the Transition Facility, a lthough contracting continued until 2008 and 
payment of funds until 2009. In 2007 EUR 78 mi llion were allocated to Bulgaria and 
Romania under TF.  
With regard to SAPARD, for Romani a and Bulgaria automatic period of 
decommitment has been extended till D ecember 2009 so contracting continues. 
2007 was the first year of commitment s under IPA focusing on Candidate and 
Potential Candidate countries fo r the programming period 2007- 2013. 
Chart PA 4: Share of irregular amount in elig ible amount of reported cases 
 
EN 98   EN 
97.91%
83.49%
74.13%
67.77% 67.34%
51.78% 51.51%
32.17%
24.33%
15.79%
6.43%5.00%2.08%5.39%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%
LT HU LV EE PL BG CZ SK HR SI TR MT RO Total
Member States - Candidate Countries
 
The comparison is drawn between the total va lues of the projects reported and the 
total irregular amounts per country. The sh are of irregular amount reached 5.4% in 
2008 while in 2006 it was 1.9%. Although the figure has increased, Chart PA 4 
illustrates that the share of irregular amount in relation to the total value of expenditure is relatively very little.  
In comparison to the overall tendency, the share for Romania is very low and it 
highly influences the total figure. Lithuani a, Hungary, Latvia, Estonia, and Poland 
report cases with rather high irregular share, which sometimes equals the total value 
of the project. 
The impact of irregularities reported in  2008 on budgetary allocations for the same 
year is 4.4% (EUR 61 million on EUR 1.4 b illion of allocations). However, this 
figure should be taken with great cauti on as the programming periods and also 
beneficiary countries are di fferent. Since 2007 pre-accessi on assistance allocations 
are given to Candidate and Potential candidate countries  in the Balkans
100. 
It would be more precise to  calculate the impact of irregularities on the whole 
programming period and the 'real' beneficiar ies. Thus the result is 0.76% (EUR 143 
million total irregular amount reported so far on the overall budget of roughly EUR 
19 billion). 
6.2.5.  Method of detection 
Reporting countries are required to indicate the manner in which the irregularity was 
discovered. In 2008 reporting countries put mo re efforts in categorizing methods of 
detection used on the basis of the pick lis t provided by OLAF. However, in a number 
of cases the codes were at tributed by OLAF on the ba sis of the descriptions 
(frequently rather vague) pr esented in the reports. 
                                                 
100 Croatia, Turkey, Bosnia-Herzegovina, Serbia (and Kosovo), and Montenegro. 
 
EN 99   EN Table PA 4 presents an overview of methods of detection which he lped to trace most 
cases, the highest irregular amounts, and th e highest average detected amounts. Most 
of the irregularities and the highest irregular amounts in 2008 were detected by 
means of ‘Control of documents’. The same method took the lead in 2007. This method actually reflects one of the key res ponsibilities of the national authorities 
implementing EU funds under decentralis ed and shared management modes. 
Besides, this method is of a rather gene ral nature and can be used throughout the 
project cycle. 
On the spot controls appeared to be very  effective and the same tendency is observed 
in the course of several years. National admi nistrative or financial controls trigger the 
third highest number of detections. 
Some new tendencies are spotted in 2008, name ly the role of 'Community controls. 
Moreover, the highest average amounts were  detected while carrying out controls 
under the request of the Comm ission. It needs to be mentioned that most of such 
cases were reported by Bulgaria in relation to the specific situation on the management of EU funds there in 2008. 
Information received from whistleblowers
101 proved to be useful and instigated the 
detection of high value case s (second highest average). 
Several cases in the data set do not provi de relevant information on the method of 
detection employed and state 'other'.  
In general, the most frequent methods of  detection imply both ex-ante and ex-post 
controls. It is a natural out come since the data set invol ves projects under different 
stages of implementation (from procurement to final payments). 
Table PA 4: Method of detection in 2008 by number of cases and irregular amounts detected 
Method of detectionNo of 
casesDetected 
EC amount 
irregularAverage 
detected 
amount
Control of documents 186 18,216,024 97,936
On the spot control of achievement of project or action 79 8,681,197 109,889
National administrative or financial control 75 5,992,717 79,903
Community controls 25 1,387,344 55,494
Control by national anti-fraud service 24 3,913,554 163,065
Spontaneous confession 21 1,503,879 71,613
Whistle blower 18 6,508,646 361,591
Ex post control 13 670,611 51,585
Additional control on request by the Commission 10 3,838,789 383,879
Not indicated 9 216,496 24,055
Other facts 8 1,845,899 230,737
Control on the premises of the compan y 7 102,145 14,592 
                                                 
101 The term 'whistleblower' in this context is used in  a broader sense than defined by the EU legislation 
and also involves anonymous sources. 
 
EN 100   EN 6.2.6.  Types of irregularities 
Reporting countries are obliged to indicat e the practices employed in committing the 
irregularity (modus operandi)102. This can be done by using the provided codes or 
giving a description. The list of codes provide s a collection of type s of irregularities. 
If the reporting countries do not choose the relevant code, OLAF picks the most 
appropriate code on the basis of the descrip tion. This is necessary  to make the data 
reported by different countries comparable. Failure to provide clear and accurate descriptions by reporting au thorities leads to difficult ies in analyzing the data. 
Most common type of irre gularity by the num ber of received cases in 2008 was 
‘Failure to respect other regulations/cont ract conditions' followed by 'Non –eligible 
expenditure' (which was the most frequent modus operandi in 2007) and ‘Failure to fulfil commitments entered into’. This is yet another indication that a number of projects failed to be implemented. 
'Falsified supporting documents' in 2008 got in to top five of the most frequent modus 
operandi and pertain to the highest irregular amount an d also average irregular 
amount. This type of irregularity does not indicate that frauds have already been 
established and only refers to the element that raised suspicion of the competent 
national authorities. Therefore, all these cases  are classified as 'suspected fraud' and 
are analysed in detail in 6.3.2. They were reported by Turkey, Slovenia, Croatia, 
Poland, Czech Republic and Bulgaria. Bulg arian cases involving allegations of 
falsified supporting documents account for 72% of the total cases bearing this type of 
infringement. 'Failure to respect deadlin es' again signals problems in the project 
implementation with second highe st average irregular amount. 
For SAPARD the most frequent modus opera ndi reported in terms of the number of 
cases is 'Failure to fulfil commitments en tered into’, and in terms of the amounts 
detected - 'Falsified supporting documents. 
For PHARE the most frequent modus operand i reported in terms of the number of 
cases is 'Unjustified expenditure' and in terms of the amounts - ‘Failure to respect deadlines'. 
'Falsified supporting documents' occur in 9 PHARE cases and 25 SAPARD cases 
reported to OLAF. 
                                                
 
102 Article 3 of Commission Regulation (EC)1681/94 
 
EN 101   EN Table PA 5: Types of irregularities by number of cases and irregular amounts 
Type of irregularityNo o f 
casesEC amount 
irregularAverage irregular 
amount
FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS 82 9,055,905 110,438
NON-ELIGIBLE EXPENDITUR E 79 3,062,000 38,759
FAILURE TO FULFIL COMMITMENTS ENTERED INTO 69 2,240,539 32,472UNJUSTIFIED EXPENDITURE 50 4,608,780 92,176
FALSIFIED SUPPORTING DOCUMENTS 36 12,095,015 335,973
ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES 30 3,631,566 121,052INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT 29 2,312,610 79,745ACTION NOT IMPLEMENTED 24 2,285,114 95,213
FAILURE TO RESPECT DEADLINES 24 5,945,892 247,746
OTHER CASES OF IRREGULAR DOCUMENTS 16 1,555,020 97,189OTHER IRREGULARITIES (TO BE SPECIFIED) 13 2,585,598 198,892INCORRECT ACCOUNTS 12 348,343 29,029
MISSING OR INCOMPLETE DOCUMENTS 11 476,061 43,278
MISSING OR INCOMPLETE SUPPORTING DOCUMENTS 9 1,185,176 131,686ACTION NOT COMPLETED 7 928,793 132,685
 
6.3. Specific analysis 
6.3.1.  Irregularities affecting different funds 
The total number of cases reported au gmented in comparison to 2007 (by 58%). 
Reporting tendencies noticed during the pr evious years did not alter and most 
irregularities were communicated for PH ARE and SAPARD funded projects. Those 
two funds made 76% of th e irregularities reported. 
As demonstrated by Chart PA 5 the high est number of cases reported in 2008 
concerned SAPARD and made almost half of the total cases reported in numbers. 
The biggest share of irregular amount wa s also reported for SAPARD (47% of the 
total).  
Chart PA 5: Distribution of co mmunications per fund in 2008 
No of cases
1%19%
35%41%1% 3%
CARDS ISPA PHARE SAPARD TF PAEC amounts affected
7%
44%47%1%1%
0%
CARDS ISPA PHARE SAPARD TF PA 
2008 is the year when such a wide variet y of pre-accession assistance programmes 
was reported. The first 4 cases were reporte d for Transition Facility. Croatia began 
reporting irregularities on CARDS. Turkey  started to report more on Turkish 
Instrument for pre-accession. Previously numbers were so low that they were not analysed separately. 
Taking a closer look at ISPA reports one obs erves that the number of cases does not 
correlate with the irregular amounts repor ted. Usually ISPA projects are huge in 
 
EN 102   EN value but the irre gular amounts reported ar e relatively little ( no reporting threshold 
was established). A number of  ISPA cases reported in 2008 do not have any financial 
impact indicated even thought the legisl ation requires provi ding indicative figures103. 
In total, 366 projects were  approved for ISPA, of which 201 were in the environment 
sector, 78 in the transport sector and 87 concerned technical assistance. The ISPA 
budget (in 2006 prices), before amendments  and excluding techni cal assistance was 
7,708 million euro104. 
In general, ISPA projects experienced delays, addenda, and retendering due to 
various infringements of procedures. P eculiarities of ISPA  programming might 
imply that irregularities occurring during tendering pr ocedures have not been 
reported especially related to the conflict of  interest. Financial corrections applied on 
a national level before claiming the funds from the Commission were not considered 
as irregularities.  
Situation for SAPARD is different because the amounts reported as irregular 
frequently coincide with the total value of  the project and full recovery is imposed. 
Most of SAPARD cases were detected afte r the payments had been made. This could 
be related to the fact that  SAPARD for EU-8 was closed in 2007, but the checks can 
be carried out 5 years after the final payments had been made so it is likely that some 
new irregularities will still be detected in the coming years. 
For Romania and Bulgaria automatic period of decommitment has been extended till 
December 2009 so contracting continues.  These two countries are reporting the 
highest number of SAPARD i rregularities (RO - 100, BG - 56105). More irregularities 
are likely to be dete cted in the contracts conclude d before 2008. In 2008 Commission 
suspended payments for 3 major SAPARD measures in Bulgaria. 
As for PHARE the situation in relation to 2007 changed and in 2008 the share of 
irregular amount reported incr eased. There is a direct li nk between thes e figures and 
the situation in Bulgaria as in 2008 44% of  total PHARE cases and 57% of affected 
amount were reported by Bulgaria. Romania,  respectively, account s for 36% of cases 
and 34% of affected amount. 
After the accession financial assistance in 2004-2006 was provided under Transition 
Facility. First TF cases were reported by Bu lgaria, Lithuania, Latvia, and Slovenia. 
                                                 
103 Commission Regulation (EC) No 1681 Article 3, Par 1 (m) 
104 European Court of Aud itors. Special Report No 12/2008 concer ning the Instrument for Structural 
Policies for Pre-accession  (ISPA), 2000-2006 
105 17 SAPARD cases are not included in this report because they were reported well after the deadline. 
 
EN 103   EN Chart PA 6: Distribution of cases by number  
2699
68151207
183
133150213
2687
6 1826 2590
52164165
34
4 1618
050100150200250
2002 2003 2004 2005 2006 2007 2008
CARDS ISPA PHARE SAPARD TF PA
 
Chart PA 6 presents the fluctuation of th e number of cases throughout a period of 7 
years. The lowest numbers of cases, with the exception of smaller scale programmes like CARDS, TF, PA, continue to be detected in ISPA with an increasing tendency 
since 2007. For PHARE and SAPARD the numbers were sharply growing since 
2007. The trend is still dominated by PH ARE and SAPARD. For 2008 a sharp rise 
by 103% is observed in the number of PHARE cases, an increase of 42% in 
SAPARD cases, and a lower increase of 14% in ISPA cases. The greater part of 
ISPA cases were reported by Romania. 
6.3.2.  Irregularity vs suspected fraud 
In general, reporting countries do not classi fy some 30% of the reported irregularities 
although compliance has improved in comparison to 2007.  
In 2008 cases classified as suspected fraud made up 9.85% (51) of irregularities and 
21.7% of irregular amount. For the sake of transparency it is wo rth mentioning that 
these figures result from OLAF  classification. According to the reporting countries’ 
classification, the share of suspected fraud is 8.5% (44). 
One can notice in Chart PA 7 that the shar e of suspected fraud has changed for 2007. 
This is caused by follow up reports and reclassification of some cases after the new circumstances had been discovered. 
Meanwhile, it is important to note that the an alysed cases are just 'suspected frauds'. 
They are under investigation by relevant national authorities. The final precise 
figures can only be presented on 'established frauds' when the court rulings are made. 
 
EN 104   EN Chart PA 7: Share of suspected fraud in reported cases  
21.70%
15.96%
12.92%
9.81%
8.42%9.71%25.56%
9.34%
9.85%11.28%15.84% 16.90%
0.00%5.00%10.00%15.00%20.00%25.00%30.00%
2003 2004 2005 2006 2007 2008% amounts % ca se s
 
7 countries out of 14 reportin g countries reported suspected fraud cases in 2008. As 
illustrated by Chart PA 8, the highest number of suspected fraud cases was reported by Bulgaria, Romania, Turkey, and Po land. The highest amounts affected by 
suspected fraud are reported by Bulgaria  in SAPARD programme, followed by 
Romanian and Croatian SAPARD. So this result shows that SAPARD is the programme most affected by suspected fra ud. High amounts indicate that larger scale 
projects were reported as allegedly fraudulent. 
 
EN 105   EN Chart PA 8: Suspected fraud cases by country and fund in 2008  
 
Distribution of fraud cases across the funds is not adequate. There is one suspected 
fraud case in ISPA (from 2008). For SA PARD 31 suspected fraud cases were 
reported in 2008 and 103 for all the years.  For PHARE 14 reported in 2008 and 112 
in total. 
6.9% of cases reported in 2008 had an elem ent of fraud i.e. falsified supporting 
documents. In PHARE they make 4.9%, in  SAPARD 11.7% of the reported cases. 
This has to be interp reted with caution as reporting countries sometimes classify the 
case as fraud but indicate the modus operandi which is more likely to be an administrative infringement rather than criminal offence. An in depth analysis is necessary of a case basis. 
In 2008 suspected fraud value in relation to th e eligible valu e of the reported projects 
made a share of 1.2%. The total irregular amount of all the re ported projects in 
relation to the total eligible amount is 5.4% . The percentage of the sum of suspected 
fraud in the total allocated amount for pe riod 2002-2007 is respecti vely even lower – 
0.14%. The figure, however, is much higher in comparison to 2007 report data. This 
outcome is explained by the fact that no ne w allocations were given to the reporting 
countries for PHARE, SAPARD, and ISPA but follow up reports were received and 
the financial aspects were specified. In addition, a high number of new cases were 
detected in 2008. 
Relatively low figures justify the argument that the major part of reported 
irregularities is not fra udulent and is undergoing corr ective actions. The cases 
classified as suspected fraud do not impl y actual losses for the EU budget. The real 
 
EN 106   EN pre-accession assistance related losses fo r EU budget could only be estimated when 
the programmes and the reported cases ar e closed (when deductions are made, 
recoveries are finali zed, or final court rulings are published). 
6.3.3.  Recovery 
The estimation of proportion of irregularities  detected before any payments had been 
made reveals the extent of preventive acti ons taken by the reporting countries at the 
early stages.  
Chart PA 9: Detection after payment  
17.21%46.04% 45.02%61.70%71.38%
54.15%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%
2 0 0 32 0 0 42 0 0 52 0 0 62 0 0 72 0 0 8% detection after payment
 
Chart PA 9 reveals the tendency that the gr eater of the reported irregularities were 
detected after the payments had been made. It  is characteristic to  the recent years and 
is a consequence of the final stages of the projects. A decreas e in 2008 could be 
explained by Croatian and Turkish cases  detected before payment during the 
contracting period. Some cases were also reported with indicative financial impact, 
therefore the result is likely to change. 
In 2008 the amounts reported to be  recovered increased by 107%. 
Table PA 6 demonstrates the recovery s ituation per country. Th e table provides an 
overview for all the years and al l the funds. It presents the recovery rate which is the 
percentage of the total amount recovere d and the total amount to be recovered. 
Estonia has the highest recovery rate, followed by Poland. 
The highest amount to be recovered in  2008 comes from SAPARD (EUR 16.5 
million) just like in 2007. The amount to be recovered for PHARE is second highest – EUR 10.8 million. ISPA amount to be rec overed is yet lower - EUR 1.6 million.  
 
EN 107   EN Romania reports the highest amounts to be recovered (EUR 7.5 million for PHARE 
and SAPARD each). Bulgaria reported EU R 2.7 million to be recovered in PHARE 
and EUR 5.9 million in SAPARD. 
In general, the recovery rate got worse in comparis on to 2007 (42.9%) and reached 
only 36.2% in 2008. 
Table PA 6: Recovery by reporting country 
Countr yEC amount to be 
recoveredEC amount 
recovered Recover y rate
BG 13,777,568 1,718,087 11.09%
CZ 1,280,939 776,055 37.73%
EE 922,875 2,652,860 74.19%
HR 472,020 28,274 5.65%
HU 1,514,045 1,412,840 48.27%
LT 855,574 437,622 33.84%
LV 906,322 53,229 5.55%
MT 233,460 33,955 12.70%
PL 1,540,929 1,992,548 56.39%
RO 25,569,349 18,347,929 41.78%
SI 58,159 0 0.00%
SK 3,361,501 1,476,274 30.52%
TR 579,679 0 0.00%
 Total 51,072,419 28,929,672 36.16%  
The overview in Table PA 7 points out dela ys in the recovery process. There are 
some amounts to be recovered detected in  2003 where the risk of losses is high. 
Actually, the rate for 2003 increased only by  3.5%. The highest recovery rate is for 
cases dated 2004. It might be influenced  by a special procedure required by 
SAPARD Multiannual Financing Agreement. The situation with respect to 2006 and 
2007 has improved but still more efforts need to be taken to  speed up the recoveries. 
Reporting countries should undertake recovery  measures soon after the detection of 
irregularities and inform the Commission about the deductions made. The figure for 
2008 is very low. 
Table PA 7: Recovery rate by reporting year  
YearEC amount 
recoveredEC amount to be 
recovered Recovery rate
2002 6,122 0 100.00%
2003 599,981 315,782 65.52%2004 3,648,603 1,127,745 76.39%
2005 4,589,800 2,960,149 60.79%
2006 5,392,572 5,705,526 48.59%2007 11,155,595 11,583,732 49.06%
2008 3,536,999 29,379,485 10.75%
Total 28,929,672 51,072,419 36.16%
 
 
EN 108   EN 6.4. Conclusions 
• Member States and Candidate Countries  reported 523 new irre gularities in 2008 
where the total financial amount affect ed was around EUR 61 million. 2008 is the 
peak year as both the number of new cases and the amounts affected are the 
highest so far received. 
Reporting discipline 
• The quality of provided information is getting better and reporting countries are 
cooperative. 
• The classification of irregularities is an element of reporting which visibly 
increased compliance yet more efforts coul d be invested for further improvement. 
In 2008 the compliance rate was 70.9%. 
• The rate of summary compliance with the reporting obligatio n has reached 91.6%. 
General trends 
• The number of cases reported in 2008 in creased by 58% and the amount affected 
augmented by 90%.  
• Irregularities are not distributed equa lly among the reporting countries. Three 
groups of reporting countries can be distinguished, namely 2004 accession Member States, 2007 accession Member St ates, and Candidate countries – Croatia 
and Turkey. In 2008 EU-10 account for 19%, Bulgaria and Romania – 73%, Croatia and Turkey – 7% of the total number of cases. 
• The total irregular amount reported by EU -10 rose by 8% and the one for EU-2 
increased by 152%. 
• The increase in the irregular amounts is justified by the enhanced controls at the 
end of the project cycle and the gr owing number of reporting countries. 
• The highest number of cases in 2008 wa s reported by Romania, Bulgaria, and 
Poland (respectively 246, 140, and 46). The pattern, however, is different with 
reference to the irregular amounts. Bulg aria, Romania, Croa tia, and Lithuania 
reported the highest irregular amounts. 
• Most of the irregularities  and the highest irregular amounts in 2008 were detected 
by means of ‘Control of documents’. Th e same method took the lead in 2007. The 
increasing role of 'Community controls' is observed in 2008. The highest average 
amounts were detected while carrying out controls following the request of the 
Commission.  
• Most common type of irre gularity by the number of cases received in 2008 was 
‘Failure to respect other regulations /contract conditions' followed by 'Non –
eligible expenditure' (most frequent modus operandi in 2007) and ‘Failure to fulfil 
commitments entered into’. 
 
EN 109   EN Specific trends 
• The highest number of cases reporte d in 2008 concerned SAPARD and made 
almost half of the total cases reported in  numbers. The biggest share of irregular 
amount was also reported for SA PARD (47% of the total).  
• 2008 is the year when a wide variety of  pre-accession assistance programmes was 
reported i.e. the first cases on Transiti on Facility, CARDS, and more cases for 
Turkish Instrument for pre-accession. 
• There is a direct link between risi ng SAPARD and PHARE figures and the 
specific situation in Bulgaria with regard to the management of EU funds. In 2008 
44% of total PHARE cases and 57% of affected amount were reported by 
Bulgaria. Romania, respectively, accounts for 36% of cases and 34% of affected 
amount. 
• In 2008 cases classified as  suspected fraud made up 9.6% of irregularities and 
21.7% of irregular amount. 
• Distribution of fraud cases across the funds  is not equal. There is one suspected 
fraud case in ISPA (from 2008). For SA PARD 31 suspected fraud cases were 
reported in 2008 (103 for all the years) . For PHARE 14 suspected fraud cases 
were reported in 2008 (112 in total). 
• The highest number of suspected fraud cas es was reported by Bulgaria, Romania, 
Turkey, and Poland. The highest amounts a ffected by suspected fraud are reported 
by Bulgaria in SAPARD programme, followed by Romanian and Croatian 
SAPARD.  
• In 2008 suspected fraud value in relation to the eligible va lue of the reported 
projects made a share of 1.17%. The total irregular amount of  all the reported 
projects in relation to the total eligible amount is 5.4%. 
• Estimation of the impact on the budget is  based on reported information and is 
inextricably linked to count ries’ approach to reporti ng and cooperation with the 
Commission. 
Recovery  
• The highest amount to be recovere d in 2008 is reported under SAPARD. 
• Romania reported the highest  amounts to be recovered. 
• Estonia has the highest recovery rate. 
• The recovery rate got worse in co mparison to 2007 (42.9%) and reached only 
36.2% in 2008. 
 
EN 110   EN 7. DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT  
7.1. Methodology and scope 
This chapter contains a descriptive analysis of the data on recovery  orders issued by 
Commission services in relation to expend itures managed under ‘ centralised direct 
management’106, which is one of the four im plementation modes the Commission 
can use to implement the budget. This chapte r is based on data retrieved from the 
ABAC system, which is a transversal, tran sactional information system allowing for 
the execution and monitoring of all budgetary and accounting operations by the Commission. The system was developed by the Commission to facilitate compliance 
with the requirements of the Financial Regulation and its implementing rules. 
One of the functionalities of the ABAC system is the ‘Recovery Context’, which 
gathers detailed information on recovery orders issued by the Commission services 
and registered in ABAC. The informati on introduced into the recovery context 
relates, amongst others, to the qualification  of the recovery order: financial officers 
have to indicate for each recovery order whether it relates to an error, an irregularity or a suspected fraud that has been iden tified in the implementation of a grant 
agreement or contract. In case the recovery  order is qualified as 'suspected fraud', 
OLAF has to be notified. For each recove ry order, information is given on the 
method of detection as well as the type of irregularity  or suspected fraud that 
constitutes the basi s for the recovery. 
The recovery context is a relatively new functionality within ABAC. The collection 
of data from the Commission services onl y started recently and the current data 
available in ABAC refer to recovery orders issued si nce 2008. This first exercise 
revealed a number of pr actical problems, which are related to different 
interpretations throughout the Commission of definitions used in ABAC; the 
omission of certain information in the 'Recovery Context' and the link of the 
information with other data in ABAC.  
A few methodological cons traints in relation to the usag e of the recovery data should 
be mentioned as well. Irregularities detect ed at an early stage of the contract 
implementation lead to a reduction of the in terim or final payments. In these cases, 
there is no need to issue a recovery order and the irregularity is not recorded in the 
recovery context. This leads to an underrepo rting of irregularities.  On the other hand, 
an irregularity involving only a small amount could generate a rec overy order that is 
substantially higher if it is combined with e.g. the recovery  of payments that were not 
used. In the latter case, an overreporting might occur. 
Nevertheless, analyses on basic financia l information could be made and it is 
expected that the type and scope of the analyses for the next exercises can be 
extended after the implementation of further detailed guidelines and the 
improvement of IT tools.  
                                                
 
106 In accordance with Article 53a of the Council Re gulation (EC, Euratom) No 1605/2002 (‘Financial 
Regulation’) and Commission Regulation (EC, Euratom) No 2342/2002 (‘Implementing Rules’), see 
also chapter XX. 
 
EN 111   EN For the financial analyses in this chapter,  the following data were used from ABAC: 
• The number and corresponding financial amoun ts of recovery orders, which were 
registered after validation  by the authorising officer, including information on the 
place of residence of the contract part ner of the Commission and the budget line 
concerned; the method of detection; the t ype of irregularity id entified and the time 
span between the approval of a budget commitment, the notification of a recovery 
order and the return payment of the undue funds to the Commission; 
• The amount of a commitment  to which a recovery order is linked and for which a 
payment has been made to a beneficiary. In most cases, the commitment is higher 
than the amount to be recovered. 
In the remainder of this chapter, the term recovery refers to the recovery order and 
the financial amount involved, whereas the term qualification refers to the 
qualification of the recovery orde r: irregularity or suspected fraud. 
7.2. General analysis 
In 2008, the Commission services  registered 932 recovery orders in ABAC that were 
qualified as irregularities or suspected fraud. The committed budget for these 932 recoveries was EUR 580 million, of which EUR 34.7 million was identified as 
irregular
107. 
7.2.1.  Financial amounts involved 
The financial impact of the 932 recoveries  registered in 2008 was EUR 34.7 million, 
which includes an amount of EUR 3.2 m illion for the 19 recoveries qualified as 
suspected fraud and notified to OLAF. Table DE1 gives an overview of the 
aggregated financial commitments by policy domain as well as the number and financial amounts of recoveries, by qualification and policy domain. The 
classification into policy domain is provi ded for ‘internal policies’ and ‘external 
actions’ (table DE1). Table DE2 gives a mo re detailed classification of the policy 
area to which the recovery orders relate. Th e recovery orders have been issued for 
commitments that relate to several budget ex ercises, some even dating back to the 
1990s, during which different budget headi ngs were used. The budget structure of 
2008 was used for tables DE1 and DE2. In  cases where the budget title of a 
commitment from an earlier budget exer cise does no longer exist, the most 
resembling budget title from the 2008 budget was used. The column ‘commitments’ contains the addition of all the comm itments made during previous budget 
exercises
108 for which a recovery order was issu ed in 2008. The last column indicates 
the addition of the amounts to be recovered (including suspected fraud) as percentage of the aggregated commitments. 
                                                
 
107 The financial impact of a case of suspected fraud can only be determined following the conclusion of an 
OLAF investigation. It is only at  the end of judicial proceedings (‘ res judicata ’) that a case can be 
qualified as fraud and that the actual amount of fraud can be established.  
108 Information on the number of commitments that were not subject to a recovery order is not available as 
the recovery orders are related to commitments made under several budget exercises. 
 
EN 112   EN Table DE 1: Commitments and Recoveries (number and amounts) by policy domain.  
Commitments Recoveries 
Area (€ 1,000) % Average € 
1,000 N % € 1 000 % Av. 
€ 1,000 Recoveries 
as % of 
commitme
nts  
Internal 
policies 453,904 78.3 555 833 89.4 27,913 80.5 33.5 6.1%
External 
actions 126,134 21.7 1,274 99 10.6 6,762 19.5 68.3 5.4%
Total 580,038 100.0 622 932 100.0 34,675 100.0 37.2 6.0%
  
The table shows that the ir regular amounts only represent 6% of the commitments 
for which recovery orders were issued . More recovery orders were issued for 
commitments made under the internal policies domain than the external assistance 
actions, but the relative share for extern al actions for both the number and the 
amounts to be recovered is substantially higher. 
Table DE2 further specifies th e recoveries by budge t title. It should be observed that 
there is not always a direct link between the budget title or budget line and the Directorate General dealing with its implementation, as several DGs can share the appropriations on a budget line. The information in this table 
do not refer to the 
number of irregularities or suspecte d fraud per Directorate General.  
Table DE 2: Recoveries (number and am ounts) by qualification and budget title 
 
EN 113   EN Recoveries 
Irregularity Suspected Fraud 
Budget Title Commit-
ments 
1 000 € Number % €1 000 % Number € 1 000 
Economic and financial affairs 0 1 0.1 2 0.0    
Enterprise 9,017 27 3.0 314 1.0    
Employment and social affairs 3,768 14 1.5 132 0.4    
Agriculture and rural development 3,878 16 1.8 795 2.5 1 102 
Energy and transport 21,046 82 9.0 3,005 9.6    
Environment 10,959 25 2.7 2,312 7.4 5 601 
Research 213,120 187 20.5 7,253 23.1 1 60 
Information society and media 31,641 202 22.1 3,184 10.1    
Fisheries and maritime affairs 1,682 3 0.3 540 1.7    
Regional policy 4,528 7 0.8 996 3.2    
Taxation and customs union 9,695 2 0.2 1 0.0    
Education and culture 36,046 204 22.3 2,917 9.3    
Communication 664 5 0.5 341 1.1    
Health and consumer protection 22,670 7 0.8 3,389 10.8    
Area of freedom, security and justice 3,079 35 3.8 845 2.7    
External relations 24,567 27 3.0 1,643 5.2 9 2,270 
Development and relations with African, 
Caribbean and Pacific (ACP) States 50,712 5 0.5 579 1.8 2 68 
Enlargement 2,819 5 0.5 191 0.6    
Humanitarian aid 48,036 50 5.5 1,884 6.0 1 127 
Commission's administration 73,310 1 0.1 1 0.0    
Statistics 8,801 8 0.9 1,123 3.6    
Total 580,038 913 100 31,447 100 19 3,228 
  
7.2.2.  Financial amounts involved by geog raphical area and Member State 
Table DE3 summarizes the recoveries per geographical area, wh ere the beneficiary 
of the Community funding resided. The column 'average' indicates the average 
amount (in EUR 1,000) per recovery. 
Table DE 3: Recoveries (number and amounts)  by region of residence and qualification  
Recoveries 
Irregularity Suspected Fraud Contractor 
place of 
residence Commit-
ments  
1 000 € N % € 1 000 % Avera
ge N € 1 000 % Avera
ge 
ACP109 11,223 12 1.3 897 2. 9 75 1 1,723 53.4 1,723
Africa 2,566 2 0.2 38 0.1 19      
Asia & Pacific 70,322 22 2.4 724 2.3 33 4 408 12.6 102
EFTA 2,855 21 2.3 437 1.4 21      
EU 539,086 799 87.5 26,04 5 82.8 33 4 571 17.7 143
Latin America 3,228 10 1.1 177 0.6 18      
NEP & PA110 8,978 30 3.3 2,071 6.6 69 7 241 7.5 34
Not indicated 20,554 17 1.9 1,059 3.4 62 3 286 8.9 95
                                                 
109 ACP: Africa, Caribbean and Pacific countries; 
110 Countries benefiting from the Eu ropean Neighbourhood Policies an d the Pre-Accession Assistance  
 
EN 114   EN Total 658,812 913 100 31,447 100 34 19 3,229 100 170
 
Most of the entities concerned have thei r residence in the European Union: 803 
recovery orders (86.2% of 932) were is sued for an amount of EUR 26.6 million 
(76.8% of EUR 34.7 million). 129 recovery or ders (13.8%) were issued to entities 
residing outside the EU, for a total amount of  EUR 8.1 million (23.2%). In the latter 
category, more than 30% of the amount of re coveries related to entities residing in 
ACP countries (EUR 2.6 million), followed by countries eligible for assistance under 
the neighbourhood policies and pre-accession assistance (EUR 2.3 million). 
The highest number of recovery orders for suspected fraud (7 cases) concerned 
countries benefiting from neighbourhood and pre-accession assistance, of which 5 
(worth up to EUR 127,000) were registered in Georgia. The highest recovery order 
was issued to a contractor in South Afri ca, which accounted for 53.4% of recovery 
orders issued to entities locat ed outside the European Union.  
Table DE4 gives an overview of the recoveri es per Member State of residence of the 
entities in the European Union and the qu alification of the re covery. This table 
details the findings for the European Uni on reported in table DE3. The 'average' 
column is the average amount, in EUR 1,000, per recovery. 
 
EN 115   EN Table DE 4: Recoveries (number and amounts) by Member State and qualification  
Recoveries 
Irregularity Suspected Fraud Contractor 
place of origin Commit-
ments 
€ 1 000 N % € 1 000 % Average N € 1 000 
AT 6,770 23 2.9 1,115 4.3 48.5     
BE 83,654 67 8.4 717 2.8 10.7     
BU 37 6 0.8 39 0.1 6.5     
CY 213 4 0.5 43 0.2 10.8     
CZ 1,450 7 0.9 204 0.8 29.1     
DE 70,137 55 6.9 2,699 10.4 49.1     
DK 4,029 18 2.3 1,729 6.6 96.1     
EE 915 9 1.1 52 0.2 5.8     
EL 12,991 44 5.5 1 ,835 7.0 41.7 1 102
ES 67,606 66 8.3 3,706 14.2 56.2 2 458
FI 9,949 23 2.9 254 1.0 11.0     
FR 47,148 95 11.9 2,905 11.2 30.6     
HU 1,907 12 1.5 117 0.4 9.8     
IR 1,207 10 1.3 241 0.9 24.1     
IT 67,600 70 8.8 2,622 10.1 37.5     
LT 289 18 2.3 187 0.7 10.4     
LU 384 8 1.0 90 0.3 11.3     
LV  9,759 8 1.0 194 0.7 24.3     
MT 207 2 0.3 21 0.1 10.5     
NL 38,245 63 7.9 3,271 12.6 51.9     
PL 7,801 27 3.8 288 1.1 10.7     
PT 22,103 29 3.6 590 2.3 20.3     
RO 143 4 0.5 126 0.5 31.5     
SK 10,143 25 3.1 212 0.8 8.5     
SL 4,959 12 1.5 115 0.4 9.6     
SV 27,194 26 3.3 568 2.2 21.8     
UK  42,247 68 8.5 2 ,106 8.1 31.0 1 11
Total EU 539,086 799 100.0 26,045 100.0 32.6 4 571
 
Most of the recoveries were made con cerning beneficiaries re siding in 5 Member 
States: France (11.9%), Ital y (8.8%), the United Kingdom (8.5%), Spain (8.3%) and 
Belgium (8.4%). Entities residing in the Me mber States of the EU account for almost 
75% of the amount of the recoveries. Enti ties from whom the highest aggregated 
amounts have to be recovered are residi ng in Spain (15.6%, EUR 4.2 million), the 
Netherlands (12.3%, EUR 3.3 million), Fr ance (10.9%, EUR 2.9 million), Germany 
(10.1%, EUR 2.7 million) and Italy (9.9%, EUR 2.6 million) were above the average. 
These five Member States account for almo st 60% of the amounts of recoveries. The 
high rates of Belgium can be  explained by the fact that  most of the European 
Institutions have their seats in this Member State: this leads to the conclusion of a 
relative higher number of contracts and grant agreements with entities residing in this 
country.  
Recovery orders involving cas es of suspected fraud from entities based in one of the 
Member States made up only 17.7% of the am ounts of recoveries, but this figure is 
 
EN 116   EN strongly determined by two cases from Spai n, which account for more than 80% of 
the suspected fraud amounts. 
7.2.3.  Method of detection 
For each recovery order, the Commission servic e that issued the order has to indicate 
how the irregularity or suspected fraud wa s detected. Six different categories have 
been pre-defined, two of which fall under th e direct responsibil ity of the European 
Commission: On-the-spot checks and the ve rification of documents by desk officers 
and financial officers responsible for the implementation of the commitment. Table 
DE5 gives a breakdown of the recoveries by method of detection. 
Table DE 5: Recoveries (number and amounts) by method of detection  
Method of detection  N %  € 1 000 % Average 
Community control / Check on the spot 210 22.5 7,740 22.3 36.9
Community control / Desk check documents 501 53.8 15,183 43.8 30.3
European Court of Auditors 3 0.3 85 0.2 28.3
Independent control (supervising engineers, auditors) 175 18.8 5,683 16.4 32.5
OLAF 16 1.7 1,357 3.9 84.8
Other 27 2.9 4,627 13.3 171.4
Total 932 100 34,675 100 37.2
  
Most of the irregularities or suspected fr aud for which a recovery order was issued, 
were detected on the basis of Commun ity controls: 711 r ecoveries (76.3%) 
accounting for EUR 22.9 million (66.1%). W ithin the ‘Community controls’ desk 
controls generated were more than two times  recoveries than ‘on- the-spot controls’. 
It is interesting to note that the relativel y modest share of recoveries issued on the 
basis of OLAF activities or detected by ‘Oth ers’ (4.6%) account for an amount to be 
recovered of 17.2%. The average amount for recoveries is EUR 37,200 but two 
methods of detection (OLAF and Other) have a substan tial higher average. There 
was more than one method of detection in 8 cases. Table DE6 gives a further 
breakdown of the recoveries by method of de tection and by qualification. The last 
column is the average amount per recovery.  
Table DE 6: Recoveries (number and amount) by method of detection and by qualification  
Qualification Method of detection N % € 1 000 % Av. 
Community control / Check on the spot 210 23.0 7,740 24.6 36.9
Community control / Desk check documents 499 54.7 14,930 47.5 29.9
European Court of Auditors 3 0.3 85 0.3 28.3
Independent control (supervising engineers, auditors) 172 18.8 5,490 17.5 31.9
OLAF 8 0.9 1,057 3.4 132.1Irregularity 
Other 21 2.3 2,145 6.8 102.1
 Total of Irregularity 913 100.0 31,447 100.0 34.4
Community control / Desk check documents 2 10.5 253 7.8 126.5
Independent control (supervising engineers, auditors) 3 15.8 193 6.0 64.3Suspected 
fraud 
OLAF 8 42.1 300 9.3 37.5
 
EN 117   EN Other 6 31.6 2,482 76.9 413.7
Total of Suspected fraud 19 100.0 3,229 100.0 169.9
Total 932  34,675  37.2
Table DE6 shows the differences between i rregularities and suspected fraud when it 
comes to their detection. ‘Community desk checks of documents’ was the most 
common method of detection of  recoveries classified as  irregularity for both the 
number of recoveries and the associated amounts, though the share of the latter drops 
slightly compared to the other methods of detection. Among the recoveries classified 
as suspected fraud, both OLAF and ‘Other ’ were the most fr equent methods of 
detection by number of cases  (respectively 42.1 % and 31.6 %). It was only in a few 
recoveries that desk controls led to a ‘suspected fraud qualif ication’, which could 
imply that the design of these controls co uld be optimized to enhance the possibility 
of suspected fraud detection. The substant ial higher amount per recovery for those 
qualified as suspected fraud compared to th ose qualified as irregularity must be 
observed.  
7.2.4.  Types of irregularity 
The Commission services also had to indicate the type of irregularity that was 
detected when the recovery order was issu ed. The number of categories is relatively 
high compared to e.g. the method of det ection, and the interp retation of these 
findings must be done with care as inte rpretation problems eas ily occur with the 
identification of the correct t ype of irregularity. It can no t be excluded that the same 
irregularity is scored differently by differe nt financial officers or that some of the 
categories used in this classification have a small overlap.  
Table DE7 presents recoveries by main types of irregularities. 
Table DE 7: Recoveries (number an d amount) by type of irregularity 
Type of irregularity Number % € 1 000 % Average 
Action not implemented  37 4.0 2,373 6.8 64
Action not in accordance with the rules 211 22.6 6,449 18.6 31
Advances not correctly reflected 1 0.1 13 0.0 13
Beneficiary ineligible 3 0.3 331 1.0 110
Calculation error 53 5.7 1,423 4.1 27
Copy documents rather than originals 3 0.3 149 0.4 50
Deadline not respected 42 4.5 762 2.2 18
Expenditure declared not related to the action 46 4.9 1,926 5.6 42
Expenditure not covered by legal base 137 14.7 4,935 14.2 36
Falsified documents 7 0.8 241 0.7 34
Inappropriate accumulation of aid 5 0.5 683 2.0 137
Incomplete Documents 32 3.4 552 1.6 17
Incorrect rates used in calculating the claim 96 10.3 3,904 11.3 41
Missing Documents 188 20.2 4,072 11.7 22
Not Applicable 13 1.4 2,184 6.3 168
Public procurement procedures not respected 6 0.6 167 0.5 28
 
EN 118   EN Quality of action inad equate 22 2.4 3,667 10.6 167
Recoverable VAT, interest rece ived not correctly reflected 30 3.2 844 2.4 28
Total 932 100 34,675 100 37
The most common type of rec overies qualified as irregu larities is ‘Action not in 
accordance with the rules’  (211 recoveries or 22. 6%) followed by ‘Missing 
Documents’ (188 recoveries or 20.2%). The share of the latter t ype falls sharply to 
11.7% if the irregular amounts are consid ered. The third most common type is 
‘Expenditure not covered by lega l base’ (137 recoveries or 14.7%). The last type for 
which the share exceeds 10% is ‘Incorrect ra tes used in calculating the claim’ (96 
recoveries or 11.3 %). In 316 recoveries, more than one  type of irregularity was 
indicated. The most frequent pair of id entified irregularities was ‘Recoverable VAT 
and interest received not corr ectly reflected’ combined with  ‘Incorrect rates used in 
calculating the claim’. This pair of irre gularities occurred in 30 recoveries. The 
second pair was ‘Incorrect rates used in calculating the clai m’ combined with 
‘Missing Documents’, which occurred in 24 recoveries. The pa ir ’Expenditure not 
covered by legal base’ combined with ’Incorre ct rates used in calculating the claim’ 
occurred in 23 cases. 
Table DE8 presents the most frequently selected pairs of irregularities. Totals are not 
given in this table because the table is not complete: the rows indicate all the categories, whereas the columns only repr esent the most frequent categories of 
irregularities, which led to so me, but not all, cells appear ing twice in the table. The 
most important findings in this table relate to cells with values of 10 as they could hint at a certain irregula rity or fraud pattern.  
Table DE 8: The most frequently i ndicated pairs of irregularity types 
Type of irregularity Incorrect 
rates used 
in 
calculating 
the claim Missing 
Documents Action not in 
accordance 
with the rules Recoverable 
VAT, interest 
received not 
correctly 
reflected 
Action not implemented  1 1  
Action not in accordance with the rules 6 21 N/A 22 
Action not used for intended purposes 1  1  
Beneficiary ineligible  1 3  
Calculation error 5 4  5 
Deadline not respected  11 9 1 
Expenditure declared not related to the action 4 7 12 3 
Expenditure not covered by legal base 23 7 15 5 
Inappropriate accumulation of aid 3 1  1 
Incomplete Documents 10 11 5 3 
Quality of action inadequate   4  
Incorrect rates used in calculating the claim N/A 24 6 30 
Missing Documents 24 N/A 21 20 
Recoverable VAT, interest received not correctly 
reflected 30 20 22 N/A 
Total 106 108 99 90 
 
EN 119   EN The most common types of recoveries fo r which more than one irregularity was 
identified are ‘Missing documents’ in 108 cases, followed by ‘Incorrect rates used in 
calculating the claim’ in 106 recoveries. 
Table DE9 provides an overview of the rec overies by type of irregularity, broken 
down by qualification of the r ecovery. For recove ries qualified as suspected fraud, 
only the categories were reported wh ere the cells were not empty. 
Table DE 9: Recoveries (number and amount) by type of irregularity by qualification 
Qualification Type of irregularity 
Number  % € 1 000 % Avera
ge 
Action not implemented 36 3.9 2,296 7.3 64
Action not in accordance with the rules 211 23.1 6,449 20.5 31
Advances not correctly reflected 1 0.1 13 0.0 13
Beneficiary ineligible 2 0.2 271 0.9 136
Calculation error 53 5.8 1,423 4.5 27
Copy documents rather than originals 2 0.2 22 0.1 11
Deadline not respected 40 4.4 697 2.2 17
Expenditure declared not related to the action 46 5.0 1,926 6.1 42
Expenditure not covered by legal base 135 14.8 3,201 10.2 24
Inappropriate accumulation of aid 4 0.4 285 0.9 71
Incomplete Documents 32 3.5 552 1.8 17
Incorrect rates used in calculating the claim 96 10.5 3,904 12.4 41
Missing Documents 187 20.5 4,045 12.9 22
Not Applicable 11 1.2 1,788 5.7 163
Public procurement procedures not respected 5 0.5 65 0.2 13
Quality of action inadequate 22 2.4 3,667 11.7 167Irregularity 
Recoverable VAT, interest received not correctly reflected 30 3.3 844 2.7 28
 Total of Irregularity 913 100 31,447 100 34
Action not implemented 1 5.3 78 2.4 78
Beneficiary ineligible 1 5.3 60 1.9 60
Copy documents rather than originals 1 5.3 127 3.9 127
Deadline not respected 2 10.5 66 2.0 33
Expenditure not covered by legal base 2 10.5 1,734 53.7 867
Falsified documents 7 36.8 241 7.5 34
Inappropriate accumulation of aid 1 5.3 398 12.3 398
Missing Documents 1 5.3 27 0.8 27
Not Applicable 2 10.5 396 12.3 198Suspected 
fraud 
Public procurement procedures not respected 1 5.3 102 3.2 102
Total of Suspected fraud 19 100 3,229 100 170
Total  932   34,675  37
Among the recoveries qualifie d as irregularities  ‘Action not in accordance with the 
rules’ was the most frequent identified cat egory (211 recoveries or 23.1%). The next 
category was ‘Missing documents (187 recoveri es or 20.5%). The four most frequent 
categories account for 68.9% of the recoveri es qualified as irregularity, which shows 
a big variety in modus operandi used in ir regular transactions. It should be observed 
 
EN 120   EN that the share of these categories is lo wer (56%) if the amounts involved in the 
recovery are taken into account. 
Among the recoveries qualified as suspected  fraud, ‘Falsified documents’ was the 
most frequent type of irre gularity (7 recoveries or 37%). However, the amounts 
involved in the recovery show a different  pattern: the 2 cases where the type of 
irregularity was ‘Expenditure  not covered by legal base ’ account for 54% of the 
amounts, whereas the category ‘Falsifi ed documents’ only accounted for 7.5%. 
7.3. Specific analysis 
7.3.1.  Irregularity versus Suspected Fraud 
Only 2 % of the 932 issued  recovery orders were qualified by the Commission 
services as suspected fraud, but they account  for 9.3% of the amounts involved in the 
recoveries. Table DE10 provides an  overview of these findings.  
Table DE 10: Recoveries (numbe r and amounts) by qualification  
Qualification N % Commit-
ments  
(€ 1 000) % Average 
€ 1,000 Irregular 
amount 
(€ 1 000) % Average  
€ 1,000 
Irregularity  913 98.0 546, 784 94.3 598 31,447 90.7 34.4
Suspected fraud 19 2.0 33,254 5.7 1,750 3,229 9.3 169.9
Total 932 100.0 580,038 100.0 622 34,676 100.0 37.2
The average irregular amount per recovery was almost 5 times higher in suspected 
fraud recoveries than in recoveries qualified as irregularity. The average for all recoveries qualified as irregularity was EUR 34,444 compared to EUR 169,947 for 
recoveries qualified as suspect ed fraud. It should be noted that the fi nancial impact of 
suspected fraud cases could be revise d following OLAF's investigations. 
7.3.2.  Time delay 
The average delay between the commitment a nd the issuing of a recovery order is 4 
years and 8 months. Taking acc ount of the applicable procedures from the moment 
of commitment through payments, controls  till issuing the r ecovery order, the 
procedure is rather fast. For recovery orde rs in direct expenditures issued in 2008 
most commitments were made in 2004 and 2006 (see graph DE1). In both years, more than 150 commitments were made fo r which a recovery or der was issued in 
2008. Almost 90% of recovery orders by number concerned commitments which 
were made between 2000 and 2006. Recovery orders by amounts for the same period 
account for almost 85% of the amounts to be recovered.  
Taking account of the amounts involved and by applying the weight ed average of the 
time delay, it can be expected that the av erage time between th e commitment and the 
issuing of a recovery order wi ll increase to 5 years and 6 months. This shows that it 
takes longer to issue a recovery order in  cases involving higher amounts, especially 
in the projects in which the total amo unt of contract has to be recovered. 
The chart below presents the recoveries registered in 2008  by number (blue line) and 
amounts (magenta bars) of commitments by year of the commitment was made (e.g.: 
 
EN 121   EN in 2008, 150 recoveries were registered in ABAC that were made in 2006. The 
amount to be recovered is more than EUR 5 million).  
Chart DE 1: Recoveries (number and amounts) by year of commitment 
0,001.000.000,002.000.000,003.000.000,004.000.000,005.000.000,006.000.000,00
19911993 19951997
1998 19992000
2001 20022003
2004 20052006
2007 2008
Commitment Year€
020406080100120140160180
Irregular amount
Number
 
7.4. Recovery  
This paragraph describes the payments made to the Commission  further to the 
issuing of the recovery orders. Once a recove ry order is issued, the beneficiary has to 
pay back the undue payment. For the recovery  orders issued in 2008, full or partial 
payment could be reported in 679 (72%) cases, which represents an amount of almost EUR 22 million (65%). 262 recovery or ders (28%) were not paid yet, which 
account for almost EUR 13 million (35%).  
Table DE 11: Recoveries (number and amount ) by payment status and qualification. 
Recovered111 To be Recovered 
Qualification Number Cashed Amount (€ 1 000) Number Open Amount (€ 1 000) 
Irregularity  665 21,387 256 10,349
Suspected fraud 14 599 6 2,631
Total 679 21,986 262 12,980
The recovery rate for all recoveries is 63. 4% and is higher for irregularities (68%) 
than for suspected fraud (18.6%). However it is important to note that the 
                                                 
111 The totals in this table exceed the total number of  recoveries and recovered amounts as some partial 
recoveries fall into both ‘recovered’ and ‘to be recovered’.  
 
EN 122   EN Commission recovered the full amount of 13 contracts out of 19 cases involving 
suspected fraud. In 6 cases, the full amount s till needs to be recovered. Five out of 
these six cases account for 81.9% of the am ounts to be recovered in suspected fraud 
cases. 
7.5. Conclusions 
This analysis was the first attempt to examine the data from the recovery context of 
ABAC. As already mentioned in the me thodology paragraph of the chapter, the 
findings should be treated caref ully as this is only the first year that a limited set of 
data was available. The findi ngs should not be considered as empirical evidence of 
the level of fraud and irregularity. Ta king account of these constraints and 
limitations, the following cautious  conclusions can be drawn. 
• Irregular amounts only represent 6% of the commitments for which recovery 
orders were issued ; 
• Almost 90% of the recoveries relate to commitments made for internal policies, 
but relative share for exte rnal actions for both the number and the amounts to be 
recovered is substantially higher; 
• The method of detection most frequently identified in recoveries qualified as 
irregularity (both number a nd amounts) is ‘Community c ontrol’, in particular by 
carrying out ‘Desk chec k of documents’. It was only in  a few recoveries that desk 
controls led to a ‘suspected  fraud qualification’, which could imply that the design 
of these controls could be optimized to enhance the possibility of suspected fraud 
detection; 
• The type of irregularity showed a large variance. In recove ries qualified as 
irregularity, ‘Action not in  accordance with the rules’ and ‘Missing documents’ 
were the most frequent ca tegories, whereas the type  of irregularity most 
frequently observed in recoveries qualif ied as suspected fraud was ‘Falsified 
documents’’ 
• The aggregated amount of recovery orders  issued for commitments made in the 
area of internal policies was four times higher than for commitments made in the 
external actions domain. Th e latter however seems to be more exposed to the 
occurrence of suspected fraud; 
• 63.4% of the debit notes issued in 2008 was paid. 
 
EN 123   EN ANNEXES 
 
EN 124   EN ANNEX 1 – NUMBER OF CASES OW NRES AND AMOUNTS – PERIOD 2004-2007 PER MEMBER STATE 
Number of OWNRES cases and amounts fo r the period 2005-2008 by Member State 
2005 2006 2007 2008 
Member State 
Cases Amount € Cases Amount € Cases Amount € Cases Amount € % 
Change 
cases 
2007- 
2008 % 
Change 
amount 
2007-
2008 
AT 83 5 153 940 75 5 937 611 93 36 518 807 103 5 028 046 10.75% -86.23% 
BE 669 9 072 828 428 12 007 783 449 22 238 675 317 12 670 490 -29.40% -43.02% 
DE 1 317 78 287 465 1 140 59 113 839 1558 77 337 728 1218 65 894 342 -21.82% -14.80% 
DK 64 6 884 838 67 6 068 078 54 7 208 999 44 3 963 276 -18.52% -45.02% 
ES 501 48 911 216 632 32 093 701 439 18 140 369 438 19 019 835 -0.23% 4.85% 
FI 34 1 992 413 28 1 464 957 34 1 764 959 21 708 003 -38.24% -59.89% 
FR 349 33 837 541 314 29 109 870 327 32 981 593 311 17 548 870 -4.89% -46.79% 
GR 55 8 366 740 48 11 697 070 57 2 976 051 32 1 444 289 -43.86% -51.47% 
IE 22 671 846 48 2 864 369 35 2 482 972 43 1 645 639 22.86% -33.72% 
IT 298 31 845 317 341 65 602 399 276 23 582 174 310 31 320 103 12.32% 32.81% 
LU 0 0 1 49 291 0 0 1 263 046 N/A N/A 
NL 1 794 29 912 777 1 406 37 346 132 1145 30 051 013 870 54 597 249 -24.02% 81.68% 
PT 20 1 652 095 17 780 560 23 1 635 142 25 2 186 424 8.70% 33.71% 
SE 60 3 250 999 47 2 164 111 43 2 318 935 70 6 331 784 62.79% 173.05% 
UK 698 59 105 121 1 057 65 054 126 1072 112 872 035 1023 98 362 245 -4.57% -12.86% 
EUR-15 TOTAL 5 964 318 945 136 5 649 331 353 897 5 605 372 109 452 4 826 320 983 641 -13.90% -13.74% 
CY 16 379 977 9 192 160 11 750 964 14 787 523 27.27% 4.87% 
CZ 19 531 275 63 2 302 704 50 2 290 130 64 5 025 048 28.00% 119.42% 
EE 3 165 287 5 178 010 12 423 140 17 1 358 643 41.67% 221.09% 
HU 70 1 986 224 103 7 805 235 69 6 265 722 64 5 852 076 -7.25% -6.60% 
LT 35 1 515 325 39 1 599 918 41 1 283 365 57 1 544 550 39.02% 20.35% 
LV 10 544 854 28 1 886 378 40 2 253 690 25 944 415 -37.50% -58.09% 
MT 6 882 756 11 1 226 978 10 404 949 3 449 940 -70.00% 11.11% 
PL 55 1 218 001 69 1 808 507 159 8 492 588 142 5 609 503 -10.69% -33.95% 
SI 22 618 272 24 950 848 27 1 579 108 26 915 631 -3.70% -42.02% 
SK 4 75 841 28 1 561 967 21 1 236 418 12 469 810 -42.86% -62.00% 
EUR-10 TOTAL 240 7 917 812 379 19 512 705 440 24 980 074 424 22 957 139 -3.64% -8.10% 
BG 0 0 0 0 15 456 726 19 502 373 26.67% 9.99% 
RO 0 0 0 0 37 3 785 318 75 7 175 419 102.70% 89.56% 
EUR-2 TOTAL 0 0 0 0 52 4 242 044 94 7 677 792 80.77% 80.99% 
 
EN 125   EN EUR-27 TOTAL 6 204 326 862 948 6 028 350 866 602 6 097 401 331 570 5 344 351 618 572 -12.35% -12.39% 
 
EN 126   EN ANNEX 2 – OWNRES CAS ES PER MEMBER STATE 
OWNRES CASES BY MEMBER STATE
02004006008001,0001,2001,4001,6001,8002,000
AT BE DE DK ES FI FR GR IE IT LU NL PT SE UK CY CZ EE HU LT LV MT PL SI SK BG RO
MEMBER STATENUMBER OF CASES
2005 2006 2007 2008
 
EN 127   EN ANNEX 3 – IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 
IMPACT ON CUSTOMS PROCEDURE FREE CIRCULATION 
YEAR CASES IMPACT CASES % 
OF TOTAL AMOUNTS 
ESTABLISHED IMPACT AMOUNTS 
ESTABLISHED % OF 
TOTAL 
2004 2256 65.01% 172 902 304 82.20% 
2005 3306 53.29% 263 805 274 80.71% 
2006 3860 64.03% 265 767 226 75.75% 
2007 3947 64.74% 327 029 733 81.49% 
2008 3601 67.38% 271 199 284 77.13% 
 
EN 128   EN ANNEX 4 – TOP 10 CHAPTER HEADINGS 
TOP 10 CHAPTER HEADINGS 
2006  2007  2008 
CN PRODUCT AMOUNT 
€ CASES   CN PRODUCT AMOUNT 
€ CASES   CN PRODUCT AMOUNT 
€ CASES 
85 TVs and parts etc. 63 260 655 1 048   85 TVs and parts etc. 86 667 729 1 062   85 TVs and parts etc. 90 487 554 809 
24 Tobacco/cigarettes 43 590 444 514   64 Footwear 48 323 370 282   24 Tobacco/cigarettes 28 701 676 344 
15 Oils and fats 22 403 986 86   24 Tobacco/cigarettes 29 872 956 367   84 Machines 23 351 047 367 
61 Clothing 19 965 746 233   87 (Parts of) cars/motors  22 374 405 335   61 Clothing 22 098 382 395 
10 Cereals 15 022 561 48   07 Edible vegetables 21 673 533 91   62 Clothing 19 638 499 437 
02 Meat 14 324 372 332   84 Machines 18 135 581 386   87 (Parts of) cars/motors  15 873 280 338 
07 Edible vegetables 13 883 909 122   61 Clothing 17 609 486 381   64 Footwear 10 188 686 233 
73 Articles of iron & steel 13 222 296 130   62 Clothing 15 304 036 445   39 Plastics 10 179 568 214 
87 (Parts of) cars/motors  11 698 920 316   63 Other textile articles 10 420 845 79   02 Meat 10 091 686 122 
17 Sugar/sugar products 11 542 566 88   73 Articles of iron & steel 8 990 712 184   07 Edible vegetables 9 772 650 154 
 
EN 129   EN ANNEX 5 – GOOD AFFECTED BY FRAUD  AND IRREGULARITY – PERIOD 2005-2007 
GOODS AFFECTED BY FRAUD AND IRREGULARITY PERIOD 2006-2008 
2006  2007   2008 
TARIFF 
CODES CASES AMOUNTS €   TARIFF 
CODES CASES AMOUNTS €   TARIFF 
CODES CASE S AMOUNTS € 
24022090 459 35 662 152   64039998 39 30 836 774   85219000 95 28 570 466 
85254099 24 15 421 737   85282190 76 23 806 063   24022090 311 24 256 682 
07032000 85 13 084 516   07032000 49 20 224 990   85282190 26 18 632 857 
15091010 15 11 258 441   24022090 261 17 253 111   84119100 18 9 259 219 
85393190 103 9 431 755   85281298 4 13 221 267   85393190 84 7 837 683 
61103099 29 8 157 065   87031018 50 9 796 834   07032000 114 7 681 578 
02071410 108 7 346 237   64030000 6 6 706 330   28046900 6 5 886 029 
10062098 8 7 333 377   85393190 102 6 683 582   02071410 51 5 602 979 
85219000 151 6 782 215   63039118 1 6 468 283   62041100 107 5 056 821 
73121071 1 6 376 418   84119190 7 5 197 247   96131000 18 4 685 240 
15091090 16 6 090 434   02071410 115 4 409 392   61103099 56 4 034 071 
10063000 1 5 818 641   85219000 114 4 107 588   24012010 11 3 794 514 
17029099 27 5 550 293   61103099 86 3 736 346   61101190 12 3 512 930 
17019910 22 5 346 516   24012010 9 3 711 817   39232100 61 3 375 377 
24022000 2 5 189 984   24031010 43 3 710 185   85287220 2 2 902 796 
08030019 54 5 119 457   62034231 21 3 456 608   61091000 47 2 828 342 
02023090 53 5 017 135   96131000 20 3 228 490   83112000 1 2 765 919 
85281294 77 4 027 664   61101190 14 3 157 134   02023090 20 2 479 389 
36799690 1 3 679 969   20031030 44 3 126 633   17019999 2 2 376 061 
96131000 16 3 663 965   04051000 1 3 071 722   61102099 64 2 375 301 
83051000 5 2 914 700   85281294 37 2 585 595   87031018 18 2 352 256 
85282190 66 2 713 408   85369010 2 2 549 674   84099100 4 2 208 179 
90013000 2 2 600 076   64039938 3 2 548 693   15119019 3 2 150 803 
85281220 15 2 413 933   85254091 12 2 484 027   85269120 19 2 118 755 
15100010 5 2 295 170   48103900 1 2 111 908   20130001 2 2 077 722 
 
 
EN 130   EN ANNEX 6 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 
FRAUD AND IRREGULARITY: BREAKDOW N BY ORIGIN OF GOODS DURING 2006-2008 
2006   2007   2008 
COUNTRY Amount € CASES   COUNTRY Amount € CASES   COUNTRY Amount € CASES 
China 90 328 190 1 516  China 169 495 156 1 718  China 133 997 371 1 659 
Japan 31 347 676 297  US 44 250 023 780  US 40 397 999 620 
US 28 921 543 688  Japan 26 484 283 270  Japan 18 798 783 220 
Thailand 19 311 907 66  South Korea 16 965 037 168  Not specified  17 764 405 584 
Not specified 18 218 201 798  Brazil 12 361 567 267  Bangladesh 14 020 461 181 
Brazil 15 048 789 354  Taiwan 12 291 037 135  South Korea 13 256 416 97 
Tunisia 14 126 527 47  Vietnam 9 154 388 61  Brazil 12 656 134 147 
South Korea 12 093 869 151  Bangladesh 8 900 154 183  Switzerland 8 509 712 77 
Turkey 10 644 686 101  Not specified  7 159 143 684  Malaysia 6 963 168 55 
 
EN 131   EN ANNEX 6.1: RECOVERY RATE (RR) BRE AKDOWN BY ORIGIN OF GOODS 2006-2008  
RECOVERY RATE (RR) BREAKDOW N BY ORIGIN OF GOODS 2006-2008 
2006   2007   2008 
COUNTRY Recovered € RR   COUNTRY Recovered € RR   COUNTRY Recovered € RR 
China 42 690 405 47%  China 65 851 360 39%  China 39 766 265 30% 
Japan 13 022 284 42%  US 34 009 628 77%  US 20 307 596 50% 
US 22 863 972 79%  Japan 21 518 197 81%  Japan 16 326 518 87% 
Thailand 1 852 386 10%  South Korea 6 972 683 41%  Not specified  2 073 402 12% 
Not specified 5 851 802 32%  Brazil 6 717 519 54%  Bangladesh 5 380 711 38% 
Brazil 6 004 188 40%  Taiwan 3 828 968 31%  South Korea 8 037 874 61% 
Tunisia 440 582 3%  Vietnam 7 839 416 86%  Brazil 4 647 418 37% 
South Korea 10 017 939 83%  Bangladesh 4 493 917 50%  Switzerland 1 012 284 12% 
Turkey 1 703 544 16%  Not specified 4 515 313 63%  Malaysia 1 596 236 23% 
 
EN 132   EN ANNEX 7 – RECOVERY RATES OWNRES 
RECOVERY RATES (RR) TR ADITIONAL OWN RESOURCES  
2007 2008 
MEMBER 
STATE AMOUNT € 
2007 RECOVERED € 
2007 RR 2007 AMOUNT € 
IN 2008 RECOVERED € 
IN 2008 RR for 
2007 in 
2008 AMOUNT € 
2008 RECOVERED € 
2008 RR 2008 
AT 5 500 312 € 1 600 436 € 29.10% 36 518 807 € 1 956 817 € 5.36% 5 028 046 € 1 678 042 € 33.37% 
BE 22 307 864 € 1 415 487 € 6.35% 22 238 675 € 5 210 766 € 23.43% 12 670 490 € 2 216 020 € 17.49% 
BG 471 173 € 236 994 € 50.30% 456 726 € 253 003 € 55.39% 502 373 € 289 569 € 57.64% 
CY 750 402 € 59 090 € 7.87% 750 964 € 434 503 € 57.86% 787 523 € 134 134 € 17.03% 
CZ 1 424 688 € 1 080 783 € 75.86% 2 290 130 € 1 539 161 € 67.21% 5 025 048 € 1 292 086 € 25.71% 
DE 54 472 872 € 39 064 385 € 71.71% 77 337 728 € 57 543 376 € 74.41% 65 894 342 € 40 753 580 € 61.85% 
DK 7 256 158 € 6 334 705 € 87.30% 7 208 999 € 6 384 112 € 88.56% 3 963 276 € 3 295 562 € 83.15% 
EE 455 754 € 231 635 € 50.82% 423 140 € 231 662 € 54.75% 1 358 643 € 411 651 € 30.30% 
ES 12 925 302 € 9 378 359 € 72.56% 18 140 369 € 13 091 879 € 72.17% 19 019 835 € 10 662 361 € 56.06% 
FI 1 714 218 € 654 884 € 38.20% 1 764 959 € 798 103 € 45.22% 708 003 € 384 491 € 54.31% 
FR 33 315 774 € 11 487 611 € 34.48% 32 981 593 € 13 046 898 € 39.56% 17 548 870 € 11 235 749 € 64.03% 
GR 2 744 851 € 151 948 € 5.54% 2 976 051 € 199 214 € 6.69% 1 444 289 € 387 361 € 26.82% 
HU 6 027 841 € 1 283 280 € 21.29% 6 265 722 € 1 606 699 € 25.64% 5 852 076 € 2 988 620 € 51.07% 
IE 2 482 972 € 1 987 124 € 80.03% 2 482 972 € 1 987 124 € 80.03% 1 645 639 € 1 544 260 € 93.84% 
IT 31 048 300 € 3 528 907 € 11.37% 23 582 174 € 5 068 369 € 21.49% 31 320 103 € 2 812 556 € 8.98% 
LT 1 286 472 € 408 342 € 31.74% 1 283 365 € 650 144 € 50.66% 1 544 550 € 688 732 € 44.59% 
LU 0 € 0 € N/A 0 € 0 € 0.00% 263 046 € 0 € N/A 
LV 2 254 487 € 874 726 € 38.80% 2 253 690 € 1 103 122 € 48.95% 944 415 € 73 706 € 7.80% 
MT 404 949 € 156 232 € 38.58% 404 949 € 199 936 € 49.37% 449 940 € 20 319 € 4.52% 
NL 57 072 423 € 8 436 879 € 14.78% 30 051 013 € 21 100 182 € 70.21% 54 597 249 € 8 289 082 € 15.18% 
PL 8 569 400 € 2 430 412 € 28.36% 8 492 588 € 2 624 790 € 30.91% 5 609 503 € 1 832 197 € 32.66% 
PT 393 960 € 239 516 € 60.80% 1 635 142 € 291 150 € 17.81% 2 186 424 € 328 155 € 15.01% 
RO 3 837 168 € 393 829 € 10.26% 3 785 318 € 411 598 € 10.87% 7 175 419 € 5 516 513 € 76.88% 
SE 2 398 254 € 1 201 561 € 50.10% 2 318 935 € 2 089 519 € 90.11% 6 331 784 € 4 501 990 € 71.10% 
SI 1 589 490 € 1 299 872 € 81.78% 1 579 108 € 1 356 182 € 85.88% 915 631 € 613 472 € 67.00% 
SK 1 070 723 € 300 113 € 28.03% 1 236 418 € 475 687 € 38.47% 469 810 € 236 534 € 50.35% 
UK 115 284 887 € 56 252 454 € 48.79% 112 872 035 € 59 673 336 € 52.87% 98 362 245 € 29 851 886 € 30.35% 
EUR-27 
TOTAL 377 060 694 € 150 489 564 € 39.91% 401 331 570 € 199 327 332 € 49.67% 351 618 572 € 132 038 628 € 37.55% 
 
EN 133   EN ANNEX 8 – SEIZED AND CONFISCATED GOODS 
SEIZED AND CONFISCATED GOODS (cigarettes CN 24022090) 
2006 2007 2008 
MEMBER 
STATES CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT € CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT € CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT € 
AT 4 97 191 € 2 89 954 € 2 48 255 € 
BE 16 876 349 € 6 365 914 € 1 200 390 € 
DE 13 511 777 € 2 171 448 € 3 231 311 € 
DK 3 78 122 € 0 0 € 0 0 € 
ES 0 0 € 0 0 € 0 0 € 
FI 7 223 516 € 8 139 145 € 7 257 448 € 
FR 26 1 264 583 € 29 1 679 953 € 33 2 304 549 € 
GR 15 3 214 309 € 13 2 072 640 € 9 971 125 € 
IE 3 216 059 € 5 803 923 € 13 2 540 368 € 
IT 0 0 € 4 345 467 € 13 1 694 276 € 
LU 0 0 € 0 0 € 0 0 € 
NL 0 0 € 0 0 € 0 0 € 
PT 1 691 200 € 0 0 € 0 0 € 
SE 3 48 760 € 3 385 600 € 3 116 014 € 
UK 163 10 266 215 € 42 4 345 939 € 100 9 789 560 € 
EUR-15 
TOTAL 254 17 488 081 € 114 10 399 983 € 184 18 153 296 € 
BG 0 0 € 0 0 € 2 52 543 € 
CY 2 364 685 € 1 33 673 € 0 0 € 
CZ 0 0 € 0 0 € 1 219 219 € 
EE 0 0 € 1 41 304 € 0 0 € 
HU 15 515 938 € 6 193 168 € 4 860 456 € 
LT 5 109 526 € 0 0 € 3 78 624 € 
LV 2 490 904 € 4 693 930 € 4 365 572 € 
MT 7 780 914 € 2 205 013 € 0 0 € 
PL 17 404 267 € 34 813 987 € 37 1 193 988 € 
RO 0 0 € 19 3 219 905 € 16 1 134 311 € 
SI 9 549 900 € 6 187 055 € 4 261 035 € 
SK 3 397 874 € 1 144 760 € 0 0 € 
EUR-12 
TOTAL 60 3 614 008 € 74 5 532 795 € 71 4 165 748 € 
EUR-27 
TOTAL 314 21 102 089 € 188 15 932 778 € 255 22 319 044 € 
 
EN 134   EN ANNEX 9 – PERCENTAGE CLASSIFICATI ON OF FRAUD PER MEMBER STATE 
PERCENTAGE CLASSIFIED AS FRAUD 2006-2008
0%10%20%30%40%50%60%70%80%90%100%
AT BE DE DK ES FI FR GR IE IT LU NL PT SE UK BG CY CZ EE HU LT LV MT PL RO SI SK
MEMBER STATE% FRAUD CASES
2006 2007 2008
 
 
EN 135   EN ANNEX 10 – AMOUNTS INVOLVED IN FRAUD 
AMOUNTS INVOLVED IN FRAUD PERIOD 2006-2008 
2006 2007 2008 MEMBER 
STATE CASES FRAUD 
CASES FRAUD IN € CASES FRAUD 
CASES FRAUD IN € CASES FRAUD 
CASES FRAUD IN € 
AT 75 25 2 250 974 93 31 34 103 931 103 25 1 652 584 
BE 428 54 3 598 030 449 54 2 286 375 317 37 2 371 821 
DE 1 140 154 13 737 742 1 558 213 16 222 344 1 218 150 13 327 586 
DK 67 15 3 359 960 54 2 213 813 44 6 670 840 
ES 632 249 21 659 342 439 172 7 997 274 438 188 11 106 390 
FI 28 24 1 267 261 34 21 1 151 960 21 11 323 853 
FR 314 32 119 450 327 153 6 294 666 311 123 4 447 123 
GR 48 48 11 697 070 57 57 2 976 051 32 32 1 444 289 
IE 48 0 0 35 4 134 805 43 13 0 
IT 341 205 57 562 427 276 101 11 918 739 310 170 18 037 668 
LU 1 1 49 291   0 0 1 0 0 
NL 1 406 441 34 203 951 1 145 341 23 429 524 870 69 2 361 909 
PT 17 8 276 018 23 2 394 483 25 5 1 676 333 
SE 47 3 0 43 3 0 70 3 0 
UK 1 057 159 10 160 937 1 072 104 9 989 927 1 023 93 9 401 126 
EUR-15 5 649 1 418 159 942 453 5 605 1 258 117 113 892 4 826 925 66 821 522 
BG 0 0 0 15 8 228 070 19 15 447 721 
CY 9 3 21 855 11 3 26 456 14 3 378 947 
CZ 63 5 91 486 50 3 649 307 64 4 79 553 
EE 5 0 0 12 1 41 304 17 1 100 592 
HU 103 59 4 499 751 69 16 2 511 001 64 26 2 448 405 
LT 39 3 414 212 41 7 77 313 57 12 428 990 
LV 28 1 130 892 40 0 0 25 0 0 
MT 11 11 1 226 978 10 5 285 766 3 2 429 621 
PL 69 19 404 267 159 68 5 972 136 142 50 1 948 060 
RO 0 0 0 37 19 3 219 905 75 27 1 521 782 
SI 24 11 579 346 27 6 187 055 26 5 277 754 
SK 28 8 477 049   
21 10 475 316   
12 3 127 700 
EUR-12 379 120 7 845 836  492 146 13 673 629  518 148 8 189 125 
EUR-27 6 028 1 538 167 788 289  6 097 1 404 130 787 521  5 344 1 073 75 010 647 
 
 
EN 136   EN update 06/05/2009
Year Cases Amounts affected% of Agricultural 
expenditureAgricultural 
expenditure
2008 1,198 102,259 0.21 48,628,607
2007 1,548 154,993 0.33 46,920,972
2006 3,249 86,825 0.17 49,742,890
2005 3,193 102,112 0.21 47,819,5092004 3,401 82,064 0.19 42,934,711
2003 3,237 169,724 0.39 43,606,858
2002 3,285 198,079 0.46 42,781,8982001 2,415 140,685 0.34 41,866,9402000 2,967 474,562 1.17 40,437,400ANNEX 11
IRREGULARITIES
UNDER
(amounts in € 1,000)YEARS 2000 - 2008COMMUNICATED BY MEMBER STATES
Reg. 1848/2006AGRICULTURAL SECTOR
period < 2007: threshold €   4,000
period > 2006: threshold € 10,000
*) The concept "irregularity" includes fraud. The qualification as fraud, meaning criminal behaviour, can only be 
made following a penal procedure.EAGF & EAFRD
0.000.200.400.600.801.001.201.40
2008 2007 2006 2005 2004 2003 2002 2001 2000
yearBudgetary impact
05001,0001,5002,0002,5003,0003,5004,000N° of cases
Agricultural expenditure
Cases
 
EN 137 update 06/05/2009
Member 
StatesNumber of cases 
involved in 
irregularitiesAmounts affected by 
irregularities% of agricultural 
expenditure
AT 20 312 0.03
BE 31 1,606 0.21
BG 2 119 0.05
CY
CZ 22 765 0.11
DE 111 3,817 0.06
DK 10 445 0.04
EE 13 278 0.31
EL 39 4,010 0.15
ES 245 14,925 0.24
FI 8 984 0.12
FR 129 11,763 0.12
HU 6 748 0.08
IE 22 397 0.02
IT 211 53,970 0.96
LT 24 804 0.26
LU 1 13 0.03
LV 13 208 0.11
MT 1 38 0.76
NL 30 1,184 0.11
PL 46 1,126 0.05PT 120 3,630 0.37
RO
SE 10 214 0.02
SI 1 39 0.02
SK 11 640 0.19
UK 7 226 0.01
TOTAL 1,133 102,259 0.21(amounts in € 1,000)ANNEX 12
COMMUNICATED BY MEMBER STATES
UNDERAGRICULTURAL SECTOR
IRREGULARITIES
Reg. 1848/2006
2008
 
 
EN 138 ANNEX 13 
STRUCTURAL MEASURES (INCLUDE THE COHESION FUND) 
IRREGULARITIES* COMMUNICATED  BY MEMBER STATES 1998-2008** 
YEARN° OF 
IRREGULARITIESFINANCIAL AMOUNTS 
(in EUR)TOTAL BUDGET 
(in MEUR)IMPACT ON 
BUDGET
2008 4,007 585,249,322 46,889 1.25%
2007 3,756 804,102,077 45,327 1.77%
2006 3,047 647,773,952 38,430 1.69%
2005 3,417 581,214,090 37,192 1.56%
2004 3,123 617,099,163 35,665 1.73%
2003 2,323 444,278,642 30,764 1.44%
2002 4,607 579,010,650 30,556 1.89%
2001 1,337 210,329,680 29,823 0.71%
2000 1,109 97,160,006 25,556 0.38%
1999 611 117,563,229 30,654 0.38%
1998 347 79,102,463 28,366 0.28% 
05001,0001,5002,0002,5003,0003,5004,0004,5005,000
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Year
N° of irregularities
0100,000,000200,000,000300,000,000400,000,000500,000,000600,000,000700,000,000800,000,000900,000,000EUR
N° OF IRREGULARITIES FINANCIAL AMOUNTS (in EUR)
 
*The concept of irregularity includes fraud. The qualificatio n as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 
** Data have been updated in relation to thos e published in the 2007 report in order to take 
into account the updates sent by Memb er States during the reporting year 2008. 
 
EN 139 ANNEX 14 
COHESION FUND 
IRREGULARITIES* COMMUNICATED  BY MEMBER STATES 1998-2008 
050100150200250300350
2008 2007 2006 2005 2004 2003 2002 2001 2000 1999
Year
N° of irregularities
050,000,000100,000,000150,000,000200,000,000250,000,000EUR
N° of irregularities Financial amounts (in EUR)
 
YEAR N° OF IRREGULARITIESFINANCIAL AMOUNTS (in 
EUR)
2008 140 56,328,911
2007 86 109,739,219
2006 219 178,487,134
2005 208 133,653,731
2004 291 194,285,278
2003 48 132,914,324
2002 4 9,627,540
2001 3 2,534,032
2000 2 36,278
1999 3 914,311
1998 0 0 
*The concept of irregularity includes fraud. The qualificatio n as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 
 
EN 140 ANNEX 15 
PART 1 
STRUCTURAL FUNDS 
REGULATIONS NN. 1681/94 AND 1828/2006 
a) ARTICLE 3/28 COMMUNICATI ONS BY MEMBER STATE - 2008 
MEMBER STATE ERDF ESF EAGGF - Guid. FIFG TOTAL
AT 36 1 3 7
BE 14 19 2 35BG 3 1 4CY 4 4
CZ 48 30 2 80
DE 196 160 20 3 379DK 4 3 7EE 6 17 5 2 30
EL 50 19 18 12 99
ES 310 121 56 6 493FI 14 12 2 28FR 55 39 4 98
HU 20 2 20 42
IE 2 2IT 591 100 102 12 805LT 13 4 10 27
LV 12 7 4 1 24
MT 1 1NL 56 208 264PL 205 63 76 1 345
PT 178 162 61 2 403
SE 24 121 1 146SI 13 13SK 49 23 1 73
UK 352 113 15 9 489
TOTAL 2,252 1,229 398 49 3,928
 
b) NUMBER OF IRREGULARITIES RE PORTED BY MEMBER STATE - 2008 
 
EN 141 MEMBER STATE ERDF ESF EAGGF - Guid. FIFG TOTAL
AT 36 1 3 7
BE 14 19 2 35
BG 3 1 4
CY 4 4
CZ 48 30 2 80
DE 192 157 20 3 372
DK 4 3 7
EE 5 16 5 2 28
EL 47 19 18 12 96
ES 307 121 54 6 488
FI 14 12 2 28
FR 55 39 4 98
HU 17 2 20 39
IE 2 2
IT 589 99 102 12 802
LT 12 4 10 26
LV 10 7 4 1 22
MT 1 1
NL 54 208 262
PL 197 58 73 1 329
PT 178 162 61 2 403
SE 24 121 1 146
SI 13 13
SK 38 23 1 62
UK 348 112 14 9 483
TOTAL 2,208 1,218 392 49 3,867 
 
EN 142 ANNEX 15 
PART 2 
STRUCTURAL FUNDS 
IRREGULARITIES REPORTED BY MEMBER STATES - 2008 
REGULATIONS NN. 1681/94 AND 1828/2006 
FINANCIAL AMOUNTS INVOLVED IN IRREGULARITIES 
MEMBER STATE ERDF ESF EAGGF - Guid. FIFG TOTAL
AT 2,840,773 21,413 2,862,186
BE 529,644 687,661 325,852 1,543,157
BG 791,453 12,864 804,317CY 172,298 172,298CZ 12,699,849 1,092,802 135,893 13,928,544DE 12,886,220 6,810,586 1,176,796 111,633 20,985,235DK 56,646 621,697 678,343
EE 961,051 501,796 498,010 92,040 2,052,897
EL 16,545,398 466,802 1,428,581 1,313,585 19,754,366ES 128,313,388 6,948,077 4,965,428 524,579 140,751,472FI 570,056 1,184,312 59,042 1,813,410FR 3,543,349 1,414,551 40,459 4,998,359HU 938,500 956,500 1,403,037 3,298,037
IE 5,303,050 5,303,050
IT 41,446,086 17,415,210 12,327,054 3,730,364 74,918,714LT 1,619,414 151,033 1,477,472 3,247,919
LV 279,058 127,764 442,848 8,070 857,740
MT 410,761 410,761NL 3,838,536 24,883,973 28,722,509PL 23,776,954 7,946,431 3,311,170 309,589 35,344,144
PT 14,347,085 8,870,530 5,851,333 399,349 29,468,297
SE 587,225 3,109,930 21,574 3,718,729SI 430,933 430,933SK 8,836,492 625,131 71,929 9,533,552UK 83,029,790 38,932,750 899,412 459,491 123,321,443TOTAL 364,581,711 122,954,111 34,414,316 6,970,274 528,920,411
 
 
EN 143 ANNEX 16 
STRUCTURAL FUNDS 
IRREGULARITIES REPORTED BY MEMBER STATES  
UNDER REGULATIONS NN. 1681/94 AND 1828/2006 
SITUATION OF RECOVERY  
PART 1 – 2008 
a) AMOUNTS RECOVERED BY MEMBER STATES 
MEMBER STATE ERDF ESF EA GGF - Guid. FIFG TOTAL
AT 1,465,226 21,413 1,486,639
BE 86,928 687,661 57,756 832,345
BG 0 0 0
CY 172,025 172,025
CZ 249,816 232,205 121,122 603,143
DE 5,524,778 2,019,629 360,001 12,920 7,917,328
DK 0 5,399 5,399
EE 0 304,058 0 0 304,058
EL 827,765 330,122 704,902 0 1,862,789
ES 51,729,498 1,507,037 1,397,696 0 54,634,231
FI 314,285 65,126 0 379,411
FR 1,065,976 113,533 0 1,179,509
HU 186,312 106,488 348 293,148IE 0 0
IT 1,297,064 689,641 1,291,985 361,520 3,640,210
LT 105,094 27,516 0 132,610
LV 54,624 10,520 0 0 65,144
MT 0 0
NL 682,363 106,158 788,521
PL 1,856,197 5,390,143 98,445 0 7,344,785
PT 6,096,352 2,269,37 9 333,478 0 8,699,209
SE 39,767 1,016,510 0 1,056,277SI 43,669 43,669
SK 629,615 55,200 0 684,815
UK 10,727,995 7,012,081 26,375 11,123 17,777,574
TOTAL 82,983,324 22,141,844 4,392,108 385,563 109,902,839
 
b) AMOUNTS TO BE RECOVE RED BY MEMBER STATES 
MEMBER STATE ERDF ESF EAGGF - Guid. FIFG TOTAL
AT 1,110,073 0 1,110,073
BE 258,161 0 134,048 392,209
BG 0 12,864 12,864
CY 0 0
CZ 11,469,043 450,925 0 11,919,968DE 6,779,749 4,071,055 699,812 82,703 11,633,319
DK 34,430 616,298 650,728
EE 921,240 197,738 284,337 79,288 1,482,603EL 15,504,391 109,649 722,317 1,313,585 17,649,942ES 74,646,627 5,441,040 2,539,986 524,579 83,152,232
FI 224,207 8,182 1,912 234,301
FR 1,613,719 720,640 45,973 2,380,332HU 257,406 680,556 529,094 1,467,056
IE 0 0
IT 30,777,897 12,820,865 6,520,066 2,123,602 52,242,430LT 1,134,909 38,333 23,854 1,197,096
L
V 156,558 117,244 442,848 8,070 724,720
MT 410,761 410,761
NL 595,266 400,780 996,046
PL 7,144,500 908,195 1,360,459 0 9,413,154PT 8,100,054 5,491,203 4,504,903 399,349 18,495,509
SE 0 643,568 21,574 665,142
SI 84,050 84,050SK 6,909,246 275,571 71,929 7,256,746UK 66,746,261 26,686,517 786,911 404,263 94,623,952
TOTAL 234,878,548 59,691,223 18,668,449 4,957,013 318,195,233
 
NB: The sum of amounts recovered and amounts to be  recovered does not equal the amounts affected by 
irregularity indicated in PART 2 of Annex 15. The di fference between those values is constituted by amounts 
that have been suspended before payment. 
 
EN 144  
ANNEX 16 
STRUCTURAL FUNDS 
IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATIONS NN. 1681/94 AND 1828/2006 
SITUATION OF RECOVERY 
PART 2 – AMOUNTS TO BE RECOVERED 
MEMBER STATEAMOUNTS AWAITING 
RECOVERYAMOUNTS IN JUSTICE*AMOUNTS DECLARED 
IRRECOVERABLE**
AT 12,880,004 356,060 4,392,276
BE 15,526,195 827,278 12,399,648
BG 12,864 0 0CY 1,282 0 0CZ 12,848,346 865,185 0DE 579,276,579 68,203,492 119,905,882
DK 9,651,599 110,975 4,451,300
EE 1,919,496 0 7,669EL 45,369,687 5,125,953 524,344ES 242,277,079 7,699,602 374,005
FI 3,244,949 889,145 593,422
FR 11,482,731 670,637 2,511,737HU 2,016,384 1,242,372 0IE 1,184,401 552,660 78,070IT 409,218,510 330,936,858 102,563
LT 1,197,096 0 0
LU 52,932 0 0LV 2,673,629 709,750 0MT 516,492 0 0NL 13,777,195 3,289,333 559,940
PL 12,231,729 1,030,885 0
PT 98,182,937 14,940,631 15,371,723SE 2,323,252 11,053 515,209SI 1,296,899 36,043 0SK 7,556,675 4,070,529 0
UK 256,768,099 422,682 19,380,574
TOTAL 1,743,487,041 441,991,123 181,168,362
 
* In justice: awaiting outcome of judi cial procedures in national courts. 
**Amounts irrecoverable: awaiting formal deci sion according to the procedure set out 
in art. 5§2 of Regulation No. 1681/94. 
 
EN 145 ANNEX 17 
COHESION FUND 
IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 
MEMBER STATEN° OF 
IRREGULARITIESFINANCIAL AMOUNTS 
(in EUR)AMOUNTS AWAITING 
RECOVERY (in EUR)
CZ 2 88,210 0EE 2 129,614 0
EL 12 4,937,771 326,398
ES 64 24,827,955 14,442,900
HU 13 1,400,938 1,033,292
IE 3 9,498,140 0
LT 8 8,280,568 47,056
LV 5 86,279 86,279
PL 7 214,754 65,550
PT 22 5,655,879 2,602,188
SK 2 1,208,803 1,164,379
TOTAL 140 56,328,911 19,768,042
 
EN 146 Annex 18 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED IN 2008 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
BG 140 55.746.357 28.863.495 8.989.139
CZ 17 901.458 464.327 409.173
EE 5 431.751 292.599 292.599
HR 18 14.111.055 3.433.811 472.020
HU 11 998.674 833.807 774.862
LT 6 2.587.730 2.533.680 365.705
LV 5 879.753 652.138 652.138
MT 1 3.350.556 167.528 167.528
PL 46 1.046.826 704.975 525.403
RO 246 1.040.726.211 21.666.478 16.259.867
SI 1 380.000 60.000 0
SK 9 2.470.509 794.753 252.270
TR 18 4.897.518 314.763 218.781
Total 523 1.128.528.398 60.782.354 29.379.4852008 all programmes
 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
BG 81 32.167.940 15.401.494 2.697.696
CZ 17 901.458 464.327 409.173
HR 7 2.069.912 1.044.981 0
LV 1 298.068 120.514 120.514
MT 1 3.350.556 167.528 167.528
PL 3 77.804 77.804 0
RO 67 38.649.525 9.393.954 7.476.651
SK 6 1.674.813 60.655 10
Total 183 79.190.076 26.731.257 10.871.5722008 PHARE
 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
BG 39 14.494.378 12.731.869 5.955.109
EE 5 431.751 292.599 292.599
HR 4 1.222.218 932.569 447.368
HU 11 998.674 833.807 774.862
LT 5 2.381.595 2.327.545 365.705
LV 3 491.937 491.937 491.937
PL 43 969.022 627.171 525.403
RO 100 36.503.894 10.074.705 7.451.312
SK 3 795.696 734.098 252.260
Total 213 58.289.165 29.046.300 16.556.5552008 SAPARD
 
 
EN 147 €
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
BG 19 8.844.039 490.132 336.334
HR 1 9.113.943 1.367.091 0
RO 79 965.572.792 2.197.819 1.331.904
Total 99 983.530.774 4.055.042 1.668.2382008 ISP A
 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
BG 1 240.000 240.000 0
LT 1 206.135 206.135 0
LV 1 89.748 39.687 39.687
SI 1 380.000 60.000 0
Total 4 915.883 545.822 39.6872008 Transition Facility
 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
HR 6 1.704.982 89.170 24.652
Total 6 1.704.982 89.170 24.6522008 CARDS
 
€
Country No of casesEC amount 
eligibleEC amount 
irregularEC amount to be 
recovered
TR 18 4.897.518 314.763 218.781
Total 18 4.897.518 314.763 218.7812008 Pre-accession assistance to Turkey
 
 
EN 148 Annex 19 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED IN 2008 
BELOW REPORTING THRESHOLD 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 15 1.893.540 64.359 35.220
CZ 4 171.226 21.513 21.513
HR 1 538.049 4.000 0
PL 3 74.236 10.930 10.930
RO 1 34.856 5.033 0
SK 1 64.039 2.441 0
TR 3 571.934 28.751 14.744
Total 28 3.347.880 137.027 82.407All programmes
 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 7 117.948 51.276 32.775
CZ 4 171.226 21.513 21.513
RO 1 34.856 5.033 0
TR 3 571.934 28.751 14.744
Total 15 895.964 106.573 69.032PHARE
 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 8 1.775.592 13.083 2.445
PL 3 74.236 10.930 10.930
SK 1 64.039 2.441 0
Total 12 1.913.867 26.454 13.375SAPARD
 
 
EN 149 Annex 20 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED – 2002-2008 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 280 87.635.494 44.861.716 13.777.568
CY 5 5.624.616 23.807 0
CZ 52 23.944.948 2.690.539 1.280.939
EE 41 28.364.624 6.445.889 922.875
HR 23 17.310.012 4.533.811 472.020
HU 108 16.399.538 6.512.981 1.514.045
LT 46 105.581.247 3.427.833 855.574
LV 38 3.316.018 986.154 906.322
MT 8 4.913.491 267.416 233.460
PL 304 790.760.846 4.740.872 1.540.929
RO 858 3.835.735.658 57.952.810 25.569.349
SI 38 4.052.982 1.554.244 58.159
SK 108 48.879.273 8.400.312 3.361.501
TR 25 6.298.426 699.083 579.679
Total 1934 4.978.817.172 143.097.467 51.072.419All Funds
 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 134 47.056.603 21.167.615 3.301.301
CY 5 5.624.616 23.807 0
CZ 33 2.961.980 1.009.352 596.834
EE 17 11.069.315 3.027.925 149.211
HR 9 5.044.912 2.144.981 0
HU 45 12.560.823 4.126.778 652.714
LT 20 912.091 576.489 407.563
LV 19 1.157.589 214.082 161.925
MT 8 4.913.491 267.416 233.460
PL 111 353.062.660 2.401.654 339.088
RO 251 318.049.590 26.786.995 12.213.972
SI 6 2.115.972 189.006 36.079
SK 93 19.321.942 6.385.563 2.019.954
Total 751 783.851.583 68.321.663 20.112.101PHARE
 
 
EN 150 €
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 119 26.236.022 18.158.494 10.139.933
CZ 18 1.022.764 838.713 684.105
EE 20 4.071.817 3.247.187 604.350
HR 4 1.222.218 932.569 447.368
HU 63 3.838.715 2.386.203 861.331
LT 18 7.614.441 2.642.877 447.534
LV 18 2.068.681 732.385 704.710
PL 172 11.141.452 2.269.475 1.196.385
RO 382 186.677.407 20.549.037 9.632.458
SI 31 1.557.010 1.305.238 22.080
SK 14 2.408.131 1.965.695 1.292.493
Total 859 247.858.658 55.027.872 26.032.747SAPARD
 
€
Country No of cases EC amount eligibleEC amount 
irregularEC amount to be 
recovered
BG 26 14.102.869 5.295.607 336.334
CZ 1 19.960.204 842.474 0
EE 4 13.223.492 170.777 169.314
HR 2 9.113.943 1.367.091 0
LT 7 96.848.580 2.332 476
PL 21 426.556.734 69.743 5.456
RO 225 3.331.008.661 10.616.778 3.722.919
SK 1 27.149.200 49.054 49.054
Total 287 3.937.963.683 18.413.856 4.283.553ISPA
 
 
EN 151   EN ANNEX 21 
IRREGULARITIES COMMUNICATED BY MEMB ER STATES AND CANDIDATE COUNTRIES 
€
YearNo of 
casesEC amount 
eligibleEC amount 
irregularEC 
amount 
to be recovere
dNo of 
casesEC amount 
eligibleEC amount 
irregularEC amount 
to be 
recoveredNo of 
casesEC amount 
eligibleEC amount 
irregularEC amount to 
be recovered
2002 6 113.406 6.122 0
2003 18 281.347.575 893.147 0 52 320.163.309 630.939 292.379 34 5.941.751 3.796.521 23.403
2004 26 279.027.957 251.987 223.824 68 13.029.114 4.138.964 730.688 133 50.515.590 5.982.992 173.234
2005 25 165.424.740 6.160.535 476 151 65.515.872 7. 784.063 2.483.164 165 53.103.936 2.826.397 476.509
2006 26 340.625.981 1.145.646 244 207 249.496.407 13. 656.756 4.512.194 164 43.527.679 3.036.900 1.045.272
2007 87 1.887.893.251 5.901.377 2.390.771 90 56.456.805 15. 379.685 1.222.105 150 36.480.538 10.338.762 7.757.774
2008 99 983.530.774 4.055.042 1.668.238 183 79.190.076 26.731. 257 10.871.572 213 58.289.165 29.046.300 16.556.555
Total 287 3.937.963.683 18.413.856 4.283.5 53 751 783.851.583 68.321.663 20 .112.101 859 247.858.658 55.027.872 26.032.747ISP
A PHARE SAPARD
 
 
EN 152   EN ANNEX 22 
IRREGULARITIES RE PORTED BY MEMBER STATES IN  2008 – AGRICULTURE, STRUCTURAL AND COHESION FUNDS, OWN RESOURCES 
CASES TOTAL A MOUNTS CA SES TOTAL A MOUNTS CASES TOTAL AMOUNTS CA SES TOTAL AMOUNTS CASES TOTA L AMOUNTS
AT 20 311,608 37 2,862,186 103 5,028,046 160 8,201,840
BE 31 1,605,690 35 1,543,157 317 12,670,490 383 15,819,337
BG 2 119,470 4 804,317 19 502,373 25 1,426,160
CY 4 172,298 14 787,523 18 959,821
CZ 22 764,680 80 13,928,544 2 88,210 64 5,025,048 168 19,806,482
DE 111 3,816,771 372 20,985,235 1,218 65,894,342 1,701 90,696,348
DK 10 445,241 7 678,343 44 3,963,276 61 5,086,860
EE 13 278,131 28 2,052,897 2 129,614 17 1,358,643 60 3,819,285
EL 39 4,010,046 96 19,754,366 12 4,937,771 438 19,019,835 585 47,722,018
ES 245 14,924,635 488 140,751,472 64 24,827,955 21 708,003 818 181,212,065
FI 8 983,842 28 1,813,410 311 17,548,870 347 20,346,122
FR 129 11,763,441 98 4,998,359 32 1,444,289 259 18,206,089
HU 6 747,522 39 3,298,037 13 1,400,938 64 5,852,076 122 11,298,573
IE 22 397,497 2 5,303,050 3 9,498,140 43 1,645,639 70 16,844,326
IT 211 53,969,740 802 74,918,714 310 31,320,103 1,323 160,208,557
LT 24 803,754 26 3,247,919 8 8,280,568 57 1,544,550 115 13,876,791
LU 1 13,375 1 263,046 22 7 6 , 4 2 1
LV 13 208,144 22 857,740 5 86,279 25 944,415 65 2,096,578
MT 1 37,814 1 410,761 3 449,940 58 9 8 , 5 1 5
NL 30 1,183,639 262 28,722,509 870 54,597,249 1,162 84,503,397
PL 46 1,126,137 329 35,344,144 7 214,754 142 5,609,503 524 42,294,538
PT 120 3,629,928 404 29,468,297 22 5,655,879 25 2,186,424 571 40,940,528
RO 75 7,175,419 75 7,175,419
SE 10 214,065 146 3,718,729 70 6,331,784 226 10,264,578
SI 1 38,808 13 430,933 26 915,631 40 1,385,372
SK 11 639,613 62 9,533,552 2 1,208,803 12 469,810 87 11,851,778
UK 7 225,775 483 123,321,443 1,023 98,362,245 1,513 221,909,463
TOTAL 1,133 102,259,366 3,868 528,920,411 140 56,328,911 5,344 351,618,572 10,485 1,039,127,260ALL SECTORS AGRICULTURE STRUCTURAL FUNDS COHESION FUND OWN RESOURCES