EN   EN 
 
 
 EUROPEAN  
COMMISSION   
Brussels, 16.12.2021  
COM(2021) 809 final  
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL  
Final evaluation of the Regulation (EU) No 250/2014 of the European Parliament and of 
the Council of 26 February 2014 establishing a programme to promote activities in the 
field of the protection of the financial interests of the European Union (Hercule II I 
programme) and repealing Decision No 804/2004/EC  
{SWD(2021)  386 final}   
 
1 
 1. INTRODUCTION  
Fraud and related illegal activities such as corruption, money laundering and illicit trade 
can pose a serious problem to the European Union (EU) and to  the Member States, and 
they can undermine both EU and national finances. This is all the more pressing  at a 
moment  when , partially in response to  the pandemic, the EU’s total spending reaches an 
unprecedented volume of around EUR  1.8 trillion for the EU’s multiannual budget for  
2021 -2027. Efficient  and proper spending of the EU budget, including in the Member 
States, is key to maintain  public (and taxpayers’)  trust and to boost the strength and 
added -value of European integration . Conversely, a high prevalence of fraud can stifle 
economic growth and undermine the broader economic recovery. Reinforcing our joint 
defences against fraud , both internal and external,  is thus an integral component of 
strengthening the EU’s resilience.  
Article 325 of the Treaty of the Functioning of the European Union (TFEU) makes it a 
joint obligation of the Member States and the EU to protect the EU’s financial interest s. 
At EU level, the anti -fraud landscape has recently undergone major changes with th e new 
European Public Prosecutor’ s Office (EPPO)  becoming operational  in June 2021, and the 
recent revision of the OLAF Regulation1 strengthening the effectiveness of 
administrative investigations carried out by the European Anti -Fraud Office (OLAF). 
The EU’s substantive  criminal law  framework was  also reinforced with the Directive on 
the fight against fraud to the Union's financial interests by means of criminal law .2  
There is a general recognition that in parallel, the EU should also support Member States 
in their work  to protect its financial interests . After all, the majority of cases of fraud and 
irregularities are detected, investigated and prosecuted  at national level .  
During the last EU budget period spanning  2014 -2020, the Hercule III programme was 
the EU’s dedicated  facility  to provid e such support.  The programme, which was 
administered by OLAF within the Commission, was established by Regulation (EU) No 
250/20143 (‘the Regulation’) . The programme’s general objective was to protect the 
EU’s financial interests , thus enhancing the competitiveness of the economy and 
protectin g taxpayers' money.  The specific objec tive wa s to prevent and combat fraud, 
corruptio n and any other illegal activity  affecting th e EU’s financial interests . Action to 
                                                 
1  Regulation (EU, Euratom) 2020/2223 of the European Parliament and of the Council of 23 December 
2020 amending Regulation (EU, Euratom) No 883/2013, as regards cooperation with the European 
Public Prosecutor’s Office and the effectiveness of the European Anti -Fraud Office investigations , OJ 
L 437  of 28 December 2020 . 
2  Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight 
against fraud to the Union's financial intere sts by means of criminal law , OJ L 198  of 28 July 2017 . 
3  Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 
establishing a programme to promote activities in the field of the protection of the financial interests of 
the European Union (Hercule III programme) and repealing Decision No 804/2004/EC, OJ L 84 of 20 
March 2014.  
 
2 protect the financial interests cover ed the whole expenditu re side  of the EU budget. On 
the revenue side , action focused on  traditional own resources . 
Article 13(2)(b) of the Regulation  mandates  the Commission to carry out a n evaluation  of 
the programme. The accompanying  staff working document contains the detailed 
findings  of the evaluation  of the Hercule III programme , and makes a number of 
recommendations based on that analysis . 
2. THE HERCULE III PROGRAMME  
The Hercule III programme is a targeted  programme, the EU’s main programme to 
protect the EU’s financial interests.   
During preparations for the last multiannual budget , the irregularities and suspected fraud 
cases detected during implementation of the budget  and reported  by Member States4 
under Article 325 TFEU showed that the detrimental financial impact throughout the 
years remained at levels requiring the EU to continue enforcing its obligation to  protect 
the EU budget through a programme such as Hercule . To reach th at objective, the budget 
for Hercule III  amounted to  EUR  104.9 million over the period 2014 -2020 . The eligible 
beneficiaries of the programme were  national or regional a dministrations of Member 
States  and research bodies, as well as educational institutes and non -profit entities set up 
and operati onal in a Member State for at least one year.  
The programme was  implemented on the basis of annual cycles that carried out the work 
programmes adopted by the Commission. Hercule III provide d financial support for :  
i. technical assistance  (at least 70% of the programme's budget) for measures  such 
as the purchase of technical equipment and information technology tools, the  
support for  cross -border cooperation and joint operations, staff exchanges , and 
the development and provision of access to databases for Member States and 
OLAF,  
ii. training  (maximum 25% of the programme's budget) for measures  such as 
conferences and seminars to enable cross -border exchange of experience and best 
practice, digital forensics training, and the development of high -profile research 
activities and studies, and  
iii. any other action that falls within the programmes’ remit  (maximum  5% of the 
budget).  
The programme provide d financial support in the form of grants, public procu rement 
contracts and reimbursement of the costs incurred by the participants to the activities.  A 
major change from Hercule II to Hercule III was the increase in the co -financing rate 
under technical assistance from 50% (Hercule II) to 80% (Hercule III) of the eligible cost 
of technical assistance.  
                                                 
4  Annual reports under Article 325 of the Treaty on the Functioning of the EU on the protection of the 
Union's financial interests (PI F Reports) are available at: https://ec.europa.eu/anti -fraud/reports_en . 
 
3 In November 2021, OLAF had registered 2 80 finalised projects out of 336 applications 
(83.3%). For a project to be considered finalised, the technical and financial report s have 
to be submitted and the final payment made . 
3. THE FINAL EVAL UATION  
Under Article 13 of the Regulation and the Commission’s Better Regulation Guidelines, 
the evaluation assessed  the programme against  five criteria :  
 relevance of all programme objectives;  
 internal and external coherence of the programme with other areas of EU action ; 
 effectiveness in attaining its objectives and expected results  including 
sustainability ;  
 efficien t use of resources , and  
 the programme’s EU added value.  
The time period covered by the evaluation is the seve n-year programming period for 
Hercule III , from  1 January 2014 to 31 December 2020 .  
The evaluation methodology  
In carry ing out the final evaluation, the Commission primarily drew on a study prepared 
by an  external contractor5. It also drew on the impact assessment carried out in 
preparation for the legislative proposal for the programme, the Commission’s mid-term 
evaluation6, the annual  work programmes of Hercule III, and the annual overview s on the 
implementation of the programme prepared by the Commission and annexed to the 
Commission annual report on the protection of the EU's financial interests  (‘PIF 
Reports ’). An inter-service steering  group (IS SG) of relevant Commission departments  
was set up to support the evaluation process. It reviewed the roadmap, the terms of 
reference for the external contract, and the inception and final reports.  
The scope of the final evaluation covers all measures funded under the Hercule III 
programme as well as preparatory and implementing work carried out by the 
stakeholders for these measures . It also covers applications for grants submitted by 
potential beneficiaries  that were rejected .  
The extern al study was based mostly on primary data sources  provided in response  to the 
evaluation questions collected via (i) interviews of EU and national civil servants, and 
beneficiaries of measures funded under the programme , and (ii) online surveys with 
                                                 
5  The study  by RAMBOLL Management Consult ing is available at 
https ://data.europa.eu/doi/10.2784/62582 . 
6  Report from the Commission to the European Parliament and the Council COM(2018)  3 final - Mid-
Term evaluation of the Regulation (EU) No 250/2014 of the European Parliament and of the Council 
of 26 February 2014 estab lishing a programme to promote activities in the field of the protection of the 
financial interests of the European Union (Hercule III programme) and repe aling Decision No 
804/2004/EC , 10.1.2018.  
 
4 benefi ciaries, unsuccessful applicants, participants in events funded under the 
programme, as well as users of services procured under the programme. This research 
includ ed 16 case studies in eight  Member States . It also used s econdary data, such as 
publicly ava ilable sources (e.g. the Hercule III annual work programmes ), applications 
submitted for grants and contracts and final reports submitted by beneficiaries.  
4. MAIN FINDINGS OF THE FINAL EVALUATION  
Overall, based on the evidence collected, the evaluation found that the Hercule III  
programme  had successfully  met its general, specific and operational objectives . Echoing 
the views of many beneficiaries, t he evaluation  also concluded that it was necess ary to 
maintain  a funding programme support ing them in their work  to protect the  EU’s  
financial interests, which contributes also to the protection of national financial interests.  
The beneficiaries considered  that the results obtained and the programme’s  overall output  
largely outweigh ed the required investment in time , effort and cost  to participate . The 
participants also considered the recognition and reputation linked to their participat ion in 
the programme as a valuable asset.  
4.1. Relevance  
The programme was seen as highly relevant  in addressing the main problems faced by 
stakeholders in protectin g the EU’s financial intere sts, confirmed by a large majority 
(80%) of applicants who responded to the survey. They considered the  programme 
relevant because it comple mented the work carrie d out at Member State level.  The 
evaluation confirmed that the drivers underpinning the Commission ’s proposal for a 
regulation  (2011) establishing  the Hercule III programme  and the findings of  the mid -
term evaluation (2018 ) remain  valid  today, in particular the occurrence of fraud to the 
European Union’s financial interests.  
Evidence from interviews with stakeholders and 16 case studies demonstrated  that, while 
most Member States have their own national anti-fraud strateg ies, the program me 
provided additional support that could be acquired fast, enabl ing national authorities to 
reach their national objectives more rapidly. Interviews with representatives of EU 
institutions confirmed  this finding , adding that the  support was even more relevant  where  
the Member States had recently cut the  available funding for national agencies.  
During the evaluation , stakeholders provided su ggestions to further improve  the 
programme . They felt it  could focus more  on expenditure fraud  and be more reacti ve to 
emerging threats  areas such as food fraud, misuse of drones and cybercrime . Some 
stakeholders highlighted that for the support to remain relevant in future years , it was 
important to continuously adapt the focus of the p rogramme to the ever -changing fraud 
landscape, in particular  to new threats and new technologies.  
 
5 4.2. Effectiveness  
The evaluation conclud ed that the programme was effective  in its technical assistance 
and training by contributing to its stated  objectives . Stakeholders highlighted for example 
that the funded activities  minimis ed risk in key areas of cigarette smuggling and 
counterfeiting , improv ed the prevention and investigation of fraud cases , facilitat ed the 
coordination of anti -fraud activities, exchange of information, knowledg e, experience 
and best practice, as well as developing high -profile research activities , improv ed 
cooperation between practitioners and academics , and rais ed awareness of magistrates 
and legal practitioners in the field of criminal law  through conferences . 
There was a broad  consensus among different stakeholders that t echnical assistance  
measures (such as financing the purchase  of scanners to detect smuggled goods, or 
funding training in digital forensic s) provided support to th e law enforcement authorities  
in the Member States in their work to combat illegal cross -border activities.  
The purchase  of modern equipment also produced a number of positive effects that are 
not among the primary programme objectives, but nevertheless benefit nat ional law 
enforcement agencies . For example , the equipment purchased to carry out  border checks 
had proven useful in detect ing illegal drugs or weapons. This proved also useful in 
seizing illegal substances or artefacts that do not primarily undermine  the EU’s finan cial 
interest s but pose a more general secur ity threat to the Member States. The acquisition of 
modern technical equipment also increased the health and safety of customs and police 
officers  as it lowered the risk of exposure to radiation . Lastly, modern communication 
and surveillance equipment helped monitor criminal activities while staying undetected . 
The evaluation demonstrated that the measures funded by the programme are sustainable, 
i.e. they produced effects that lasted beyond the programme complet ion. The 
sustainability of technical assistance depends on the nature and costs of the purchased 
equipment. As long as the equipment is used to combat  fraud, it can have long -lasting 
effects. Training and conferences  also produced some sustainable effects,  in particular 
when participants shared knowledge and experience at their workplaces after the event.  
The evaluation also indicated aspects that may hamper the effectiveness of the 
programme. The lack of resources in Member State administrations and subsequent 
inability to cope with the administrative requirements of the programme can lead to 
fewer applications. Making more guidance available to applicants could be a key to 
remedy thi s issue.  
4.3. Efficiency  
Overall, th e evaluation showed  that the programme is efficient , both in terms of training 
and technical assistance. Weighing up the costs and benefits of the programme , most 
stakeholders were of the view that the benefits outweighed the costs  (92% of replies to 
the applicants’ survey) .   
 
6 Some applicants suggested lightening  the work involved in  the application and reporting 
processes, for instance by reducing redundancies in the application form or reducing the 
volume of information  requested . They  also suggested that it would be useful to provid e 
further guidance and support to better understand the award criteria and best practices. 
This would help avoid common mistakes and reduce the time it takes to prepar e 
application s. 
4.4. Coherence  
The evaluation demonstrated that the internal and external coherence  of the 
programme  was satisfactory . Specifically on internal coherence , the consultant’ s study 
did not identify  any overlaps between activities funded by Hercule III. Some activities 
funded under technical assistance and training may appear similar but they target 
different audiences and have different objectives. For instance , training under the 
technical assistance p illar focuse d on providing information on the use of the technical 
equipment purchased whereas training under the training pillar  focused on  raising 
awar eness and exchanging best practice. Therefore, the activities eligible for funding 
under the programme were  strongly complementary.  
The Commission used its internal consultation processes to ensure e xternal coherence 
between the programme and other Commission spending programmes , in particular at the 
stage s of prepar ing the annual work programmes and select ing grant applications.  The 
Commission prevented  overlaps between Hercule III and the Fiscalis 2020, the Customs 
2020 and the Justice programme by ensuring that the programmes pursued separate 
objectives , as laid down in the legislation. Any residual potential overlaps were avoided 
by provid ing detail in each annual work programmes , including on the annual objectives, 
type of activities, participants and beneficiaries to prevent duplication.  
The evaluation also identified a high degree of  complementarity between the programme 
and the Anti -fraud Information System (AFIS). Anticipating this finding, the 
Commission decided to integrate AFIS into the EU’s anti-fraud programme, the 
successor of Hercule III  for the next budget period  2021 -2027 . Lastly, the programme 
leaves scope for Member States to target their requests in areas highlighted in the 
multiple  action plans adopted by the EU on anti -fraud, home  affairs  and customs. This 
creates additional synergies and promotes coherence with other areas of E U action.   
4.5. EU added value  
The evaluation demonstrated the programme’s  EU added value . Stakeholders almost 
unanimously considered that action taken under the programme ha d significant added 
value compared to what could have been achieved at nation al and regional levels without 
the programme. In particular, respondents found the programme to provide additional 
value in two areas. Firstly, it acted as a driver and enabler to counter and reduce the risk 
of fraud for the E U’s financ es. This was particularly the case for technical assistance 
measures where , according to beneficiaries , the limits set under national budgets would 
 
7 not have  enabled them  to make large investments in technical equipment. In this context, 
several beneficiaries and uns uccessful ap plicants mentioned that being associated with 
the programme provides a higher degree of legitimacy to their work at national level.  
Secondly, respondents perceived the programme to be  a factor facilitating cooperation 
between the Member States through conferences, training and database tools.  Such cross -
border cooperation would have been much more difficult to achieve at national level.  
5. CONCLUSIONS AND RECOM MENDATIONS  
The evaluation  concluded that the programme remains relevant. It is coherent, effective, 
efficient and provides EU added value. However, it also identified a number of current 
and f oreseeable  challenges which the successor programme of Hercule III, the EU’s new 
anti-fraud programme ( UAFP ) must  address .  
Like the Hercule III programme, the UAFP  should  also continu ously adjust to new 
developments in the fraud landscape, such as technological developments and the 
increasing complexity of criminal activities , notably cross -border crime . This applies in 
equal measure to fraud  on both  the expenditure and the revenue side of the budget , where 
attempts to avoid tax and customs duties pose serious challenges to the fight against 
fraud.  The Commission should contin ue to consult Member States when prepar ing the 
new UAFP work programmes to ensure maximum relevance of the support offered.   
The benefits of the programme clearly outweigh ed the costs incur red by the beneficiaries. 
However, differen ces in the administrative capacit y of Member State administrations 
pose a challenge that could be  overcome by providing more guidance for applicants and , 
where possible,  by simplif ying the procedures.  
The programme proved to be internally and externally coherent but  it is important to 
maintain the  internal  consultation and  coordination procedures to avoid any overlap . For 
example, the Commission’s first implementing decision7 under the UAFP already 
explicitly addresses any potential overlap between action under the UAFP and the new ly 
established  instrument for financial support for customs control e quipment8. 
The programme demonstrated  clear EU added value. However, despite the good eviden ce 
base available to the external consultant, it remains a challeng e to assess the impact of 
the programme , especially in quantit ative terms , under the monitoring and evaluation 
framework applicable to Hercule III. Under the new multiannual budget , the Commission 
is developing a cross -cutting  evaluation and monitoring fram ework applicable to all 
                                                 
7  Commission Implementing Decision COM(2021)  5338 final of 23.7.2021 on the financing of the 
Union Anti -Fraud Programme and the adoption of the work programme for 2021 , 23.7.2021.  
8  Regulation (EU) 2021/1077 of the European Parliament and of the Council of 24 June 2021  
establishing, as part of the Integrated Bord er Management Fund, the instrument for financial support 
for customs control equipment, OJ L 234, 2 July 2021, p. 1 . 
 
8 spending programmes. In addition, the UAFP could improve the current framework by 
developing an appropriate number of indicators specific to eligible projects . It would also 
be useful to set up a centralised database of implemented projects . This would help 
collate and store data on implementation of the UAFP and would aid the subsequent 
evaluation  stage . 
6. THE WAY FORWARD  
It is reassuring that t he conclusions and recommendations presented in this report  and, in 
more detail , in the accompanying staff working document are to a good extent already 
reflected in  the UAFP. In that sense, this e valuation lends good support to the 
Commission’s current practice.  
The UAFP has two main objectives. First, to protect the EU’s financial interest s. Second, 
to support mutual assistance between Member States authorities and cooperation between 
them and the Commission to ensure the correct application of the law on customs and 
agricultural matters. In addition to  these objectives, what this evaluation has shown is 
that protecting the EU’s financial interests often has positive  side effects – for the fight 
against drugs, in combating the shadow economy and money laundering, for public 
security and even for the envi ronment and the health of officers  carrying out checks . 
The new programme combines the activities of the former Hercule III programme with 
the financing of the AFIS and the Irregularities Management System (IMS). This merger 
of operational activities is expected to generate  synergies and to allow for a better 
strategic alignment of these previously separate strands of work . 
More generally, the UAFP responds to today’s challenges in several  ways:  
First of all, as more and more criminal activities are run in cyberspace, the programme 
supports Member States in strengthening their  digital capacit y to detect and investigate  
fraud . To this end, the UAFP supports the purchase of advance d analytical tools, 
databases and provides  expert training on digital forensics . A stronger  focus on data and 
analysis also is fully aligned with the new Commission anti -fraud strategy ( CAFS ), 
which promotes the deployment of advanced analytical tools.  
Secondly, considering especially the increase  in EU expenditure under the new budget  
and NextGenerationEU, the UAFP shifts the bulk of funding from the revenue side to 
fighting fraud against expenditure , including under the Recovery and Resilience 
Facility. This change of paradigm is amplified by the  fact that the EU has now 
established the new programme for the purchase , upgrade and maintenance  of customs 
control equipmen t (CCE) . With a budget of around EUR  1 billion for the current seven -
year period, this new instrument will free up some resources in the UAFP since CCE had 
absorbed a substantial share  of the technical assistance provided under the Hercule III 
programme.  
 
9 Looking at the findings of this evaluation, the Commission considers that the UAFP 
provides a solid base to support Member States and other eligible entities in tackl ing the 
ever-evolving fraud landscape . It also takes into account the new institutional setting at 
European level with the launch of the EPPO.  
At a more operational level, when  summarising the key findings of the evaluation  in 
terms of recommendations for the future , two aspects stand out: first, the desire voiced by 
stakeholders to receive  more detailed guidance from the Commission when they prepar e 
an ap plication. This is something the Commission, with OLAF as lead service, will look 
into when launching the next calls for proposals in 2022 and beyond , mindful of the need 
for the process to give fair and equal chances to all applicants. Second , the finding s of the 
evaluation invite the Commission to reflect again on the delicate balance between the 
strong wish to minimise the administrative burden on applicants and the need for more 
information readily available for monitoring and ex -post assessments. This balance is not 
easy to strike , and the Commission will look into ways to further fine -tune its reporting 
tools  to this end .