European Anti-Fraud Office

Internal Audit Capability and Evaluation

Ref. Ares(2013)2101030 - 13/06/2013

European Anti-Fraud Office

Evaluation of the PERICLES programme

Final Report

June 2013

European Anti-Fraud Office

CONTENTS

EXECUTIVE SUMMARY 4

FINAL EVALUATION REPORT 7

1 - INTRODUCTION 7

1.1 The protection of the euro 7

1.2 The PERICLES programme 8

1.3 The evaluation of the Pericles programme 9

1.4 Previous evaluations of the PERICLES programme 10

2 - THE OBJECTIVES AND INTERVENTION LOGIC OF THE PERICLES 11

PROGRAMME

3 - EVALAUTION OF THE RELEVANCE, EFFICIENTCY AND EFFECTIVENESS 13

OF THE PERICLES PROGRAMME

3.1 Relevance 15

3.2 European and overall added value of the programme 24

3.3 Efficiency 26

3.4 Effectiveness 35

3.5 Prospects for sustainability 44

4 – CONCLUSSIONS 45

Annexes:

Annex I: Programme's intervention logic

Annex II: Methodology

Annex III: Evaluation matrix

Annex IV: Replies to the questionnaire to competent authorities in the MS, the ECB and

Europol

Annex V: Replies to the questionnaire to competent authorities in third countries

Annex VI: Replies to the questionnaire to participants in programme's activities

LIST OF ACRONYMS

CTW Activities financed by the programme which combine conference, training and workshop

CNAC Coins National Analysis Centre

EC European Commission

ECB European Central Bank

ECEG Euro Counterfeit Expert Group

EQ Evaluation Question

ETSC European Technical and Scientific Centre

EU European Union

EUROJUST European Union's Judicial Cooperation Unit

EUROPOL European Police Office

MS/EU MS Member States of the European Union

NAC National Analysis Centre NCO National Central Office OLAF European Anti-fraud Office USA United States of America VAT Value Added Tax

EXECUTIVE SUMMARY

The protection of the euro

Euro banknotes and coins were first introduced in 2002 for 12 Member States of the European Union (MS). Currently, the euro is the single currency shared by the 17 Member States of the euro area in use for 330 million people in this area. It is also used in a large scale for international trading transactions and serves as an important reserve currency for third countries.

Counterfeiting of currencies remains a concern throughout the European Union. Counterfeits decrease the acceptability of notes and coins and harm citizens and businesses that are not reimbursed for counterfeits even if received in good faith. For the euro, its use in 17 MS and its worldwide importance means that it is also open to the risk of counterfeiting on a transnational scale.

The Pericles programme

The Pericles programme ("the programme") was established by Council Decision

2001/923/EC of 17 December 2001 for a four years period (1st January 2002 to 31

December 2005) and subsequently extended until 31 December 2013. The programme budget is Euro 1 million per year. The programme is implemented and coordinated by the European Anti-Fraud Office (OLAF), on behalf of the Commission, and the MS. This coordination should take account of other measures undertaken at MS and European level, in particular by the European Central Bank (ECB) and European Police Office (Europol).

The overall objective of the programme is to protect the euro against counterfeiting, with particular attention to transnational and multidisciplinary aspects and promoting convergence among MS.

The specific objectives of the programme are: raising awareness, providing high level training, encouraging cooperation, and promoting exchanges of information, experiences and good practices of staff concerned in the EU and third countries. The main target groups for the programme are police forces, intelligence personnel, representatives of national central banks, mints, judicial officers, commercial banks and other relevant private sector organisations. To achieve its specific objectives, the main activities supported by the programme are: training, networking and dissemination activities, information and staff exchanges and technical assistance (including studies and teaching sources).

The evaluation of the programme

The evaluation covered by this report is mandated by Council Decision 2001/923/EC, as amended by Council Decision 2006/849/EC. As requested by the Council Decision, the evaluation has focussed on the relevance, efficiency and effectiveness of the programme. The prospects for sustainability of the results achieved have also been assessed.

The evaluation has not assessed the overall relevance of the programme (whether the programme should be continued after 2013) as this was assessed in the context of the mid-term evaluation performed by the Commission and the impact assessment which supported the Commission's proposal for the continuation of the programme during the period 2014/20201 (the "Pericles 2020"). Nevertheless, the evaluation has assessed the

1 Impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council establishing an exchange, assistance and training programme for the protection of the euro against counterfeiting (the 'Pericles 2020' programme)

European and overall added value of the programme and its complementarity and coherence with other existing activities at MS and European level.

Overall performance of the programme

The programme provides a clear European added value. The specific objectives of the programme are highly relevant to the achievement of its overall objective. The activities financed by the programme and the target groups involved are highly relevant to achieve its specific objectives. The transnational and multidisciplinary dimensions of the programme activities also represent a clear added value of the programme compared to activities carried out at MS and European level. Overall, the efficiency of the programme is satisfactory and the programme has been highly effective in contributing to the achievement of its specific objectives. The evaluation has identified some potential improvements which could enhance the overall efficiency and effectiveness of the programme.

Relevance

The specific objectives of the programme are highly relevant to the achievement of its overall objective of protecting the euro against counterfeiting. The target groups and activities financed by the programme are also, in general, highly relevant to the specific objectives and the programme resources have been used mainly to finance the activities with the highest relevance and for the most relevant target groups.

European and overall added value of the programme

The euro is the single currency shared by the 17 Member States of the euro area. It is also used at a large scale in international trading transactions and serves as an important reserve currency for third countries. The protection of the euro against counterfeiting is clearly therefore of European interest which goes beyond the interest of individual MS.

Addressing the threats posed by criminal groups involved in the production and/or distribution of counterfeit euro and operating in different MS and third countries requires the cooperation among the competent authorities in the MS and with their counterparts in third countries. The programme facilitates this cooperation by providing technical and operational training, networking, dissemination and exchange activities to the staff of relevant competent authorities in the MS and third countries and, by so doing, it provides a clear European added value.

The evaluation also showed that the activities implemented by a competent authority in one MS also address the needs of other competent authorities in the same or other MS.

The combination of an European/international dimension of the programme, together with a multidisciplinary dimension, represents a clear added value of the programme compared to activities carried out at MS and European level (namely by the ECB, Europol and Eurojust). The programme is also the only specific programme at European level which finances activities on euro protection.

Efficiency

Overall, the programme's activities and outputs are delivered at a reasonable cost and correspond to the priorities and needs identified, although there is some potential to improve efficiency.

The complementarity and coherence of the programme activities are in general satisfactory. However, these and other efficiency aspects are not always clearly presented and reported.

The meetings of the Euro Counterfeiting Experts Group (ECEG) provide an adequate mechanism for coordinating and steering the programme. The evaluation has identified some potential improvements which could facilitate the role of the ECEG for coordinating and steering the programme.

Effectiveness

The specific objectives of the programme are being achieved satisfactorily. Overall, the programme has been highly effective in contributing to the achievement of its specific objectives.

Concrete results achieved with the programme's contribution have been reported by the competent authorities and include: satisfactory cooperation among competent authorities in the EU and with third countries, improved capacity of competent authorities in the EU and third countries, successful cross-border operations, and the promotion of national structures and the development of relevant legal instruments on euro protection. Intangible effects deriving from networking, motivation of officials and facilitating mutual trust among officials of competent authorities are important contributions of the programme.

The activities financed by the programme have a clear transnational and multidisciplinary dimension. The programme has also contributed to the promotion of convergence among the MS on euro protection, mainly by providing high level training, which is one of the specific objectives of the programme. It has also contributed by facilitating the exchange of information and best practices improving the understanding of the various situations in the MS, and the consequences of different levels of protection resulting from different criminal law systems. The role of the programme in promoting convergence beyond these areas is more uneven.

Overall, the complementarity and coherence of the programme activities with other existing measures in MS, and at European level, are satisfactory. The existing coordination and cooperation mechanisms are adequate to achieve the overall objective of the programme. Nevertheless, while the existing planning process has, in general ensured coordination and flexibility to address new threats and priorities, a multi-annual strategy for the programme with a clearly defined timeframe is not in place and the current annual reporting does not provide sufficient information on the results achieved by the programme.

Prospects for sustainability

The sustainability of the results achieved will depend significantly on the possibility to continue financing similar activities to maintain the existing level of cooperation among the competent authorities, a continuous training of the staff concerned and responding to new threats and needs (new counterfeits, new modus operandi of criminal groups, new MS or third countries affected by counterfeiting, new euro notes issued by the ECB as from

2013, etc.).

The evaluation showed that the continuation of the activities currently implemented by the

MS with the programme support would be at risk without financing at EU level.

FINAL EVALUATION REPORT

1 - INTRODUCTION

1.1 – The protection of the euro

Euro banknotes and coins were first introduced in 2002 for 12 EU MS. Currently, the euro is the single currency shared by the 17 Member States of the euro area in use for 330 million people in this area. It is also used at a large scale in international trading transactions and serves as an important reserve currency for third countries.

Counterfeiting of currencies remains a concern throughout the European Union. Counterfeits decrease the acceptability of notes and coins and harm citizens and businesses that are not reimbursed for counterfeits even if received in good faith. For the euro, its worldwide importance means that it is also open to the risk of counterfeiting on a transnational scale.

Table 1: Counterfeit euro bank notes

Year || Number of counterfeit bank notes detected in circulation2

2002 || 167,000

2003 || 542,000

2004 || 594,000

2005 || 579,000

2006 || 565,000

2007 || 561,000

2008 || 666,000

2009 || 860,000

2010 || 751,000

2011 || 606,000

2012 || 531,000

At European level, responsibilities of preventing and fighting counterfeiting are shared between the European Commission, the European Central Bank, Europol and Eurojust. The Commission prepares legislative initiatives. The European Anti-Fraud Office (OLAF), on behalf of the Commission, organises and finances training and technical assistance to the Member States and manages the European Technical and Scientific Centre (ETSC), the centre for technical analysis of new types of counterfeit coins.

The European Central Bank (ECB) performs a technical analysis of new types of counterfeit euro banknotes, stores the technical and statistical data on counterfeit banknotes and coins in a central database and disseminates them to all those involved in combating counterfeiting. Europol supports law enforcement services in the Member States, and third countries having an operational/strategic agreement (e.g. certain South American countries). This support seeks to prevent and combat euro counterfeiting by facilitating the exchange of information, providing operational and strategic analysis, financial support to cross-border operations, and technical and on the spot operational

2 Source: ECB

support. For third countries not having a strategic or operational agreement, Europol also provides support, normally through MS liaison officers. Eurojust facilitates investigations and prosecutions between competent authorities in Member States, as well as the execution of international mutual legal assistance requests and provides financial support to Joint Investigation Teams.

The number of counterfeit euro banknotes detected in circulation since 2002 has been relatively stable with a peak during the period 2008-2010. A total of 531,000 of counterfeit euro banknotes were withdrawn from circulation in 2012.

The 20 and 50 euro denomination are the most frequently counterfeited banknotes representing almost 80% of the total counterfeit euro banknotes.

The number of counterfeit euro coins removed from circulation increased by 17% to

184,000 in 2012. According to the ETCS/OLAF, this increase could be attributed to the efforts of the MS in implementing the regulation concerning authentication of euro coins.

Table 2: Counterfeit euro coins

Year || Counterfeit euro coins detected in circulation3

2002 || 2 300

2003 || 32 800

2004 || 74 500

2005 || 100 500

2006 || 163 800

2007 || 211 100

2008 || 195 900

2009 || 172 100

2010 || 185 800

2011 || 157 500

2012 || 184 000

The 2-euro denomination remains by far the most affected by this criminal activity, representing almost 2 out of every 3 counterfeit euro coins detected4.

1.2 – The Pericles programme

The Pericles programme ("the programme") was established by Council Decision

2001/923/EC of 17 December 2001 for a four years period (1st January 2002 to 31

December 2005). This Decision was amended by two Council Decisions: 2006/75/EC of 30

January 2006 and 2006/849/EC of 20 November 2006. The latter Decision extended the duration of the programme until 31 December 2013. The programme budget is Euro 1

million per year.

3 Source: ETSC/OLAF

4 Source "Euro coin counterfeiting in 2012" press release (http://europa.eu/rapid/press-release_IP-13-

105_en.htm)

The objectives of the programme are established by article 2 of Council Decision

2011/923/EC. Its overall objective is to protect the euro against counterfeiting. The Decision provides that the programme "shall take account of transnational and multidisciplinary aspects" and should "concentrate on promoting convergence of the substance of measures so as to guarantee equivalent levels of protection on the basis of consideration of best practice while also respecting the distinct traditions of each Member State".

As per article 5 of Council Decision 2001/923/EC, the programme shall be implemented and coordinated by the Commission and the Member States of the European Union (EU MS). This coordination should take account of measures undertaken elsewhere, in particular by the European Central Bank (ECB) and Europol.

Activities financed under the programme are implemented either directly by the Commission (OLAF) or by the competent authorities in the MS, both in MS in the euro area and in MS which are not part of the euro area. Beneficiary authorities in the MS implementing the programme should co-finance at least 20% of the total eligible costs.

Activities can take place both inside and outside of the EU and the cost of participation of relevant target groups from third countries in these activities is eligible for co-financing from the programme.

Within the Commission, Unit D5 in OLAF (HERCULES, PERICLES and Euro protection) is responsible for the management and implementation of the programme.

The Euro Counterfeiting Experts Group (ECEG), which includes representatives from the competent national authorities, the ECB and Europol, plays an important role to define the priorities for euro counterfeiting and to discuss different policy areas related to the protection of the euro. In practice, the ECEG also provides steering and guidance on the activities to be financed by the Pericles programme. The results of the programme activities are presented to the ECEG. The ECEG meets three times per year. Eurojust and Interpol are also invited to participate as observers. More information about the role played by the ECEG is provided in EQ 4.

1.3 The evaluation of the Pericles programme

The evaluation covered by this report is requested by Council Decision 2001/923/EC, as amended by Council Decision 2006/849/EC, which provides that, by 30 June 2013, the Commission should send to the European Parliament and the Council a report, which shall be independent of the programme manager, evaluating the relevance, efficiency and effectiveness of the programme and a communication on whether the programme should be continued and adapted, accompanied by an appropriate proposal.

The evaluation has been performed by the Internal Audit Capability and Evaluation function of OLAF assisted by a Steering Group which also ensured the quality control of the evaluation. The steering group included representatives from the European Central Bank (Anti-Counterfeiting Section) and the following European Commission services: OLAF D5 (Hercules, Pericles and euro protection) OLAF R2 (Budget), Secretariat General C1 (Evaluation and simplification) and DG Justice B.2 (Criminal Law).

The tasks of the steering group have included: endorsing the Terms of Reference of the evaluation; endorsing the inception report for the evaluation, providing comments on the draft report, ensuring the overall quality control of the evaluation and providing general guidance and assistance to the evaluator.

Objectives of the evaluation

As established by Council Decision 2001/923/EC, the overall objective of the evaluation has been to assess the relevance, efficiency and effectiveness of the programme. Some aspects of sustainability have also been assessed.

The specific objectives of the evaluation are:

1. Reporting to the European Parliament, the Council and other relevant stakeholders on the relevance, efficiency, effectiveness of the programme.

2. Supporting decision making, namely on potential areas for improvement identified during the evaluation.

Scope of the evaluation

The evaluation covered the activities programmed and implemented from 2002 to the first call for proposals of 2012, but with special focus on activities implemented since 2006 (date of the first extension of the programme).

The evaluation has covered the different types of activities financed under the programme, namely: training and dissemination activities (including workshops, meetings and seminars), information and staff exchanges, technical assistance, studies and teaching sources. A sample of activities was selected by the evaluator for desk review and to support interviews with OLAF D5, OLAF R2 (Budget) and competent national authorities which implemented these activities. Another sample of activities was selected to send questionnaires to the participants in these activities5.

1.4 – Previous evaluations of the Pericles programme

A first evaluation of the Pericles programme was carried out by the OLAF's Internal Audit

Capability and Evaluation function in 2004 following a similar request of Council Decision

2001/923/EC. This evaluation was carried at a very early stage of implementation of the programme and covered activities which took place between 1st January 2002 and March

2004. The evaluation concluded that in general the programme had contributed or was

contributing to achieve the specific objectives of the programme and provided several operational recommendations to improve efficiency and effectiveness. During the course of this evaluation, OLAF D5 reported that the recommendations have in general been implemented although a formal action plan for implementation was not prepared.

The Commission also undertook a "Mid-term evaluation 2006-2010" of the programme in

20116. This evaluation was mainly based on the replies to a questionnaire sent to the competent national authorities. The replies to the questionnaire provided relevant input to

identify areas for improvement and to determine whether the programme should continue

beyond 2013. This evaluation served to support the preparation of an impact assessment on the continuation of the programme beyond 2013. Based on this impact assessment, the proposal for Pericles 2014-2020 is currently being discussed in the trilogue European Parliament-Council-Commission.

5 The details of the samples size and selection criteria applied are provided in Annex II (Methodology)

6 The Mid-term evaluation is attached to the impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council

establishing an exchange, assistance and training programme for the protection of the euro against

counterfeiting (the 'Pericles 2020' programme)

2 – THE OBJECTIVES AND INTERVENTION LOGIC OF THE PERICLES PROGRAMME

As part of the preparatory work for this evaluation, the evaluator assessed the intervention logic of the programme, including its different level of objectives, type of activities, target groups and decision making mechanisms. This work permitted the definition of the methodology for the evaluation, including drafting the questionnaires for different groups of stakeholders. The methodology was included in the inception report for the evaluation which was formally endorsed by the steering group. Annex I provides an outline of the intervention logic of the programme.

The objectives of the programme as established by article 2 of Council Decision

2011/923/EC are:

Overall objective:

To protect the euro against counterfeiting, with particular focus on:

• Transnational and multidisciplinary aspects, and

• promoting convergence of the substance of measures so as to guarantee equivalent levels of protection on the basis of consideration of best practice while also respecting the distinct traditions of each Member State.

Specific objectives:

a) raising awareness of the staff concerned of the EU dimension of the new currency

(also as a reserve currency and a currency for international transactions);

b) acting as a catalyst to encourage closer cooperation between the structures and staff concerned, the development of a climate of mutual trust and satisfactory knowledge, inter alia of methods of action and difficulties, by promoting various appropriate measures such as placements, specialist workshops or the involvement of guest speakers in national training and staff exchanges;

c) promoting convergence of high-level training activities for trainers in ways which are compatible with national operational strategies;

d) expanding general knowledge, in particular of relevant EU and international law and instruments;

e) disseminating the results achieved, as part of the exchange of information, experience and good practices.

When assessing relevance, efficiency and effectiveness of the programme, the evaluator has taken the following approach:

• The specific objective of expanding general knowledge has been considered as part of the specific objective of raising awareness of staff concerned;

• while expanding general public awareness is not a specific objective of the programme, the effects of programme activities in expanding general public awareness have also been discussed with stakeholders and the questionnaire sent to competent authorities in the EU have included a question on this topic. The answers provided some indication on the programme's spillovers in expanding general public awareness of counterfeiting;

• disseminating the results achieved has been considered in the context of exchange of information, experience and best practice.

Taking into account the above-mentioned methodological considerations, the specific objectives can be summarised as follows:

a) raising awareness of the staff concerned;

b) acting as a catalyst to encourage closer cooperation between the structures and staff concerned, the development of a climate of mutual trust and satisfactory knowledge;

c) promoting convergence of high-level training activities;

d) exchange of information, experience and good practices;

The types of activities to achieve these objectives are described in article 3 of Council

Decision 2001/923/EC and include:

• Training and dissemination activities (including workshops, meetings and seminars);

• information and staff exchanges;

• technical assistance (including studies, teaching sources, computer support applications such as software and other technical support instruments).

Article 3 also provides that financial support for cooperation in cross-border operations can be provided when such support is not available from other European institutions and bodies. To date, this type of support has been co-financed by the programme only once.

Article 4 of Council Decision 2001/923/EC provides that, in addition to the Commission contribution, other parties should be invited to contribute to the attainment of the objectives of the programme, including national central banks, the European Central Bank, Europol, Interpol, the European Technical and Scientific Centre (ETSC) and other specialised bodies. The contribution of these stakeholders is actually key to achieving the overall objective of the programme of protecting the euro against counterfeiting. In this regard, when evaluating the effectiveness of the programme, the evaluator has focussed on the specific objectives of the programme as described above and to what extent the programme has contributed to the achievement of these objectives. The evaluation has also assessed the added value of the programme as compared to other existing instruments.

Coordination with other existing instruments has also been assessed to evaluate the efficiency and effectiveness of the programme. As per article 5 of Council Decision

2001/923/EC, the programme shall be implemented and coordinated by the Commission and the EU Member States. Coordination should take account of measures undertaken

elsewhere, in particular by the ECB and Europol. The coordination namely takes place in

the context of Euro Counterfeiting Experts Group (ECEG), which includes representatives of competent national authorities in the EU MS, the ECB and Europol. Interpol and Eurojust are also often invited to attend the meetings of the ECEG.

As per article 7 of Council Decision 2001/923/EC, the programme is open to participants from third countries.

3 – EVALUATION OF THE RELEVANCE, EFFICIENTCY AND EFFECTIVENESS OF THE PERICLES PROGRAMME

The evaluation has focussed on the relevance, efficiency and effectiveness. Prospects for sustainability have also been evaluated. The European added value and general added value of the programme have been analysed as part of the relevance (EQ3). The coherence of the programme has been assessed in the context of the added value of the programme as compared to other existing instruments (EQ3), the coordination mechanisms (EQ4) and the complementarity of the programme with other existing measures at MS and European level (EQ8).

The evaluation questions (EQ) are: Relevance:

EQ1. To what extent are the specific objectives of the programme relevant to achieve its overall objective?

EQ2. To what extent are the programme activities and target groups relevant to achieve its specific objectives?

EQ3. To what extent does the programme provide European added value? Efficiency:

EQ4. To what extent do the management, coordination (with ECB, Europol and Member States) and administrative structures currently in place ensure an economic and efficient use of the programme resources?

EQ5. To which extent are the activities and outputs of the programme delivered at a reasonable cost?

Effectiveness:

EQ6. To what extent have the specific objectives of the programme been achieved?

EQ7. To what extent have the activities financed under the programme contributed to achieve its specific objectives?

EQ8. To what extent do the coordination and cooperation mechanisms in place ensure consistency and complementarity with other existing measures (in particular those implemented by the ECB and Europol) with the view to achieve the overall objective of protecting the euro against counterfeiting?

EQ9. To what extent have transnational and multidisciplinary aspects and promoting convergence among EU-MS been sufficiently taken into account by the programme?

Sustainability:

EQ10.To what extent are the results achieved (or likely will be) sustainable?

The DG BUDG’s guide7 “Evaluating EU activities – a practical guide for the Commission Services” has provided the overall methodology guidance for this evaluation. On the basis of this guide, the evaluator developed a specific methodology for this evaluation. The

7 Available at: http://ec.europa.eu/dgs/secretariat_general/evaluation/docs/eval_activities_en.pdf

methodology was included in the inception report and was formally endorsed by the steering group.

The main sources of information used by the evaluator have been:

• Examination of programme documentation and other relevant information;

• questionnaire to competent authorities in the EU MS, the ECB and Europol;

• questionnaire to a sample of authorities in third countries having participated in the programme activities;

• questionnaires to participants in a sample of programme activities; and

• interviews with key stakeholders (a sample of competent authorities in the MS, the

ECB, Europol, Eurojust and OLAF).

The replies to questionnaires, particularly the questionnaire sent to competent authorities in the MS, the ECB and Europol, have provided an important input to the evaluation. A total of 34 competent authorities replied to the questionnaire (32 replies from 23 different MS, 1 reply from the ECB and 1 reply from Europol). 17 out of the 32 competent authorities in the MS which have replied to the questionnaire have implemented programme activities. 5 of these competent national authorities have implemented more than 6 activities, 2 competent authorities have implemented from 4 to 6 activities and 10 competent authorities have implement from 1 to 3 activities. The details of the replies to this questionnaire are provided in annex IV.

The replies to the questionnaire have provided an overall indication on the relevance, efficiency, effectiveness and sustainability of the programme. This information has been complemented with personal and/or telephone interviews with the ECB, Europol, Eurojust and a sample of competent authorities in the MS. Finally, the analysis has been completed with the examination of relevant documentation8 and the replies to the questionnaires sent to competent authorities in third countries and participants in a sample of programme activities. The details of the replies to these questionnaires are provided in annex V and annex VI.

Where the comparison of the difference sources of information has resulted in significant variations regarding the relevance, efficiency, effectiveness or sustainability of the programme, these variations are reported together with the different views expressed by stakeholders.

When reporting the replies to the questionnaires, the percentage of respondents expressing different opinions have been calculated without including those competent authorities or participants which did not express an opinion. In general, the number of non-opinion received is considered low and as not substantially affecting the results and performance reported by the respondents. Nevertheless, for some questions, a significantly high number of non-opinion replies have been recorded. A high level of non- replies has been interpreted by the evaluator as an indication of uneven results and/or performance.

The methodology for this evaluation is explained in detail in annex II (Methodology) and annex III (Evaluation Matrix). The evaluation matrix provides relevant information on the analysis done and the different sources of information used to answer each evaluation question.

8 The details of the documentation reviewed, including the number of activities and the selection criteria applied are provided in Annex II (Methodology)

The following sections provide the results of the evaluation for each evaluation criteria and question.

3.1 - Relevance

The overall relevance of the programme (whether the programme should be continued after 2013) has been assessed in the context of the mid-term evaluation performed by the Commission and the impact assessment which supported the Commission's proposal for the continuation of the programme during the period 2014/20209 (the "Pericles 2020"). Therefore, a specific question on the overall relevance of the programme has not been included for this evaluation. Nevertheless, the evaluation has addressed the European added value of the programme (EQ3) and also the prospects for sustainability of the results achieved (EQ10).

The Terms of Reference for this evaluation included three questions related to relevance. These questions were intended to evaluate the relevance of the programme at four levels:

• The relevance of the specific objectives to achieve the overall objective of protecting the euro against counterfeiting;

• the relevance of the activities financed by the programme to achieve its specific objectives;

• the relevance of the target groups to achieve its specific objectives;

• the European added value of the programme and the added value of the programme compared to other financial instruments.

The relevance of the specific objectives is addressed by evaluation question (EQ) 1, and the relevance of activities and target groups by EQ 2. EQ 3 refers to the European added value of the programme and the added value of the programme compared to other existing financial instruments at MS and EU level.

EQ 1: To what extent are the specific objectives of the programme relevant to achieve its overall objective?

The specific objectives of the programme are highly relevant to achieve its overall objective of protecting the euro against counterfeiting. The evaluation has not revealed more areas to be covered by the existing specific objectives.

The overall objective of the programme as per Council Decision 2001/923/EC is to protect the euro against counterfeiting, with particular focus on: (a) Transnational and multidisciplinary aspects, and (b) promoting convergence among EU-MS to guarantee equivalent level of protection.

The specific objectives of the programme are presented in section 2 of this report.

The replies from the competent national authorities in the MS, the ECB and Europol to the questionnaire reflect an overall high relevance of the specific objectives. Exchange of information, experience and good practices is the specific objective which presents the highest level of relevance.

9 The Mid-term evaluation is attached to the impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council establishing an exchange, assistance and training programme for the protection of the euro against

counterfeiting (the 'Pericles 2020' programme)

Interviews with a sample of MS, the ECB and the Europol and examination of documentation by the evaluator have also confirmed the opinions expressed by competent authorities in the questionnaire.

No specific formal research studies have been identified during the course of this evaluation which could provide additional relevant input as regards the relevance of the specific objectives. Examination of the minutes of the ECEG's meeting has not revealed any important concern which could question the relevance of the specific objectives.

Article 7 Council Decision 2001/923/EC explicitly refers to international cooperation with EU accession countries and other third countries. The evaluation has showed that cooperation with third countries is one area where important results have been achieved in terms of the specific objectives of the programme. Cooperation with third countries is therefore also highly relevant.

The replies to the questionnaire sent to competent national authorities in the MS, ECB and

Europol are summarised below:

Relevance of raising awareness of the staff concerned

79% (26 respondents) of the competent authorities which expressed their opinion (33 respondents) considered as high or very high the relevance of this specific objective and

21% (7 respondents) as positive/fair. No respondent considered the specific objective of no or of limited relevance and 1 competent authority did not express an opinion.

Relevance of acting as a catalyst to encourage closer cooperation

79% (26 respondents) of the competent authorities which expressed their opinion (33 respondents) considered as high or very high the relevance of this specific objective and

21% (7 respondents) as positive/fair. No respondent considered this specific objective of no or limited relevance and 1 competent authority did not express an opinion.

Relevance of promoting convergence of high-level training

The questionnaire did not include a specific question on converge of training but on the overall relevance of promoting convergence. 70% (23 respondents) of the competent authorities which expressed their opinion (33 respondents) considered as high or very high the relevance of promoting convergence among the MS to guarantee an equivalent level of protection and 27% (9 respondents) as positive/fair. 1 respondent considered convergence of limited relevance and 1 competent authority did not express an opinion.

Relevance of exchange of information, experience and good practices

This specific objective presents the highest relevance. 85% (29 respondents) of the competent authorities considered as high or very high the relevance of this specific objective and 15% (5 respondents) as positive/fair. No respondent considered the specific objective of no or of limited relevance and all competent authorities expressed an opinion.

EQ 2: To what extent are the programme activities and target groups relevant to achieve its specific objectives?

The target groups and activities financed by the programme are in general highly relevant to the achievement of its specific objectives. Training and dissemination/networking activities are the most relevant activities. Staff exchanges and teaching sources are also highly relevant and the relevance of studies is positive. Around 95% of the programme resources have been allocated to the activities with highest relevance (training, dissemination/networking and staff exchanges). The relevance of computer support applications such as software, so far not financed by the programme, and support to cross-border operations, so far very infrequently financed by the programme, is more uneven due the existence of other sources which fund these activities. The programme is most relevant for police forces which also represent the target group most involved in the implementation of the programme activities both as organisers and as participants. Judicial authorities and national central banks are also highly relevant and both target groups participate in most programme activities, although the evaluation findings suggest that there may be room to increase the participation of judicial authorities. Private sector, namely financial/banking sector, is also a relevant target group particularly for the MS which are not part of the euro area and third countries where training at national level is not always provided by national authorities.

The evaluation has assessed the relevance of activities and target groups at three levels:

a) To what extent the activities and target groups foreseen in Council Decision

2001/923/EC are relevant to achieve the specific objectives of the programme;

b) to what extent the programme resources have been allocated to the most relevant activities and target groups; and

c) the involvement of the different target groups in the implementation of the activities.

Relevance of activities

The types of activities to achieve the specific objectives of the programme are described in article 3 of Council Decision 2001/923/EC and can be summarised as follows:

• Training activities;

• Dissemination and networking activities (including workshops, meetings and seminars);

• Information and staff exchanges;

• Technical assistance (including studies, teaching sources, computer support applications and other technical support instruments);

• Financial support for cooperation in cross-border operations when such support is not available from other European institutions and bodies.

Based on the replies to the questionnaires to competent authorities and participants in programme activities, training and dissemination/networking are the most relevant activities. Staff exchanges and teaching sources are also highly relevant. The relevance of studies is clearly positive while the relevance of computer support applications and support to cross-border operations, although positive, is more uneven due the existence of other sources which are funding these activities.

The "Mid-term evaluation 2006-2010" undertaken by the Commission identified that financing by the programme of specialised equipment to be used by third countries for the protection of the euro, which is not currently eligible for financing, would be relevant. The financing by the programme of specialised equipment has been included in the Commission's proposal for Pericles 202010 to respond to specific needs of some third countries in Latin America. During the course of this evaluation, the evaluator discussed the relevance of this type of activity with some stakeholders. Based on these discussions, the activity would be relevant to achieve the overall and specific objectives of programme and it is also used by the USA to support the protection of the US Dollar in the countries of the region. However, it was also underlined that the resources of the programme are limited and the value-for-money of financing theses activates, and coordination with other existing sources of funding such as Europol, should be carefully assessed when specific activities of this type are considered for financing under the programme in the future.

The analysis of the use of the programme resources allocated to the different type of activities (Table 3 and Chart 1) showed that around 9.4% of resources have been allocated to conferences, 42% to activities which include different combinations of conferences, training and workshops (CTW), 30% to training and workshops (WS), 13% to staff exchanges, 5% for studies and teaching sources, and less that 1% to others (expert visits and the support to one cross border operation). These figures show that around 95% of the programme resources have been used for the most relevant activities (training, networking/dissemination and staff exchanges).

Table 3: Type of activities 2002/201211 (1st call)

Type of ac tivity || Number || Amount alloc ated

Conferenc es || 10 || €842,933

CTW || 37 || €3,764,391

Training/Workshops || 43 || €2,680,771

Staff Exc hanges || 40 || €1,160,359

Studies/Teac hing sourc es || 8 || €426,711

Other || 5 || €79,839

Total || 143 || €8,955,004

10 Impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council establishing an exchange, assistance and training programme for the protection of the euro against counterfeiting (the 'Pericles 2020' programme)

11 The table has been prepared by the evaluator using the annual activity reports prepared by OLAF D5.

Chart 1: Number of activities and allocation of programme resources (2002-2012 first call)

The analysis of relevance for each type of activity, including the replies to the questionnaires, is provided below. The analysis of the costs of the different activities is provided in EQ4.

Relevance of training activities

The replies to the questionnaires and interviews with stakeholders confirmed that training activities are highly relevant to achieve the specific objectives of raising awareness of staff concerned and promoting convergence of high-level training. Both competent authorities and participants in the programme activities considered the training provided by the programme as highly relevant for their work in the area of euro protection. 82% (28 respondents) of the competent authorities in the EU rated the relevance of training activities as high or very high, and 15% (5 respondents) as positive/fair. One competent authority considered the activity of limited relevance.

83% of the participants in training activities considered that their participation had been highly relevant for their work in the area of euro protection. 83% of the participants who replied to the questionnaire identified improving their knowledge and skills in the area of euro protection against counterfeiting among their objectives when participating in the programme activities.

Interviews and replies to questionnaires suggest that training in euro protection is also highly relevant for staff in competent authorities in MS which are not part of the euro area and third countries where training is not always provided at national level. Further analysis in this regards is provided in the sections on efficiency and effectiveness below.

Relevance of dissemination and networking activities

Dissemination and networking activities include conferences, workshops, meetings and seminars. Dissemination and training activities are often combined. Dissemination and networking activities are relevant to achieve all the different specific objectives of the programme.

The replies to the questionnaires and interviews with stakeholders confirmed an overall high relevance of dissemination and networking activities to achieve the different specific objectives of the programme. 79% (27 respondents) of the competent authorities in the

EU considered as high or very high the relevance of these activities and 16% (6 respondents) as positive/fair. One competent authority considered these activities of limited relevance. The relevance of these activities were also confirmed by the objectives pursued by competent authorities when organising and/or participating in programme activities. Encouraging closer cooperation and developing a climate of mutual trust with organisations and staff concerned in other EU countries and the exchange of information, experiences and best practices are among the objectives pursued by more than 80% of the competent national authorities organising and/or participating in programme activities. Cooperation and exchanges with organisations and staff concerned in third countries is among the objectives pursued by more than 60% of these authorities.

The replies to the questionnaires to competent authorities in third countries and to participants also showed a high relevance of dissemination and networking activities. 76% of participants in networking and dissemination activities considered that their participation had been highly relevant for their work in the area of euro protection. 64% of the participants who replied to the questionnaire identified networking and improving cooperation and mutual trust with their counterparts in EU countries (46% with their counterparts in third countries) among their objectives when participating in the programme activities.

Relevance of information and staff exchanges

Staff exchanges include visits to the premises of competent authorities involved and often include operational training. Staff exchanges promote the exchange of information, experience and best practices, as well as enhance mutual trust among the competent authorities participating in the activity.

The replies to the questionnaires and interviews with stakeholders confirmed a high relevance of staff exchanges. 84% (27 respondents) of the competent authorities in the EU considered as high or very high the relevance of this activity and 16% (5 respondents) as positive/fair. No competent authority considered the activity of limited relevance and two competent authorities did not express any opinion.

Relevance of studies and teaching sources

Studies and teaching sources are potentially relevant to achieve all the different specific objectives of the programme. The replies to the questionnaires and interviews with competent authorities suggest that teaching sources are considered by competent authorities more relevant than studies. The replies to the questionnaire showed that 70% of respondents (23 competent authorities) considered as high or very high the relevance of teaching sources as compared to 52% (15 competent authorities) for studies. While 1 competent authority did not express an opinion on the relevance of teaching sources, 5 competent authorities did not express an opinion on the relevance of studies.

Only few studies and teaching sources have been financed by the programme. The examination of a sample of these activities and interviews with stakeholders confirmed their relevance.

Relevance of computer support applications such as software

Computer support applications are potentially relevant to achieve all the different specific objectives of the programme. The replies to the questionnaire sent to competent

authorities in the EU showed that computer support application is considered a relevant activity although with some mixed results. From the 27 competent authorities which expressed an opinion, 63% (17 respondents) considered as high or very high the relevance of this activity and 26% (6 respondents) as positive/fair. 3 competent authorities considered the activity of limited relevance and 7 competent authorities did not express an opinion.

Computer support applications have not been financed by the programme. Interviews with competent authorities showed that software applications are already provided by Europol and Interpol (to support cross border operations) and by the ECB (central data base on counterfeit banknotes). Computer support applications such as software are therefore potentially relevant to achieve the specific objectives of the programme. However, other sources are already providing the necessary support. In this regard, the evaluation has not identified additional needs for specific software applications which could be co-financed by the programme.

Relevance of support to cross-border operations

The possibility to support cross-border operations with the programme resources was introduced by Council Decision 2006/75/EC of 30 January 2006 amending Council Decision

2001/923/EC. To date, this type of support has been provided only once.

The results of the questionnaires and interviews with stakeholders suggest that while support to cross-border operations is clearly relevant to support the overall objective of protecting the euro against counterfeiting, the relevance of this support under the programme is uneven, particularly because support to cross border operations is provided by Europol and Eurojust.

The replies to the questionnaire to the competent authorities in the EU have expressed a mixed view on whether support to these operations should be co-financed by the programme. 7 out of 34 competent authorities did not express an opinion. From those expressing an opinion (27 competent authorities), 63% (17 respondents) considered the relevance of this activity as high or very high and 30% (8 respondents) as positive/fair. 2 competent authorities considered the activity of limited relevance.

Interviews with stakeholders also suggest that there is not a common understanding on how the programme can complement other existing financing sources for cross-border operations, namely from Europol and Eurojust. The interviews showed that some competent authorities support the notion that it could be useful for the programme to provide financing for costs related to cross-border operations ineligible for financing from other sources. These costs would include the costs related to the participation of police or judicial authorities third countries in preparatory meetings or the costs related to the participation of experts, other than police or judicial authorities (for example, experts from national central banks) in preparatory meetings. However, it was revealed during the interviews with Europol and Eurojust that costs related to the participation of police or judicial authorities from third countries, or other relevant stakeholders from the EU, related to the preparation of cross-border operations could potentially be financed by their institutions under certain circumstances.

The feasibility of financing these types of activities was also discussed with stakeholders and assessed by the evaluator. The financing of cross-border operations by the programme is difficult given their inability to always be planned in advance. Implementation by the MS competent authorities, which requires previous examination of the Pericles evaluation committee, would therefore not be feasible and only direct implementation by the Commission/OLAF could render the financing of this type of activity under the programme feasible.

The existing approach that this type of support should be provided only when other sources of funding are not available seems reasonable. However, the findings of the evaluations suggest that there is not a common understanding among all relevant stakeholders on which costs can be financed by other sources of funding. So far there has been a limited risk of overlapping as this type of support has been financed by the programme in one occasion and for a limited amount (€ 6,600). Nevertheless, the evaluation showed the need to clarify the existing diverting views among stakeholders in order to ensure the coherence of future programme activities with other existing sources of financing, namely from Europol and Eurojust, as regards support to cross border operations.

Relevance of target groups

Article 4.1 of Council Decision 2001/923/EC provides the target groups for the activities financed by the programme. These target groups are: police forces, intelligence personnel, representatives of national central banks and other financial intermediaries, mints, judicial officers, commercial banks and other relevant private sector organisations (such as: chambers of commerce or comparable structures capable to provide access to small and medium size enterprises, traders and hauliers).

The relevance of the above-mentioned target groups was evaluated in the questionnaire sent to competent authorities and complemented with interviews and examination of relevant documentation. The replies to the questionnaire sent to competent authorities in the EU MS, the ECB and Europol showed a very high relevance for police, national central banks, judicial authorities and mints (it should be noted that 21 out the 32 competent authorities in the MS who replied to the questionnaire are police authorities).

The relevance of police and judicial authorities is confirmed by the nature of their activities and results achieved on the fight against euro counterfeiting (cross-border operations carried out, individuals arrested, sanctions imposed, counterfeit euros seized, etc).

The relevance of national central banks and mints is also clear given their role in distributing and producing banknotes and coins and as central players at national level to collect and analyse counterfeit notes and coins. Interviews with stakeholders, including interviews with three national central banks, and the examination of a sample of activities have showed that national central banks usually participate in the activities organised by other target groups and are also closely involved in the organisation of some of these activities.

For the other target groups (ministry of finance, financial/banking private sector and other relevant private sector organisations) the views expressed in the questionnaires are more mixed.

The interviews with stakeholders suggest that the relevance of ministries of finance as target groups for the programme is uneven and would vary depending on their different roles in the different EU MS. The examination of a sample of programme activities shows that activities implemented by the ministries of finance are mainly networking and awareness raising activities which also involved other target groups (namely police, judicial authorities, national central banks, and commercial banks). The examination of documentation by the evaluator also suggest that the results achieved by the ministries of finance on the fight against euro counterfeiting, and therefore their relevance for the programme activities, are more difficult to identify compared to other target groups. It is therefore particularly important for this target group that their role and potential contribution to achieve the programme specific objectives is clearly presented in the proposals for programme activities.

The interviews with stakeholders suggest that the relevance of the financial/banking private sector would depend on whether training is provided at national level. For the MS of the euro area, regular training on euro protection is provided to the financial/banking private sector by the national central banks. For third countries, and MS which are not members of the euro area, the relevance of this target group would be clearer as the competent national authorities in these countries do not have a legal requirement to play an active role in providing training on the protection of the euro in their countries. A similar analysis also applies for other relevant private sector organisations.

The following paragraphs analyses the relevance on the use of programme resources based on the involvement of the different target groups in the implementation of the programme activities both as organisers and participants.

Regarding the use of programme resources by the various target groups (Chart 2), 85% of the programme resources implemented by the competent national authorities in the MS are implemented by police authorities, 8% by ministries of finance, 6% by National Analysis Centers, Coins National Analysis Centers and National Central Offices and less than 1% by national central banks.

Chart 2: Implementation of activities per target group 2002-2012 first call (funds allocated).

Ministry o f Finance

8.4%

Nationa Central Bank

0.4%

NAC/CNAC/NCO

5.7%

Police

85.3%

Chart 3: Profile of participants in programme activities 2006-2011

Regarding the profile of participants in the programme activities, during the period 2006-

2011 (Chart 3), 68% of participants were police forces, 9% staff from national central

banks, 6% judicial authorities, 6% financial sector, 3% ministry of finance and 6% others. Participants are therefore mainly police forces. Representatives of judicial authorities and central banks generally participate in all activities, although not always on staff exchanges activities or technical trainings. The review of a sample of activities suggests that the private financial/banking sector has mainly participated in activities organised outside the EU. Other participants include staff from the embassies of MS in the countries where activities take place and staff from EU institutions and bodies (ECB, Europol, Eurojust and the Commission). Interpol and the US secret service (which is competent for the protection of the US Dollar) also participate in the activities.

The examination of relevant documentation showed that the high participation of police in the programme activities is mainly explained by the fact that a significant part of the activities are training activities which are most relevant for police forces (identification of counterfeit notes, investigative techniques, etc.) or activities to promote cooperation and exchanges among police forces. Police also participate in the programme activities as organisers, facilitators and trainers, and this also explains the high participation of this target group.

Regarding national central banks, they mostly participate as facilitators or trainers. As regards judicial authorities, their relatively low participation in the programme activities compared to police would be partly explained because there are very few activities specifically targeted to this target group and that they do not usually participate as organisers, trainers or facilitators. According to interviews with stakeholders, the number of police officials dedicated to the protection of the euro in the MS is clearly higher than judicial officers and this also explains the higher participation of police compared to judicial authorities.

The interviews with stakeholders have not provided a conclusive view as to whether the participation of judicial authorities should be increased. Nevertheless, as discussed in EQ9, a potential to increase their involvement in the programme activities may exists.

3.2 European and overall added value of the programme

EQ3: To what extent does the programme provide European added value?

The protection of the euro as a common currency for 17 EU MS and as an international and reserve currency has a clear European interest which goes beyond the interest of individual MS. The fight against euro counterfeiting requires cooperation at European and international levels. The programme finances activities which facilitate this cooperation. The combination of an European/international dimension of the programme together with a multidisciplinary dimension represents a clear added value of the programme compared to activities carried out by the MS and other EU institutions or bodies. The programme also provides added value in terms of enhancing bilateral contacts, promoting mutual trust and as a motivational instrument.

The protection of the euro against counterfeiting has a clear European/international dimension: the euro is used as a common currency by 17 EU MS and it is also largely used internationally as a second currency and serves as reserve currency for third countries. The worldwide importance of the euro means that it is particularly open to the risk of counterfeiting on a transnational scale and the fight against euro counterfeiting requires therefore cooperation at European and international level.

The programme co-finances activities involving relevant competent authorities in the EU and third countries. These activities are intended mainly to provide relevant training, improve cooperation, exchanges of information and best practices among competent national authorities and their staff in different MS and third countries.

According to reports from the EC12 and Europol13 and interviews with competent authorities in the MS, Europol and Eurojust, criminal groups involved in euro counterfeiting often operate at a European and international level. Counterfeit euros are often distributed not only on the MS where they are produced but also in other MS. Criminal groups operating in third countries (EU neighbourhood countries in the Western Balkans, Mediterranean countries and Eastern Europe), are also involved in the distribution/production of euros produced/distributed in the EU.

Another area of particular risk is Latin America where counterfeit euros are produced by criminal groups for their later distribution in the EU as well as in the Latin America region. This situation entails a risk for the euro, not only because of the export of counterfeit euro into the EU, but also because the distribution of counterfeit euros in third countries undermines the confidence in the euro as an international currency.

Addressing threats from criminal groups from third countries on the production and/or distribution of counterfeit euro requires the cooperation between the MS and the third countries affected by euro counterfeiting. It also requires that the relevant authorities in the third countries involved have access to technical and operational training on the detection of counterfeit euro as well as on investigative techniques. It also requires raising awareness among the relevant authorities in third countries (namely police, judicial authorities and central banks).

Technical and operational training, networking and awareness raising activities are the main activities financed by the programme in third countries. The benefits of this support in terms of increased protection of the euro clearly provide a European added value which goes beyond the interest of individual MS.

The European added value of the programme has also been confirmed by the replies to the questionnaire sent to the competent authorities in the EU MS, the ECB and Europol.

74% (23 respondents) of the competent authorities which expressed their opinion (31 respondents) considered as high or very high the European added value of the programme

and 23% (7 respondents) as positive/fair. 1 competent authority considered the European added value as insufficient and 3 authorities did not express an opinion.

The questionnaire also included questions on the existing national strategies on euro protection. Out of the 32 competent authorities in the MS who replied to the questionnaire, 18 (15 of them from the euro area) declared that they have a national strategy in place. Regarding their profile, 12 of these authorities are police, 4 national central banks and 2 others. The target groups for these national strategies are national stakeholders and, to a certain extent, include a multidisciplinary dimension. For the police authorities, the main target group of the national programmes are the police forces (100%) in their countries. Around 40% of the police national strategies are also addressed to the financial/banking private sector and to the national central banks, one third to other private sector (such as chambers of commerce and industry and other comparable structures) and one fourth to the judicial authorities. Regarding the national strategies of the national central banks which replied to the questionnaire, the main target groups are the staff of the banking/financial private sector and the general public.

12 Impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council establishing an exchange, assistance and training programme for the protection of the euro against counterfeiting (the 'Pericles 2020' programme) Impact assessment (Commission Staff Working Paper SWD(2013) 19 final).accompanying the Commission's proposal for a Directive of the European Parliament and of the Council on the protection of the euro and other currencies against counterfeiting by criminal law.

13 Europol organised Crime Threat Assessments (OCTA 2011 and 2013).

The added value of the programme as compared to activities undertaken by the MS stems therefore mainly from its transnational dimension, at two levels: (a) cooperation between the MS, and (b) cooperation between the MS and third countries.

A transnational dimension is also provided by activities carried out by the ECB (to national central banks), Europol (training, technical and operational support and financial support to cross-border operations) and Eurojust (financial support to Joint Investigation Teams). The added value of the programme with respect to activities undertaken by other EU bodies stems from its multidisciplinary dimension and the focus on activities at European level which are not financed by other existing sources. Additionally, several national competent authorities interviewed have stressed that the program activities provide a clear added value in terms of further enhancing cross-border cooperation (as compared to other existing tools) by facilitating direct bilateral contacts and promoting a climate of mutual trust between the staff of the competent authorities in the MS and between the staff in the MS and third countries. Several national competent authorities also underlined that the participation in programme activities is an important motivational instrument for staff of competent authorities in both the EU and third countries.

The implementation modality which combines the implementation of activities by the Commission and MS is shown to be an important strength of the programme. The implementation of activities by MS allows competent national authorities to identify and address new threats and emerging needs, while ensuring the management of the programme at the European level. This also allows the programme to benefit from the strengths of the different MS in their relations with third countries. At the same time, the implementation by the Commission provides flexibility to rapidly define and implement activities and to complement the activities implemented by MS.

The Technical Assistance and Information Exchange instrument (TAIEX14) managed by the Directorate-General Enlargement of the European Commission has also funded a few activities (namely study visits) including themes related to currency counterfeiting to competent authorities from candidates and potential candidates to the EU. These activities are coordinated with OLAF and are not frequent. The Pericles programme is therefore the only programme at European level specifically addressing euro protection.

4.3 Efficiency

EQ 4: To what extent do the management, coordination (with ECB, Europol and Member States) and administrative structures currently in place ensure an economic and efficient use of the programme resources?

The main coordination mechanism for the programme is the Euro Counterfeiting Experts' Group (ECEG) where the competent authorities from the MS, the ECB and Europol are represented. Overall, the ECEG meetings provide an adequate mechanism for coordinating and steering the programme, although the evaluation has identified some potential improvements which could facilitate the role of the ECEG. The administrative structures in place provide an adequate framework for an efficient use of resources, although there is some room to further streamlining the application and reporting procedures.

The analysis of this question has been separated into two parts:

a) Efficiency of the management and administrative structures for the implementation of the programme,

14 http://ec.europa.eu/enlargement/taiex/what-is-taiex/index_en.htm

b) Efficiency of the role of the ECEG to steer the programme and coordinate its implementation with other existing measures at national and European level.

Efficiency of the management and administrative structures for the implementation of the programme

Article 12 of Council Decision 2001/923/EC provides that projects (activities) under the programme may emanate from the MS competent authorities or from the Commission.

Approximately 25-30% of the annual budget of the programme is implemented directly by the Commission (OLAF D5). These activities (workshops, seminars, studies, teaching material, etc) are implemented through contracts with external suppliers procured under exiting framework contracts managed by OLAF or other Commission services. The rest of the budget, around 70-75%, is implemented through grants signed with competent authorities in the MS following calls for proposals issued twice a year by OLAF D5. Both, procurement and grants, are regulated by the applicable rules for grants as established by the Financial Regulation applicable to the general budget of the Union15 and its rules of implementation16 (hereafter referred as the Financial Regulation applicable to the general budget of the Union).

With regard to grants, competent authorities in the EU MS are invited to submit proposals for activities. The proposals are assessed by an evaluation committee in OLAF (the Pericles evaluation committee). Following the evaluation of the proposals, the evaluation committee prepares a report with the recommended activities to be co-financed by the programme. Once the grant agreement between OLAF, on behalf of the Commission, and the competent national authority is signed, the latter is entitled to receive an advance payment equivalent to 50%, or 70% in exceptional and duly justified circumstances, of the grant amount. As per article 12 of Council Decision 2001/923/EC, competent authorities in the MS may present one or, exceptionally, two projects a year concerning workshops, meetings and seminars. Projects in connection with placements, exchanges or assistance may also be presented.

Once the activities are implemented, competent national authorities must submit a technical and a financial report to OLAF which may ask the competent national authorities for clarification on the information submitted and or additional supporting documentation before approving the final balance payment.

In order to assess the efficiency in the selection of activities, the evaluator has reviewed the efficiency criteria used when selecting the activities financed by the programme. Article 12 of Council Decision 2001/923/EC provides that the Commission shall select projects by the MS, and projects devised on its own initiative, on the basis on several criteria, including the following efficiency criteria: complementarity with other previous, current and future projects; cost-effectiveness ratio; the amount of aid requested and whether it is commensurate with the anticipated results.

For the activities implemented by the competent national authorities in the MS, the calls for proposals issued by OLAF refer to the selection criteria in Council Decision

2001/923/EC as part of the selection and award criteria. The examination of relevant documentation has also showed that several efficiency criteria are applied by the Pericles

evaluation committee when examining the proposals from MS (for instance whether the costs of different inputs are reasonable as compared to other activities or whether some of

15 Regulation (EU, EURATOM) No 966/2012 of the European Parliament and the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002.

16Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of

Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union.

the costs are actually needed for the project). The committee also assesses the eligibility of the activities (transnational and multidisciplinary aspects), the eligibility of costs proposed and the ceilings applicable (for example for accommodation and maintenance costs).

The examination of relevant supporting documentation has also showed that most projects which are submitted by the national competent authorities to OLAF have been previously presented and, to a variable extent, discussed at the ECEG meetings. These discussions, together with bilateral contacts between OLAF and the competent authorities in MS, define which projects are in line with the strategy and priorities identified for the programme. This coordination also takes into account the activities implemented by the Commission (OLAF).

This coordination work allows for the identification of projects which will be submitted to the Pericles evaluation committee and which in general do not exceed, or rarely exceed, the resources available for each call for proposal. The examination of the minutes of the Pericles evaluation Committee has showed that proposals are rarely rejected by the committee. Those which have been rejected have been so due to an insufficient demonstration of transnationality and/or multi-disciplinarity, but not due to a lack of sufficient resources.

The mechanism described above (presentation and previous discussions of the projects in the ECEG meetings and bilateral contacts between OLAF and MS) facilitates the coordination of efforts among the competent authorities in the MS. An alternative mechanism which would encourage competent authorities in the MS to prepare more applications which would be compared in term of their value for money could increase the efficiency on the use of the programme resources. However, it would also increase the administrative burden for the national competent authorities as higher number of proposals would not be accepted. Interviews with stakeholders also suggest that the rejection of proposals submitted may also entail a reputation risk for national competent authorities concerned and may discourage them from submitting further proposals.

Encouraging the submission of more proposals to OLAF could increase the efficiency of the use of resources. However, the costs associated to increase the number of proposals, and potential risks which could derive from the rejection of proposals, may outweigh the potential gains. It should be noted that the potential efficiency gains to obtain by increasing the number of proposals are relatively limited given the small size of the programme.

Table 4 and Chart 4 provide details on the number of activities implemented and the allocation of the programme resources. Table 4 shows that a total of 143 activities have been financed during the period from 2002 to 2012 (first call for proposals) for a total amount committed close to € 9 million. This shows that approximately 85% of the funds available for the programme have been committed since the inception of the programme in 2002. The annual reports on the implementation of programme activities show that for the period 2007-2012, the level of commitment of funds available has been over 90%. During the period from 2002 to 2012 (first call for proposals), around 26% of the programme resources have been implemented by the Commission (OLAF).

As regards the implementation of programme activities by the competent authorities in the MS through grant agreements signed with OLAF, Chart 4 shows that five MS (France, Germany, Italy, Portugal and Spain) have implemented around 86% of the budget implemented by national competent authorities. The examination of programme documentation has showed that since 2007, the number of competent authorities and MS which have implemented programme activities has increased compared to the period

2002-2006, also as a consequence of the enlargement of the EU to 12 new MS in 2004 and 2007.

Table 4: Activities implemented per MS and EC/OLAF (2002 – 2012 first call)

Member State || Number || Amount alloc ated

Belgium || 5 || €104,508

Estonia || 2 || €16,850

Finland || 1 || €37,268

Franc e || 10 || €710,253

Germany || 14 || €1,552,391

DE, NL,UK || 1 || €28,900

Greec e || 3 || €240,890

Hungary || 2 || €84,302

Italy || 33 || €1,399,523

Poland || 3 || €164,587

Portugal || 8 || €619,856

Romania || 2 || €117,993

Spain || 16 || €1,408,740

The Netherland || s 1 || €117,733

Total MS || 101 || €6,603,794

EC/OLAF || 42 || €2,351,211

Grand Total || 143 || €8,955,004

Chart 4: Allocation of programme resources per MS (2002-2012 first call)

The interviews and the examination of the programme documentation suggest that the size of national administrations, in particular the staff dedicated to euro protection seems to be an important factor explaining why the largest MS in the euro area are those more active in organising and implementing programmes activities. Trade and migration flows and the use of a common language would also explain the involvement of some MS in the organisation and implementation of programme activities, particularly for activities involving third countries.

In order to assess the reasons why some competent authorities in the MS have not implemented programme activities, the questionnaire sent to these authorities included a question related to the main reasons for not having implemented programme activities.

The results of this question are provided in table 5 (the 15 competent national authorities which had not implemented activities were allowed to choose more than one reason).

Table 5: Main reasons reported by competent authorities in the MS

for not having implemented programme activities

|| N || %

Your requirements for transitional c ooperation are c overed by your partic ipation in PERICLES ac tivities organised by other organisations. || 9 || 60%

The administrative proc edures to organise PERICLES ac tivities are not suffic iently c lear and/or transparent || 1 || 7%

The administrative burden related to the preparation of the proposals and reporting requirements || 1 || 7%

Your organisation does not have suffic ient resourc es available to c o- financ e the ac tivities || 8 || 53%

Other || 2 || 13%

The above replies show that the main reason for not implementing programme activities reported by competent authorities is that that their requirements for transnational cooperation are covered by their participation in activities organised by other organisations. The lack of sufficient resources available to co-finance the activities is the second main reason.

The above replies show that the activities implemented by a competent authority in a MS also benefit and address the needs of other competent authorities in the same and/or another MS. The replies also show that the lack of sufficient resources available to co- finance the activities is an important hurdle for some competent authorities.

The evaluator has also assessed the objectives of a sample of activities and how efficiency aspects are presented in the proposals. The activities financed by the programme have different types of specific objectives. In some cases these objectives are broad (such as building institutional capacity in euro protection in a third country). In other cases, the objectives are more focussed (capacity building provided through training, information exchange and good practices) while other activities focus on maintaining the results already achieved (for example, satisfactory cooperation between staff concerned). These specific objectives are presented by the applicants with variable clarity and quality.

The proposals submitted also include information on the complementarity and coherence with previous and other existing programme activities, as well as the expected results. The quality and clarity of this information varies among the applications examined. The proposals also include information on the criteria used to select the participants and countries involved and other relevant value-for-money criteria (for example, different alternatives considered). Nevertheless, this information is not always sufficiently comprehensive.

In general, interviews with national competent authorities and OLAF D5 have provided satisfactory explanations on the complementarity of activities and other efficiency aspects. Nevertheless, further efforts in improving the definition of the specific objectives for each activity, its complementarity and coherence with other activities financed by the programme and value-for-money criteria would enhance the efficiency of the programme. In this regard, the application forms used could be revised to facilitate the presentation and the assessment by the Pericles evaluation committee of the complementarity,

coherence and value for money (including for example more information on the different alternatives considered by the applicants to organise the activity or the cost per participant) of the activities proposed.

The evaluation has also assessed the efficiency of the administrative procedures in term of their timeliness, administrative burden and clarity/transparency.

The questionnaire sent to competent authorities in the MS showed positive although mixed results regarding the efficiency of the administrative procedures as regards timeliness, administrative burden and clarity/transparency. The main concerns expressed by the competent authorities in the MS which have implemented activities are:

• The financial procedures are too rigid as some type of expenses are not eligible (Value Added Tax, local transportation, provision of interpretation facilities, rental of premises or costs related to currency exchange);

• The financial procedures are not sufficiently clear and often change;

Regarding the Value Added Tax (VAT), the competent national authorities interviewed declared that they are not always entitled to exemption of or reimbursement of the VAT when the programme activities take place in a different MS or in a third country. VAT can represent a significant cost for competent authorities organising the activities if they are not entitled to exemption or reimbursement. Some national competent authorities declared that the non-eligibility of VAT may put at risk the organisation of future activities. The rules applied regarding the eligibility of VAT under the programme are those for grants financed from the budget of the Union as per the Financial Regulation and therefore there is no or very limited flexibility for OLAF to decide on the eligibility of VAT. These rules have been recently updated by the new Financial Regulation applicable to the budget of the Union17.

Regarding local transportation (internal transfers), interpretation facilities or rental of premises, relevant provisions are provided by article 8 of Council Decision 2001/923/EC. The implementation of these provisions is open to interpretation as to whether the costs associated to the provision of these inputs should always be borne by the MS or if the provisions apply only to those activities organised on their territory. As per the current application forms developed by OLAF, these costs should be borne by the competent national authorities, independently of the location of the activity. For several national competent authorities interviewed, providing these inputs pose problems to organise the activities as they, or the partner competent authorities in another MS or third country where the activity takes place, do not always have the means to provide the local transportation, interpretation facilities or premises. The concerns of competent MS authorities regarding this have already been identified in the Mid-term evaluation 2006-

2010 performed by the Commission18 and the Commission's proposal for an extension of the programme for the period 2014-2014 has included a proposal to eliminate these

provisions from the Council Decision.

The concerns from competent authorities in the MS regarding the clarity of financial procedures were also reported by the mid-term evaluation performed by the Commission.

17 Regulation (EU, EURATOM) No 966/2012 of the European Parliament and the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002.

Commission Delegated Regulation (EU) No 1268/2012 of 29 October 2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union.

18 The Mid-term evaluation is attached to the impact assessment (Commission Working Paper SEC(2011) 1615 final) which supported the Commission's proposal for a Regulation of the European Parliament and of the Council

establishing an exchange, assistance and training programme for the protection of the euro against

counterfeiting (the 'Pericles 2020' programme)

To address them, in June 2011, a specific workshop was organised by OLAF on "How to apply and report under Pericles". Most competent national authorities attended the workshop and, according to their replies to the evaluation sheet distributed to participants, the training was considered useful by most participants. Nevertheless, while complexity of administrative procedures is not among the main reason reported by competent authorities in the MS for not implementing programme activities as reported in Table 5 above, some competent national authorities interviewed consider that the administrative procedures are still complex for them. In this regards, the interviews with stakeholders and examination of relevant documentation suggest there may be some room for further streamlining the standard application and reporting forms in order to facilitate the presentation of the different costs and the verification of ceilings applicable.

Efficiency of the role of the ECEG to steer the programme and coordinate its implementation with other existing measures at MS and European level

The main coordination mechanism for the programme is the discussion at the ECEG meetings. Additionally, steering, at technical level, and high level meetings between the ECB, Europol and OLAF on the protection of the euro are also organised (usually once a year or every two years). The protection of the euro is also discussed during bilateral meetings between Europol and OLAF and between the ECB and OLAF.

The programme strategy is prepared by OLAF/D5 based on the discussions during the ECEG meeting. The strategy is subsequently presented and discussed with the ECEG. The strategy identifies the needs for support as well as the priority geographical areas. OLAF/D5 also keeps regular contacts with the ECB, Europol and the competent national authorities to identify the needs for programme's assistance and the activities they plan for the next 1-2 years. The strategy usually covers a period of one year although it also provides some indications on the priorities for future years. However, the scope in terms of the period of time covered by the strategy is not clearly defined.

The examination of the minutes of the ECEG meetings and the evaluator's participation in two meetings as observer showed that the activities which are planned to be implemented by the competent authorities in the MS and by OLAF are briefly presented at the ECEG meetings. The representatives of the MS and OLAF also present their preliminary ideas about potential actions at the ECEG.

The replies to the questionnaire to competent authorities in the MS, the ECB and Europol showed positive views of the existing coordination through the ECEG meetings to ensure an efficient use of the programme resources, although with areas for improvement. 76% (22 respondents) of the competent authorities which expressed their opinion in the questionnaire (29 respondents) considered as high or very high the efficiency of the coordination mechanism and 21% (6 respondents) as positive/fair. 1 respondent considered it as insufficient and 5 did not express an opinion. Nevertheless, 5 competent authorities replied that there is room to improve the coordination with other exiting measures at MS and European level in terms of efficiency and 16 replied that there is some room for improvement.

The interviews with stakeholders and the comments provided in the questionnaires, together with the evaluator's examination of programme documentation and participation as observer in two meetings of the ECEG, provided some indications on potential areas for improvement.

The main potential improvement would be introducing a multi-annual strategy with a clear scope in terms of period of time covered (a 3-years coverage seems the most suitable option). This multiannual strategy would provide a more comprehensive and strategic planning and would facilitate a more advance planning by the competent national authorities in the MS. It would also facilitate the coordination among the programme's

activities and with other activities at European (by the ECB, Europol and Eurojust) and MS level. Stakeholders interviewed underlined that the multiannual strategy should however keep a certain level of flexibility to respond to new priorities or threats.

Another potential area for improvement regards the use of the technical reports of activities. Currently the results of the programme activities are usually briefly presented at the ECEG meetings and some technical reports on the implementation of activities are made available to the members of the ECEG when requested. Some competent authorities considered that it would more efficient that technical reports of activities are made available to the members of the ECEG and that only the results of the most relevant activities (or the results of a series of activities) are presented. The time saved could be dedicated to further discussions on the planning and coordination of the programme activities.

EQ5: To which extent are the activities and outputs of the programme delivered at a reasonable cost?

Overall, the activities and outputs are delivered at a reasonable cost. The evaluation has identified some potential areas for improving efficiency. These would include reorienting the content of some activities towards a more operational content and increasing training for trainers activities.

The efficiency of activities financed by the programme has been evaluated at two levels:

a) The unitary costs (travel, accommodation, maintenance, etc);

b) Cost of different type of activities (depending on their nature, duration and periodicity).

The questionnaire to competent authorities in the MS, the ECB and Europol included a question on whether they consider there is scope to save programme resources (without involving a significant negative impact on the overall achievements of the programme) by taking one or more the following actions: (a) Reducing the number of training activities, (b) reducing the number of dissemination/networking activities, (c) reducing the number of participants in training activities or (d) reducing the number of participants in dissemination/networking activities.

A majority of competent authorities replied there is not or there is only limited scope to save programme resources by taking any of the four measures presented above. Few competent authorities considered that there is scope to reduce the number of networking activities or reducing the number of participants in some activities. In this regard, some competent authorities interviewed considered that the participation in the programme activities could be limited to one or maximum two activities per year and participant as a way to save resources and encouraging the participation of more stakeholders. Nevertheless, while this approach could improve the efficiency of the programme, its implementation could create a significant administrative burden and it may not be always suitable (for example, when more than two types of training activities are organised per year).

Another potential improvement on the efficient use of the programme resources discussed with stakeholders would be that the costs related to travel and accommodation of staff and/or representatives of commercial banks and other relevant private sector bodies are not financed by the programme (unless they participate as trainers). For some stakeholders, a high level training provided for free should be by itself a sufficient incentive for private entities to participate in the programme activities. This would allow

increasing the number of training activities delivered to relevant private sector target groups without involving an increase of costs.

The questionnaire to competent authorities in the EU MS, the ECB and Europol also included a specific question on whether they considered that more programme resources should be dedicated to one type of activity compared to others. The responses largely supported those activities which already absorb around 95% of the budget of the programme (training, networking/dissemination and staff exchanges).

The evaluator also compared the costs of a sample of activities. This analysis showed that the most costly activities are conferences. This is mainly due to the higher number of participants compared to staff exchanges or training activities. Conferences are also often combined with training and/or workshops and therefore involve a longer duration compared to training and often require interpretation. The duration of these combined activities varies from 3 to 5 days. Based on interviews and the examination of documentation for a sample of activities, the duration of these activities is reasonable although some participants considered that some extra time would be preferable. Nevertheless, interviews showed that some competent authorities consider that the agenda of some activities is excessively oriented towards general presentations. In their view, more time should be dedicated to more operational discussions, including work- shops and bilateral meetings, rather than general presentations.

The examination of supporting documents also showed that interpretation costs are significant for some activities (higher that 10% of the total budget for some activities reviewed). Interpretation into two or three languages is often needed for conferences and other activities. Nevertheless, for some activities, there may be some room to save resources and enhancing subsequent cooperation and exchanges by promoting the participation of trainers, facilitators and participants who can use a common language.

Regarding accommodation and maintenance costs, the procedures provide for the verification that unit costs for accommodation and maintenance are in accordance with the ceilings applicable to the EC officials as per the relevant regulations. These ceilings are also used for other programmes implemented by the Commission. Regarding travel costs, the review of a sample of activities showed that long distance flights for the activities implemented by the MS are usually booked in economy class.

Overall, the analysis showed that the activities and outputs of the programme are delivered at a reasonable cost.

The questionnaire to competent authorities in the EU MS, the ECB and Europol also included a