EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 22.7.2008 
SEC(2008)2300 
  
REPORT FROM THE COMMISSION TO  THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 
Annex to the 2007 Report from the Commissio n on the protection of the European 
Communities’ financial interests  and the fight against fraud 
STATISTICAL EVALUATION OF I RREGULARITIES- OWN RESOURCES, 
AGRICULTURE, STRUCTURAL MEASUR ES, PRE-ACCESSION FUNDS AND 
DIRECT EXPENDITURE -YEAR 2007  
{COM(2008)475} {SEC(2008)2301} 
 
EN 2   EN TABLE OF CONTENTS 
1. The situation in 2007.................................................................................................... 6 
1.1. Legal bases and concepts ............................................................................................. 6 1.2. Key Facts................................................................................................................. ..... 8 
1.2.1. Traditional Own Resources.......................................................................................... 9 1.2.2. Agriculture ............................................................................................................. ...... 9 
1.2.3. Structural Measures..................................................................................................... .9  
1.2.4. Pre-accession Funds..................................................................................................... 9 
1.2.5. Direct Expenditure – Centralised Direct Management .............................................. 10 PART I - REVENUES ............................................................................................................. 1 1 
2. TRADITIONAL OWN RESOURCES (ANNEXES 1-10) ....................................... 11 2.1. Management of Traditional Own Resources (TOR).................................................. 11 2.1.1. Monitoring of establishment and recovery of TOR ................................................... 11 2.1.2. Procedure for managing Member States' requests for write-off ................................ 12 2.1.3. Particular cases of Member St ate failure to recover TOR ......................................... 13 
2.2. Reporting Discipline .................................................................................................. 13 2.3. General Trends........................................................................................................... 1 4 
2.3.1. Method of detection ................................................................................................... 15  
2.3.2. Types of irregularity and fraud .................................................................................. 16 2.3.3. Irregular and fraudulent import of  monitors and televisions ..................................... 17 
2.3.4. Data main sectors TOR .............................................................................................. 19 2.4. Specific analysis......................................................................................................... 19 
2.4.1. Specific facts TOR ..................................................................................................... 1 9 
2.4.2. Classification of irregularitie s and fraud by Member States...................................... 20 
2.5. Recovery .................................................................................................................. .. 20 
2.5.1. Recovery rate ........................................................................................................... .. 20 
2.5.2. Impact on the budget.................................................................................................. 21  
2.6. Conclusions............................................................................................................... . 22 
PART II - EXPENDITURE ..................................................................................................... 24 3. AGRICULTURAL EXPENDITU RE (Annexes 11-12) ............................................ 24 
 
EN 3   EN 3.1. Reporting discipline ................................................................................................... 24 
3.1.1. Timely reporting........................................................................................................ . 25 
3.1.2. Electronic format (AFIS/ECR-module 595) .............................................................. 26 3.1.3. Budget year, budget line and product affected........................................................... 27 
3.1.4. Year of detection vs year reported ............................................................................. 28 3.1.5. Practices employed (Art. 3 (1) (e) Reg. 1848/2006).................................................. 29 3.1.6. Suspected fraud (Art. 3 (1) (f) Reg. 1848/2006)........................................................ 29 3.1.7. Legal/natural persons identification........................................................................... 31 3.1.8. Summary ................................................................................................................. ... 32 
3.2. General Trends........................................................................................................... 3 3 
3.2.1. Amounts involved ...................................................................................................... 33  
3.2.2. Impact on the budget.................................................................................................. 34  
3.2.3. Method of detection ................................................................................................... 37  
3.2.4. Types of irregularity................................................................................................... 39 
3.3. Specific Analysis........................................................................................................ 4 3 
3.3.1. Analysis of support measures..................................................................................... 43 3.3.2. Irregularity versus Suspected fraud............................................................................ 50 3.4. Recovery and sanctions.............................................................................................. 54 
3.4.1. Recovery ................................................................................................................ .... 54 
3.4.2. Sanctions ............................................................................................................... ..... 55 
3.5. Conclusions............................................................................................................... . 56 
4. SRTUCTURAL MEASURES (Annexes 13-17) ....................................................... 59 4.1. Reporting Discipline .................................................................................................. 59 4.1.1. Timely reporting........................................................................................................ . 59 
4.1.2. Electronic reporting.................................................................................................... 61 
4.1.3. Programme identification number (CCI code)........................................................... 62 
4.1.4. Year of detection vs  year of reporting........................................................................ 63 
4.1.5. Practices employed (art. 3(1)(d) of Reg. NN. 1681/94 and 1831/94)........................ 63 
4.1.6. Suspected fraud (art. 3(1)(e) of Reg. NN. 1681/94 and 1831/94).............................. 64 4.1.7. Legal/natural persons identification........................................................................... 65 
 
EN 4   EN 4.1.8. Summary ................................................................................................................. ... 65 
4.2. General Trends........................................................................................................... 6 6 
4.2.1. Amounts involved ...................................................................................................... 69  
4.2.2. Impact on budget........................................................................................................ 71 
4.2.3. Detection methods...................................................................................................... 7 2 
4.2.4. Types of irregularity................................................................................................... 73 
4.2.5. Trends related to the programming period 2000-2006 .............................................. 74 4.3. Specific analysis......................................................................................................... 77 
4.3.1. Irregularities affecti ng the different funds ................................................................. 77 
4.3.2. Irregularities by Objective – Programming Period 2000-2006.................................. 79 
4.3.3. Irregularities vs suspected frauds............................................................................... 81 4.3.4. Irregularities detected before payment....................................................................... 84 4.4. Recovery .................................................................................................................. .. 85 
4.5. Conclusions............................................................................................................... . 86 
5. PRE-ACCESSION FUNDS (Annexes 18-21)........................................................... 89 5.1. Reporting discipline ................................................................................................... 89 5.1.1. Timely reporting........................................................................................................ . 90 
5.1.2. Time gaps............................................................................................................... .... 91 
5.1.3. Personal data ........................................................................................................... ... 93 
5.1.4. Reporting thresholds .................................................................................................. 93  
5.1.5. Practices employed..................................................................................................... 9 4 
5.1.6. Classification of irregularity ...................................................................................... 94 5.1.7. Summary ................................................................................................................. ... 95 
5.2. General Trends........................................................................................................... 9 5 
5.2.1. Amounts involved ...................................................................................................... 97  
5.2.2. Method of detection ................................................................................................. 100 5.2.3. Types of irregularity................................................................................................. 10 1 
5.3. Specific analysis....................................................................................................... 10 2 
5.3.1. Irregularities affecting different funds ..................................................................... 102 5.3.2. Irregularity vs suspected fraud................................................................................. 104 
 
EN 5   EN 5.4. Recovery .................................................................................................................. 105 
5.5. Conclusions.............................................................................................................. 1 07 
6. DIRECT EXPENDITURE – Centralised direct Management................................. 110 6.1. Methodology ............................................................................................................ 110  
6.2. General analysis ....................................................................................................... 111  
6.2.1. Method of detection ................................................................................................. 111 6.2.2. Types of irregularity................................................................................................. 11 2 
6.2.3. Amounts involved .................................................................................................... 114 6.3. Specific analysis....................................................................................................... 11 7 
6.4. Recovery .................................................................................................................. 118 
6.5. Conclusions.............................................................................................................. 1 18 
ANNEXES ........................................................................................................................ ..... 119 
 
EN 6   EN 1. THE SITUATION IN 2007 
1.1. Legal bases and concepts 
Community legislation provides for the pr otection of the Community’s financial 
interests in all areas of activity1. Member States are required to notify the 
Commission of evidence of fraud and other ir regularities. This need is particularly 
evident in those sectors of the Community  budget where the main responsibility for 
management is with the Member States, na mely, in the fields of Agriculture and 
Structural Funds (on the expenditure side) and Own Resources (on the revenue side). 
In these areas, Member States must inform the Commission of all irregularities involving more than €10,000 of community finan ces. This applies at all stages in the 
procedure for recovering monies  unduly paid or not received. 
Regulation No. 1848/2006
2 specifies the requirement for the agriculture sector, 
Regulations Nos. 1681/943 and 1831/944, as amended, respectiv ely by Regulations 
Nos. 2035/2005 and 2168/2005, for structural measures and Regulation No. 1150/2000 for own resources. In the case of pre-accession funds the obligation to 
report irregularities is specified in Comm unity legislation and in the Pre-Accession 
and Accession Agreements between the Eur opean Community and the Candidate and 
Acceding States.  
The European Parliament and the Counc il adopted a series of Regulations 
introducing a new system for the Structural Funds for the new 2007-2013 programming period
5. A revised system for manage ment and control was adopted 
through the new Regulations, introducing a certification authority and an audit 
authority (replacing the notions of pa ying and control authority). Some new 
responsibilities have now been added to th e authorities, strengthening the control 
framework. The rules on reporting irregular ities to the Commission have been 
                                                 
1 See in particular Article 3(1) of Council Regulation (EEC) No 595/91 of 4 March 1991 (OJ L 67, 
14.3.1997), Commission Regulation (EC) No 1681/94 of 11 July 1994 (OJ L 178 of 12.7.1994), as 
amended by Regulation (EC) No 2035/2005 of 12 December 2005 (OJ L 328 of 15.12.2005), and No 
1831/94 of 26 July 1994 (OJ L 191, 27.7.1994), as amended by Regulation (EC) No 2168/2005 of 23 December 2005 (OJ L 345 of 28.12.2 005), for expenditure, and Article 6(5) of Council Regulation (EC, 
Euratom) No 1150/2000 for traditional own resources. 
2 As of 1st January 2007, also the threshold for the agriculture sector has been increased to €10,000 
following the provisions contained in article 6(1) of Regulation (E C) 1848/2006 of 14 December 2006 
(OJ L 355 of 15.12.2006). 
3 Regulation 1681/94 applies to the Structural Funds, that is to say European Regional Development 
Fund (ERDF), European Social Fund (ESF), European Agriculture Guidance and Guarantee Fund 
(EAGGF) – Section Guidance and Financial Instrument for Fishery Guidance (FIFG). 
4 Regulation 1831/94 applies to the Cohesion Fund. 
5 Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the 
European Regional Development Fund and repealing Regulation (EC) No 1783/1999; Regulation (EC) 
No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social 
Fund and repealing Regulation (EC) No 1784/1999; Council Regulation (EC) No 1083/2006 of 11 July 
2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; Council Regulation 
(EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 
1164/94, OJ L 210, 31.7.2006. 
 
EN 7   EN retained, but the communication procedure is now part of the implementing 
Regulations6 rather than a separate Regulation, as was previously the case. The old 
Regulations have been repealed, but will continue to apply with reference to former programming periods. 
The provisions to be followed are mostly  based on the Commission Regulation (EC) 
No 1681/1994. Member States ar e required to report irregul arities under Article 3 of 
these regulation (for own resources the releva nt provisions are cont ained in Article 6, 
paragraph 5. For agricu lture, the relevant provisions ar e contained in article 3) within 
two months of the end of each quarter. Unde r Article 5 (again, Ar ticle 6, paragraph 5 
for own resources) they have to subm it updates of the cases communicated and 
relevant information about the financial,  administrative and judicial follow-up.  
The distinction between irregularities
7 and fraud is that fraud8 is a criminal act that 
can only be determined by the outcome of j udicial proceedings. As  such, it is only 
when the judicial procedure has come to an  end that the actual  amount of fraud can 
be determined. While awaiting the results, the Commission works on the basis of the information supplied by Member States c oncerning cases of irregularities some of 
which, in the opinion of the reporting Member  States, give rise to suspicions of 
fraud
9. The Commission's statistical assessm ent of, and ability to respond to, 
                                                 
6 Commission Regulation (EC) No  1828/2006 of 8 December 2006 setting out rules for the 
implementation of Council Regulation (EC) No 1083/2006 laying down general provisions on the 
European Regional Development Fund, the European Social Fund and the Cohesion Fund and of Regulation (EC) No 1080/2006 of the European Parliament and of the Council on the European 
Regional Development Fund, OJ L 371, 27.12.2006. This repeals Regulations (EC) No 1681/94 and 
(EC) No 1831/94. Commission Regulation (EC) No 498/2007 of 26 March 2007 laying down detailed 
rules for the implementation of Council Regulation (EC) No 1198/2006 on the European Fisheries 
Fund.  
7 According to the definition provided for in Article 1(2) of Regulation No. 2988 /1995, 'Irregularity` shall 
mean any infringement of a provision of Community law resulting from an act or omission by an 
economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by  reducing or losing re venue accruing from own 
resources collected directly on behalf of the Communities, or by an unjustified item of expenditure. 
Sectoral legislation now reproduce a very similar definition adapted to  the specific sector concerned. 
8 According to the definition provided for in Article 1 of the Convention on the protection of the 
Community’s financial interests of 26 July 1995 (OJ C No 316 of 27.11.1995), which entered into force 
on 17 October 2002, «[…] fraud affecting the European Communities' financial interests shall consist of: 
(a) in respect of expenditure, any intentional act or omission relating to: 
- the use or presentation of false, in correct or incomplete statements or documents, which has as its effect 
the misappropriation or wrongful retention of funds from the general budget of the European 
Communities or budgets managed by, or on behalf of, the European Communities, 
- non-disclosure of information in violation of a specific obligation, with the same effect, - the misapplication of such funds for purposes other than those for which they were originally granted; 
(b) in respect of revenue, any intentional act or omission relating to: 
- the use or presentation of false, in correct or incomplete statements or documents, which has as its effect the 
illegal diminution of the resources of the general budget of the European Communities or budgets 
managed by, or on behalf of , the European Communities, 
- non-disclosure of information in violation of a specific obligation, with the same effect, 
- misapplication of a legally obtained benefit, with the same effect.» 
9 According to the definition provided for in Article 1a of Reg. No. 1681/94 as amended by Reg. No. 
2035/2005, ‘suspected fraud’ means an irregularity giving rise to the initiation of administrative and/or 
judicial proceedings at national level in order to establish the presence of intentional behaviour, in 
particular fraud, such as is referr ed to in Article 1(1), point (a), of the Convention on the protection of 
 
EN 8   EN irregularities is influenced by the accuracy  and timeliness of the notifications made 
by the Member States.  
The practices of the national administrati ons still vary, though improvements have 
been achieved thanks to the efforts made to harmonise their approaches. The data 
communicated by Member States is sometimes incomplete. Furthermore, the distinction between “suspected frauds” and other irregularities is not consistent as 
Member States do not always have th e same definition of criminal risk. 
Consequently, a significant proportion of communications received by the 
Commission do not distinguish between  suspected fraud and irregularity. 
The Commission works in close cooperation with the Member States to improve the 
notification system for irregularities, in part icular to clarify the concepts of “fraud” 
and “irregularity”
10 and as a result of this, attempts to measure the possible economic 
impact of fraud in certain sectors have b een made. However, for the reasons outlined 
above, the figures presented below should be interpreted with caution. It would be 
particularly inappropriate to draw simple conclusi ons about the geographical 
distribution of fraud or on the efficiency of the s ervices which contribute to the 
protection of financial interests .  
1.2. Key Facts 
Annex 22 gives an overview of  all irregularities communi cated by Member States 
under Regulation No. 1848/2006 for the agricu lture sector, Regulations Nos. 1681/94 
and 1831/94 for structural measures  and Regulation No. 1150/2000 for own 
resources. No irregularities have b een yet communicated under Regulation No. 
1828/2006. 
In general, the number of irregularities notified for the year 2007 has decreased by 
9%. 
The following paragraphs will provide details concerning the different sectors of the 
budget analysed in this document. 
The total number of irregularities has in creased for traditiona l own resources and 
structural funds. It has also increased fo r the pre-accession funds. It has decreased for 
the cohesion fund and agriculture. 
However, the total financial amounts affected  by irregularities notified for the year 
2007 has increased by 19%. 
                                                                                                                                                         
the European Communities' financial interests. Simila r definitions are inserted in relevant sectoral 
regulations as Reg. No. 1848/2006, for agriculture and Reg. No. 1828/2006 for the Structural Funds 
new programming period 2007-2013. 
10 The Commission opened a dialogue with the representatives of the Member States to clarify basic 
concepts and to re-assure Member States that the communication of irregularities in no way prejudices 
the outcome of criminal judicial proceedings. A working document on the practical modalities for the 
communication of irregularities was established. Disc ussions are continuing in the Advisory Committee 
on the Coordination of Fraud Prevention. 
 
EN 9   EN The total amounts affected by irregularit ies have increased for traditional own 
resources, agriculture and structural funds . Irregular amounts also  increased for the 
pre-accession funds. They have decreased for the cohesion fund. 
1.2.1.  Traditional Own Resources 
In 2007, the number of cases of irregularities communicated by the Member States 
decreased from 5,705 to 5,321. However, the amount of TOR increased from EUR 353 million to EUR 377 million. 
Communications from the ten new Member Stat es have continued to  grow since their 
accession in 2004. This is a result of increas ing familiarity with the requirements of 
the reporting system. 
1.2.2.  Agriculture 
In 2007, OLAF processed 7,155 communi cations under Regulation (EC) No 
1848/2006. A large number of these comm unications, i.e. 6,406, were updates of 
cases that had been re ported prior to 2007.  
Member States reported 1,548 new irregul arities compared with 3,249 in 2006. The 
total amount affected in 2007 was about EU R 155 million, as against approximately 
EUR 87 million in 2006. 
Irregularities notified in th is sector represent 0.33% of the agricultural budget. 
1.2.3.  Structural Measures 
In 2007, Member States repo rted 3,740 irregular ities under Regulation (EC) No. 
1681/94 which covers the four Structural Funds and 92 under Re gulation (EC) No. 
1831/94 (on the Cohesion Fund). In 2006 the reported irregulariti es were 2,988 and 
228 respectively. 
The total amount affected by irregula rities in 2007 was about EUR 827.6 million, 
EUR 717.4 million of which was from the Structural Funds (EUR 516.6 million in 
2006) and EUR 110.2 million from the Cohe sion Fund (EUR 186.6 million in 2006).  
Irregularities reported in this sector were equivalent to 1.83% of  the budget allocated 
to structural measures in 2007. 
1.2.4.  Pre-accession Funds 
In 2007 Member States and Acceding Count ries sent to OLAF 1,615 reports of 
which 332 new communications  and 1,283 updates of cases wh ich had been reported 
previously.  
The total amount affected by irregulariti es reported in 2007 was EUR 32 million 
where PHARE accounts for EUR 16 million (96 cases), SAPARD – EUR 11 million (150 cases), ISPA – EUR 6 million (86 cases). 
 
EN 10   EN Irregularities reported in this sector repr esent 2.46% of the budget allocated to pre-
accession measures in 2007. 
1.2.5.  Direct Expenditure – Cent ralised Direct Management 
In 2007, 411 cases of irregularities were  detected by Commission Services. 
The total value of contracts in which irregularities have  been detected amounts to 
EUR 300 million of which EU R 33 million has been iden tified as irregular 
The financial impact of thes e irregularities amounted to 0.30% of the total value of 
contracts managed on a centralised direct basis by the Commission. 
 
EN 11   EN PART  I - REVENUES 
2. TRADITIONAL  OWN  RESOURCES  (ANNEXES  1-10) 
2.1. Management of Traditional Own Resources (TOR)  
The Community must have access to Traditional Own Resources ('TOR')11 under the 
best possible conditions. In conformity with Regulation (EC, Euratom) 1150/200012 
Member States are responsible for making available to the Co mmission, within the 
deadlines set, TOR that they  have established. Establ ished amounts of customs or 
agricultural duties which have  been recovered and debts which are guaranteed and 
not under appeal are to be made via the A-account . However where TOR has been 
established by a Member State but not yet recovered and where no security has been 
provided or the established amount has been disputed Member States may enter these 
TOR amounts in the B- account. These amounts of TOR are not then  made available 
until actually recovered. Most fraud and irre gularity cases relate to B-account items. 
2.1.1.  Monitoring of establishment and recovery of TOR  
In order to get the right picture of Member States TOR recovery activity it is 
important to keep in mind that over 95%  of all amounts of TOR established are 
subsequently recovered without  particular problem. Thes e amounts are entered in the 
A-account and made available to the Commission. This covers most of the 'normal' 
import flows where release for free circul ation gives rise to a customs debt. The 
remaining exceptional items are entered in  the B-account. This  proportion should be 
borne in mind when evaluating Member States ' recovery activity. In return for their 
collection task, and to suppor t sound and efficient management of public finances, 
Member States may keep 25% of the am ounts involved. In its capacity as 
Authorizing Officer responsible for ex ecuting the EU budget, the Commission (DG 
Budget as delegated Authorizing Officer) m onitors Member State activity concerning 
establishing and recovering TOR. 
The following three methods are used: 1. Overall monitoring of recovery of  TOR via the write-off procedure; 
2. Regular inspection in Member States of the establishmen t and recovery of 
TOR, and B-account entries; 
3. Specific monitoring (in close cooperation with OLAF) of Member States 
follow-up of recovery in individual cases with significant financial impact and which 
involve Mutual Assistance.  
These three methods allow the Commission to monitor Member States' performance 
without interfering too much in  their day to day operations. 
                                                
 
11 These are mainly custom s and agricultural duties. 
12 Regulation 1150/2000 of 22 May 2000. 
 
EN 12   EN 2.1.2.  Procedure for managing Member States' requests for write-off  
Member States must take all availabl e measures to ensure that amounts 
corresponding to the entitlements establishe d are made available to the Commission. 
This requirement is in Article 17.1 of Regulation 1150/2000. That article also 
provides that a Member State may only be  released from its obligation where 
established entitlements pr ove irrecoverable either: 
(a) for reasons of force majeure ; or 
(b) for other reasons which cannot be attributed to that Member State. 
Amounts of established entitlements become irrecoverable by one of two routes. The 
first is by a decision of a Member State declaring  that they cannot be recovered – 
this declaration may be made at any time. However, TOR must be deemed  
irrecoverable by a Member State at the late st five years from the date on which the 
amount was established, or in  the event of an administra tive or judicial appeal, the 
final decision was given, or the last part -payment of an established amount was 
made, whichever is the later. Where th e irrecoverable amount of TOR exceeds a 
threshold of EUR 50,000 the write-off must  be reported to the Commission. For 
amounts under EUR 50,000, Member States do no t have to communicate the case to 
the Commission unless the Commission makes a specific request. A 2004 
amendment to Regulation No 1150/200013 introduced the 5-year timeframe within 
which a Member State has to provide th e Commission with information on amounts 
of established entitlements of TOR deemed irrecoverable. As a result it is expected 
that before 2009 there will be a marked in crease in requests by Member States to 
write-off established TOR amounts deemed irrecoverable, whereas 2007 showed a 
decrease in requests compared with 2006 ( ↓ 60 requests). The increase will consist of 
old cases not yet reported to the Commission, but which meet the 5-year deadline triggering application of the write-off procedure. DG Budget is preparing to deal with the anticipated increase in the numbe r of cases. A new IT -application called 
WOMIS
14 will be introduced in 2008 to s upport Member States and DG Budget in 
managing the write-off requests. 
In 2007 100 write-off requests amounting to EUR 37,854,293.39 were 
communicated to the Commission by 8 Member  States. In total, 117 requests were 
processed in 200715 with the following result:16  
                                                 
13 Regulation No. 2028/2004, amending Regulation No. 1150/2000. 
14 WOMIS: Write-Off Management and Information System.  
15 Origin of the cases: 8 cases from Belgium, 62 from Germany, 9 from Denmark, 8 from France, 2 from 
Italy, 1 from the Netherlands, 6 from Sweden and 4 from the UK. 
16 The breakdown between the amounts for each of the pos itions is, at present, only an estimate because 
sometimes elements from the same case may be par tly accepted, considered no t suitable or refused. 
Additional information from the Member States (in particular on the proportion covered by guarantee) 
is then needed to provide the final classification and quantification of the amounts concerned. 
 
EN 13   EN Table OR 1: Write-off request s treated in 2007 – results  
Commission position cases % cases € % amount 
Unsuitable exemption request 0 0% 0 0%
Write-off accepted 79 66,90% 33,250,905.56 50,41%
Required additional information 23 19,60% 4,458,985.69 6,76%
Write-off refused 16 13,55% 28,143,171.43 42,67%
TOTAL 118* 100% 65,953,062.68 100%
* One case was part accepted and pa rt refused so the total is 118. 
Examination of Member States diligence in these cases constitutes a very effective 
mechanism for gauging their activity in the fi eld of recovery. It encourages national 
administrations to intensify their recovery activity in terms of regularity, efficiency 
and effectiveness, since a lack of diligence leading to failure to recover results in 
individual Member States having to f oot the bill. During 2007 over EUR 16.5 million 
was paid by Member States, be cause of refused write-offs. 
2.1.3.  Particular cases of Member State failure to recover TOR  
Where TOR are not established because of an administrative error by a Member 
State, the Commission applies the principle of financial responsibility17. As a result 
during 2007 over EUR 20 million was paid by  Member States, aside from belated 
interest18.  
All together the cases of financial respons ibility dealt with by DG Budget up until 
the end of 2007 total nearly EUR 190 million. The main objective of this procedure 
is to encourage individual Member States to improve their administrations' performance and to address weaknesses lead ing to a loss of TOR and national taxes. 
This money is in effect transferred back to  the Member States in proportion to their 
contribution to the EU budget as it reduces  their contributions via the GNI-resource. 
2.2. Reporting Discipline  
Under Article 6(5) of Regulation 1150/ 2000, Member States are required to 
communicate to the Commission, via the OWNRES system
19, cases of fraud and 
irregularity where the TOR-amount ex ceeds EUR 10,000. The requirement to report 
such cases is designed to inform the Budgeta ry Authority of the st ate of play relating 
to fraud and irregularities in TOR. This po litical dimension is a clear signal to all 
stakeholders of the importance of prom pt, accurate and complete reporting. The 
OWNRES-database is a key tool obtaining data for global analyses of fraud and 
irregularities, and presents  valuable information to the Budgetary Authority. 
                                                 
17 Case C-392/02 of 15 November 2005. These cases are identified on the basis of Articles 220(2)b 
(administrative errors not detectable by the operato r) and 221(3) (time-barring resulting from Customs' 
inactivity ) of the Community Customs Code; of Articles 869 and 889 of the Provisions for application 
of the Code; or on the basis of non-observance, by the customs administration, of articles of the Community Customs Code giving rise to legitimate expectations on the part of an operator. 
18 In such a situation there is no registra tion in OWNRES of the fraud or irregularity. 
19 OWNRES is an abbreviation for Own Resources. 
 
EN 14   EN Because all TOR-amounts exceeding EU R 10,000 in the B-account represent an 
irregularity (fraud includ ed) by definition a match be tween the two from the 
perspective of the B-account should be 100%20. In the past (2003-2006) specific 
attention was given to this question in ACOR21 meetings, resulting in an 
improvement in matching from 30% in 2003 to over 90% in 2006. In the absence of 
any signals of significant changes in 2007 no new comparison has been demanded by 
the Commission. However, previous experience had shown shortcomings in registering in OWNRES irregularities wher e no debt was subsequently established 
(most commonly cigarette smuggling where the goods are seized and subsequently 
confiscated thus exti nguishing the debt) so a reminder wa s sent to Member States in 
2007. This has resulted in improvements in registration
22. 
OWNRES is not a reliable source of data on fraud alone isolated from irregularity. 
This is because (until a Cour t judgement is obtained) th e distinction between fraud 
and irregularity has usually been made on subjective grounds. These grounds vary 
greatly between national administrations a nd so the results cannot be relied upon. 
Please bear these cons iderations in mind, when looking at the following analysis of 
OWNRES data. 
Year of detection versus year reported  
Cases should be included in OWNRES upon th e initial discovery of the irregularity 
or fraud case. As a result the year of th e customs operation and the year of discovery 
of the irregularity or fraud can diverge. Member States are continually adding new cases and updating existing items. So th e information generated by OWNRES 
represents the situation on the date of the query. For instance, the number of irregularities and frauds concerning 2006 in last year's report was 5,243 cases 
whereas the number of cases now shown for 2006 is 5,705 cases
23. This continuing 
development is inherent to the system. 
2.3. General Trends  
The number of cases communicated to OWNRES decreased by 6.7% in 2007 in 
comparison with 2006 (from 5,705 in 2006 to 5,321 in 2007), but the amount of TOR 
involved increased by nearly 7% (up fr om EUR 352 million in 2006 to EUR 377 
million in 2007 )24. The trend for the number of belatedly discharged transit 
operations to decrease continued25, although their proportion of the amount 
increased. 
                                                 
20 Items registered in OWNRES are not necessarily also  in the B-account. Where a debt has been paid or 
not established (for instance where goods have been seized and confiscated) the amounts should not be 
entered in the B-account.  
21 ACOR= Advisory Committee on Own Resources, section Traditional Own Resources. 
22 See annex 8. 
23 The information generated by OWNRES used to produce the figures in this chapter was all requested 
by queries made on 9 March 2008. 
24 See annex 1 (table) and annex 2 (chart). 
25 In 2005 the number of cases of belatedly discharged Transit was 2,325 being 38.4% of the total number 
of cases registered and 3.7% of the total amount. In  2006 there were 1,440 cases (25.2% of the cases 
and 4.4% of the total amount) and in 2007 there were 1,193 cases (22.4% of the cases and 6.9% of the 
amount). 
 
EN 15   EN Communications from the ten new Member Stat es have continued to grow since their 
accession in 2004, however the rate of grow th has significantly slowed. 2007 shows 
12% growth when compared with 2006 whereas when 2006 was compared with 
2005, it showed growth of 47%. If the comparisons are made using the amounts of TOR, the growth rates are 22% and 123% respectively. 
The OWNRES database now contains 44,103 cases in total (1989-2007), showing an 
increase of over 16% during 2007. Significant changes in the number of registrations 
in 2007 compared with 2006 can be seen for Poland (+129%), Latvia (+43%), Portugal (+35%), the Czech Republic (- 38%), and Spain and Hungary (-35%). 
Significant changes in amounts can be s een in Poland (+374%), Belgium (+90%), 
Portugal (-52%), the UK (+87%) and Spain (-57%). 
2.3.1.  Method of detection 
A variety of detection met hods can reveal irregularity or fraud. Judging from the 
2007 data the most fruitful methods are national post-clearance inspections  and 
primary national inspections  (either physical inspections or inspections of documents 
– the latter category featuring most frequent ly). Post-clearance in spections feature in 
43.6% of the cases discovered whereas pr imary national inspections cover 36.5%. 
It seems that the shift which could already be seen in 2006 from primary (38.4%) to 
post-clearance inspections ( 41.1%) is continuing in 2007. It may mark the beginning 
of a trend related to ongoing changes in declaration and control procedures. The 
relative importance of insp ections by anti-fraud services  was stable with 6.9% in 
2007 compared to 7.9% in 2006. 
Chart OR 1: Method of detection 2005-2007 
METHOD OF DETECTION 2005-2007
05001.0001.5002.0002.500
Audit of the
accountsCommunity
inspectionsInspection by
anti-fraud
serv icesInspection visit National post-
clearance
inspectionsPrimary
national
inspectionsTax audit Voluntary
admission
METHOD OF DETECTIONNUMBER OF CASES
2005 2006 2007
 
 
EN 16   EN 2.3.2.  Types of irregularity and fraud 
A breakdown of frauds and irregularities by customs procedure  and by  mechanism 
type confirms that release for free circulation  is the procedure most commonly 
specified (64% of the cases26). Smuggling, misdescripti on and false declarations 
(incorrect value, origin, and preferentia l arrangements) are the mechanisms most 
frequently mentioned. 
The goods (defined by the first two numbers of the CN-code27) most affected by 
fraud and irregularities in 2007, as in previ ous years, are TVs/monitors etc. (CN 85) 
and tobacco products (CN 24). Vegetables (s pecifically garlic) (CN 07) increased in 
importance when compared to 2006 as did footwear (CN 64), (parts of) cars and 
motors (CN 87) and clothing (CN 61-62), wh ereas meat (CN 02), articles of iron and 
steel (CN 73) and cereals (CN 10) went down28. 
Chart OR 229: Fraud and irregularities – breakdown by goods in 2007 
 
Analysis of the origin  of goods subject to fraud and irregularity30 reveals that, just as 
in 2006, goods originating from China, Ja pan, the USA, Thailand and South Korea 
remain very much affected. The numbe r of cases in the origin category  non-specified 
decreased, as in 2006, in parallel with the decrease in Transit cases. 
                                                 
26 See annex 3. In 2005 there was a decrease in impor tance of the customs procedure free circulation (53% 
of the cases) which was directly related to an incr ease in cases of transit (38% of the cases). This 
increase of transit cases was in its turn linked to an improvement in registering those cases. 
27 Combined nomenclature or CN - nomenclature of the Common Customs Tariff. 
28 See annex 4 and 5. 
29 The product description in the chart is a generic description the goods involved. See annexes 4 and 5 for 
detailed analyses.  
30 See annex 6. Fraud and Irregularities - breakdown by goods in 2007 in Mio. €  
Animals and products 
thereof 14 (4%)  
Metals 16 (4%)  TV's, (computer) monitors 
 etc.113 (31%)  
Food, Drinks and
Tobacco 50 (14%)  
Textile 46 (12%)Vegetables 28 (7%)Vehicles etc. 24 (6%)  Chemical products 20 (5%)  Others 46 (12%)
Footwear 18 (5%)  
 
EN 17   EN 2.3.3.  Irregular and fraudulent import of monitors and televisions 
Specific OWNRES queries were made about imports in CN 8531 and for CN 85 28 
specifically (TVs and monitors), because thes e goods showed the hi ghest risk in past 
years therefore gaining the attention of Parliament and the Commission.  
Interpreting the data in OWNRES presented be low, it is important to realize that the 
date on which an irregular ity or fraud is discovered by customs does not have to 
coincide with the date of occurrence of th e fraud or irregularity  itself. In OWNRES 
Member States register the date upon the initia l discovery of the irre gularity or fraud. 
This means that no conclu sions about the date of oc currence of the fraud or 
irregularity itself can be  drawn based on the OWNRES data alone, unless the fraud 
or irregularity was discovere d as a result of primary na tional inspections involving 
the release for free circulation customs proce dure. In that case the discovery usually 
coincides with the moment of the im port declaration (presuming the case is 
registered accurately by the Member State) . As a result one should be very careful 
drawing conclusions about fraud or irregul arities by extrapolating the figures and 
interpreting them as today's risks. 
The cases for 2007 relating to CN 85 (932 ca ses) indicate a TOR impact of EUR 93 
million, whereas both in 2006 (1031 cases ) and in 2005 (1102 cases) the amount 
involved was EUR 65 million. Of the 932 cases for 2007, 622 ar e closed (i.e. paid or 
no longer due) leaving 310 cases open, of which 98 cases, representing EUR 14 
million (15% of the total amount), are indica ted as fraudulent. Of these 98 cases, 44 
cases were discovered duri ng a primary national inspect ion during the release for 
free circulation customs procedure, invol ving EUR 8 million. For this last group of 
cases, where in principle the date of discove ry coincides with the date of the fraud, 
one could conclude there is a current risk of this type of fraud, however in those 
circumstances the traditional own resources that could be due are usually guaranteed 
before the goods are released for free circ ulation. In the table below the figures are 
compared with 2005 and 2006. 
Table OR2: open fraud cases free circ ulation customs procedure - 2005-2007 
2005 2006 2007 
Total 
(I) Open fraud 
cases (II) Open fraud cases 
free circulation 
(III) Total (I) Open fraud 
cases (II) Open fraud cases 
free circulation 
(III) Total (I) Open fraud 
cases (II) Open fraud cases 
free circulation 
(III) 
1102 90 37 1031 122 53 932 98 44 
€65 
MLN €8 MLN €1.2 MLN 65 MLN €8 MLN € 4 MLN € 93 MLN € 14 MLN € 8 MLN 
(1) Total number of cases of irregularity and fraud. 
(II)Open cases registered as fraud. (III) Open fraud cases discovered during primary national insp ections during release for free circulation customs procedure 
 
Incorrect classification is the primary cause - EUR 40 million of the total amount 
registered. Half of that relates to TVs and monitors proper to CN 85 28 being 
                                                 
31 CN 85: Electrical machinery and equipment and parts thereof; sound recorders and reproducers, 
television image and sound recorder s and reproducers, and parts an d accessories of such articles. 
 
EN 18   EN initially declared as computer m onitors (CN 84 71). Another cause was 
misdescription of origin - this accounted  for some EUR 13 million of the amounts 
registered in 2007, but actually related to  goods from China (TVs (CN 85 28)) all of 
which had been imported in earlier years. Th is trade was the focu s of inquiries as 
Member States followed up MA communication 2002/06. Other types of irregularities (or fraud) totalled EU R 3 million. Summarizing, for 2007, 93% of the 
cases involving CN 85 28 were related to inco rrect classification, making it, just as in 
previous years, the most common type of irregularity or fraud.   
Focusing on CN 85 28, the financial impact trend of all cases  is up overall after a 
drop last year. In 2005 the amount involved was EUR 28 million (226 cases), in 2006 
(247 cases) the amount involved dropped to  EUR 13 million, whereas in 2007 (246 
cases) the amount increased to EUR 56 million.  
In the table below you will find the figur es for 2005-2007 where the total number of 
cases involving CN 85 28 is compared w ith the cases discovered during primary 
national inspections regarding the releas e for free circulation customs procedure 
(identical analysis like above for CN 85). 
 
EN 19   EN Table OR3:comparison of cases involving CN85 28 with cases free circulation 2005-
2007 
2005 2006 2007 
Total (I) Open fraud 
cases (II) Open fraud cases 
free circulation 
(III) Total (I) Open fraud cases 
(II) Open fraud 
cases free 
circulation 
(III) Total (I) Open fraud 
cases (II) Open fraud 
cases free 
circulation 
(III) 
226 29 8 247 26 10 246 37 23 
€28 MLN €2.3 MLN €0.3 MLN €13.5 
MLN €1.6 MLN €1.2 MLN € 56 MLN € 8.5 MLN € 6.7 MLN 
(1) Total number of cases of irregularity and fraud. 
(II)Open cases registered as fraud. (III) Open fraud cases discovered during primary national insp ections during release for free circulation customs procedure.
 
The figures show an increase in registered  fraud cases during the release for free 
circulation customs procedure in 2007 fo r CN 85 28, however before drawing 
conclusions, further analysis is necessa ry. OWNRES does not provide enough details 
or background information for that. 
MA communications  
In 2007 there was a reference to an MA comm unication in 9% of the cases regarding 
CN 85 involving an amount of EUR 14 million (15% of the total amount)32. The 
percentage of cases in which there is a reference to MA communications remains 
relatively stable, having been 7% in 2005 and 6% in 2006. The percentage of the 
amount involved is more volatile as in 2005 it was 18%, and in 2006, 28%. We also 
looked specifically at references for MA communications for those items relating to 
CN 85 28. We found that 24 references (10% ) had been made in 2007 for an amount 
of EUR 9 million (16%)33. 
2.3.4.  Data main sectors TOR 
See annex 1-10. 
2.4. Specific analysis 
2.4.1.  Specific facts TOR 
In 2007 there were 182 cases registered of  seized and confiscated cigarettes (CN 
code 24 02 20 90) involving estimated34 TOR of over EUR 15 million. The twelve 
new Member States were responsible for registering in OWNRES 73 cases totalling 
EUR 5.5 million with newcomer Romania de tecting 19 cases. In 2006 the number of 
registered cases concerning seized a nd confiscated goods was 147 totalling EUR 
                                                 
32 These 81 cases with a reference to an MA communi cation, involving €14 million, do not coincide with 
the 98 open cases involving €14 million as well. 
33 MA 2005/009 was the most important involving 20 cases and €7.5 million.  
34 See annex 8. The numbers for this year differ significan tly from last year's report in an effort to correct 
for variations between Member States' methods of registering these cases. 
 
EN 20   EN 10.5 million of which the then ten new Member States had detected 59 cases 
involving EUR 3.5 million.  
2.4.2.  Classification of irregulariti es and fraud by Member States 
OWNRES cases concern custom operations invo lving irregularity or fraud. Of all the 
cases registered in 2007 23%  (1215 of 5321 registered ca ses) are categorised as 
frauds, that is the same proportion as in 2006 (1327 of 5705 registered cases)35. 
However, differences between Member Stat es in the proportion so categorised are 
relatively large. For inst ance in 2007, the United Ki ngdom categorised only 103 out 
of 1,069 cases as fraud (equivalent to 9.6%) whereas Greece so categorised 100% 
(53 out of 53 cases communicated) an d France 46.4% (149 out of 321 cases 
notified). For 2006 the figures were for the UK 0.11% (1 out of 882), for Greece 100% (46 out of 46) and for France 10.2% (32 out of 314). These figures 
demonstrate that the categorisation of irre gularity and fraud in OWNRES is not yet 
fully reliable. 
2.5. Recovery 
2.5.1.  Recovery rate 
Member States have to recover establishe d amounts including those they register in 
OWNRES. However, for a variety of reas ons an established amount may not be 
completely recovered, despite Member Stat es' efforts. The proportion varies from 
Member State to Member State. Differences arise from things such as the type of 
fraud or irregularity, and the type of debtor or  judicial procedur es involved. Amounts 
established may change because of additiona l information or judicial procedures, or 
the debt may be deemed irrecoverable because of the debtors' financial problems.  
The Recovery Rate ('RR') e xpresses the percentage of th e established debt that is 
actually recovered. It is constantly ch anging because of the ongoing processes of 
recovery in Member States. The overall RR for 2006 recorded in last year's report 
was 32% although it has since climbed to 40%. At present the RR for 2007 is 40%
36 
which is a good starting position, because ov er the last decade the RR has varied 
between 40% and 55% (see OR: Chart 3)  
The RR of the 10 Member States which acced ed in 2004 is, at the moment, slightly 
below the relatively good start they had displayed. They will now be facing a growing number of post-clearance contro ls covering periods after their accession. 
The RR for Romania and Bulgaria is rela tively low, however excluding cases of 
smuggled and seized cigarettes it is above the average rate of the EUR-27. 
                                                
 
35 See annex 9. 
36 See annex 7.  
 
EN 21   EN Chart OR 3: Recovery rates 1996-2007 
Recovery Rates 1996-2007
0,00%10,00%20,00%30,00%40,00%50,00%60,00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year%EUR-15 
EUR-10
EUR-2
 
* For 2001 the average RR is only 26%, because of the impact of Italy's RR, which is 2.14 % on an 
established amount of EUR 94 million. 
Recovery in case of fraud 
OWNRES shows that the amount of TOR due  in fraud cases decreased in 2007. As 
part of the overall amount of irregulariti es and fraud cases registered the share of 
fraud was EUR 106 million compar ed to EUR 158 million in 200637.  
The amount recovered in cases of fra ud was EUR 18 million in 2007, which gives a 
fraud recovery rate of 17.3%. For 2006 the total has reached EUR 32 million which 
gives a rate of 20.2%. However, one can no t say yet that 2006 was better, because 
the recovery rates, as mentioned before, ch ange with elapsed time. The recovery rate 
in cases of fraud is clearly much lower than  that for irregularities since the overall 
recovery rate in 2007 is 40%. This can be explained by the length and complexity of 
procedures. 
2.5.2.  Impact on the budget 
The amounts that were registered in OWNR ES for 2007 have a financial impact of 
EUR 377 million. Over the last decade th e value of amounts has ranged from EUR 
200 million (year 1997) up to EUR 377 millio n (year 2007). The amounts change 
continuously, as the figure is based on es tablished amounts registered in OWNRES 
which are updated with correc tions that can be significant38.  
                                                 
37 See annex 10. For the delay in registration see the paragraph on reporting discipline. 
38 E.g. for the year 2000 the maximum impact wa s initially € 516 million. Corrections of over €250 
million because of remissions change d it to €244 million at present. 
 
EN 22   EN Chart OR 4: Financial Impact TOR 1997-2007 
Financial Impact TOR 1997-2007
0100200300400500600
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
YearMillion 
Euro
Total Member States
 
2.6. Conclusions  
In its capacity as Authorizing Officer, th e Commission (DG Budget is the delegated 
Authorizing Officer) monitors the estab lishment and recovery of TOR by Member 
States in various ways. The monitoring is carried out in partnership with different 
Commission services, including OLAF.  
Once a debt is established a Member St ate can only be discharged from the 
obligation to make the TOR availa ble to the Commission because of force majeure 
or for reasons which can not be attributed to the Member State concerned. As Member States are responsible for making TOR available to the EU Budget, should 
they wish to be released from their obliga tion in a particular instance they need to 
prove that one of these circumstances exists. Where debts are not established 
although they should have been, Member Stat es are held liable for the TOR foregone 
(these cases are not regist ered in OWNRES). As a result Member States made 
available over EUR 36 million in 2007. Some  actions are still ongoing and new cases 
are being given appropriate follow up.  
Because of the particular interest the Budge tary Authority has in recovery, reliable 
information regarding the number of cases  of irregularity and fraud and their 
development must be entered in OWNR ES. Member States have a special 
responsibility to ensure that appropriate statistical information on irregularity and 
fraud is provided to the Commission. Th erefore in 2007 Member States were 
requested to address the shortcomings in registration in OWNRES of cases where no 
debt needed to be established (usually smuggled cigarettes). 
Regarding the reliability of information in OWNRES, making a distinction between 
irregularity and fraud or analysing fraud separately is risky and the output is not very 
useful. Only Court decisions make it certain  whether a case is one of irregularity or 
fraud, whereas within OWNRES this distinction is usually based on a 
prognostication made by Member States' ad ministrations. The figures in OWNRES 
showing marked differences in the propor tions of cases denoted as frauds or 
irregularities between Member States poi nt that out clearly. OWNRES can only be 
 
EN 23   EN used for global analysis and monitoring. For cases where there is no debt (seized and 
confiscated smuggled goods) reporting is  improving but still not reliable.  
The amounts of TOR at stake in irregularity  and fraud are, ac cording to OWNRES, 
up to EUR 377 million in 2007. Recovery rate s over the last decade have rarely 
exceeded 50% and in cases of fraud have been even lower. The opening figure for 2007 is respectable, but past experience s uggests that the improving the overall 
outcome will remain challenging.  
The goods involved in irregular ities and frauds demanding Member States' attention 
are very diverse, notably TVs and monitors , clothing, foods, vegeta bles and of course 
tobacco. TVs and monitors keep their rele vance in 2007, being once again (one of 
the most) important goods invol ved in registered cases of irregularity (or fraud), just 
like previous years. The origin of the goods concerned is equally varied, although 
some countries remain continuously at the top of the rankings (like China, USA, 
Japan). When irregularity or fraud is discove red by a Member State it is mostly in the 
customs procedure of free circulation (misdescripti on, undervaluation or simply 
smuggling)  as in previous years. 
The Commission encourages Member States to continue their activities in the field of 
recovery and providing statis tical information. In partic ular concerning statistical 
information Member States need to step  up their involvement to make OWNRES a 
fully reliable source, including also thos e cases, smuggling in the main, where no 
establishment was required. The Budgetary Au thority is entitled to have available the 
best possible information when mo nitoring TOR and recovery issues. 
 
EN 24   EN PART  II - EXPENDITURE 
3. AGRICULTURAL  EXPENDITURE  (ANNEXES 11-12)  
The analysis is a descriptive analysis based on the communications forwarded by 
Member States under Commission Regul ation (EC) No. 1848/2006 in the budget 
year 2007 (16 October 2006 – 15 October 2007). 
It should be noted that not all irre gularities are reported. Under Reg. 1848/2006, 
Member States must only inform the Comm ission of irregulariti es involving more 
than EUR 10,000. Reg. 1848/2006 repealed Reg. 595/1991 and came into force on 1 January 2007. Under Reg. 595/1991 Member St ates were obliged to inform the 
Commission of irregularities i nvolving more than EUR 4,000.  
In 2007, OLAF processed 7,155 comm unications under Reg. 1848/2006. A high 
percentage of these communi cations, (6,406), were updates of cases that had been 
reported prior to 2007. 
Member States reported 1,577 new irregula rities (under Reg. 1848/2006) compared 
with 3,249 irregularities in 2006. During 2007,  Member States reclassified 29 of 
these irregularities as non-irregularities.  The total number of new irregularities is 
therefore 1,548. The total amount affected  in 2007 was about EUR 155 million, as 
against approximately EUR 87 million in 2006. 
Irregularities notified in this  sector represent only 0.33% of the agricultural budget.  
Annex 12 gives an overview per Memb er State, indicating the number of 
irregularities, the amounts i nvolved and the percentage of  agricultural expenditure. 
Since the information system of irregularities was established, Member States 
reported 43,712 irregularities, involving some EUR 3,508 million. The total amount 
affected by irregularities detected befo re payment was approximately EUR 282 
million and after payment approximately EUR 3,226 million.  
Under Reg. 595/91, Member States were requ ired to indicate the amounts recovered. 
There is no such requirement under Reg. 1848/2006. This means that from 2007 
onwards, the statistical anne x of the annual report will  no longer contain figures on 
the recovery of unduly paid amounts ba sed on information reported under Reg. 
1848/2006. 
3.1. Reporting discipline 
Reg. 1848/2006 came into force on 1 Janua ry 2007. The year 2007 was announced as 
the "zero tolerance year": communications that  did not fulfil the re quirements of Reg. 
1848/2006 would be "refused" and Member States would be asked to forward a new communication to fulfil their obligations. 
Article 3 and article 5 of Reg. 1848/2006 lay down the reporting obligations of 
Member States. The reporting obligations as  stipulated in arti cle 3, paragraph 1, 
 
EN 25   EN letters a – p of Reg. 1848/2006 are used to determine the reporting discipline and the 
level of compliance of the Member Stat es. The focus however, will be on those 
obligations that are crucial for (strategic) analysis. Per topic, a compliance rate will 
be indicated. The compliance rate is base d on a quantitative analysis, which implies 
that the data quality was not yet an important factor to determine the compliance rate. 
Member States should not forget the ma in purpose of forwarding information: to 
enable the Commission to perform risk analyses (see art. 10 Reg. 1848/2006). For 
that purpose, OLAF needs to receive reliable, consistent and complete data and as early as possible.  
3.1.1.  Timely reporting 
Under Reg. 1848/2006 Member States are re quired to report  at the latest
 within 2 
months after the end of the quarter in wh ich an irregularity was the subject of a 
primary administrative or judicial fi nding and/or new information about an 
irregularity that has already been reported becomes known. Member States indicate th e reporting quarter 
and the date of communication. These 2 (two) indicators can be used 
to determine if a Member State 
complied with the rules. 6 Member States failed to comply to forward all communications within the period of 2 months after the "reporting quarter". Table AG1 on the right hand side gives an overview.  
It is however, more interesting to examin e the time gap between the detection and the 
reporting of the irregularity.  
Member States are obliged to indicate the date on which the primary administrative 
or judicial finding on the irre gularity was established on th e basis of art. 3(1) k Reg. 
1848/2006.  
The time gap should be maximum 5 month (3 months (quarter) + 2 months). Table 
AG2 gives per Member State an overview of the time gap between  the discovery of 
the irregularity and the reporting.  
For convenience sake, a time lap of 6 (six) m onths is taken to indicate the level of 
compliance of Member States. Member States reported in total 510 out 1,548 of 
cases timely.  
The average time gap is 1.2 years. For Austri a and Sweden this gap is far above the 
average, 3.4 years and 2.3 years respectiv ely. Irregularities s hould be reported as 
soon as possible, which means immediately after discovery. An average gap of more 
than 1 year is therefore too high.  
Late reporting of an irregular ity could imply that a Member State failed to take all 
necessary actions to limit or to reduce its fi nancial impact. Audits have revealed that reported reported reported reported
in total timel y too late too late
(< 01/12/2007) ( ≥ 01/12/2007) in %
AT 28 27 1 4%
DE 94 1 93 99%
FR 147 111 36 24%
LV 11 3 8 73%SE 15 13 2 13%
SK 25 19 6 24%
total 1.577 1.431 146 9%
Art. 3 (1) Reg. 1848/2006
download 5 Februari 2008MSTABLE AG1
TIMELY REPORTING
BUDGET YEAR: 2007
 
EN 26   EN some Member States wait until recovery pr ocedures are underway before reporting. 
Recovery becomes even more difficult wh en the authorities have informed the 
beneficiary of the contro l results and no immediate recovery action has been 
undertaken.  
For 37 cases Member States needed between 4 and 8 years to repor t an irregularity 
after its discovery. In 29 cases, Member States even needed more than 8 years to report the irregularity after its discovery.  
Table AG2: Time gap between discovery and reporting  
> ½ year > 1 year > 2 year > 3 year > 4 yea r average
total ≤ ½ yea r and and and and and > 8 yea r in compliance
≤ 1 year ≤ 2 year ≤ 3 year ≤ 4 year ≤ 8 year years
BG BG
LU 0 LU
MT 0 MT
RO RO
FI 20 18 1 1 0.4 90% FI
CY 651 0 . 4 8 3 % CY
SI 9711 0 . 4 7 8 % SI
IE 26 17 5 2 1 1 0.8 65% IE
IT 237 152 28 16 9 4 1 27 1.6 64% IT
BE 34 21 8 4 1 0.9 62% BE
FR 1 4 78 03 81 3 7 4 5 1 . 0 5 4 % FR
EL 86 45 21 7 3 10 1.0 52% EL
UK 95 44 25 18 6 1 1 0.9 46% UK
CZ 1 0424 0 . 7 4 0 % CZ
NL 64 19 7 18 18 2 1.4 30% NL
PT 1 9 05 36 67 1 0 . 8 2 8 % PT
HU 1 2345 1 . 1 2 5 % HU
DE 94 15 49 29 1 0.9 16% DE
SK 23 3 6 14 1.9 13% SK
EE 1 62473 1 . 3 1 3 % EE
AT 2 733413 1 21 3 . 4 1 1 % AT
DK 2 025931 1 . 4 1 0 % DK
LT 1 0163 0 . 9 1 0 % LT
LV 11 1 10 0 0.6 9% LV
SE 1 4143213 2 . 3 7 % SE
PL 6 2 32 73 2 1 . 0 5 % PL
ES 335 11 125 140 27 19 13 1.5 3% ES
total 1,548 510 440 393 94 45 37 29 1.2 33% total
Art. 3 (1) k Reg. 1848/2006
download 5 February 2008Table AG2
TIME GAP BETWEEN DISCOVERY AND REPORTING OF IRREGULARITY
budget year 2007
MS MS
 
Prescription has also to be taken into acc ount. A late acting of authorities could lead 
to no follow up, neither administrative nor judicial. 
Last but not least: risk analyses with adde d value can only be provided if information 
is forwarded immediately after the discovery of an irregularity.  
The EU-27 compliance rate is 33%.  
3.1.2.  Electronic format (AFIS/ECR-module 595) 
The system of electronic  reporting of irregular ities, AFIS/ECR-module 595, 
introduced in 2001 for agriculture, has led to  an improvement in data quality and in 
the timeliness of reporting. It has also reduced misunderstandings and 
misinterpretations and has consequently improved compliance with the regulations.  
 
EN 27   EN AFIS/ECR-module 595 is, however, not used by  all Member States. At the end of 
2007, three Member States (Germany39, Spain and Latvia) were  still not using this 
module.  
3.1.3.  Budget year, budget line and product affected 
The obligation to indicate the common market  organisations affected, the sectors and 
products concerned can be found in Art. 3(1) (a) Reg. 1848/2006. 
Expenditure is based on the appropriations fo r a given year. As far as the EAGF and 
EAFRD are concerned, the budget year does not coincide with the calendar year. Therefore, Member States should i ndicate the budget year as well as the 
appropriation in their communications so  that the support measure (budget line) 
affected by the irregularity can be identified.  
Table AG3 gives an overview per Member St ate of the number of cases in which the 
budget year, the budget line and th e product has been indicated. 
Table AG3: budget year, budget line and produc t affected by the irregularities 
MS total year compliance measure compliance product compliance total MS 
BG BG
LU LU
MT MT
RO RO
AT 27 27 100% 27 100% 27 100% 100% AT
CY 6 6 100% 6 100% 6 100% 100% CY
CZ 10 10 100% 10 100% 10 100% 100% CZ
DK 20 20 100% 20 100% 20 100% 100% DK
EE 16 16 100% 16 100% 16 100% 100% EE
HU 12 12 100% 12 100% 12 100% 100% HU
LT 10 10 100% 10 100% 10 100% 100% LT
LV 11 11 100% 11 100% 11 100% 100% LV
PL 62 62 100% 62 100% 62 100% 100% PL
SE 14 14 100% 14 100% 14 100% 100% SE
SI 9 9 100% 9 100% 9 100% 100% SI
IT 237 229 97% 237 100% 237 100% 99% IT
SK 23 22 96% 23 100% 23 100% 99% SK
FR 147 128 87% 147 100% 147 100% 96% FR
IE 26 20 77% 26 100% 26 100% 92% IE
EL 86 65 76% 86 100% 86 100% 92% EL
PT 190 130 68% 190 100% 190 100% 89% PT
UK 95 64 67% 95 100% 95 100% 89% UK
NL 64 28 44% 64 100% 64 100% 81% NL
FI 20 7 35% 20 100% 20 100% 78% FI
BE 34 6 18% 34 100% 34 100% 73% BE
ES 335 0 0% 335 100% 335 100% 67% ES
DE 94 0 0% 11 12% 34 36% 16% DE
total 1.548 896 58% 1.548 100% 1.548 100% 86% totalTABLE AG3 MEASURE
BUDGET YEAR 2007
Art. 3(1) a Reg. 1848/2006
download 5 February 2008BUDGET YEAR, PRODUCT AND MEASURE
 
A large number (11) of Member States co mply fully with this obligation. For all 
other Member States, attention needs to be  paid to indicating the budget year and the 
measure affected.  
                                                 
39 On 7 April 2008, Germany and OLAF agreed during a high level meeting on an IMS-pilot (IMS = 
Irregularity Management System). IMS is a web ba sed application to report  irregularities which will 
replace the current electronic reporting module. The pilot will start in summer 2008. This will allow a 
considerable improvement of the reporting of irregularities. 
 
EN 28   EN Member States with a low compliance ra te are Germany (16%) and Spain (67%). 
These are also the 2 Member States th at are not using AFIS/ECR-module 595 to 
report irregularities40.  
The EU-27 compliance rate is 86%. 
3.1.4.  Year of detection vs year reported 
Member States are obliged to report the date , or dates, on which the irregularity was 
committed and the date of discovery of th e irregularity. Art. 3 (1) i Reg. 1848/20016 
obliges Member States to indicate the peri od during which, or th e moment at which, 
the irregularity took place. Member States  are obliged to indicate the date of 
discovery on the basis of art. 3 (1) k Reg. 1848/2006. Table AG4 shows the time gap 
between the date on which the irregularity took place, the discovery and the reporting 
of the irregularity.  
Table AG 4: Time gap between irregularity, discovery and reporting 
average
time
gap
date no date error
MS Total indicated indicated date compliance days years days years MS 
BG BG
LU LU
MT MT
RO RO
CY 6 6 100% 166 0,5 130 0,4 0,8 CY
IE 26 12 14 2 46% 373 1,0 274 0,8 1,8 IE
SI 9 9 100% 559 1,5 151 0,4 1,9 SI
LT 10 10 100% 454 1,2 338 0,9 2,2 LT
PL 62 61 1 98% 479 1,3 365 1,0 2,3 PL
CZ 10 10 100% 592 1,6 260 0,7 2,3 CZ
FI 20 15 5 75% 719 2,0 139 0,4 2,3 FI
HU 12 11 1 92% 579 1,6 414 1,1 2,7 HU
SK 23 23 100% 326 0,9 679 1,9 2,8 SK
UK 95 94 1 1 99% 712 2,0 314 0,9 2,8 UK
EE 16 16 100% 633 1,7 487 1,3 3,1 EE
NL 64 64 2 100% 764 2,1 497 1,4 3,5 NL
FR 147 147 100% 915 2,5 350 1,0 3,5 FR
DK 20 20 100% 767 2,1 524 1,4 3,5 DK
LV 11 11 1 100% 1.108 3,0 218 0,6 3,6 LV
PT 190 73 117 38% 1.108 3,0 304 0,8 3,9 PT
BE 34 34 100% 1.218 3,3 340 0,9 4,3 BE
DE 94 94 100% 1.229 3,4 338 0,9 4,3 DE
ES 335 335 100% 1.206 3,3 548 1,5 4,8 ES
SE 14 14 100% 1.377 3,8 835 2,3 6,1 SE
EL 86 30 56 35% 1.929 5,3 369 1,0 6,3 EL
AT 27 27 100% 1.158 3,2 1.230 3,4 6,5 AT
IT 237 237 100% 1.974 5,4 592 1,6 7,0 IT
total 1.548 1.353 195 6 87% 1.171 3,2 450 1,2 4,4 total
art. 3 (1) i, k Reg. 1848/2006 TIME GAP BETWEEN IRREGULARI TY, DISCOVERY AND REPORTING
BUDGET YEAR 2007
download 5 February 2008indication of between between
date on which the irregularity took place irregularity and discovery discovery and reportingTABLE AG4
CASES average time ga p average time gap
 
The table shows that alt hough the reporting discipline of Member States has 
improved, it still needs atten tion. In 195 cases, Member St ates did not indicate the 
date on which the irregularity took place.  Especially Greece, Finland, Ireland and 
Portugal should pay particular attention to this obligation. In 6 cases Member States 
indicated an error value.  
The average time gap between an irregularit y being committed and its discovery is 
3.2 years; the average time gap between the discovery of an  irregularity and 
reporting it to the Commission is 1.2 year. As already mentioned, irregularities 
                                                 
40 See footnote 39.  
 
EN 29   EN should be reported as soon as possible, wh ich means immediately after discovery. An 
average time gap of more than 1 year is th erefore, too high. The system of electronic 
reporting offers the possibility to report an  irregularity as soon as it is discovered. 
The average time gap between an irregularity being committed and it being reported 
to the Commission is 4.4 years. For Aust ria, Greece, Italy and Sweden counts that 
the average gap is more than 6 years.  
One cause for concern is that Member States are reporting a relatively high 
proportion of cases (approximately 30%) in wh ich the irregularity or fraud took place 
more than four (4) years ago, i.e. before 2003. This is of particular concern as the 
chances of recovery decreases with time.  
Member States were unable to indicate th e year(s) in which the irregularity took 
place in 201 cases (195 (blank) + 6 (error)).  
In 91 cases Member States reported that the irregularity starte d or took place before 
1998. Spain and Italy were responsible for 37 and 41 of these cases respectively.  
3.1.5.  Practices employed (Art . 3 (1) (e) Reg. 1848/2006) 
Art. 3(1) (e) Reg. 1848/2006 contains the oblig ation to report the practices employed 
in committing the irregularity (modus ope randi). The practices employed can be 
indicated by code as well as with text. The codes are in a pick list that contains a 
collection of different type s of irregularity. The reporti ng module also offers the 
possibility to use written text to descri be more precisely th e practices employed.  
Only Germany did not use codes to indica te the type of irregularity. All other 
Member States indicated the type of irregular ity by code. The latte r indicates a EU-
27 compliance level of 94%. Finland however, reports code 999 (“other 
irregularities”) in a rather hi gh percentage (6 0%) of cases.  
Member States also described in more detail the practises employed in committing 
the irregularity. A more precise descripti on of the irregularity helps to improve the 
quality of the analysis therefore Member  States are requested to forward more 
detailed information on the modus operandi . Copying the findings of the audit report 
directly into the reporting module would already improve th e quality of the reporting. 
The compliance rates of Italy (26%), Irel and (35%) and the Netherlands (50%) are 
rather low. 
The EU-27 compliance rate is 81%. 
3.1.6.  Suspected fraud (Art. 3 (1) (f) Reg. 1848/2006) 
Art. 3 (1) (f) Reg. 1848/2006 obliges Member  States to indicate if the practice 
amounts to a suspected fraud or not. Member States classified approximately 71% of 
the reported cases. Table AG5 gives an over view of the classification per Member 
State and by Member State. Me mber States that did not clas sify all or part of their 
reported cases are: 
 
EN 30   EN Spain compliance level 0% 
Germany41 compliance level 0% 
Belgium compliance level 18%  The Netherlands compliance level 42% Finland compliance level 65% Germany and Spain together reported 429 ca ses which is approxi mately 28% of the 
total number of cases.  
Table AG5: Classification per Me mber State and by Member State 
MS total IRQ2 IRQ3 IRQ5 no classification compliance MS 
BG BG
LU LU
MT MT
RO RO
AT 27 27 100% AT 0%
CY 6 6 100% CY 0%
CZ 10 10 100% CZ 0%
DK 20 20 100% DK 0%
EE 16 16 100% EE 0%
EL 86 82 4 100% EL 5%
FR 147 142 1 4 100% FR 3%
HU 12 11 1 100% HU 8%
IT 237 222 15 100% IT 6%
LT 10 10 100% LT 0%
LV 11 4 7 100% LV 64%
PL 62 6 56 100% PL 90%
PT 190 186 4 100% PT 2%
SE 14 14 100% SE 0%
SI 9 9 100% SI 0%
SK 23 23 100% SK 0%
UK 95 83 11 1 99% UK 12%
IE 26 25 1 96% IE 0%
FI 20 13 7 65% FI 0%
NL 64 21 6 37 42% NL 22%
BE 34 6 28 18% BE 0%
DE 94 94 0% DE
ES 335 335 0% ES
total 1.548 936 105 4 503 68% total 10%
Art. 3 (1) f Reg. 1848/2006
download 5 February 2008IRQ5 = established fraudIRQ2 = irregularity
IRQ3 = suspicion of fraud
blank = not classified by Member Statesuspected or 
established 
fraud in %TABLE AG5
CLASSIFICATION OF THE IRREGULARITY
BUDGET YEAR 2007
 
Reg. 1848/2006 introduced the obligation to id entify the suspected fraud cases. The 
average level of suspected fraud cases is  10%, calculated on the basis of the number 
of classified cases. In the right-hand colu mn of table AG5 an overview is given per 
Member State. 
To avoid misunderstandings: the rate of 10% is based solely on the classification by 
Member States. Cases that have not been cl assified have not been  taken into account. 
The EU-27 compliance rate is 68%. 
                                                 
41 Germany will classify its cases when it starts to use IMS (summer 2008). See footnote 39. 
 
EN 31   EN 3.1.7.  Legal/natural persons identification 
Member States are also required to give detailed information on the identity of the 
natural and legal persons involved. Art.  3(1) l Reg. 1848/2006 states that the 
identities of the natural and/or legal persons  involved, or of other entities which have 
taken part in the commission of th e irregularity, should be indicated. 
The reporting of personal data, including addr esses, still needs the attention of some 
Member States. In particular Finland, Spai n and Ireland need to pa y attention to this 
obligation.  
Germany42 informed the Commission about restri ctions in its national legislation 
with respect to the reporting of personal da ta. Germany is the only Member State that 
does not report any personal data. Neverthe less, in 3 cases Germany did forward the 
names of the natural persons involved. Table AG6 provides an overview of the 
reporting of personal data. 
Table AG6: personal data reported 
CASES
total indicated compliance indicated compliance indicated compliance indicated compliance
BG BG
LU LU
MT MT
RO RO
AT 27 27 100% 27 100% 27 100% 27 100% 100% AT
BE 34 34 100% 34 100% 34 100% 34 100% 100% BE
CY 6 6 100% 6 100% 6 100% 6 100% 100% CY
CZ 10 10 100% 10 100% 10 100% 10 100% 100% CZ
DK 20 20 100% 20 100% 20 100% 20 100% 100% DK
SI 9 9 100% 9 100% 9 100% 9 100% 100% SI
LV 11 11 100% 11 100% 11 100% 11 100% 100% LV
FR 147 147 100% 136 93% 147 100% 147 100% 98% FR
UK 95 95 100% 95 100% 84 88% 95 100% 97% UK
SE 14 14 100% 12 86% 14 100% 14 100% 96% SE
HU 12 12 100% 11 92% 11 92% 12 100% 96% HU
PT 190 190 100% 170 89% 170 89% 170 89% 92% PT
PL 62 57 92% 57 92% 57 92% 57 92% 92% PL
SK 23 23 100% 11 48% 23 100% 22 96% 86% SK
EL 86 86 100% 77 90% 31 36% 86 100% 81% EL
LT 10 10 100% 9 90% 2 20% 10 100% 78% LT
NL 64 57 89% 42 66% 42 66% 57 89% 77% NL
EE 16 16 100% 16 100% 15 94% 1 6% 75% EE
IT 237 237 100% 236 100% 3 1% 234 99% 75% IT
IE 26 26 100% 11 42% 3 12% 12 46% 50% IE
ES 335 335 100% 0 0% 0 0% 0 0% 25% ES
FI 20 5 25% 0 0% 0 0% 0 0% 6% FI
DE 94 3 3% 0 0% 0 0% 0 0% 1% DE
TOTAL 1,548 1,430 92% 1,000 65% 719 46% 1,032 67% 68% TOTAL
Art. 3 (1) l Reg. 1848/2006
download 5 February 2008TABLE AG6
PERSONAL DATA
budget year 2007
MSNAME STREET POST CODE CITY overall 
complianceMS
 
Germany, Finland and the Netherlands onl y reported personal data in a limited 
number of cases. This does not mean howev er, that all other Member States fully 
comply with Reg. 1848/2006. Member States should also remember to indicate the 
complete address of the persons involved. Th e post code is particularly useful in 
helping to identify the regions  and areas that are more affected by irregularities. 
The EU-compliance rate is 68%. 
                                                 
42 For this issue possible solutions were also discussed in the meeting on 8 April 2008. See footnote 39. 
 
EN 32   EN 3.1.8.  Summary 
Table AG7 contains an overview of the compliance rate per reporting obligation. 
Member States are ranked in order of compliance. The table focuses on reporting 
obligations that have a high added value for analysis purposes. The letters above the columns refer to the reporting obligations th at are contained in Art. 3 (1) of Reg. 
1848/2006.  
Table AG7: compliance per Member State year 2007 
timely measure practices classification date personal
reporting affected employed committed data compliance
1a e f i l
BG  BG
LU  LU
MT MT
RO  RO
CY 83% 100% 100% 100% 100% 100% 97% CY
SI 78% 100% 100% 100% 100% 100% 96% SI
CZ 40% 100% 100% 100% 100% 100% 90% CZ
FR 54% 96% 90% 100% 100% 98% 90% FR
UK 46% 89% 99% 99% 95% 97% 88% UK
HU 25% 100% 100% 100% 92% 96% 85% HU
DK 10% 100% 100% 100% 100% 100% 85% DK
LV 9% 100% 100% 100% 100% 100% 85% LV
AT 11% 100% 96% 100% 100% 100% 85% AT
SK 13% 99% 100% 100% 100% 86% 83% SK
SE 7% 100% 93% 100% 100% 96% 83% SE
PL 5% 100% 100% 100% 98% 92% 83% PL
LT 10% 100% 100% 100% 100% 78% 81% LT
EE 13% 100% 100% 100% 100% 75% 81% EE
IT 64% 99% 26% 100% 100% 75% 77% IT
BE 62% 73% 91% 18% 100% 100% 74% BE
EL 52% 92% 79% 100% 35% 81% 73% EL
PT 28% 89% 86% 100% 38% 92% 72% PT
FI 90% 78% 90% 65% 75% 6% 67% FI
IE 65% 92% 35% 96% 46% 50% 64% IE
NL 30% 81% 50% 42% 100% 77% 63% NL
ES 3% 67% 99% 0% 100% 25% 49% ES
DE 16% 16% 100% 0% 100% 1% 39% DE
total 33% 86% 81% 68% 87% 68% 70% total
Art. 3 (1) a - p Reg. 1848/2006
download 5 February 2008table AG7
COMPLIANCE
budget year 2007
MS MS 
 
Bulgaria, Luxembourg, Malta, and Romania had no irregularities to report and are 
therefore considered to be 100% compliant. The rates of Bulgaria, Luxembourg, 
Malta and Romania have not been take n into account to calculate the EU-27 
compliance rate. 
In general, Member States do try to co mply with Reg. 1848/2006 but there is still 
room for improvement. Timely reporting will lead to a higher compliance rate by a 
large number of Member States. 
Germany is the Member State with the lowest  compliance rate, partly due to the fact 
that no personal data was forwarded and due to the lack of other basic information 
such as budget lines or measures affected and the classification of  the irregularities. 
Member States with low compliance rates are Germany (39%) and Spain (49%). 
Both of them do not use the system of electronic reporting as provided by OLAF. 
The EU-27 compliance rate is 70%. 
 
EN 33   EN 3.2. General Trends 
This analysis is a descriptive analysis, the aim of which is to pr ovide feedback to the 
Member States on the communications that were received by the Commission in the 
budget year 2007 and to give an overa ll view for the period 1971 - 2007.  
One should bear in mind that Member Stat es must only inform the Commission of 
irregularities involving more than EUR 10,000.  
The threshold of EUR 10,000 was introdu ced by Reg. 1848/2006 that came into 
force on 1 January 2007. Under Reg. 595/91, the threshold was EUR 4,000. The increase of the threshold from EUR 4,000 to EUR 10,000 has to be taken into 
account when this report is compared w ith report of the pr evious years. The 
descriptive analysis of this report therefore, cannot be ri ght away compared with the 
results of previous years.  
Bulgaria, Luxembourg, Malta and Romania di d not report any irre gularity in 2007.  
The budget year 2007 runs from 16 October 2006 – 15 October 2007. 
3.2.1.  Amounts involved 
The total number of irregul arities reported in the budget year 2007 was 1,548. These 
1,548 cases amount to approximately EU R 155 million. Table AG8 provides an 
overview per Member State of the irregular ities reported and the amounts affected by 
these irregularities in the budget year 2007. 
Table AG8: Irregularities reported in the budget year 2007 
reported no irregularity irregularity total amount affected detected detected
(IRQ 0) expenditure by irregularit y before payment after payment
AT 28 1 27 430,748 401,511 31,771 369,741 AT
BE 35 1 34 14,044,367 13,866,333 64,102 13,802,231 BE
BG BG
CY 6 0 6 232,013 83,362 67,932 15,430 CY
CZ 10 0 10 103,168 103,168 28,038 75,130 CZ
DE 94 0 94 12,176,901 2,854,876 193,951 2,660,925 DE
DK 20 0 20 16,195,943 15,257,984 4,693,325 10,564,659 DK
EE 17 1 16 201,670 83,985 0 83,985 EE
EL 90 4 86 4,845,037 4,185,084 601,483 3,583,601 EL
ES 335 0 335 88,843,891 23,609,346 48,542 23,560,804 ES
FI 20 0 20 412,855 338,508 0 338,508 FI
FR 147 0 147 6,589,053 32,637,233 34,324 32,602,909 FR
HU 13 1 12 601,932 233,052 0 233,052 HU
IE 28 2 26 490,043 490,043 119,233 370,810 IE
IT 237 0 237 43,601,904 43,063,210 256,927 42,806,283 IT
LT 10 0 10 321,847 232,242 102,322 129,920 LT
LU LU
LV 11 0 11 141,835 141,835 0 141,835 LV
MT MT
NL 64 0 64 26,748,104 4,349,283 696,042 3,653,241 NL
PL 64 2 62 2,335,930 1,099,347 911,944 187,403 PL
PT 199 9 190 33,740,566 5,570,368 15,881 5,554,487 PT
RO RO
SE 15 1 14 839,098 284,714 3,103 281,611 SE
SI 9 0 9 232,894 232,894 0 232,894 SI
SK 25 2 23 2,206,415 1,707,309 0 1,707,309 SK
UK 100 5 95 15,740,236 4,167,640 45,782 4,121,858 UK
total 1,577 29 1,548 271,076,449 154,993,326 7,914,703 147,078,624 totalamounts in €
download 5 February 2008casesbudget year 2007irregularities reported and amounts affected
MS MS
Art. 3(1) m, n Reg. 1848/2006Table AG 8
 
Member States reported initially 1,577 cases. During 2007, 29 cases were 
reclassified as “non-ir regularity” (IRQ 0).  
 
EN 34   EN The number of reported cases decreased in 2007 by more than 50% compared with 
2006. The decrease can be explained for a la rge part by the introduction of the new 
threshold of EUR 10,000.  There is however a remarkable increase of  the amounts affected by the irregularities. 
It is the highest amount aff ected since 2004 (see annex 11). 
Chart AG1: Irregularities communica ted by Member States (1971-2007) 
05001,0001,5002,0002,5003,0003,5004,000
1971
19721973
1974
19751976
1977
19781979
1980
19811982198319841985
1986
198719881989199019911992
1993
19941995199619971998
1999
20002001200220032004
2005
20062007Cases
050100150200250300350400450500
Amounts in millions €
cases amounts in € amounts in € -/- peak trend line 
Chart AG1 reflects these trends. The “amounts in EUR” line shows two peaks, one in 
1994, the other in 2000. These peaks are the result of three Italian cases in 1994 and 
two Italian cases in 2000. Leaving aside th ese exceptional cases, since 1994 there has 
been a clear steady downward trend in the total amounts affected by irregularities. 
This can be explained by the introduction of the direct aid/payment section, the 
introduction of the integrated administ ration and control system (IACS) and the 
move towards direct aid and paym ents decoupled from production.  
The amounts affected by irregularities increa sed in 2007 with almost 80%. The total 
amount affected by irregularities wa s about EUR 155 million, as against 
approximately EUR 87 million in 2006. Howe ver, it should be noted that two (2) 
cases notified by France repres ent 31% of this increase. 
In 2007, the countries which reported the hi ghest number of cases were Spain, Italy, 
Portugal and France with 335, 237, 190 and 147 cases respectively.  
In monetary terms, Italy reported the highe st amounts affected by irregularities, more 
than EUR 43 million, followed by France  which reported a total amount of 
approximately EUR 32.6 million. France however , reported 2 cases in which the total 
amount affected was approximately EUR 27 million. 
Annex 12 gives an overview for each Member State. 
3.2.2.  Impact on the budget 
Table AG9 provides an overview of the to tal expenditure in 2007 per budget chapter. 
The total expenditure is appr oximately EUR 47.3 billion.  
 
EN 35   EN Table AG9: Expenditure and i rregularities per budget chapter43 
total amount total amount irregularity
expenditure irregularity in % of
in € in € expenditure
050201 Cereals -140,940,536 1,497,405 -1.1%
050202 Rice -701,984 253,038 -36.0%
050203 non-Annex 1 products 185,480,304 1,883,729 1.0%
050204 Food programmes 250,688,751 306,371 0.1%
050205 Sugar 456,103,298 27,244,937 6.0%
050206 Olive oil 64,378,045 4,154,116 6.5%
050207 Textile plants 20,028,255 335,953 1.7%
050208 Fruit and vegetables 1,250,913,067 32,139,133 2.6%
050209 Products of the wine-growing sector 1,452,857,308 3,785,331 0.3%
050210 Promotion 47,790,781 499,961 1.0%
050211 Other plant products/measures 363,594,426 4,312,504 1.2%
050212 Milk and milk products 638,469,656 38,731,014 6.1%
050213 Beef and veal 98,405,333 11,720,317 11.9%
050214 Sheepmeat and goatmeat 0 910,893
050215 Pigmeat, eggs and poultry, bee-keeping and other animal products 174,659,430 1,478,295 0.8%
050216 Sugar Restructuring Fund 551,426,309 0 0.0%
050301 Decoupled direct aids 30,373,161,575 1,060,474 0.0%
050302 Other direct aids 6,263,815,742 1,118,007 0.0%
050303 Additional amounts of aid 434,037,089 0 0.0%
050304 Ancillary direct aids (reliquats, small producers, agrimonetary aids, etc.) -371,366 11,031 -3.0%
050401Rural development financed by the EAGGF Guarantee Section - Completion of earlier 
programme (2000 to 2006 )-29,957,929 21,502,442 -71.8%
050404Transitional Instrument for the financing of rural development by the EAGGF Guarantee 
Section for the new Member States2,016,076,720 0 0.0%
050405Rural development financed by the European Agricultural Fund for Rural Development 
(EAFRD ) (2007 to 2013 )2,451,057,379 0 0.0%
Combination of several support measures affected by irregularities was indicated by MS 0 2,048,375
total 46,920,971,655 154,993,326 0.3%Table AG9
EXPENDITURE AND IRREGULARITIES PER BUDGET CHAPTER
budget year 2007
budget 
chapterdescription
download 4 April 2008
total amount of expenditure updated on 16 May 2008  
The highest expenditure concerned “decoupl ed direct aids” and was about EUR 30.4 
billion which is 65% of the total expenditure in  the agricultural sector. “Decoupled 
direct aids” (chapter 05 03 01) was introdu ced in 2006. Member States reported for a 
total amount affected by irregularities  of approximately EUR 1.1 million. France 
received the highest sum of approxima tely EUR 5.7 billion, followed by Germany 
that received approximately EUR 5.4 billion. France reported in 2007 no 
irregularities concerning “d ecoupled direct aids”. Germ any reported 30 cases with a 
total amount affected of approximate ly EUR 0.5 million. The low number of 
irregularities can be explained by the fact  that the expenditure per beneficiary does 
not exceed the threshold of EUR 10,000 in a large number of cases. 
The highest amount affected by irregularitie s were reported for the budget chapters 
concerning “milk and milk products” (05 02 12 ), “fruit and vegetables” (05 02 08), 
“sugar” (05 02 05) and “rural developm ent – guarantee section (05 04 01, 05 04 04 
and 05 04 05) with a total amount affect ed of EUR 38.7 million, EUR 32.1 million, 
EUR 27.2 million respectiv ely EUR 21.5 million. 
In percentage of the total expenditure, the highest amounts were reported for the 
budget chapter concerning “beef and veal” (05 02 13) with 11.9%. 
Also of interest is the level of irregul arities as a percenta ge of agricultural-
expenditure per Member State. Belgium has the highest percentage with 1.62%, 
followed by Denmark, Italy and Portugal with 1.40%, 0.82% and 0.68% respectively. Annex 12 gives an overview of these percentages.  
Some Member States report mo re irregularities than others . It is possible that some 
Member States are underreporting. Ta ble AG10 shows the relationship, in 
percentages, between the total amount allocated per Member State, the total amount 
affected by irregularities per Member States and the total number of irregularities per 
Member State.  
                                                
 
43 Information provided by DG AGRI. Negative amounts are caused by corrections made in 2007. 
 
EN 36   EN Member States are ranked in order of their budget allocation, starting with the 
Member State receiving the highest amount . France received the highest amount 
(EUR 9.7 billion) whilst Bulgaria received  the lowest amount (EUR 0.2 million). 
Table AG10: total agricultural expenditure and irregularities 
in % of total in % of total in % of
total total amount total amount cases total cases
expenditure affected affected reported
FR 9,735,649,588 20.7% 32,637,233 21.1% 147 9.5% FR
DE 5,974,923,975 12.7% 2,854,876 1.8% 94 6.1% DE
ES 5,918,501,718 12.6% 23,609,346 15.2% 335 21.6% ES
IT 5,222,263,584 11.1% 43,063,210 27.8% 237 15.3% IT
UK 4,341,392,612 9.3% 4,167,640 2.7% 95 6.1% UK
EL 2,879,299,650 6.1% 4,185,084 2.7% 86 5.6% EL
PL 2,297,395,215 4.9% 490,043 0.3% 26 1.7% PL
IE 1,723,322,002 3.7% 103,168 0.1% 10 0.6% IE
NL 1,144,013,906 2.4% 1,099,347 0.7% 62 4.0% NL
DK 1,086,244,832 2.3% 4,349,283 2.8% 64 4.1% DK
SE 950,822,180 2.0% 15,257,984 9.8% 20 1.3% SE
BE 853,634,814 1.8% 284,714 0.2% 14 0.9% BE
AT 826,654,840 1.8% 13,866,333 8.9% 34 2.2% AT
PT 821,932,364 1.8% 5,570,368 3.6% 190 12.3% PT
FI 808,532,115 1.7% 401,511 0.3% 27 1.7% FI
HU 651,132,609 1.4% 338,508 0.2% 20 1.3% HU
CZ 539,853,347 1.2% 233,052 0.2% 12 0.8% CZ
LT 324,411,585 0.7% 1,707,309 1.1% 23 1.5% LT
SK 302,271,528 0.6% 232,242 0.1% 10 0.6% SK
SI 168,520,479 0.4% 232,894 0.2% 9 0.6% SI
LV 165,727,510 0.4% 141,835 0.1% 11 0.7% LV
EE 79,073,910 0.2% 0 0.0% 0 0.0% EE
LU 46,742,889 0.1% 83,985 0.1% 16 1.0% LU
CY 45,447,412 0.1% 83,362 0.1% 6 0.4% CY
RO 6,893,688 0.0% 0 0.0% 0 0.0% RO
MT 6,136,125 0.0% 0 0.0% 0 0.0% MT
BG 177,176 0.0% 0 0.0% 0 0.0% BG
total 46,920,971,655 100.0% 154,993,326 100.0% 1,548 100.0% totalbudget year 2007
MSexpenditure irregularities irregularities
MSTable AG10
EXPENDITURE AND IRREGULARITIES PER MS
 
Together France, Germany, Spain, Italy a nd the United Kingdom receive more than 
66% of the total agricultural budget, i.e. approximately EUR 31.2 billion. In 2007, France received more than EUR 9.7 bill ion. Germany and Spain received both 
almost EUR 6.0 billion. Italy received mo re than EUR 5.2 million and the United 
Kingdom more than EUR 4.3 billion.  
In 2007, France received approximately EU R 9.7 billion, which is approximately 
20.7% of the total agricultural budget. The re ported French cases were responsible 
for 21.1% of the amounts affected by irre gularities. In the period 2004-2006, France 
reported a relatively low amount affected  by irregularities. The relatively high 
percentage of 2007 can be explained by 2 cas es in which the total amount affected 
was approximately EUR 27.5 million. It con cerned in both cases the product butter 
(CN-code 0405) and cases for which France we nt to court (penal procedure) in the 
period 1999 – 2000. These cases should have been reported in 2000. If these cases 
would not be taken into account, the French  cases would only be responsible for 4% 
of the amounts affected by i rregularities. The number of  reported irregularities by 
France is also rather low: 9.5%. This rather low rate co uld indicate underreporting. 
The latter counts also for Member States  as Germany and Ireland. The rather low 
percentage of cases reported could indicate underreporting.  
A relatively high number of cases and hi gh total amount is reported by Portugal, 
Spain and Italy. Portugal received 1.8% of the total agricultural-budget and is 
 
EN 37   EN responsible for 3.6% of the total amounts affected by irre gularities a nd 12.3% of the 
total number of reported irregularities. Sp ain received 12.6% of the total agricultural-
budget and reported 15.2% of the total amount s affected by irregularities and 21.6% 
of the total number of repor ted irregularities. Italy rece ived approximately 11.1% of 
the total agricultura l budget and reported 27.8% of the total amounts affected by 
irregularities and 15.3% of  the total number of reported irregularities. 
Spain and Portugal reported also in the period 2004-2007 a relatively high number of 
irregularities as well as a relatively high amount aff ected by irregularities.  
3.2.3.  Method of detection 
Member States are obliged to indicate th e manner in which the irregularity was 
discovered (see art. 3(1)g Reg. 1848/2006). To  indicate the manner, Member States 
have the possibility to indicate the reas on why an audit, check or scrutiny was 
performed and how it was performed.  The common agricultural policy (CAP) was re formed in 1992 based on a system of 
direct aid for farmers, which significantly  increased the number of beneficiaries but 
also the risk of irregularity and fraud. The integrated administration and control 
system (IACS) was therefore introduced  by Council Regulation (EEC) No 3508/92 
to meet those risks. The system consists of five elements: 
1. a computerised database 
2. an identification system for agricultural land parcels,  3. a system of identification a nd registration of animals,  
4. aid applications,  5. an integrated system for administrative controls and field inspections.  In the EU, all IACS aid a pplications are processed and checked administratively. 
These checks are complemented by on-the-spot controls, selected on the basis of risk 
analysis. In the budget year 2007, almost  85% of agricultural expenditure under 
EAGF was processed through IACS.  
Member States indicated that in 54 cases the irregularity was discovered thanks to a 
check or audit performed on basis of IACS. This is approximately 3% of the total 
number of reported irregularities. In 413 cas es, Member States did not indicate the 
reason why an audit, check or scrutiny was performed, which is approximately 27% 
of the total amount of reporte d irregularities. It concerne d mainly cases reported by 
Germany, Spain and The Netherlands. Table AG11 gives an overview. 
 
EN 38   EN Table AG11: Reasons for performing an audit, control, scrutiny 
reason for performing a control, audit, scrutiny etc. alone *) shared **) total in %
blank (no information given by MS) 413 27%
administrative enquiry 173 48 221 14%other other 206 8 214 14%judicial enquiry 153 22 175 11%scrutiny on basis of Reg. 4045/1989 129 18 147 9%routine 104 30 134 9%random check 81 18 99 6%comparison of data 58 9 67 4%risk anal
ysis 45 16 61 4%
scrutiny on basis of Reg. 3508/1992 & 1782/2003 (IACS) 39 15 54 3%
tip from informant, whistleblower, etc. 22 9 31 2%spontaneous confession 13 4 17 1%control on basis of Reg. 386/1990 8 1 9 1%information and/or request from EU-body 3 5 8 1%other described occassions 3 13 16 1%
total 1037 216 1666
download 5 February 2008Table AG11
DETECTION OF THE IRREGULARITY
budget year 2007
Art. 3(1) g Reg. 1848/2006**) shared = more than 1 reason for performing a control etc.was indicated*) alone = only 1 reason for performing a control etc. was indicated
 
Member States are also under an obligation to perform certain controls on the basis 
of Council Regulation (EEC) No 4045/89 and Council Regulation (EEC) No 386/90.  
Council Regulation (EEC) No 4045/89 relates to the scrutiny of the commercial 
documents of entities receiving or making paymen ts relating directly or indirectly to 
the system of financing by the EAGF in order to ascertain whether transactions 
forming part of the system of financing by the EAGF have actually been carried out 
and have been executed correctly.  
Member States indicated that  in 147 cases the irregularity was discovered thanks to 
an audit performed on basis of Reg. 4045/1989. This is approximately 9% of the total 
number of reporte d irregularities. 
Council Regulation (EEC) No 386/90 lays do wn certain procedures for monitoring 
whether operations conferring entitlement to the payment of refunds on, and all other 
amounts in respect of, export transactions  have been actually carried out and 
executed correctly. 
Member States indicated that in 9 cases the irregularity was discovered thanks to a 
check performed on basis of Reg. 386/1990. Th is is approximately 1% of the total 
number of reporte d irregularities. 
In 175 cases, the reason to perform a control was based on a judicial enquiry. This is 
approximately 10% of the total amount of reported irregularities. Member States 
classified 15 of these cases as su spected fraud or established fraud.  
In table AG11 an overview was given of the reason why a cont rol was performed. 
Table AG12 provides an overview how an a udit, check or scrutiny was performed.  
 
EN 39   EN Table AG12: type/method of control 
type of control, audit, scrutiny etc. alone shared *) total in %
other other 444 83 527 34%
control of accounts 256 188 444 29%control on the premises of the company 273 39 312 20%control of documents 118 127 245 16%ex post control 14 165 179 12%face vet / documentary check 53 11 64 4%initial enquiry 46 5 51 3%on the spot control of achievement of project or action 35 6 41 3%other Customs controls, checks, audits, scrutinies etc. 29 9 38 2%anal
ysis of samples 20 11 31 2%
control of production 11 1 12 1%
physical check of goods 3 8 11 1%preventive check 6 2 8 1%control of movement 1 3 4 0%control of products 1 0 1 0%teledetection 0 0 0 0%
total 1310 658 1968
download 5 February 2008Table AG12
DETECTION OF THE IRREGULARITY
budget year 2007
Art. 3(1) g Reg. 1848/2006*) alone = only 1 type of control etc. was indicated
**) shared = more than 1 type of control etc.was indicated
 
Member States indicated in 527 cases “oth er other”, which is 34% of the total 
amount of reported irregularities.  In 29% of the cases, the control was perf ormed via a control of the accounts of the 
persons involved.  According to the notifications of the Member  States, teledetection did not lead to the 
discovery of any irregularities.  
3.2.4.  Types of irregularity 
Member States are also obliged to repor t and to describe the practices employed 
(modus operandi) of the detected irregular ity (see art. 3(1)e Reg. 1848/2006). A clear 
overview of the (most recently used) modus  operandi in committing irregularities 
will support the Member States and the Comm ission in their fight against fraud and 
help to reduce the numbe r of irregularities.  
The Annual Report 2005 and the Annual Repor t 2006 noted that “almost all Member 
States seem to have developed a prefer ence for one or two codes which permit no 
detailed breakdown”. The latter was a react ion from the Member States to a first 
attempt by OLAF to estimate the level of (suspected) fraud in the agricultural sector on the basis of the types of irregularity and modus operandi reported. By indicating 
only one or two (general) codes, it becam e more difficult to estimate the level of 
(suspected) fraud. Member States were request ed to pay some attention to this point 
especially where codes such as 499, 699 and 999 were reported. These codes indicate “other irregularities” and do not he lp to identify the modus operandi.  
Member States have improved their reportin g of the type of ir regularity and the 
modus operandi. The EU-27 compliance rate on type of irregularity is 94%.  
 
EN 40   EN In 6% of the cases, no code was indicated. It concerns cases reported by Germany. 
OLAF has tried to “translate” the someti mes basic descriptions in the German 
communications into codes. Finland used th e code 999 (= other ir regularities) in 60% 
of its cases.  
Table AG13 gives an overview of the types of irregularity most frequently reported 
by Member States. The types of irre gularity are clustered by main group. 
Table AG13: Irregularities and frequen cy of used types of irregularities 
number in % amount in € in %
1600 (non-)action 627 41% 50,579,560 33%
1500 product, species and/or land 301 19% 65,892,038 43%
1400 documentary proof 192 12% 9,763,043 6%
1100 request for aid 144 9% 8,159,166 5%
1700 customs - movement of goods 53 3% 11,473,190 7%
1300 accounts and records 41 3% 1,264,547 1%
1200 beneficiary 38 2% 935,218 1%
1900 other 35 2% 1,223,232 1%
 combinations 117 8% 5,703,332 4%
 total 1,548 100% 154,993,326 100%
Art. 3(1)g Reg. 1848/2006
download 5 February 2008Table AG13
TYPE OF IRREGULARITY PER GROUP
budget year 2007
group descriptioncases
 
Group 1100 request for aid 
In 9% of the reported irregul arities it concerned cases in which the irregularity was 
directly linked to the request for a suppor t measure. As example, can be mentioned 
an “incorrect or incomplete request for aid”. These cases should normally be 
discovered before payment.  
The overall rate of irregularities 
detected before payment is approximately 5%, e.g. 78 cases out of 1,548. Table AG14 provides an overview per Member State. The obligation to indicate if an irregularity is discovered before or after a payment can be found in art. 3(1)n Reg. 1848/2006. In 56 cases Member States did not indicate if the detection of the irregularity took place before or 
after payment. Also no information was given on the amounts affected by these irregularities. The latter is even more surprising now a large amount of these cases were already closed by the Member States which implies that no information about the amounts affected  will be forwarded.  before before & after after no
payment payment payment information
AT 31 2 3 2 7
BE 32 7 4 3 4
BG
CY 516
CZ 19 1 0
DE 85 8 1 9 4
DK 11 9 2 0
EE 97 1 6
EL 18 0 5 8 6
ES 1 321 13 335
FI 20 20
FR 21 3 7 8 1 4 7
HU 12 12
IE 42 22 6
IT 26 2 2 45 2 3 7
LT 64 1 0
LU
LV 11 11
MT
NL 38 5 3 6 4
PL 36 20 4 2 62
PT 1 189 190
RO
SE 21 2 1 4
SI 99
SK 18 5 23
UK 38 5 7 9 5
total 79 43 1,370 56 1,548MS total
Art. 3(1)n Reg. 1848/2006
download 5 February 2008Table AG 14
IRREGULARITIES DISCOVERED BEFORE / AFTER PAYMENT
budget year 2007
discovery of irregularity
 
EN 41   EN Table AG13 shows that in 9% of the am ount of reported irregularities, the 
irregularity was already committed duri ng the request phase. Table AG15 provides 
an overview of the types of irregularities which were applied during the request phase. The most frequent irregularity was “incorrect or incomplete request”. Rather high is also the amount of irregularities in which the modus operandi is described as “not eligible for aid”. United Kingdom, Denmark and Lithuania indicated  in respectively 
7, 3 and 1 cases that the applied modus opera ndi was “false or falsified request for 
aid”. All 11 cases were classified as ir regularity (IRQ2) and not as suspected fraud 
(IRQ3).  
Group 1200 beneficiary 
Table AG12 shows also that in 38 cases the irregularity was linked to the beneficiary 
itself. It concerned in 16 cas es an incorrect identity.  
Group 1600 (non-) action 
In 39% of the reported irregu larities it concerned cases in  which the irregularity was 
directly linked to an action performed or  not performed by the involved persons. In 
those cases, the support measure demands th at a certain action is undertaken. The 
beneficiary however, did not perform this ac tion or did not implement, complete or 
finalise the action.  
Group 1500 product, species and/or land 
In 19% of the cases, representing 43% of th e total amount affected by irregularities, 
the irregularity concerned the product, species (animals) or land for which the 
subsidy was granted. As example, can be mentioned the over-declaration of land and 
the declaration of fictitious  land. Especially in the s ector “rural development”, 
irregularities were committed by an over-declaration of land. In some cases it even concerned the declaration of fictitious land. Over-declaration can be considered as an 
error or mistake as declaration of fictitious land needs to be considered as (suspected) 
fraud. 
Table AG13 shows that in 19% of 
the cases, representing 43% of the total amount affected by irregularities, the irregularity concerned the product, species (animals) or land for which the subsidy was granted. Table AG16 provides an overview of the practises employed for these types of irregularities. In 5 cases, Member States reported that it concerned a fals ification of the product. The total amount 
affected was rather high, e.g. almost EU R 30 million. 1 Case was classified as 
suspected fraud (IRQ3) and concerned the ex port of beef and veal. 4 cases were 
classified as established fra ud (IRQ5) and concerned butter. description cases amounts in €
product, species, land or measure not eligible for aid 29 3,766,520
incorrect or incomplet request 64 3,233,031other irregularities concerning the right to aid 30 580,115false or falsified request 11 356,269overfinancing 5 140,507incompatible cumulation of aid 4 82,724
several requests for the same object 1 0total 144 8,159,166
download 5 February 2008Table AG15
IRREGULARITIES CONCERNING THE REQUEST FOR AID
budget year 2007
Art. 3(1) e Reg. 1848/2006
description cases amounts in €
falsification of the product 5 29,711,934
incorrect classification or tariff heading 12 14,465,380fictitious use or processing 9 12,528,552
inexact quantity 102 3,542,047
inaccurate product declaration 46 1,237,829inexact composition 13 1,174,386
declaration of fictitious land 59 983,596
variation in quality or content 12 523,977other 43 1,724,336
total 301 65,892,038
download 5 February 2008Table AG16
IRREGULARITIES CONCERNING PRODUCT
budget year 2007
Art. 3(1) e Reg. 1848/2006
 
EN 42   EN The 9 cases in which the practises employe d was described as “fictitious use or 
processing” were also all classified by Memb er States as “suspected fraud” (IRQ3). 
It concerned in all cases th e fruit and vegetables sector . The total amount affected 
was also here rather high, approximately EUR 12.5 million. 
In 12 cases the Member States describe d the practises employed as “incorrect 
classification or tariff heading”. It concer ned in all cases expor t refunds concerning 
especially pig meat. All cases were cl assified as “irregularity” (IRQ2).  
The practises employed “declaration of fictitious land” occurred mainly in the sector 
“rural development” and “decoupled dire ct aids” (Single Payment Scheme and 
Single Area Payment Scheme). Germany, Hungary and Poland reported these cases. 
Poland classified all its cases as “suspect ed fraud” (IRQ3), Hungary classified all 
their cases as “irregularity” (IRQ2) and Germ any did not classify any of its cases.  
 
EN 43   EN 3.3. Specific Analysis 
In 2007 Member States reported 1,548 cases of irregularities involving a total 
amount affected of approximately EU R 155 million. Member States must only 
inform the Commission of irregulariti es involving more than EUR 10,000. 
Member States must inform the Commissi on of the common market organisations 
affected, the sectors and products concerne d by irregularities. Unfortunately, some 
Member States do not comply fully with this  rule. Some Member States do not report 
any budget lines or indicate on ly a part of the budget lin e. The incomplete reporting 
makes it difficult to perform detailed analysis.  
3.3.1.  Analysis of support measures 
Table AG17 gives an overview of the irre gularities reported per main category of 
support measure. The division into the diffe rent types of measures is based on the 
indications given by Memb er States of the: 
• measures affected, 
• regulations infringed,  
• modus operandi. 
Table AG 17: Irregularities per main category of support measure 
average in % of
group description cases amounts in € amounts in € total
20 Milk and milk products 76 38,731,014 509,619 25%
15 Fruits and vegetables 118 32,139,133 272,366 21%
11 Sugar 10 27,244,937 2,724,494 18%
40 Rural development 589 19,453,831 33,029 13%
21 Beef and veal 78 11,720,317 150,260 8%
12 Olive oil 85 4,154,116 48,872 3%
16 Wine 154 3,785,331 24,580 2%
50 Other measures - environment & forestry 38 2,048,611 53,911 1%
32 POSEI 15 2,041,619 136,108 1%
30 non-annex-1 products 27 1,883,729 69,768 1%
13 Other plant products - dried fodder 24 1,673,816 69,742 1%
10 Cereals 47 1,497,405 31,860 1%
23 Pigmeat, eggs, poultrymeat, bee-keeping 30 1,478,295 49,276 1%
17 Tobacco 26 1,112,297 42,781 1%
70 Decoupled direct aids (SPS) 61 993,355 16,285 1%
22 Sheep and goats 53 910,893 17,187 1%
36 Other measures - other 29 597,069 20,589 0%
38 Promotion measures 2 499,961 249,981 0%
40 / 75 rural development & decoupled direct ai ds (reproted by PL) 32 469,898 14,684 0%
99 other \ other 11 451,555 41,050 0%
18 / 31 Seeds & food programmes (reported by EL) 1 380,423 380,423 0%
14 Textile plants 2 335,953 167,977 0%
31 Food programmes 2 306,371 153,186 0%
21 / 22 Beef and veal & sheep and goats (reported by IT) 7 266,637 38,091 0%
18 Seeds, hops and rice 8 253,038 31,630 0%
10 / 21 / 22 Cereals & beef and veal & sheep and goats (reported by IT) 1 143,351 143,351 0%
12 / 18 / 20 / 21 / 22 Olive oil & seeds & milk (reported by IT) 1 117,285 117,285 0%
18 / 22 Seeds & milk (reported by IT) 2 78,218 39,109 0%
75 Decoupled direct aids (SAPS) 12 67,119 5,593 0%
11 / 20 / 21 / 23 Sugar & milk & beef and veal (reported by NL) 1 50,000 50,000 0%
18 / 22 / 40 Seeds & milk & rural development (reported by IT) 1 36,526 36,526 0%
30 / 31 Non-annex 1 products & food programmes (reported by NL) 1 20,597 20,597 0%
10 / 20 Cereals & milk (reported by IT) 1 19,767 19,767 0%
10 / 18 Cereals & seeds (reported by IT) 1 14,118 14,118 0%
39 Agri-monetary aid 1 11,031 11,031 0%
80 COP-area payments 1 5,710 5,710 0%
total 1,548 154,993,326 100,125 100%Table AG17
download 5 February 2008art. 3 (1) a Reg. 1848/2006BUDGET YEAR 2007IRREGULARITIES PER BUDGET CHAPTER
 
 
EN 44   EN The highest amounts affected by irregulari ties reported related to “milk and milk 
products”. Member States reported a to tal of 76 cases involving milk and milk 
product measures (group 20). These cases alone amount to almost EUR 38.8 million, 
which is approximately 25% of the tota l amount affected by irregularities.  
The second most affected sector is “fruits and vegetables” (group 15), where 
Member States reported 118 cases invol ving approximately EUR 32.1 million. A 
rather high amount affected by irregular ities is reported for the group “sugar”. 
Member States reported 10 cases involving more than EUR 27 million. This implies that the average amount per irre gularity is relatively high for cases report ed in this 
group. The high amount is caused by 2 i rregularities reporte d by Belgium and 
Denmark. The amount affected by was EUR 12.6 respectively EUR 14.2 million.  
The highest number of irregularities repor ted related to “rural development”. 
Member States reported a total of 589 cas es involving rural development measures 
(group 40). These cases alone amount to almost EUR 19.5 million, which is approximately 13% of the total amou nt affected by irregularities.  
The last group of particular concern is “beef and veal” (g roup 21). In this sector 78 
cases were reported involving approxi mately EUR 11.7 million. These 4 groups 
together account for about 56% of the tota l number of reported irregularities and 
about 83% of the total amount affected by irregularities. 
Some Member States reported for some cas es a combination of different measures 
affected by the same irregularity. This is  indicated in table AG16. The Netherlands 
for instance reported 1 case in which support measures concerning “sugar”, “milk and milk products” and “beef and veal” were affected by one and the same 
irregularity. Italy reported a case in whic h support measures concerning “cereals”, 
“beef and veal” and “sheep and goats” were affected by one and the same 
irregularity. These peculiar cases are not taki ng into account in the rest of the specific 
analysis.  
Milk and milk products (group 20) 
Member States reported a total of 76 cases affecti ng milk and milk products 
measures (group 20). These cases alone amount to approximately EUR 38.8 million, which is approximately 25% of the total amount affected by irregularities. This is relatively high.  
Table AG18 shows the measures that were  mostly affected by irregularities, 
indicating the number of cases, the total amounts and average amount per 
irregularity.  
The largest number of irregul arities and the highest total amounts affected related to 
“butter and butter oil – e xport refund” (code 2000 R). Th ese irregularities were 
reported by 9 Member States (BE, CY , CZ, DE, ES, FR, IE, NL and UK). The 
practises employed (modus operandi) can be summarised as: 
• non-arrival at final destination 
• product non-eligible for export refund 
 
EN 45   EN Table AG18: Milk and milk products: me asures affected by irregularities 
in % of in % of average
code description numbe r total amount in € total amount in €
2000 R butter and butter oil - export refund 17 22% 16,114,080 42% 947,887
2040 Sbutter - concentrated butter, butter for making 
icecream and pastries etc.11 14% 12,707,200 33% 1,269,699
2099 S milk and milk products - other 2 3% 8,789,283 23% 2,933,163
2071 S milk - additional levy 16 21% 252,628 1% 15,789
2002 R cheese - export refund 7 9% 222,288 1% 31,755
2033 S milk and milk products - intervention storage 1 1% 98,755 0% 98,755
2001 R skimmed milk powder - export refund 4 5% 96,249 0% 24,062
 other 18 24% 450,531 1% 293,521
total 76 100% 38,731,014 100% 5,614,633
art. 1 (1) a Reg. 1848/2006
download 5 February 2008Table AG18
MILK AND MILK PRODUCTS
budget year 2007
cases amounts
 
France indicated in 1 case that it concerne d (established) fraud. In 2 cases, Member 
States were not able to indicate the meas ure affected. It concerned cases reported by 
Italy and the Netherlands. These 2 Member  States indicated code 2099 S, which 
stands for “other”. The Italian case how ever, concerns almost EUR 8.8 million. The 
irregularity started in 2002 and ended in 2004. Italy as well as the Netherlands did 
not describe the practises employed in these 2 cases. 
Member States classified in 49 cases (64%) the irregularities as irregularity or as 
(suspected or established) fraud. The average level of (s uspected or established) 
fraud cases is 22%, calculated on the basis of the number of classified  irregularities. 
It concerned in almost all cases support measures concerning butter. 
Fruit and vegetables (group 15) 
Member States reported a total of 118 cases  affecting measures to support the fruit 
and vegetables sector (group 15). These ca ses alone add up to approximately EUR 
27.2 million, which is approximately 18% of the total amount affected by 
irregularities (see table AG17). This is also relatively high. Table AG19 shows the 
measures which were hit by irregularities,  indicating the number of cases, the total 
amounts and the average amount per irregularity.  
Italy, Greece, Spain and United Kingdom repor ted 8 cases in which the total amount 
affected by the irregularity was more than EUR 1 million per case. Italy reported 5 cases as the other 3 Member States reporte d each 1 case with an amount affected of 
more than EUR 1 million.  
In recent years, Member States have c onsistently reported a relatively high number 
of irregularities relating to citrus fruits (code 1515 S). This trend was confirmed in 
2007. Although Member States reported fewer irregularities, the amounts affected 
increased from EUR 4.3 million to EUR 14 million. These cases were reported by 
three (3) Member States. Italy reported 5 ca ses with a total amount affected of EUR 
13.4 million. Spain and Portugal together re ported the other 12 cases with a total 
amount affected of EUR 0.6 million. 
For the measure “operational funds fo r producer organisations” (code 1502 S) 
Member States have also consistently reported a relatively  high number of 
 
EN 46   EN irregularities. 7 Member Stat es reported 68 cases with a total amount affected of 
almost EUR 13.2 million. Almost 98% of the total amount affected concerned cases 
reported by Italy, Spain and United Kingdom. Italy is responsible for approximately 
53% of the amounts affected by irregular ities as Spain and United Kingdom are 
responsible for 26% respec tively 19%. Spain, Italy and United Kingdom reported 
each one (1) case involving a total of more than EUR 1.5 million. 
Table AG 19: Fruit and vegetables: meas ures affected by irregularities 
in % of in % of average
code description number total amount in € total amount in €
1515 S citrus fruits 17 14% 14,029,282 44% 825,252
1502 S operational funds for producer organisations 68 58% 13,243,930 41% 194,764
1511 S processed tomato products - production aid 2 2% 1,207,148 4% 603,574
1513 A dried grapes and figs 1 1% 1,108,875 3% 1,108,875
1512 S fruit-based products - production aid 2 2% 1,093,285 3% 546,643
1507 S nuts 4 3% 671,250 2% 167,813
1508 A bananas - compensation aid 8 7% 247,971 1% 30,996
1590 V other 7 6% 160,962 1% 22,995
other 9 8% 376,430 1% 41,826
total 118 100% 32,139,133 100% 272,366
art. 1 (1) a Reg. 1848/2006
download 5 February 2008Table AG19
FRUIT AND VEGETABLES
budget year 2007
cases amounts
 
Member States classified in 68 cases (58%) the irregularities as irregularity or as 
(suspected) fraud. The average level of (sus pected) fraud cases is 21%, calculated on 
the basis of the number of classified irre gularities. Spain, as main supplier for 
irregularities in the fruit and vegetables sector, did not  classify any irregularity. 
Sugar (group 11) 
Member States reported a total of 10 cases affecting measures to support the sugar 
sector (group 11). These cases alone add up to approximately EUR 32.1 million, which is approximately 21% of  the total amount affected by irregularities (see table 
AG16). This is rather high. The rather high  financial impact is mainly caused by 2 
cases reported by Belgium and Denmark. Be lgium and Denmark reported both 1 case 
in which the total amount affected was EUR 12.6 million respectively EUR 14.2 
million.  
The Danish case concerned the support meas ure “production refunds on sugar used 
in the chemical industry”. Belgium indicate d “restructuring of the sugar industry”. 
Denmark classified the case as an irregular ity (IRQ 2) as Belgium did not give any 
classification.  
Rural development (group 40) 
Member States reported a total of 589 cas es affecting rural development measures 
financed by the EAGGF guarantee section (group 40). These cases alone amount to 
approximately EUR 19.5 million, which is approximately 13% of the total amount 
affected by irregularities (see table AG 17). Table AG20 shows the measures that 
were mostly affected by irregularities, indicating the number of cases, the total amounts and average amount pe r irregularity. The largest number of irregularities 
related to “forestry – former system” (code 4072 A). 
 
EN 47   EN Table AG 20: Rural development: meas ures affected by irregularities 
in % of in % of average
code description number total amount in € total amount in €
4072 A forestry - former system 113 19% 5,251,360 27% 46,472
4050 A agri-environment - new system 132 22% 2,583,331 13% 19,571
4080 A a improvement of land 12 2% 2,021,089 10% 168,424
4060 Aimproving the processing and marketing of agricultural 
products22 4% 1,973,631 10% 89,711
4051 A agri-environment - old system 80 14% 1,348,921 7% 16,862
4081 A c encouragement of tourist and craft-based activities 15 3% 1,120,804 6% 74,720
4081 A d environmental protection & improvement of animal welfare 15 3% 560,118 3% 37,341
4070 A forestr y - new s ystem (art. 31 - ob jecive 1 ) 10 2% 513,337 3% 51,334
other 190 32% 4,081,240 21% 21,480
total 589 100% 19,453,831 100% 33,029
art. 1 (1) a Reg. 1848/2006
download 5 February 2008Table AG20
RURAL DEVELOPMENT
budget year 2007
cases amounts
 
Member States classified in 442 cases (75%) the irregularities as irregularity or as 
(suspected) fraud. The average level of (sus pected) fraud cases is 7.2%, calculated on 
the basis of the number of classified irre gularities. Spain, as main supplier for 
irregularities in the fruit and vegetables sector, did not  classify any irregularity.  
The highest amount affected by irregularit ies is reported for the support measure 
“forestry – former system” (code 4072 A) as the highest number of irregularities is 
reported for the support measure “agri-env ironment – new system” (code 4050 A).  
The measures “forestry – former system ” (code 4072 A), “agri-environment” (codes 
4050 A and 4051 A) – together account for approximately 55% of the total amount 
of irregularities connected to rural development. 
Member States reported in total 125 
irregularities relating to forestry measures (codes 4070 A, 4071 A and 4072 A) and a total amount affected by forestry measures of almost EUR 5.8. It concerned in more than 90% of the cases the support measure “forestry – former system”. Table AG21 on the right hand side gives an overview of those irregularities. Spain and Portugal reported the highest number of cases with the highest amount affected. The average amount per case is fairly high in the cases reported by 
Italy and Spain, at about EUR 63,500 re spectively EUR 55,000. The modus operandi 
in 47% of the cases can be described as  “not respecting dead lines” or “irregular 
termination”. Poland classified 2 cases as suspected fraud (IRQ 3), in one of those 
cases the irregularity was committed by a decl aration of fictitious land. Spain and the 
Netherlands did not classify any of their cases. All other Member States classified 
the cases as an irregularity (IRQ 2).  in % of in % of average
MS number total amount in € total amount in €
ES 67 54% 3,652,159 63% 54,510
PT 43 34% 1,541,700 27% 35,853
IT 8 6% 508,551 9% 63,569
NL 11 % 3 2 , 3 6 91 % 3 2 , 3 6 9
FR 22 % 3 0 , 0 3 51 % 1 5 , 0 1 8
PL 22 % 1 8 , 7 9 70 % 9 , 3 9 9
UK 22 % 1 1 , 1 2 10 % 5 , 5 6 1
total 125 100% 5,794,732 100% 46,358cases amounts
art. 1 (1) a Reg. 1848/2006
download 5 February 2008Table AG21
FORESTRY
budget year 2007
 
EN 48   EN Table AG22 on the right hand side gives an overview per Member State of the 
number of irregularities re ported and the amounts affected for “agri-environment” 
measures (code 4050 A and 4051 A). It is surprising that Portugal reports the highe st number of 
irregularities and the highest 
amounts affected by irregularities. Approximately 4% of the EU-budget concerning “agri-environment” measures is spent in Portugal. The total amount affected by irregularities however is approximately 26% of the total expenditure in 2007. Member States as France, Spain and Germany receive a far higher level of support but report a far lower percentage amount affected by irregularities: 1%, 1% and 6% respectively.  
Most frequently occurring modus ope randi can be summarised as “missing 
documents” and “action not completed”. Me mber States classified in 169 cases 
(80%) the irregularities as irregularity or as (suspect ed) fraud. None of these cases 
was classified as (suspected) fraud (IRQ 3). Germany and Spain did not classify any 
of their cases. 
Member States reported a limited number of  irregularities relating to the measures 
“improving the processing and marketing of agricultural products” (code 4060 A) 
and “improvement of land (code 4080 A a) . The financial impact, however, is high: 
almost EUR 4 million (see table AG 20). Th e Netherlands reported 1 irregularity 
with an amount affected of almost EUR 1.1 million.  
Poland reported 42 cases in which the suppor t measures “transitional instrument for 
the financing of rural development” (code  4095 A) and “single area payment scheme 
(SAPS)” (code 7500 A) were invo lved. All these cases were classified as “suspected 
fraud” (IRQ 3). The financial impact of these cases was almost EUR 0.5 million. The 
modus operandi in more than 90% of the cas es can be described as “declaration of 
fictitious land”.  
Beef and veal (group 21) 
Member States reported a tota l of 78 cases relating to b eef and veal measures (group 
21). These add up to approximately EUR 11.7 million, approximately 8% of the total 
amount affected by irregularities. The highe st amounts affected by  irregularities and 
the largest number of irregularities 
were reported for export refund (code 2100 R), followed by “extensification premiums” (code 2125 A). Table AG 23 on the right hand side provide s an overview. 
Spain reported 25 “export refund cases” (code 2100 R) in which amount in % of amount in % of
MS in € total cases in € expenditure
FR 34,394,978 47% 25 337,519 1%
ES 15,140,304 21% 11 198,573 1%
DE 11,584,071 16% 31 717,474 6%
EL 5,776,803 8% 35 655,348 11%
PT 2,786,328 4% 36 736,332 26%
DK 2,409,777 3% 4 261,948 11%
IT 609,763 1% 16 304,099 50%
other 215,718 54 720,959
total 72,917,742 100% 212 3,932,252 5%irregularity
art. 1 (1) a Reg. 1848/2006expenditure
download 5 February 2008Table AG22
AGRI-ENVIRONMENT
budget year 2007
in % of in % of
code numbe r total amount in € total
2100 R export refunds 35 45% 6,029,168 51%
2125 A extensification premiums 17 22% 4,496,707 38%
other 26 33% 1,194,442 10%
total 78 100% 11,720,317 100%cases amounts
art. 1 (1) a Reg. 1848/2006
download 5 February 2008Table AG23
BEEF AND VEAL
budget year 2007
 
EN 49   EN almost EUR 5.9 million was affected by irregu larities. Italy reported sixteen (16) 
cases concerning the support measure “ex tensification premium”. The amount 
affected by these irregularities was approximately EUR 4.5 million.  
Member States classified in 51 cases (65%) the irregularities as irregularity or as 
(suspected) fraud. Only 2 cases were classi fied as (suspected) fraud (IRQ 3). Spain, 
as main supplier of irregularities in the b eef and veal sector, did not classify any 
irregularity. 
Export refunds 
Table AG24 gives an overview of the irre gularities per Member State relating to 
export refunds. The number of irregul arities and the amounts affected by 
irregularities in this area are decreasing, accounting for approximately 9% of the total 
number of irregularities reported in  2007. Only 14 Member States reported 
irregularities related to e xport refunds. As mentioned ear lier, this is one of the 
consequences of the reforms in the Common Agricult ural Policy.  
Table AG 24: Irregularities in export refunds per Member State 
MS total 2007 export refunds in % of total total 2007 export refunds in % of total
AT 27 19 70% 401,511 285,270 71%
BE 34 19 56% 13,866,333 551,631 4%
BG
CY 6 1 17% 83,362 17,508 21%
CZ 10 1 10% 103,168 14,217 14%
DE 94 18 19% 2,854,876 1,135,541 40%
DK 20 5 25% 15,257,984 126,894 1%
EE 16 83,985
EL 86 2 2% 4,185,084 681,015 16%
ES 335 37 11% 23,609,346 6,797,770 29%
FI 20 338,508
FR 147 9 6% 32,637,233 16,018,290 49%
HU 12 233,052
IE 26 3 12% 490,043 85,441 17%
IT 237 43,063,210
LT 10 232,242
LU
LV 11 141,835
MT
NL 64 15 23% 4,349,283 626,643 14%
PL 62 3 5% 1,099,347 4,714 0%
PT 190 1 1% 5,570,368 22,245 0%
RO
SE 14 284,714
SI 9 232,894
SK 23 1,707,309
UK 95 13 14% 4,167,640 459,467 11%
total 1548 146 9% 154,993,326 26,826,647 17%
art. 1 (1) a, n Reg. 1848/2006
download 5 February 2008Table AG24
EXPORT REFUNDS
budget year 2007
cases amounts in €
 
Member States reported 146 cases relati ng to export refunds and a total amount 
affected of almost EUR 26.9 million, which is  17% of the total amount affected by 
irregularities.  
France reported the highest to tal amount affected by irregu larities. The total amount 
affected by irregularities was more than EU R 16 million: the number of cases was 9.  
 
EN 50   EN The rather high amount affected by the irre gularities is mainly caused by 1 (one) 
irregularity reported by France. France reported in 1 ca se a total amount affected of 
almost EUR 15.4 million. It concerned ex port refund of butter. The case was 
classified as “established fraud”. This implies that a final court decision was achieved. It is also remarkable that a fina l court decision has been achieved in the 
year of (first) reporting.  According to the French communication, the expenditure 
was based on a budget line of the year 2000 as the irregularity started in 1997 and 
ended in 2000. 
In Austria irregularities in export refunds, account for approximately 71% of the total 
number of irregularities.  
Spain reported 37 cases with a total amount  affected of almost EUR 6.8 million.  
2 (two) cases were qualified as “suspected fraud” of which one (1) case had a total 
amount affected of more than EUR 1 million.  
Table AG25 on the right hand side 
shows the product groups most often involved in  export refund 
irregularities. The highest amounts affected are for measure concerning 
butter and butter oil (code 2000 R). 
It concerns a case for which France went to court (penal procedure) in 2000. This case therefore, should have been reported in 2000 and not in 2007. The total amount affected of this case was approximately EUR 15.4 million. Excluding this French case of the analysis, the highest number of cases reported and the highest amounts affected are for the meas ures concerning beef and veal. Member 
States reported 35 cases with a total amount  affected of more than EUR 6 million.  
Spain reported the highest number of irregu larities: 25 cases. Spain reported by far 
the highest amount affected by irregulariti es, almost EUR 5.9 million and in 2 cases 
the amounts affected were more than EUR 1 million. The most frequent modus operandi is “missing (supporting) documents”. 
More than 40% of the irregu larities relating to the e xport of non-annex-1-products 
(code 30xx R) were reported  by Germany. Unfortunately, Germany was not able to 
indicate which products were exported a nd to precise the measure affected.  
A small number of irregulariti es (2) are classified as “other” (code 9920 R), which 
means that the Member State did not  specify the measure involved. These 
irregularities were reported  by Denmark. These irregulari ties concern most likely the 
export of “non-annex-1-products”. 
3.3.2.  Irregularity versus Suspected fraud 
With the introduction of the electronic re porting system in mid-2001, Member States 
were asked to classify the irregularities re ported. To assist them, an extra field was 
added to the module offering four possibili ties: mistake, irregularity, (suspected) code description cases amounts in €
2000 R butter and butter oil 17 16,114,080
2100 R beef and veal (CN 0201, 0202, 1602) 35 6,029,168
30xx R *) non-annex-1-products 28 1,904,326
2300 R pigmeat 25 1,205,260
1100 R sugar and isoglucose 7 417,400
2002 R cheese 7 222,288
1600 R wine 4 143,723
1000 R wheat grain and flour 2 136,906
other 21 653,495
total 146 26,826,647
download 5 February 2008
*) Germany did not specify the specific non-annex-1 measure affected by irregularitiesTable AG25
EXPORT REFUNDS PER MEASURE
budget year 2007
art. 3(1)a Reg. 1848/2006
 
EN 51   EN fraud and organised crime. The field was modified in  2004 and 2006 and now offers 
four possibilities:  
• IRQ 0 = no irregularity 
• IRQ 2 = irregularity 
• IRQ 3 = suspected fraud  
• IRQ 5 = established fraud 
Reg. 1848/2006, which came into force on 1 January 2007, introduced the obligation 
to identify fraud cases. Unfortunately, not all Member States comply with this 
obligation. Germany and Spain did not classify any cases. Belgium, Finland and the 
Netherlands should pay extra a ttention to this obligation. 
Classification of irregula rities by Member States 
Table AG26 gives an overview of the clas sification of irregularities by Member 
States. Fraud as a percentage of the total amount of cases in volved in irregularities is 
about 10%. The term fraud includes “suspi cion of fraud” (IRQ3) and “established 
faud” (IRQ5). The non-irregular ities (IRQ0) have not been taken into account for the 
analysis. As mentioned earlier, Member Stat es still need to improve their reporting, 
therefore the figures shown in the table should be treated with caution. 
Table AG 26: Classification of ir regularities by Member States  
MS total IRQ2 IRQ3 IRQ5 blank compliance fraud in % MS 
AT 27 27 100% 0% AT
BE 34 6 28 18% 0% BE
BG BG
CY 6 6 100% 0% CY
CZ 10 10 100% 0% CZ
DE 94 94 0% DE
DK 20 20 100% 0% DK
EE 16 16 100% 0% EE
EL 86 82 4 100% 5% EL
ES 335 335 0% ES
FI 20 13 7 65% 0% FI
FR 147 142 1 4 100% 3% FR
HU 12 11 1 100% 8% HU
IE 26 25 1 96% 0% IE
IT 237 222 15 100% 6% IT
LT 10 10 100% 0% LT
LU LU
LV 11 4 7 100% 64% LV
MT MT
NL 64 21 6 37 42% 22% NL
PL 62 6 56 100% 90% PL
PT 190 186 4 100% 2% PT
RO RO
SE 14 14 100% 0% SE
SI 9 9 100% 0% SI
SK 23 23 100% 0% SK
UK 95 83 11 1 99% 12% UK
total 1,548 936 105 4 503 68% 10% total
art. 3 (1) f Reg. 1848/2006
download 5 February 2008IRQ3 = suspicion of fraud
IRQ5 = established fraud
blank = not classified by Member State
fraud = (IRQ3 + IRQ5) / totalTable AG26
CLASSIFICATION OF THE IRREGULARITY
budget year 2007
IRQ2 = irregularity
 
 
EN 52   EN Classification of irregularities by OLAF 
In previous reports, OLAF classified  all cases. In the period 2000 – 2006 the 
percentage of irregular ities classified as “suspected frauds” varied between 10% and 
13% of the total number of irregularities reported.  In case OLAF would classify the 2007-irre gularities by applying the same method as 
used for the period 2000 - 2006, the irregularities to be classified as “suspected 
frauds” would be 14% of the total num ber of reported irregularities. The 
classification by OLAF is ba sed on the classification by Member States, the types of 
irregularities (codes) as indicated by Member States, the modus operandi as 
described by the Member States and additional comments made by Member States.  The higher fraud rate can be explained by th e classification of the German cases and 
the reclassification of some cases of other Member States. A rather large number of French cases w ould be reclassified from “irregularity” 
(IRQ2) into “suspicion of fraud” (IRQ3) due to the modus operandi applied in these 
cases. The practices employed for a large number of these cases can be summarised 
as “false and/or fa lsified accounts or false and/or fa lsified documents”. OLAF would 
classify these cases as “sus picion of fraud” (IRQ3).  
Germany did not classify any of its reporte d irregularities. The cases in which the 
modus operandi can be summarised as “d eclaration of fictit ious land” were 
considered as “suspicion of fraud” cases. 
As said, table AG 26 and the OLAF-rate should be treated with caution. Member 
States still need to improve their reporting. 
Estimated level of fraud 
On the basis of the irregul arities reported in the pe riod 2000-2007 an attempt has 
been made to estimate the level of “susp ected fraud” in the agricultural sector. Chart 
AG2 reflects the results of this analysis and shows the percenta ge of irregularities 
which can be classified as “suspected fra ud” and/or “established fraud” cases, both in 
terms of the number of cases and the amounts affected by th e irregularities. 
Given that it is still an early attempt to estimate the level of fraud in the agricultural 
sector, the figures should be interpreted cautiously. Nevertheless, the results of the 
analysis are in line with the results of  those Member States which classify the 
irregularities.  
Chart AG 2: Irregulari ties and “suspected fraud” 
0%10%20%30%40%50%60%
2000 2001 2002 2003 2004 2005 2006 2007cases calculated by OLAF cases calculated by MS
amounts calculated by MS amounts calculated by OLAF 
 
EN 53   EN One early conclusion is that, as a per centage of the total number of reported 
irregularities, “suspected fr aud” varied between approxi mately 10% and 14% in the 
period 2000–2007. The chart shows that the leve l of “suspected fraud” cases, as a 
percentage of the total nu mber of irregularities repor ted, is relatively stable.  
“Suspected fraud” as a per centage of the total amounts af fected by the irregularities 
reported varied between approximately 14% and 45% during the period 2000–2007. A greater difference between the percentage of “suspected fraud” cases based on the amounts and the percentage based on the number of “suspected fraud” cases was to be expected; amounts vary more a nd differ per irregularity reported. 
It should be reiterated that the obligation to indicate “fraud” was introduced by Reg. 
1848/2006, which came into force on 1 January 2007. 
 
EN 54   EN 3.4. Recovery and sanctions44 
3.4.1.  Recovery 
Pursuant to Article 6 of Regulation (EC) No. 885/2006 Member Stat es had to report 
to the Commission the amounts to be recove red at the end of financial year 2007. 
These amounts, which are certified by the Certification Bodies in each Member 
State, include all recovery cases (irregular ities and administrative errors) irrespective 
of the amount concerned. Therefore, the info rmation provided below is not limited to 
irregularity cases notified to OLAF under Regula tion (EC) No. 1848/2006. On the 
basis of the tables submitted by the Member  States to the Commission (DG AGRI), 
situation as of 11 April 2008, the amounts are the following: 
• EUR 154.3 million was recovered by Memb er States and credited to the 
Community budget during financial year 2007; 
• EUR 165.8 million was declared irrecoverabl e by Member States on the basis of 
Article 32(6) of Regulation (EC) No. 1290/2005 in financial year 2007; 
• The total outstanding amount that remains to be recovered by the Member States 
was EUR 1,438.2 million at the end of financial year 2007. 
Table AG27 gives a breakdown of thes e amounts on Member State level. 
Table AG27: financial information on recovery 
                                                 
44 The analysis, text and table concerning recovery are provided by DG AGRI. Under Reg. 1848/2006 
Member States are not required to indicate the amounts to recover to OLAF. 
 
EN 55   EN MSRecovered during FY 
2007 Recovered in % of totalDeclared irrecoverable 
during FY2007Outstanding at the end 
of FY 2007Outstanding in % of 
total
AT 2,691,366.29 1.70% 57,16 1.62 8,544,331.19 0.60%
BE 4,914,909.76 3.20% 26,068.27 49,614,092.40 3.40%
BG 0 0.00% 0 0 0.00%
CY 0 0.00% 0 0 0.00%
CZ 194,184.88 0.10% 0 2,876.96 0.00%
DE 24,272,453.07 15.70% 4,864,365.16 72,897,029.93 5.10%
DK 5,669,409.85 3.70% 1,132,705.24 12,040,203.82 0.80%
EE 937,624.16 0.60% 16,753.65 249,688.84 0.00%
ES 23,304,438.91 15.10% 20,551, 894.75 172,392,029.75 12.00%
FI 2,631,183.66 1.70% 242.48 881,768.21 0.10%
FR 23,938,989.20 15.50% 5,854,248.07 334,092,963.72 23.20%
GB 15,320,082.16 9.90% 10,349,849.62 71,036,700.82 4.90%
GR 1,328,190.75 0.90% 10,841.64 44,669,181.50 3.10%
HU 3,046,296.02 2.00% 0 28,606,596.52 2.00%
IE 6,793,276.81 4.40% 214,788.14 11,040,538.62 0.80%
IT 12,466,435.97 8.10% 121,625, 153.07 553,849,675.67 38.50%
LT 1,992,817.36 1.30% 76.86 611,936.91 0.00%
LU 70,910.00 0.00% 0 52,472.06 0.00%
LV 590,571.42 0.40% 54.09 331,396.28 0.00%
MT 5,573.33 0.00% 0 10,346.43 0.00%
NL 10,479,316.30 6.80% 666,852.42 23,442,819.05 1.60%
PL 2,650,224.33 1.70% 630.29 383,370.22 0.00%
PT 6,551,177.97 4.20% 302,961.28 49,929,716.70 3.50%
RO 0 0.00% 0 0 0.00%
SE 3,146,909.72 2.00% 36,50 3.54 1,110,496.42 0.10%
SI 1,285,270.12 0.80% 0 610,532.42 0.00%
SK 12,988.08 0.00% 78,107 .13 1,772,4 96.44 0.10%
Total 154,294,600.11 100% 165,789,257.32 1,438,173,260.89 100%Table AG27
Financial information on recovery cases from Tables 1-4 of Annex III of Regulation (EC) No 885/2006
Financial year 2007
 
3.4.2.  Sanctions 
The agricultural sector is  renowned for its severe penalty system. Community 
legislation provides a mandatory system  for imposing penalties. Reg. 1848/2006 
obliges Member States to report details c oncerning the initiation or abandonment of 
any procedures for imposing administrative or  criminal sanctions as well as the main 
results of such procedures.  
Table AG28 gives an overview of penaltie s concerning the year 2007 reported under 
Reg. 1848/2006 to OLAF.  
Table AG 28: Penalties and sanctions 
 
EN 56   EN total number information information in % total amount penalties penalties in %
MS of cases on penalties of total cases affected in € of total amount MS 
AT 27 19 70% 401,511 525,851 131% AT
BE 34 18 53% 13,866,333 288,716 2% BE
BG BG
CY 6 3 50% 83,362 0 0% CY
CZ 10 1 10% 103,168 0 0% CZ
DE 94 0 0% 2,854,876 0 0% DE
DK 20 8 40% 15,257,984 17,122 0% DK
EE 16 1 6% 83,985 15,039 18% EE
EL 86 3 3% 4,185,084 1,363,489 33% EL
ES 335 4 1% 23,609,346 99,427 0% ES
FI 20 0 0% 338,508 0 0% FI
FR 147 13 9% 32,637,233 140,422 0% FR
HU 12 0 0% 233,052 0 0% HU
IE 26 3 12% 490,043 17,294 4% IE
IT 237 6 3% 43,063,210 13,255 0% IT
LT 10 0 0% 232,242 0 0% LT
LU LU
LV 11 7 64% 141,835 0 0% LV
MT MT
NL 64 6 9% 4,349,283 20,807 0% NL
PL 62 39 63% 1,099,347 1,115 0% PL
PT 190 1 1% 5,570,368 2,225 0% PT
RO RO
SE 14 0 0% 284,714 0 0% SE
SI 9 0 0% 232,894 0 0% SI
SK 23 6 26% 1,707,309 0 0% SK
UK 95 14 15% 4,167,640 189,259 5% UK
total 1,548 152 10% 154,993,326 2,694,021 2% total
art. 5(1) Reg. 1848/2006
download 5 February 2008Table AG 28
PENALTIES AND SANCTIONS
budget year 2007
cases amounts
 
In 2007, Member States reported 1,548 cases. In 152 cases, Member States indicated 
that a sanction had been imposed, still has to  be imposed or will not be imposed. In 
all other 1,396 cases, no information wa s received from Member States. 
The total amount of penalties imposed in  2007, according to the reports received 
from Member States, is 2% of the tota l amount affected by irregularities. The 
percentage is rather “high” thanks to the fact that Austri a and Greece reported a 
relatively high percentage of pe nalties, 131% respectively 33%.  
One of the reasons for this rather low percentage is the fact that only a limited 
number of Member States are reporting the penalties applied and, in addition, some 
of the Member States which do report the penalties imposed, only do so in a limited 
number of cases.  
The penalties and sanctions in the agricu ltural sector are included in the working 
programme 2008 of the Europ ean Court of Auditors. 
3.5. Conclusions 
Introduction 
• Member States reported 1,548 new irregularities in 2007; 
• the total amount affected in 2007 was about EUR 155 million; 
• Bulgaria, Luxembourg, Malta and Romania ha d no irregularities to  report in 2007; 
 
EN 57   EN •  Reporting discipline: 
• the reporting discipline of Member States improved in 2007, but further 
improvements are still necessary; 
• Germany, Spain and Latvia are not usi ng the electronic reporting module as 
provided by OLAF to forward communications45; 
• the average time between committing an irre gularity and reporting the irregularity 
to the Commission is 4.4 years; 
• the average time between the discovery and the reporting of  an irregularity is 1.2 
year; 
• Austria has an average time gap between  discovery and reporting of 3.4 years; 
• Austria, Greece, Italy and Sweden have an  average time gap of more than 6 years 
between the moment that an irregularity was committed and its reporting; 
• 33% of the irregularities were reported within 6 m onths after the discovery; 
• Germany and Spain did not cla ssify any of its irregulari ties as suspicion of fraud 
or established fraud; 
• Germany is the only Member State th at is not reporting any personal data46; 
• The EU-27 compliance rate is 70%. 
General trends: 
• EUR 30.4 billion of the total expend iture (EUR 46.9 billion) concerned 
“decoupled direct aids” (05 03 01).  
• total amounts affected by irregularities con cerning “decoupled di rect aids” (05 03 
01) was only EUR 1.1 million; 
• the number and amounts of irregularities ar e not equally spread over all Member 
States; 
• Spain, Italy and Portugal re port a relatively high num ber of irregularities and a 
relatively high total amounts affected by irregularities; 
• Belgium, Germany, France, Ireland and Po land report a relativel y low number of 
irregularities; 
• Most frequently occurring type of irre gularity (41%) concerned the action or non-
action of a beneficiary; 
                                                 
45 See footnote 39. 
46 See footnote 42. 
 
EN 58   EN • 5% of the irregularities were  detected before payment; 
Specific analysis: 
• the five main categories most a ffected by irregularities are: 
– Milk and milk products : 76 cases involving EUR 38.7 million 
– Fruit and vegetables : 118 cases involving EUR 32.1 million 
– Sugar : 10 cases involving EUR 27.2 million 
– Rural development : 589 cases involving EUR 19.5 million 
– Beef and veal : 78 cases involving EUR 11.7 million; 
– the “suspicion of fraud” level for the category “milk and milk products” is 
22%; 
– France and Spain report a relatively low number of irregularities and a 
relatively low amount affected by i rregularities for the category “agri-
environment”; 
Irregularity vs suspected fraud: 
• “suspected fraud” and “established fraud” cases, as a percentage of the total 
number of irregularities reported, vary between 10% (classif ication by MS) and 
14% (classification by OLAF). 
Penalties and recovery: 
• the total amount of penalties reported to OLAF is approximately 2% of the total 
amount affected by irregularities; 
• Austria, Greece and Estonia reported to OL AF more penalties and sanctions than 
other Member States. 
 
EN 59   EN 
4. SRTUCTURAL  MEASURES  (ANNEXES 13-17) 
In 2007, Member States repo rted 3,740 irregularities un der Regulation (EC) No 
1681/94 which covers the four Structural Funds47 and 92 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). The total amou nt affected by ir regularities in 2007 
was about EUR 827.6 million, EUR 717.4 million of which was from the Structural 
Funds and EUR 110.2 million from the Cohe sion Fund. Irregularities reported in this 
sector were equivalent to 1.83% of  the budget allocated to it in 2007. 
Since the information system of irregularit ies was established, Member States have 
reported 25,757 irregularities, of which 24,875 related to the Structural Funds and 
882 to the Cohesion Fund. 
4.1. Reporting Discipline 
In 2007, the Commission received 7,026 comm unications under Regulations (EC) 
Nos 1681/9448 and 1831/9449, of which 3,194 were updates of cases that had been 
previously reported (under Ar ticle 5 of the abovementioned regulations). For the first 
time, irregularities were rece ived from all 25 Member States. Bulgaria and Romania 
benefit from the Structural funds since their accession and under the new programming period 2007-2013, but as these programmes are not yet in their operational phase, no irregularit ies have yet been reported. 
4.1.1.  Timely reporting 
Under Reg. 1681/94 and Reg. 1831/94 
Member States are required to report at the 
latest  within 2 months after the end of the 
quarter in which an irregularity was detected and/or new information about an irregularity that has already been reported 
becomes known. Member States indicate the reporting quarter and the date of communication. These 2 (two) indicators can be used to determine if a Member State complied with the rules. 14 Member States failed to comply to forward all communications within  the period of 2 
                                                
 
47 The four Structural Funds are: 
The European Regional Development Fund (ERDF), supporting primarily productive investment, infrastructure 
and development of SMEs; 
The European Social Fund (ESF), supporting measures to promote employment (education systems, vocational 
training and recruitment aids); 
The Guidance Section of the European Agricultura l Guidance and Guarantee Fund (EAGGF-Guidance), 
supporting measures for the adjustment of agricultural structures and rural development; 
The Financial Instrument for Fishery Guidance (FIFG), supporting measures for the adjustment of the fisheries 
sector and the ‘accompanying measur es’ of the common fishery policy. 
48 As amended by Regulation (EC) No 2035/2005. 
49 As amended by Regulation (EC) No 2168/2005. 
 
EN 60   EN months after the "reporting quarter". Howe ver, in the case of 4 countries (Italy, 
Portugal, Luxembourg and the Czech Republ ic), only a very limited number of 
irregularities was reporte d too late. Table SF1 provides an overview.  
The situation is improving. In 2006 63% of irregularitie s were reported on time, 
while in 2007 the share of irregularities reported on time grew to 75%. The 
increasing use of electronic means for reporti ng has positively influenced this result 
(see infra , par. 4.1.2). However still some countri es send an important part of their 
communications well after the deadline indicated in the legislation and, therefore, need to put more attention on this aspect. 
It is, however, more interest ing to verify how long a Member State needs after the 
detection of an irregularity to report it to the Commission services. As a matter of fact, Member States are requested to i ndicate «the date on which the primary 
administrative or judicial finding on  the irregularity was established»
50. They have 
failed to indicate a precise date in 142 cas es on 3,832 (less than 4%. For more details 
see infra  par. 4.1.4). For the remaining 3,690 case s, the gap between detection and 
reporting is indicated by Member State in the table SF2 below. 
Table SF2: Years of delay between i rregularity detection and reporting - 2007 
 
                                                 
50 See art. 3(1) lett. (j) of Regulations NN. 1681/94 and 1831/94 as amended, respectively, by Regulations 
NN. 2035/2005 and 2168/2005. 

 
EN 61   EN It is positive that more than 82% of the ir regularities are reported with a maximum of 
one year of delay to the Commission. A certain delay is understandable in a management system quite complicated like that  of the Structural funds. It is less easy 
to understand, however, delays that exceed the 2 years, which happens in almost 18% of the cases. This situa tion is particularly true fo r Member States like Ireland 
(for which the delay of more than 2 years concerns 94% of  the irregularities reported 
in 2007), France (26%), Finland (19%), Ital y (16%), Denmark (11%) and Greece and 
Portugal (10%). These countries should pay particularly atten tion in the future to this 
aspect. 
Timeliness is of the outmost importance in order to allow the Commission to analyse 
correctly and in the right moment in time th e changing trends and patterns related to 
irregularities across Europe. 
4.1.2.  Electronic reporting 
The systematic use of the el ectronic reporting system from Member States is steadily 
increasing
51. In 2006, 51% of all irregularities we re reported electronically through 
the AFIS/ECR system, while in 2007 the propor tion of irregularities  reported through 
electronic means has reached 75% of the to tal, as detailed in chart SF1 below. 
Chart SF 1: Reporting of irregularities – used formats 
 
The number of irregularities reported on pa per has decreased by 37.5% in relation to 
the previous year, while those reported through the electronic modules of the 
Commission has increased by 28%. Also th e number of irregularities reported 
through other electronic means (el ectronic file) has increased by 11%. 
The increased use of the AFIS/ECR m odules 1681 and 1831 is leading to an 
improvement in data quality and in timelin ess of reporting. Usi ng these electronic 
modules reduces the risk of Member Stat es interpreting the reporting requirements 
                                                 
51 It should be noted that electroni c reporting is not compulsory for Member States, as article 6a of 
Regulations NN. 1681/94 and 1831/94, as amended, respectively, by Regulations NN. 2035/2005 and 
2168/2005, indicates that information required «shall be sent, whenever it is possible to do so, using the 
module provided by the Commission». 

 
EN 62   EN and technical aspects in different ways a nd, therefore, improves the consistency of 
the information submitted to the Commission. 
There are still 8 countries that do not use the AFIS/ECR modules 1681 and 1831: 
Estonia, France, Germany, Ireland, L uxembourg, Latvia, Spain and Sweden. 
Germany and Estonia send an electronic file  via the AFIS-mail, which still needs 
some processing. Table SF3 indicates the reporting formats used by Member States 
and the relative number of irregul arities forwarded to the Commission. 
Table SF 3: Reporting formats used by the Member States 
 
4.1.3.  Programme identification number (CCI code) 
One of the most important information to be communicated is the Common 
Identification Code (CCI from the French  acronym), which allows for the correct 
identification of the programme that was affected by the irregularity. This piece of 
information is absolutely essential for a correct financial follow-up and for a reliable analysis of the irregularitie s by the Commission services. 
Member States have been particularly co mpliant from this point of view, because 
only for 14 irregularities on 3,832 the iden tification number was not provided. 

 
EN 63   EN 
4.1.4.  Year of detection vs year of reporting 
The analysis of the gap between detectio n and reporting has been  already described 
under par. 4.1.1. The table below indicates in how many cases the Member States 
failed to provide «the date on which the pr imary administrative or  judicial finding on 
the irregularity was established»52. 
The table indicates only the Member Stat es which have failed to indicate the 
appropriate information in some of the irregularities communicated to the Commission.  
The non-compliance level is, in general, very low (3.7%). It is clear that in certain 
cases, like France, Finland, Greece, the Netherlands, Portugal, Poland and Sweden, the non compliance is very limited and it is due to just a few cases of irregularities (1, maximum 2) for which the Member States did not indicate the date of establishment of the irregularity. These are not serious failures to comply with the regulations. 
In some other cases,  the percentage of 
irregularities where the required element was not indicated is still relatively low on the total: this is the case of countries like Spain, Italy and the United Kingdom. It should also be noted that these countries are among those which reported the highest number of irregularities. 
More serious appears the situation of 
the Czech Republic, Hungary and Slovakia, where the missing information represen ts a higher share 
of the total. 
4.1.5.  Practices employed (art. 3(1) (d) of Reg. NN. 1681/94 and 1831/94) 
Art. 3(1) (d) of Reg. NN. 1681/94 and 1831/ 94 contain the obligation to report the 
practices employed in committing the irregularity ( modus operandi ). The practices 
employed can be indicated by code as well as with text. The codes are in a pick list that contains a collection of different t ypes of irregularity. Th e reporting module also 
offers the possibility to use written text to describe more precisely the practices employed.  
                                                
 
52 See art. 3(1) lett. (j) of Regulations NN. 1681/94 and 1831/94 as amended, respectively, by Regulations 
NN. 2035/2005 and 2168/2005. 
 
EN 64   EN Only in 5.5% of the cases, Member States failed to describe the modus operandi  in 
details. However, only in 2 cases they misse d to provide a short description using the 
codes from the pick list. Complian ce rate is therefore very high. 
4.1.6.  Suspected fraud (art. 3(1)(e ) of Reg. NN. 1681/94 and 1831/94) 
Art. 3(1)(e) of Reg. NN. 1681/94 and 1831/94 ob liges Member States to indicate if 
the practice amounts to a suspected fra ud or not. Member St ates classified 
approximately 67% of the reported cases . Table SF5 gives an overview of the 
classification by Member State. Member States that did not classify any of their reported cases are Spain, France, Ireland and Luxembourg. Denmark, Germany and Sweden qualified a very low percentage of the reported irregularities (between 
18.2% and 34%). The compliance rate of the ot her Member States can be evaluate as 
satisfactory to very satisfactory. 
Table SF5 Classification of reporte d irregularities by Member State 
 
For a more detailed analysis of this information see infra  section 4.3.3. 

 
EN 65   EN  
4.1.7.  Legal/natural persons identification 
Member States are also required to provide information on the identity of the natural 
and legal persons involved. Art. 3(1)(k ) of Reg. NN. 1681/1994 and 1831/94 states 
that the identities of  the natural and/or legal persons  involved, or of  other entities 
which have taken part in the commission of the irregularity, should be indicated. 
 
Germany informed the Commission about restri ctions in its nationa l legislation with 
respect to the reporting of personal data . Nevertheless, in 3 cases Germany did 
forward the names of the natural persons involved53. 
Table SF6 provides an overview of  the reporting of personal data. 
The compliance rate of 87% is high.  
4.1.8.  Summary 
Table SF7 contains an overview of the compliance rate per reporting obligation. The 
table summarises the findings of the previous  paragraphs as the examined reporting 
obligations have a high added value for analysis purposes.  
                                                 
53 Germany will classify its cases when it starts to use the IMS (summer 2008). See footnote 39. 
 
EN 66   EN Table SF7: compliance per Member State year 2007 
 
In general, Member States do try to co mply with the reporting obligations and 
important progresses have been found in rela tion to previous years starting from the 
timeliness of the reporting. There is still r oom for improvement, in particular from 
countries like Germany54, France, Ireland and Spain which score far below the 
average.  
The EU-25 compliance rate is 84%. 
4.2. General Trends 
Overall trends In 2007 the number of reported irregul arities increased by around 19.2% as 
compared to the year before. Also the re lated irregular amounts increased of about 
17.7%, the irregularities reaching EUR 827.6 million (including the Cohesion Fund). 
As far as the number of irre gularities communicated is c oncerned, it has reached its 
peak in 2002 with more than  4,500 irregularities notified. This situation was due to 
the closure of the programming period 1994-199 9. As shown in chart SF5, since then 
the number of irregularities has osc illated between 2,500 and 3,800. In 2006, the 
number of irregularities re ported decreased in comparison to the situation in 2005. 
That was caused mostly by the change in  the legislation. The Regulations Nos. 
                                                
 
54 See footnote 39. 
 
EN 67   EN 2035/2005 and 2168/2005 amending, respectiv ely, Regulations Nos. 1681/94 and 
1831/94 raised the reporting threshold from EUR 4,000 to EUR 10,000.  
Chart SF 2: 1998-2007 trend concerning number of reported irregularities for the 
Structural Funds, the Cohesion Fund and in total 
 
In 2007, however, the number of irregul arities increased again, up to 3,832 
(including the Cohesion Fund). The main expl anations for this ne w increase seem to 
be mainly two.  
In first place, a higher number of irregular ities from the new Member States (EU10), 
as a result of full implementation of th e programmes and a bett er understanding and 
implementation of the reporting obligation. The number of irregularities from the 
EU10 increased by 31.5% in relation to 2006. 
In the second place, it should be stressed that the sector of the Cohesion policy has 
been subject to a particular “pressure” fr om the control author ities and this is 
reflected in a higher number  of irregularities in rela tion to 2006 also from the old 
Member States (EU15). The incr ease from the EU15 was of 23.5%. 
The irregular amounts grew as well, reach ing a new maximum level after that of 
2006. However, their relative impact on th e overall Cohesion Policy budget remained 
stable (for a detailed analys is about the impact on budget see infra  par. 4.2.3). The 
explanations for such a further increa se are the same two explained above. 
Chart SF 3: 1998-2007 trend concerning irregular financial amounts for the 
Structural Funds, the Cohesion Fund and in total 

 
EN 68   EN  
The variation in relation to the year 2006 has been again greater for the EU10 
(+56.8%) than for the EU15 (+37.7%).  
The difficulty in interpreting charts SF2 and SF3 consists in the fact that projects 
financed through the Cohesion policy budget are implemented through several years 
and the number of irregularities and related financial impact is only calculated on the 
reporting year. It can also ha ppen that Member States still report irregularities 
referred to the Programming Period 1994-1999 a nd these are included in the chart 
too (for an analysis per programming period, see infra  paragraph 4.2.5). 
Furthermore, as of 2007, the new programming period 2007-2013 comes into relevance. The budget allocated to the Cohesion polic y 2007, in fact, refers to its first 
year, but no irregularities can be related to it, considering that the programmes under 
which the financed projects and opera tions will be implemented were under 
negotiation and no real financing occurr ed. As a matter of fact, the reported 
irregularities are referre d exclusively to the progr amming periods 1994-1999 and 
2000-2006 (for more details see infra  par. 4.2.5). 
Furthermore, only some of these irregularit ies have real financial consequences and 
constitute a specific potential loss to the European budget. In  fact, some irregularities 
are detected before any payment is made a nd the question of recovery does not arise 
(for more details see infra  paragraph 4.3.3). 
Moreover, the majority of irregularities having a real financial impact are not 
fraudulent and, once an irregular situation has been identified, corrective measures 
are adopted and recovery pro cedures started. These may take some time. In cases of 
suspected fraud, however, penal or judicial  procedures are activated and longer 
delays can be expected. 
Trend related to Member States 
Like in previous years, the irregularitie s are not distributed equally among Member 
States.  
Taking into consideration how the irregular ities are split among Me mber States, like 
in previous years the biggest countries and those with the highest overall funding 
from the Cohesion policy report the most ir regularities. In 2007, the highest number 
of irregularities was reported by Italy ( 658, -12%), Spain (647, +51%) Portugal (544, 
+19%), the United Kingdom (502, +125%) and Germany (412, +28%). Apart from 

 
EN 69   EN Italy, all other countries having reported a high number of irregul arities, presented a 
significant increase. Another Member State wh ich registered a significant increase in 
terms of number of reported irregular ities in 2007 is Po land (295, +88%). 
In the analysis of the particular funds, the irregularities are split differently among 
the Member States than in the total number of cases.  
For example, in the European Social Fund (ESF) irregularities, Portugal remains also 
in 2007 the Member State having reported th e highest number of irregularities (224), 
followed by Italy (208), the United Kingdom (170) and Germany (143).  
In the European Regional Development Fund (ERDF) the countries reporting the 
most irregularities are Spain (391), It aly (306), the United Kingdom (280) and 
Portugal (263).  
In the European Agriculture Guarant ee and Guidance Fund – Guidance section 
(EAGGF-Guidance), Italy reported the hi ghest number of irre gularities (134), 
followed by Poland (94), Spain (70) and Portugal (47). Concerning Poland, the 
EAGGF-Guidance irregularities stand up for almost one third of the total number of 
irregularities reported by this Member State.  
In the Financial Instrument for Fishery Gu idance (FIFG), irregularities from Spain 
(18), the United Kingdom (11) and Italy (10) account for 65 % of the total number of 
reported irregularities affecting this Fund. 
Finally, concerning the Cohesion Fund, Spai n reported more than one third of the 
received irregularities (34) for this f und. Greece, which in the previous years had 
reported the greatest share of the irregularit ies affecting this Fund, comes in second 
place (28), followed by Poland (9). Concerning this Fund, the number of reported irregularities appears too low in relati on to the other funds  and the allocated 
resources. 
In 2007, for the first time since the enlargem ent of 2004, all Member States reported 
irregularities to the Commission services. Th is is a very positive element, because it 
shows and improved understanding from the Member States of the reporting 
obligations. 
4.2.1.  Amounts involved 
As far as amounts per country are concerne d, they go more or le ss in line with the 
number of the reported cases, with the count ries reporting the highe st numbers, also 
reporting the highest irregul ar financial amounts.  
The number of reported irregularities and related amounts is clearly linked to the 
budget that is allocated to each Member State,  as showed in chart SF4. This “rule” is 
in general confirmed, with some exceptions. 
On one side, the United Kingdom appears over -represented in this chart. This is due 
to the fact that 2007 has been  a special year for the num ber of irregularities and 
related irregular amounts report ed by this countr y, as a result of ex tensive controls 
carried out. On the other, in relation to the budget allocated, the number of 
 
EN 70   EN irregularities and related amounts reported by France appear  too low and this is a 
confirmation of what already highlight ed in the previous years. Similar 
considerations can also be expressed for Belgium in relation to the other Member 
States which have a comparab le level of resources allo cated, such as Hungary and 
Finland, though, in this case,  the difference is less evident than France and his 
“neighbours”. 
Those significant differences between Memb er States in terms of number of 
irregularities and amounts affected do not necessarily mean that one country is more fraudulent than another. The reason for the high number of  irregularities in the given 
country could be as well a higher number of controls carried out in  the analysed year. 
This constitutes another reason why more effo rts need to be undertaken in view of an 
improved harmonisation of re porting of irregularities.  
Chart SF 4: Number of cases and amounts affected by irregularities per Member 
State (in the order of increasing SF budget) 
020,000,00040,000,00060,000,00080,000,000100,000,000120,000,000140,000,000160,000,000180,000,000200,000,000
CY MT LU SK EE LV DK LT SI CZ A T HU BE FI SE IE NL PL FR UK PT EL IT DE ESIrregular amounts in €
0100200300400500600700N° of irregularities
Irregular amounts in € N° of irregularities
 
However, as not all Member States benefit also from the Cohesion Fund, the analysis 
will first focus on the four structural funds  and then a different subparagraph will 
present the situation co ncerning the Cohesion Fund55. 
The four Structural Funds 
                                                 
55 The Cohesion Fund finances big infrastructure projects related to transports, energy and environment in 
those Member States whose average income pro cap ita is lower than 90% of the European average. 
 
EN 71   EN Spain reported the highest irregular financial amounts (181 MEUR, +112% in 
relation to the year 2006), followed by the United Kingdom (161 MEUR, +170%), 
Italy (158 MEUR, -31%) and Portugal (50 MEUR, +34%). 
In the analysis of the particular funds, the situation varies slightly. 
In the ERDF, Spain (163 MEUR) is follo wed by Italy (122 MEUR), the United 
Kingdom (114 MEUR) and Germany (41 MEUR).  Poland is the first of the EU10 
(26 MEUR). 
In the ESF, the United Kingdom and the Netherlands (24 MEUR) are followed by 
Italy (21 MEUR) and Portugal (15 MEUR).  The first of the EU10 is the Czech 
Republic (3 MEUR). 
In the EAGGF section Guidance, the highest  irregular financial amounts have been 
reported by the United Kingdom (21 MEUR),  Italy (14 MEUR), Greece (7 MEUR) 
and Spain (6 MEUR). Poland is the Member State of the EU10 group with the highest reported irregul ar amounts (3 MEUR). 
In the FIFG, Portugal (1.7 MEUR) is fo llowed by Italy (1.4 MEUR), the United 
Kingdom (0.99 MEUR) and Spain (0.8 MEUR). 
The Cohesion Fund 
For the Cohesion Fund, once more Greece is the Member State having reported the 
highest irregular amounts (67 MEUR), though with a significant d ecrease in relation 
to 2006 (-43%); it is followed by Spai n (32.6 MEUR, -26.6%) and Ireland (6.6 
MEUR, no irregularities reported in 2006).  
Among the EU10, Latvia (0.77 MEUR) and Hungary (0.63 MEUR) come before 
Poland (0.59 MEUR). For the second consecu tive year, the Czech Republic failed to 
indicate the estimated irregular amou nts for the reported irregularities. 
4.2.2.  Impact on budget 
Since 2002 the impact of repor ted irregularities has been  oscillating between 2.0% 
(in 2002) and 1.6% (in 2003), as showed in chart SF5. 
Chart SF 5: Impact of irregularities on SF budget 
 
EN 72   EN  
0.00%0.50%1.00%1.50%2.00%2.50%
Impact on budget 0.15% 0.39% 0.45% 0.68% 2.01% 1.57% 1.95% 1.62% 1.83% 1.83%1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
 
In particular, the impact on the budget of  the reported irregularities has remained 
stable from 2006 to 2007.  
On the one hand, this supports the conc lusion that a certain consistency and 
continuity have been achieved in the re porting of irregularities by Member States. 
However, on the other hand, there is a grea t difficulty in analys ing correctly this 
information. As already indicated above (see supra  par. 4.1), the reported 
irregularities refer to programmes and proj ects that are of a multi-annual nature and, 
furthermore, a part of the reported irregu larities refers to a different programming 
period (for more details see paragraph 4.2.5 below). Furthermore, the budget for the 
year 2007, on which the impact of irregularities reported by the Member States has 
been calculated, is indicating the resources allocated to the first year of the programming period 2007-2013, while none of  the reported irre gularities can be 
referred to it. 
This implies that a correct estimation of the impact of irregular ities and suspected 
frauds on the part of the European budge t dedicated to the Cohesion policy is 
possible only by analysing the irregulariti es by programming period. Paragraphs 
4.2.5 and 4.3.2 will deal with these specific issues.  
4.2.3.  Detection methods 
Table SF8 shows the most frequent det ection methods and the related detected 
amounts. 
Table SF8: detection methods 
 
EN 73   EN Description FrequencyDetected 
amountsAverage detected 
amounts
Control of documents 779 102,126,093 131,099
Other facts 693 195,351,017 281,892
National administrative of financial control 401 115,023,951 286,843
On the spot control of achievement of project 
or action 284 21,142,123 74,444
Ex post control 308 49,565,839 160,928
Documentary check 236 25,209,383 106,819
Control on the premises of the company 203 79,023,324 389,277
Routine 203 71,316,589 351,313
Download 15/04/2008Table SF8
DETECTION METHODS
Year 2007
Art 3(1) lett (f) Reg NN. 1681/94 and 1831/94
 
Two aspects need to be underlined. In the first place the excessive use of a generic 
description of the detection method used: “o ther facts”. Secondly, the extremely high 
average amounts detected thr ough “Controls on the premis es of the company” and 
“Routine controls”. 
4.2.4.  Types of irregularity 
Differences remain among Member States as  to the types of i rregularities reported 
and, to a certain extent, these are consistent  with last year. The majority of cases 
involve irregularities of an “a dministrative” nature that are normally dete cted in the 
course of the rou tine documentary checks which ar e conducted before any payment 
of European money is made. To demonstrat e this, among the most frequent types of 
irregularity reported by Member States are the “not eligible expenditure” and 
“missing or incomplete supporting documents ”. Once again, Italy was the country 
where the most falsifications of documents  were detected. Ital y was not the only MS 
to report this kind of situation as sim ilar cases were also reported by Poland, 
Germany, the United Kingdom, Portugal, Latvia, Luxembourg, Hungary, the Czech 
Republic and France. 
Table SF9 shows the most frequent types of  irregularities togeth er with the amounts 
involved and the indicative average amount:  
Table SF9: Most frequent ty pes of irregularities reported 
 
EN 74   EN  
It is important to underline that the most frequent types of irre gularities are almost 
the same as in the last four years confirming a certain consistency in patterns and trends relating to structural measures a nd consistency in repor ting by the Member 
States.  
The consistent pattern across al l the funds is that the “non-eligible expenditure” is the 
most reported typology. “Infringement of ru les concerned with public procurement” 
is the second most reported typology  for the ERDF and the Cohesion Fund. 
“Missing or incomplete supporting documents”  is the second most reported typology 
for the ESF and FIFG. 
It should be underlined that the generic code  “other irregularities ” is still the third 
most used typology (the second for the EAGGF  – section Guidance), with an impact 
of 8.5% on the total reported irregularities. Member States should still pay some 
attention to this aspect. 
4.2.5.  Trends related to the programming period 2000-2006 
In 2007, about 97% of the reported irregular ities were referred to the programming 
period 2000-2006, as showed in chart SF6. The number of irregularities still referred 
to the programming period 1994-1999 is ther efore decreasing. In 2006, the share of 
irregularities related to the old programmi ng period was still about 9% of the total 
reported irregularities. 

 
EN 75   EN Chart SF 6: Distribution of reporte d irregularities per programming period 
 
This is to be expected as th e attention of the controls is  naturally focussed on running 
projects rather then closed operations. 
Chart SF7 shows the trend of  reported irregularities (in terms of both numbers and 
financial amounts involved) referred to the 2000-2006 pr ogramming period alone as 
from the year 2000. 
Chart SF 7: 1998-2006 trend concerning nu mber of reported irregularities and 
irregular amounts – Programming Period 2000-2006 
Irregularities related to the current programmi ng period have been steadily increasing 
year after year. This is due to the fact th at controls on the pr ojects also progressed 
with the advancing of the financed operati ons. It is worth remembering that the 
projects financed through the Structural Funds are implemented during several years. 

 
EN 76   EN Chart SF8 puts in comparison the trend related to the programming period 2000-
2006 with that of the previous period in terms of numbers of reported irregularities. 
Chart SF 8: 1998-2006 trend concerning nu mber of reported irregularities and 
irregular amounts – Programming Period 2000-2006 
 
The chart clearly shows that the number of  irregularities related to the current 
programming period reported in the first 8 years since its be ginning are many more 
than those related to the previous. 
This is due to a number of reasons. The incr eased resources allocated to the structural 
measures, the higher number of Member St ates that benefit from them, a better 
understanding of the reporting obligations  from national authorities, but also, 
probably, a growing attention to th is sector and improved controls. 
This difference between the two programming periods also induces to foresee that 
the peak referred to the year of closure of the current programming period will be 
probably lower than that of the previous round (in corres pondence with Year 9-Y10). 
See paragraph 4.3 for more analysis  about the programming period 2000-2006. 

 
EN 77   EN 4.3. Specific analysis 
4.3.1.  Irregularities affecti ng the different funds 
Table SF10 shows the repartition of the i rregular amounts report ed for 2007 between 
the different Funds (including the Cohesion Fund). 
The numbers have increased in comparison to  last year due to the already mentioned 
change in the legislation. In 2006 th e Member States communicated to the 
Commission 3,216 irregularities; in  2007 it was 3,832 (increase by 19.2%). 
Like in previous years, mo st of the irregularities were communicated for the ERDF 
and ESF. About 83% of the irregularities were reported for t hose two funds alone. 
The other three funds have seen a decrease as compared to 2006.  
This situation is showed in details  in chart SF9 and table SF10 below. 
Chart SF 9 Cases of irregularities per Structural Fund (CF included) 
 
Table SF 10: Number of reported irregulari ties by fund in 2007 as compared to 2006 
  ERDF ESF EAGGF-G FIFG CF TOTAL 
2007 1,906 1,290 484 60 92 3,832 
2006 1,225 1,133 548 82 228 3,216 
Difference 681 157 -64 -22 -136 616 
Variation % 55.6% 13.9% -11.7% -26.8% -59.6% 19.2% 
As far as the amounts are concerned, the total irregular amounts grew by 17.7% as 
compared to 2005.  
Like in the number of cases, the ERDF ha s also the biggest share in the irregular 
amounts – 64%. However, differently than in the number of cases, the ESF accounts only for 14% of the amounts and the Cohesion Fund for 13% . That difference in the 
share of different funds in the total number  of cases and total amounts is due to the 
fact that the average costs of projects va ry significantly according to the financing 
fund (and therefore acco rding to the type of project/ope ration financed). The projects 
carried out in the framework of the Cohesion Fund can be extremely costly, wherefrom very high values  of irregularities.  
Chart SF10 represents graphica lly the described situation. 

 
EN 78   EN Chart SF 10: Amounts affected per Structural Funds (CF included) 
 
As compared to 2006, the share of the ERDF  has greatly increase d (as last year it 
represented 50% of the amounts). The total irregular amount for the ERDF has risen 
by 48% in comparison to 2006. Two other funds experienced an increase of the irregular amounts in 2007 in re lation to the previous year. In the EAGGF-Guidance a 
growth of 13.7% was observed, while the ESF increased by 20% in value. Table SF11 provides details co ncerning all the funds. 
Table SF 11: Irregular amounts by fund as compared to 2006 (amounts in € 1,000) 
  ERDF ESF EAGGF-G FIFG CF TOTAL 
2007 534,363 114,138 62,874 6,056 110,223 827,654 
2006 360,024 94,955 55,317 6,401 186,605 703,302 
Difference 174,339 19,183 7,557 -345 -76,382 124,352 
Variation % 48.4% 20.2% 13.7% -5.4% -40.9% 17.7% 
While comparing the share of funds in the total irregularities, the most striking 
conclusion is the difference in the Cohesi on Funds share in the total amounts and in 
the number of cases. This however is due, as  already mentioned, to the high value of 
projects carried out in its framework.  
If only the four Structural Funds are taken in considera tion, the distribution of the 
reported irregularities and related involved financial amounts is that presented in the 
following charts SF11 and SF12. 
Chart SF 11 (left): Number of irregularities per Structural Fund (CF excluded) 
Chart SF 12 (right): Amounts affected  per Structural Funds (CF excluded) 

 
EN 79   EN  
Table SF12 below shows how irregularitie s among the funds are distributed in 
relation to the financial allo cations of the different f unds (Cohesion Fund excluded). 
The data contained in the ta ble highlight an over-repres entation of irregularities 
related to the ERDF. A possible explanatio n is the fact that the ERDF finances 
projects of greater financial value than  the other funds and, therefore, related 
irregularities may affect  higher financial amounts. 
Table SF 12: Irregularities by fund ( number and amounts) in relation to budget 
allocated 
 
4.3.2.  Irregularities by Objective – Programming Period 2000-2006 
The Cohesion policy, as already specified in paragraph 4.1, aims at supporting the 
economy of regions lagging behind or in a difficult contingent economic situation. 
The European support; which is always accompanied by a national support, varies 
according to the fact that a region falls within the area of a given objective.  

 
EN 80   EN Charts SF13 and SF14 show how the irregular ities reported in 2007 and related to the 
programming period 2000-2006 were dist ributed among the different objectives56. 
Chart SF 13 (left): distribution of irre gularities related to PP2000-2006 by number, 
according to objective – 2007 – reported irre gularities (left) and related irregular 
amounts (right) 
Chart SF 14 (right): distribution of irre gularities related to PP2000-2006 by value, 
according to objective – 2007 
 
The distribution of the irregul arities is very much in line with the allocation of the 
financial resources among the different object ives, with a slight over representation 
of irregularities related to  objective 3 programmes and an under representation of 
irregularities affecting objective 2 regi ons and programmes for fisheries out of 
objective 1 regions as showed in the table SF13. 
Table SF 13: Irregularities by objecti ve (by numbers and amounts) in relation to 
budget allocated 
                                                 
56 Three general objectives are foreseen for the programming period 2000-2006: 
Objective 1: promote the development and structural adjustment of regions whose development is lagging 
behind; 
Objective 2: supporting the economic and social conv ersion of areas experiencing structural difficulties; 
Objective 3: supporting the adaptation and modernisation of education, training and employment policies and 
systems in regions not eligible under Objective 1. 
Furthermore, through the Funds are also financed the so called “Community Initiatives” , aimed at intervening 
on specific aspects such as, for example, st imulating interregional cooperation (INTERREG); 
promoting the design and implementation of innovative models of development for the economic and 
social regeneration of troubled urban areas (URBAN).  

 
EN 81   EN  
4.3.3.  Irregularities vs suspected frauds 
First estimations of which proportion of th e reported irregularities could be defined 
as “suspected frauds” were presente d in the Annual Reports since 2004. These 
attempts were mainly based on specific analyses of the information reported by the Member States concerning the modus operandi , the type of irregularity, the 
administrative state of an irregularity a nd the additional inform ation given in text 
fields. 
After the modifications introduced by Regulations Nos. 2035/2005 and 2168/2005 to 
the basic Regulations Nos. 1681/94 and 1831/94, as of January 1st 2006, Member 
States have to classify the reported irregularity, indicating whether the reported 
irregularity is a “suspected fraud” or not. The concept of “suspected fraud” is 
necessary, because a given situation can be defined as fraud only after a sentence is 
issued by a competent court.  
As already indicated under paragraph 4.1.6, Me mber States were able to classify 
67% of the reported irregularities (that is to say that they indicated whether the 
reported situation was evaluated as an ad ministrative irregularity or a suspected 
fraud). It is an encouragi ng progress in relation to the previous year, when only 51% 
of the reported cases provided for this indica tion, but it also shows that there is still 
room for improvement, in particular from certain Member States (4 Member States 
have still not provided  any qualification at all; other 3 Member States could provide 
the classification only for a limited part of  their reported irre gularities. For more 
details, see supra par. 4.1.6). 
The data sample is, therefore, particularly significant and the results of this analysis 
base now on more solid grounds than in the past. 
About 15% of the 2,582 irre gularities for which qualific ation has been provided, 
were qualified as “suspected frauds”. This result is fully in line with last years’ estimations.  

 
EN 82   EN Furthermore, by applying the same analyt ical techniques of the previous years57 to 
the data set classified by the Member States , the results obtained ar e rather consistent 
with those obtained on the portion of information received from the Member States as indicated in table SF14 below. In fact, the results differ in only 4% of the cases. 
Table SF14: Comparison between Commissi on and Member State classification of 
irregularities 
 
It should be also highlighted that from a very detailed analysis of the cases where 
differences exist, elements provided by the Member States induce to consider correct 
the re-classification ope rated by the Commission. 
Table SF15 shows the different results base d on the classification provided by the 
Member States (and limited to the 2,582 ir regularities for which the qualification has 
been provided) and that operated by the Commission on the whole data set for the year 2007.  
Table SF 15: Percentage of irregulari ties qualified as “suspected fraud” and 
estimation of “suspected frauds” on th e reported irregularities per Fund 
 
The differences between the percentages can  be explained by the fact that the two 
data set are not the same.  
As already indicated under paragraph 4.1, in relation to the reporting of irregularities 
affecting the Cohesion Fund, th ere seems to be a discrepa ncy with the other funds 
that induces to think that still many progres ses are needed in relation to compliance 
with reporting obligations. 
                                                
 
57 The estimation method has remained basically the same, with some minor variations, following the 
lessons “learned” in analysing the cases directly classified by the Member States. This slightly 
“revised” method has been applied again to the entir e database of reported irregularities for the years 
2000-2007 in order to produce Chart SF15. The different method used explains the different values 
showed on that chart in comparison with similar char ts appeared on the statistical annexes to the annual 
reports for the years 2005 and 2006. 

 
EN 83   EN Table SF16 presents the same comparis on between the classification provided by 
Member States and Commission’s analysis  in relation to the amounts reported. 
Table SF 16: Percentage of reported financ ial amounts involved in cases qualified as 
“suspected fraud” and estimation of “suspected fraud” amounts per fund 
 
This table shows even more the need for a deeper attention by Member States 
reporting irregularities affecting the Cohe sion Fund. The 0% indicated above is due 
to the fact that the irregular amounts for the cases classified as “suspected frauds” still need to be assessed by the national authorities. 
Despite the consistent and positive results showed above in terms of comparability 
and compatibility of the two appro aches (the Member States’ and the 
Commission’s), it is still recommended to take a lot of caution in assessing the meaning of these figures. A 100% classification from the Member States would remove this caution, but the resu lts are, indeed, encouraging.  
Chart SF15
58 presents the trend of the percentage of suspected frauds on the total 
reported irregularities in the last ei ght years calculated according to the 
Commission’s estimations. 
A striking aspect is the relatively stable pe rcentage of irregular ities that could be 
estimated as suspected fraud in the last four years. It is around 12% of the total 
reported (black line on the chart). 
                                                 
58 As data referred to the Cohesion fund are considered not reliable, they have been excluded from this 
chart. See also footnote 51 for more details about data showed on this chart. 

 
EN 84   EN Chart SF 15: Level of “suspected frauds ” on total reported irregularities from 2000 
to 2007 
 
The lowest level of suspected fraud as a percentage of total reported irregularities 
was registered in 2002. This was also the year in which the highest number of cases of irregularities was reported to OLAF, co inciding with the closure of the 1994-1999 
programming period.  
On the basis of this estimation, in 2007, re ported “suspected frauds’ affect about 
0.31% of the commitments. 
However, this does not mean that this am ount is effectively defrauded or turns out 
into a loss for the Eu ropean budget. In fact, these amounts relate to suspected 
fraudulent behaviours th at have been detected by na tional authorities and for which 
recovery procedures are undergoing. Moreover,  when these situati ons were detected 
in early stages of the process, the “potential” loss is even decreased, because no payments or only interim payments have been granted. 
By analysing only the cases estimated to be considered as “suspected frauds”, the 
amounts still to be recovered related to  them impact on the EU budget for 0.20%. 
4.3.4.  Irregularities detected before payment 
Therefore, an interesting aspect to examin e in the framework of the protection of the 
Communities’ financial interests is what proportion of irregularities is detected 
before any payment is effectively made to the beneficiaries. 
This aspect can provide some concrete elements also concerning Member States’ 
preventive action. 

 
EN 85   EN Table SF17 shows the total number of irre gularities reported by each Member State 
(column A); the number of irregularities detected before any payment is made 
(column B); what percentage B represen ts on A (column C); the financial amounts 
reported as irregular (colum n D) and those related to the irregularities detected 
before payment (column E); and finally wh at percentage of the total irregular 
financial amounts reported have been id entified before payment (column F). 
Table SF 17: irregularities detected before payments per Member States - 2006 
 
Very high rates of detection before paymen t emerge especially in some of the new 
Member States (namely Hungary, Malta, Po land and Slovakia) and in Sweden, the 
Netherlands and Ireland.  
4.4. Recovery 
In 2007, Member States communicated, pursuant to Regulation No. 1681/94, 3,740 
irregularities for a total financia l amount of EUR 717,431,387 (see Annex 15).  
The situation as regards recovery in 2007 (see Annex 16) is as follows:  
– Member States recovered EUR 153,465,848; 

 
EN 86   EN – the sum to be recovered was EUR 418,231,399;  
– in the same period, the amount declared  irrecoverable pursuant to Article 5, 
par. 2 of Regulation No. 1681/94, and whic h is awaiting a formal decision is 
EUR 216,644  
Pursuant to Regulation No.1831/94, Member St ates reported 92 irregularities for a 
total amount of EUR 110,222,823 (see annex 17), of which EUR 39,298,464 remain 
to be recovered. 
4.5. Conclusions 
Introduction 
• Member States reported 3,832 irregularities in 2007; 
• The total financial amount affect ed in 2007 was about EUR 828 million. 
Reporting discipline 
• The number of irregularities reported  through the Electronic modules AFIS/ECR 
has been increasing and repres ent now over 75% of the total; 
• Eight (8) Member States still do not use the electronic modules AFIS/ECR: 
Estonia, France, Germany, Ireland, L uxembourg, Latvia, Spain and Sweden; 
• Germany and Estonia send an electronic file via the AFIS-mail, which still needs 
some processing; 
• Member States need to pay more attent ion to submit the irregularities within 
deadlines established by re gulations, but the situation is improving in relation to 
the past; 
• The time gap between detection and repor ting is satisfactory for 82% of the 
irregularities; 
• Germany is the only country that does not communicate personal data; 
• The classification of the irregularity (i ndicating whether or not it is a case of 
“suspected’ fraud) is an element of the re porting that needs to be strengthened. In 
2007, the classification was provided in 67% of the irregularitie s, increasing in 
comparison with 2006; 
• Despite the clarifications and simplifications introduced with Regulations Nos. 
2035/2005 and 2168/2005, there is  still need for further harmonisation of 
reporting between Member States. 
General trends 
• The number of irregulariti es reported to the Commi ssion increased by 19.2% in 
relation to 2006; 
 
EN 87   EN • The irregular financial amounts related to  those irregularities  increased by 17.7%; 
• The impact of irregularities on the total St ructural actions budget remained stable 
(1.83%); 
• Italy, Spain, Portugal, the United Kingdo m and Germany are the countries that 
reported the highest number of irregulariti es in 2007. Poland is the first among the 
EU10; 
• Spain, Italy, the United Kingdom and Germa ny are the countries that reported the 
highest amounts. Poland is the first of the EU 10; 
• Higher irregular financial amounts reporte d by a given country do not necessary 
imply that in this country more frauds a nd irregularities occur than in others. The 
reason could be a higher number of controls; 
• The most frequent method for detecting irre gularities is the cont rol of documents. 
The method which has the highest averag e detected amount is “control on the 
premises of the company”; 
• Not eligible expenditure is the most frequently reported type of irregularity. The 
other reported typologies are in  line with previous years; 
• Concerning the programming period 2000-2006, the trend is increasing for both 
number of irregularitie s and related amounts. 
Specific analysis 
• ERDF remains the fund to which the highe st number of irre gularities and the 
highest amounts are related. This is normal c onsidering that it is the Fund with the 
largest resources available.  
• ERDF was also the fund having showed the highest increase in terms of number 
of reported irregularities  and related amounts.  
• Irregular amounts increased al so in relation to ESF and EAGGF. They decreased 
for FIFG and the Cohesion Fund; 
• The greatest majority of irregularit ies related to the programming period 2000-
2006 are referred to Objective 1 regions which are also the regions benefiting 
from the greatest support. In general, th ere is a certain correlation between the 
budget allocated and the i rregularities reported; 
• “Suspected frauds”, as a percentage of the total number of reported irregularities, 
represent around 12-15% in 2007. This resu lt is in line with previous years 
• High rates of detection before payment em erge especially in some of the new 
Member States (namely Hungary, Malta, Po land and Slovakia) and in Sweden, the 
Netherlands and Ireland. 
Recovery 
 
EN 88   EN • In 2007, the irregular financial amounts incr eased and so did the amounts to be 
recovered; 
• 63% of the reported irregular amounts are to be recovered, while they represented 
51% of the total reported irregular amounts in 2006; 
• The amounts to be recovered are declining for the Cohesion Fund. 
 
EN 89   EN  
5. PRE-ACCESSION FUNDS  (ANNEXES 18-21) 
In 2007 Member States and Candidate Count ries sent 1,615 reports on three pre-
accession funds (PHARE, SAPARD, ISPA) to  the Commission/OLAF of which 332 
new communications and 1,283 updates of  cases which had been reported 
previously. The total amount affected by irregularities in 2007 was EUR 32,384,953 
where PHARE accounts for EUR 15,787,226 (96 cases), SAPARD – EUR 10,789,619 (150 cases), ISPA – EUR 5,808,108 (86 cases). 
5.1. Reporting discipline 
The obligation to report irregularities in the area of pre-accession assistance is 
established in the Financing Agreemen ts signed between the acceding countries, 
Candidate countries and the European Co mmunity and is in accordance with the 
provisions of Commission Regulation (EC) 1681/1994
59. 
Pre-accession assistance relate d irregularities are reported using standard paper form. 
Afterwards the submitted information is inserted in the data base managed by OLAF. The reporting countries tend to misinterpr et the obligatory fields in the form, 
therefore the consistency and comparability of the reported information remains to be an issue. 
Table PA 1: Share of reliability of reported information in 2007 
CountryCases with 
mistakesCommunications 
2007 Reliability %
BG 40 347 88.47%
RO 34 639 94.68%
SK 10 57 82.46%
HU 8 25 68.00%
PL 8 380 97.89%
CZ 4 70 94.29%
LT 4 31 87.10%
EE 2 23 91.30%
LV 1 20 95.00%
TR 1 6 83.33%
HR 0 2 100.00%
MT 0 11 100.00%
SI 0 4 100.00%
Total 112 1615 93.07%Table PA1
Reliability of reported information 2007
 
Insufficient quality of reported informati on remains to be an outstanding problem 
although some improvements have been achieved. Inconsistencies and even 
contradictions in different sections of the same report still occur. In absolute numbers 
Bulgaria has the highest number of notifi cations containing one or more content 
                                                 
59 As amended by Regulation (EC) No 2035/2005 
 
EN 90   EN mistakes (40), followed by Romania (34). In  relative terms Hunga rian notifications 
are the least reliable. The same countri es were identified in the 2006 report. 
The share of reliable reports in Table PA 1 has to be interpreted with caution60. Most 
common mistakes are incorrect  or incomplete financial aspects of the reports, 
missing practices employed in committing irregularities, missing types of irregularities.  
A number of technical nature mistakes occur in Bulgarian, Hungarian, Czech, and 
Romanian reports, namely, numbering of the cases is not sequential, reporting quarters are mixed, some pages are mi ssing, project details are not precise .  
The incorrect numbering of the cases become s a hindrance to cooperation with MSs’ 
authorities on follow up of related issues . Sequential numbering is  an important pre-
condition and some progress is expected  from some reporting authorities.  
The irregularity management team in OLAF performs quality checks and tries to 
clarify all the inconsis tencies found in the reports. Fre quently they occur in financial 
aspects as miscalculations or result from  different exchange rates used. A more 
responsible approach towards the preparation of reports  by the repor ting authorities 
would enable the Commission to minimi ze the quality check s and correspondence 
related to these issues.  
At the end of 2007 a thorough overview
61 of OLAF data base and cross check of all 
the communications sent by reporting countri es were carried out. It resulted in 
clarifying financial aspects sections as we ll as deleting duplicate cases. Member 
States’ authorities have been contacted a nd requested to provide further information 
on cases detected before 2007 which contain inconsistencies and were not followed-up (no information provided on administra tive or judicial measures taken and 
recoveries). Bulgaria, Czech Republic, Hungary, Latvia, Lithuania, Poland, 
Romania, Slovakia, and Slovenia receive d lists of cases. Bearing in mind the 
approaching closure of the programmes data  on the financial aspects should be up to 
date and precise. 
5.1.1.  Timely reporting 
Timely reporting of irregularities continue s to be one of the problems OLAF is 
facing when working with analysis of th e reported information. In 2007 5 countries 
out of 14 missed the reporting deadline
62 for at least one of the pre-accession funds. 
The deadlines were fully respected by C yprus, Czech Republic, Estonia, Latvia, 
Lithuania, Malta, Romania, and Slovenia. Some special cases are worth bringing into 
the light. Bulgaria missed the reporting d eadline for ISPA for a ll 4 reporting quarters 
in 2007. Croatia started reporting first cases in  2007 (only ‘nil’ repo rts had been sent 
                                                 
60 Mistakes are calculated on a case basi s. If there are several mistakes in  one report it is counted as one. 
A comparison is then drawn between problematic cases and all communications (new and updates) 
received from the reporting country in 2007. 
61 Consequently eligible amounts and irregular amounts may differ from the ones indicated in 2006 report. 
62 Following the two months at the end of each qua rter, Member states and Candidate Countries are 
obliged to report to the Commission any irregularities which have been the subject of initial 
administrative or judicial investigations. 
 
EN 91   EN before), however, the deadlines were missed. Hungary failed to report PHARE and 
SAPARD on time for three quarters in 2007. Turkey does not keep to the reporting 
schedule. 
Table PA 2: Timely reporting 
CountryReported too 
lateReported on 
time Total reports% of late 
reports
HR 2 0 2 100.00%
HU 19 6 25 76.00%
SK 26 31 57 45.61%
BG 88 259 347 25.36%
PL 57 323 380 15.00%Table PA2
TIMELY REPORTING
 
Failure to respect reporting deadlines by th e Member States and Candidate Countries 
makes the preparation of a thorough analytic al overview of dete cted irregular cases 
rather difficult. Since pre-accession assistan ce related irregularities are reported in 
paper some time is needed to process them.  
5.1.2.  Time gaps 
In accordance with the Regulation 1681/94 there are three obligatory dates to be 
filled in (date of first information, the period of irregularity, date when the 
irregularity was established). The calculati ons are based on the dates presented in the 
first notifications sent  in 2007. Failure to indicate at least one of the required dates 
affects the compliance. Some reporting countries tend to leave out the dates therefore 
more attention should be concentrated on this aspect.  
Table PA 3: Compliance in 2007 – missing dates 
Country No casesCases with 
dates missing % Compliance 
BG 76 22 71.05%
CZ 7 1 85.71%
EE 8 0 100.00%
HR 2 0 100.00%
HU 7 6 14.29%
LV 2 0 100.00%
MT 2 1 50.00%
PL 44 1 97.73%
RO 164 8 95.12%
SI 1 1 0.00%
SK 13 1 92.31%
TR 6 2 66.67%
 Total 332 43 87.05%Table PA3
COMPLIANCE 2007 - MISSING DATES
 
Table PA 4 presents the average time peri od that each reporting country takes to 
detect an irregularity and th en to report it to the Comm ission. Cyprus and Lithuania 
did not report any cases in 2007. The analysis  takes into account the start date of 
 
EN 92   EN irregularity, the date of establishment, and the date of reporting the case to the 
Commission. Due to missing dates in a number of cases Table PA 4 is compiled on a limited dataset. 
Table PA 4: Timely repor ting – time gap in 2007 cases 
Country Irregularity - Detect ion Detection - Reporting
BG 14.26 2.56
CZ 19.91 9.77
CY
EE 22.03 1.95
HR 4.87 0.82
HU 42.57 5.13
LT
LV 22.58 0.83
MT 4.77 4.80
PL 32.49 5.39
RO 22.31 2.50
SI
SK 4.68 7.55
TR 1.80 2.23
Total 17.48 3.96Average time gap in monthsTable PA4
TIMELY REPORTING - TIME GAP 2007 CASES
 
The average time span for relevant author ities to detect an irregularity is 17,48 
months. However, for Hungary it is 3.5 years, for Poland almost 3 years. This time period also signals the end of the project cycle. 
A maximum period of 5 months (3 months  + 2 months) to report a detected 
irregularity is es tablished by Regulation No. 1681/ 1994. According to the provided 
information, it takes almost 4 months on aver age to report the det ected irregularities. 
Czech Republic and Slovakia were late to submit the information on detection to the 
Commission. 
Some very short periods between detecti on and reporting (less th an a month) give 
rise to doubts on the correct interpretation of ‘the date of establishment’ by the 
reporting countries. Reporting c ountries are required to fill  in the date of primary 
administrative or judicial finding
63. If the data are correct the result is very positive. 
                                                 
63 As defined in Art. 1a (3) of the Commission regulation 1681/94 "primary administrative or judicial 
finding" means a first written assessment by a competent authority, either administrative or judicial, concluding on the basis of specific facts that an irregularity has been committed, without prejudice to 
the possibility that this conclusion may subsequently have to be revised or withdrawn as a result of 
developments in the course of the administrative or judicial procedure. 
 
EN 93   EN 5.1.3.  Personal data 
Personal data relate to one more aspect of reporting discipline. Reporting countries 
are obliged to give information on the identity of the natura l or legal persons 
involved in the irregularity64. 
Table PA 5: 2007 cases c ontaining personal data 
Country No casesMissing 
names Compliance %
BG 76 0 100.00%
CZ 7 0 100.00%
EE 8 0 100.00%
HR 2 0 100.00%
HU 7 0 100.00%
LV 2 0 100.00%
MT 2 1 50.00%
PL 44 1 97.73%
RO 164 3 98.17%
SI 1 0 100.00%
SK 13 2 84.62%
TR 6 0 100.00%
 Total 332 7 97.89%Table PA5
PERSONAL DATA 2007
 
In general the situation is very satisf actory and only Malta, Poland, Romania, and 
Slovakia need to slightly improve. 
5.1.4.  Reporting thresholds 
Different thresholds to report the detected irregular cases to th e Commission apply to 
pre-accession assistance, namely  EUR 4000 for SAPARD, EUR 10,000 for 
PHARE65, and no threshold for ISPA  related irregularities. Some reporting countries 
keep sending cases where the Community amount affected is below the reporting threshold. Table PA 6 shows the number of  cases reported below the threshold in 
2007. 
Table PA 6: Irregularities repor ted in 2007 below the threshold 
                                                
 
64 Missing personal data at some instances might be justified by provisions of Article 3(3) of Regulation 
1681/94 stipulating ‘If national provisions provide for the confidentiality of investigations, 
communication of information shall be subject to the authorization of the compet ent court of tribunal’. 
65 Since 1st January 2006 
 
EN 94   EN Country
 No Reports Eligible amount Irregu lar amount Amount to be recovered
BG 25 3,215,329 92,169 61,479
CZ 1 164,033 798 0
EE 3 13,492 4,787 2,846
LV 1 46,548 1,227 943
PL 2 18,757 6,745 6,745
RO 1 40,878 1,436 0
SK 3 371,309 12,180 6,716
Total 36 3,870,346 119,342 78,729All funds €Table PA6
CASES BELOW THE THRESHOLD
 
5.1.5.  Practices employed 
Reporting countries are obliged to indicat e the practices employed in committing the 
irregularity ( modus operandi )66. This can be done by using the provided codes or 
giving a description. The list of codes provide s a collection of type s of irregularities. 
If the reporting countries do not choose the relevant code OLAF picks the most 
appropriate code on the basis of the descrip tion. This is necessary  to make the data 
reported by different countries comparable. Failure to provide clear and accurate descriptions by reporting authorities leads to difficulties in analyzing the data. Reporting countries should be more pr ecise in providing such information. 
5.1.6.  Classification of irregularity 
Reporting countries are obliged to indicate whether the reported irregularity can be 
considered as ‘suspected fraud’ or not. Wh en the reporting countries  fail to classify 
the reported cases OLAF does it on the ba sis of the overall information provided in 
the report. Table PA 7 provides a rate of co mpliance with respect to classification of 
irregularity. 
Table PA 7: Compliance in 2007 - cla ssification of irregularities  
Country Blan k Fraud Irregularit yNo of cases Compliance %
CZ 7 7 0.00%
MT 2 2 0.00%
SI 1 1 0.00%
TR 6 6 0.00%
PL 33 3 8 44 25.00%
SK 9 4 13 30.77%
HU 4 3 7 42.86%
LV 1 1 2 50.00%
EE 3 5 8 62.50%
RO 57 10 97 164 65.24%
BG 21 8 47 76 72.37%
HR 2 2 100.00%
 Total 144 21 167 332 56.63%CLASSIFICATION OF CASES 2007 Table PA7
 
                                                 
66 Article 3 of Commission Regulation (EC)1681/94 
 
EN 95   EN Croatia fully complied but only two cases  were reported. Czech Republic, Malta, 
Slovenia, and Turkey did not classify a ny of the reported irregularities in 2007. 
Cyprus and Lithuania have not reported any new cases in 2007 so they do not appear 
in the compliance assessment. On average 56.6 % of cases were classified. There is a 
decrease in compliance with reference to 2006.  
5.1.7.  Summary  
Table PA 8 makes a summary of different aspects of compliance rate. The countries 
are listed in order of compliance with th e requirements established by the Regulation 
1681/94. Inconsistencies for each country ar e more precisely seen by analysing 
separate columns. Cyprus and Lithuania did not report new cases in 2007 therefore 
their compliance could only be measured on the basis of updates but could not be 
complete. 
The summary reveals that countries reporti ng very few cases lik e Malta and Slovenia 
get to the bottom of the list because mistakes get high weighting. They should pay more attention to the classification of cases and dates. As for Hungary the low 
overall result is a matter of great concern.  
Summary compliance of 82.4% manifests some  limitations with reference to further 
analysis carried out in the report. Low compliance with the reporting obligation 
might imply some weaknesses in administra tive set up of the reporting mechanism in 
the Member States and Candi date Countries concerned. 
Table PA 8: Compliance pe r reporting country 2007 
CountryMissing 
datesMissing 
namesClassification 
of casesTimely 
reportingSummary 
compliance %
EE 100.00% 100.00% 62.50% 100.00% 90.63%
RO 95.12% 98.17% 65.24% 100.00% 89.63%
LV 100.00% 100.00% 50.00% 100.00% 87.50%
BG 71.05% 100.00% 72.37% 74.64% 79.52%
PL 97.73% 97.73% 25.00% 85.00% 76.36%
HR 100.00% 100.00% 100.00% 0.00% 75.00%
CZ 85.71% 100.00% 0.00% 100.00% 71.43%
TR 66.67% 100.00% 0.00% 100.00% 66.67%
SK 92.31% 84.62% 30.77% 54.39% 65.52%
MT 50.00% 50.00% 0.00% 100.00% 50.00%
SI 0.00% 100.00% 0.00% 100.00% 50.00%
HU 14.29% 100.00% 42.86% 24.00% 45.29%
 Total 87.05% 97.89% 56.63% 87.88% 82.36%SUMMARY COMPLIANCE %Table PA8
 
5.2. General Trends 
The intention of this descriptive analysis is to provide an overview of the reported 
irregularities in 2007 as well as comparison with the trends observed for the period 
2002 -2006.  
 
EN 96   EN One should take into account  that Member States and Candidate Countries must 
report to the Commission cases exceeding the established th resholds. As presented in 
Table PA 6 reports below the threshold ar e included in the overall analysis. Since 
reporting countries decided to report them  to the Commission it is possible that 
irregular amounts are only indicative and will  be specified. Theref ore they are likely 
to get higher in the follow up reports. 
Overall trend 
The number of cases reported (first co mmunications) in 2007 decreased by 15.9%, 
however, the number of follow-up reports increased by 55.9% in comparison to 
2006.  
A sharp decrease by 53.2% is  observed in the number of PHARE cases, a small 
decrease by 8.5% in SAPARD cases, and an  enormous increase by 230.7% (from 26 
in 2006 to 86 in 2007) in ISPA cases. This reflects that less new cases are detected because pre-accession funds are undergoing the fi nal stages of the project cycle. The 
high number of updates illustrates that bene ficiary countries are actively proceeding 
with administrative or judicial measur es concerning cases detected previously. 
However, the high number of updates is no t characteristic to  all the reporting 
countries. Some of them ju st started reporting in 2007. 
Irregularities are not dist ributed equally among the re porting countries due to 
different periods of eligibility of expe nditure. Three groups of  reporting countries 
can be distinguished, namely 2004 acces sion Member States, 2007 accession 
Member States, and Candidate countries  – Croatia and Turkey. In 2007 EU-10 
account for 25.3%, Bulgaria and Romania – 72.3%, Croatia and Turkey – 2.4% of 
the total number of reported  cases. Talking about the tota l irregular amount reported 
EU-10 make 19.7%, Bulgaria and Romani a – 76.1%, Croatia and Turkey – 4.1%. 
Chart PA 1: Irregularities communicate d by reporting countries (2002-2007) 
5,344,93810,426,64417,372,538
13,774,244
14,89032,384,953
104227341395
332
6
05000000100000001500000020000000250000003000000035000000
2002 2003 2004 2005 2006 2007Amounts EU R
050100150200250300350400450
Cases
Amounts Cases
 
 
EN 97   EN 5.2.1.  Amounts involved 
For the purposes of this report the term  eligible amount stands for the amount 
committed to be paid at the signature of the contract if the expenditure incurred is justified and eligible.  
With regard to the amounts involved both eligible and irregular total amounts went 
up. 
In 2007 the eligible amount increased by 208% in comparison to 2006. This was 
caused by a big increase of eligible expe nditure for ISPA (432%). The decrease in 
PHARE and SAPARD could not counterbalance the ISPA increase. In PHARE 
eligible expenditure declined by 77% and in SAPARD it went down by 17%.  
EU-10 does not report ISPA irregularities any longer due to the transfer of 
expenditure into the Cohesion Fund. Conse quently, only Bulgaria and Romania sent 
communications for ISPA in 2007 (see A nnex 18). There is a striking difference 
between both the number of cases and am ounts involved as reported by Bulgaria and 
Romania. The number of ISPA cases reporte d by Romanian authorities has increased 
four times combined with 5 time increase in  the irregula r amounts. As for Bulgaria 
the number of cases increased twice (from 2 to 4) but the irregular amount almost 15 
times. The eligible amount re ported by Bulgarian author ities is relatively small 
bearing in mind that the average value of ISPA contracts is a million euro or more. 
Obviously there is a difference in the appro ach to irregularity reporting in those two 
countries.  
Irregular amount reported in 2007 went up by 135%. The irregular amounts in all 
three funds went up sharply, especially for ISPA. There are several reasons behind it. 
Many projects, which did not get into the audit samples before, are being checked only at the final stages of the implemen tation when the final payment claims are 
tabled. Since all the projects are being checked before fina l payments are made, this 
triggers the detection of irre gularities. Big irregular amount s manifest the fact that a 
number of projects failed to be implemented or violated eligibility rules, therefore the 
whole amount of the contract becomes irregular.  
Chart PA 2: Irregular amounts by fund 
 
EN 98   EN 
024681012141618
2002 2003 2004 2005 2006 2007Irregular amount m illion EUR
ISPA PHARE SAPARD
 
The charts have to be interpreted with caution. The number of re porting countries is 
growing therefore it results in the increas ing amounts. What is more, pre-accession 
assistance funded projects run over seve ral years while the affected amounts are 
calculated with reference to the reporting year. While the closure of the programmes is approaching the remaining projects (possi bly contracted at the beginning of the 
programme and with several addenda ) are frequently problematic.  
Furthermore, a distinction has to be ma de between cases with potential financial 
impact detected before the payments and real  financial impact resu lting in recoveries 
(see 5.3.2 and 5.4). 
The major part of irregular cases is not fraudulent and undergoing corrective 
measures (see 5.3.2). 
Countries benefiting from the biggest s upport (Romania, Poland, Bulgaria, Hungary) 
reported the highest number of irregular ities (164, 76, 44 and 7 respectively). The 
pattern, however, is different with refe rence to the irregular amounts. Romania, 
Bulgaria, Hungary, and Slova kia reported the highest ir regular amounts. Annex 18 
presents all the figures in deta il per each reporting country. 
The differences in the number of reporte d cases and irregular amounts do not imply 
higher vulnerability to irregularities by so me countries. The reasons for high number 
of irregularities reported coul d be a higher number of cont rols carried out by national 
authorities or Community a udits in the reporting year. 
Impact on the budget After the accession of EU-10 no new expenditure was committed (except for 
SAPARD where some commitments were made up at the end of 2004). For Bulgaria and Romania the last commitment y ear was 2006. 2007 was the first year of 
 
EN 99   EN commitments under Instrument of Pre-Accession Assistance (IPA)67 focusing on 
Candidate and Potential Candidate count ries for the programming period 2007- 2013. 
Chart PA 3: Reported irregular amount as  share of the eligible amount under 
reported irregular projects 
39.86%
27.43%
22.79%
9.66%
6.39%
1.08% 0.86% 0.43% 0.42%1.92%13.66%16.15%36.97%38.89%52.88%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%
BGSIHUHR TREESKLVCZ MTROLT PL CY
 Total
Member States - Candidate CountriesShare of irregular amount
 
The comparison is drawn between the total va lues of the projects reported and the 
total irregular amounts per country. The sh are of irregular amount makes 1.92%. The 
chart illustrates th at the share of ir regular amount is very litt le. Big beneficiaries of 
pre-accession assistance like Poland and Romania report relativel y little irregular 
amounts detected, therefore it influences th e overall figure. Bulg aria, Slovenia, and 
Hungary report cases with ra ther high irregular share wh ich sometimes equals the 
total value of the project. 
The impact of irregularities reported in  2007 on budgetary allocations for the same 
year is 2.46% (EUR 32 million irregular am ounts on EUR 1.3 billion of allocations). 
However, this figure should be read with  great caution as budgetary allocations for 
2007 refer to different beneficiaries68. 
If the impact of irregularities is ca lculated on the whole programming period 
(therefore on the “real” beneficiaries), in fact, the result is  quite different: 0.49% 
(EUR 79 million total irregular amounts repor ted so far on an overall budget of about 
EUR 16 billion). 
                                                 
67 Council Regulation (EC) No 1085/2006 
68 As of 1st January 2007, the co untries benefiting from pre-accession  assistance are: Croatia, Turkey, 
FYROM, Albania, Bosnia-Herzegovina, Serbia (a nd Kosovo) and Montenegro. See footnote 66. 
 
EN 100   EN 5.2.2.  Method of detection 
Reporting countries are required to indicate the manner in which the irregularity was 
discovered69. Despite the fact that pick list fo r possible methods of detection had 
been provided, few reporting authorities ma de use of it. Theref ore the codes were 
attributed on the basis of the descrip tions (frequently very laconic and vague) 
presented in the reports. 
Most of the irregularities in 2007 were dete cted by means of ‘Control of documents’. 
This method is becoming more frequent in  comparison to all years. This could be 
explained by checks of the final payment requests due to the closure of many projects. On the other hand this method is of  a rather general natu re and can be used 
throughout the project cycle. 
Table PA 9: Method of detection by number of reported irregularities 
Description
Cases % Cases %
Control of documents 114 34.34% 414 29.47%
National administrative or financial control 63 18.98% 420 29.89%
On the spot control of achi evement of project or action 61 18.37% 194 13.81%
Ex post control 21 6.33% 82 5.84%
Interservice collaboration 17 5.12% 23 1.64%
Control of accounts 16 4.82% 29 2.06%
National fiscal control 10 3.01% 42 2.99%
Community controls 4 1.20% 13 0.93%
Control by national anti-fraud service 4 1.20% 25 1.78%
22 6.63% 163 11.60%
Total 332 100.00% 1405 100.00%Table PA9 
METHODS OF DETECTION
2007 All years
 
The Table PA 10 below presents an overvie w of methods of detection which helped 
to trace the highest irregular amounts. Half of irregular amounts in 2007 were 
detected by means of ‘Control of documents’ . This is the most frequent method for 
all reporting years. The majo r difference between two tables is that in terms of 
detected irregular amounts ‘O n the spot control of achieve ment’ appeared to be more 
effective. ‘National administrative or fina ncial control’ in 2007 traced less irregular 
amounts in comparison to all the years whil e ‘On the spot control of achievement’ 
discovered more in comparison to overall tendencies. All three methods imply ex-
ante and ex-post controls. It is a natural outcome since the data  set involves projects 
under different stages of implementation (from procurement to final payments).  
Table PA 10 : Method of detection by irregular amounts reported 
                                                 
69 Article 3 of Commission Regulation (EC)1681/94 
 
EN 101   EN Description
 Amount % Amount %
Control of documents 16,854,135 52.04% 30,531,162 38.49%
On the spot control of achi evement of project or action 5,827,667 17.99% 9,050,114 11.41%
National administrative or financial control 4,572,144 14.12% 22,901,988 28.87%
Information published in the media 1,521,578 4.70% 1,777,645 2.24%
Community controls 1,176,577 3.63% 1,248,069 1.57%
Interservice collaboration 853,733 2.64% 1,224,260 1.54%
Additional control on request by the Commission 364,021 1.12% 364,021 0.46%
National fiscal control 302,538 0.93% 1,245,144 1.57%
912,560 2.82% 10,975,804 13.84%
Total 32,384,953 100.00% 79,318,207 100.00%2007 All yearsTable PA10 
METHODS OF DETECTION
 
5.2.3.  Types of irregularity  
Most common type of irregularity by nu mber of received cases in 2007 was ‘Non 
eligible expenditure’ just like in 2006. 22% percent of cases were of this type. 
Second most frequent modus operandi ‘Failu re to fulfil commitments entered into’ 
changed in comparison to 2006. This is ye t another indication that a number of 
projects failed to be implemented. 
Table PA 11: Types of irregularities by number of reported irregularities 
Table PA11 
TYPES OF IRREGULARITIES 
Description 2007 All years 
  Cases % Cases % 
NON-ELIGIBLE EXPENDITURE 74 22.29% 249 17.72% 
FAILURE TO FULFIL COMMITMENTS ENTERED INTO 70 21.08% 129 9.18% 
FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS 66 19.88% 157 11.17% 
UNJUSTIFIED EXPENDITURE 32 9.64% 65 4.63% 
INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT 13 3.92% 77 5.48% 
ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES 10 3.01% 62 4.41% 
ACTION NOT IMPLEMENTED 9 2.71% 20 1.42% 
FALSIFIED SUPPORTING DOCUMENTS 9 2.71% 81 5.77% 
OTHER IRREGULARITIES (TO BE SPECIFIED) 8 2.41% 96 6.83% 
  41 12.35% 469 33.38% 
Total 332 100.00% 1405 100.00%
  
‘Failure to respect other re gulations or contract conditi ons’ was the most frequent 
modus operandi in 2007 for P HARE (33%) followed by ‘Ac tions not carried out in 
accordance with rules’ (10%).  There is a change in comparison to 2006 when the 
types of irregularities were more related to project impl ementation and justification 
of expenditure incurred. As for ISPA in 2007 the most common type was ‘Non eligible expenditure’ (53%) and ‘Unjustifie d expenditure’ (34%).  This tendency did 
not change with reference to 2006. As for SAPARD the most recurrent was ‘Failure 
to fulfil commitments entered into’ (44%) and ‘Failure to respect other regulations or 
contract conditions’ (21%). 
 
EN 102   EN 3,92% of cases reported in 2007 had an el ement of fraud i.e. falsified supporting 
documents, false or falsified certificates or declarations, false or falsified request for 
aid70. In PHARE they made 10%, SAPA RD 2% of the reported cases.  
A comparative analysis based on the affected  irregular amount in Table PA 12 shows 
a slightly different result. The most fre quent types of irregu larities involving higher 
amounts in 2007 were ‘Failure to respect ot her regulations or contract conditions’ 
followed by ‘Falsified supporting documents’. This is the outcome of high share of 
these types in PHARE, respectively 34% a nd 47% of irregular amount in this fund. 
Irregularities detected in SAPARD involve d ‘Failure to fulfil commitments entered 
into’ (70%), in ISPA – ‘Non eligible’ expenditure’ (47%). 
‘Failure to respect other regulations or c ontract conditions’ is the most common type 
of irregularity looking at the overall tendenc y. This implies that project results were 
affected by certain infringements. 
Table PA 12 : Types of irregularit ies by reported irregular amounts 
Table PA12 
TYPES OF IRREGULARITIES 
Description 2007 All years 
  Amount % Amount % 
FAILURE TO FULFIL COMMITMENTS ENTERED INTO 9,707,885 29.98% 12,721,116 16.04% 
FALSIFIED SUPPORTING DOCUMENTS 4,678,147 14.45% 8,836,819 11.14% 
FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS 4,333,913 13.38% 10,646,655 13.42% 
NON-ELIGIBLE EXPENDITURE 3,714,600 11.47% 7,160,854 9.03% 
INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT 1,244,739 3.84% 2,388,268 3.01% 
UNJUSTIFIED EXPENDITURE 1,170,296 3.61% 1,903,159 2.40% 
ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES 1,100,499 3.40% 2,213,248 2.79% 
OPERATOR/BENEFICIARY NOT HAVING THE REQUIRED QUALITY 616,937 1.91% 618,002 0.78% 
OTHER IRREGULARITIES (TO BE SPECIFIED) 483,708 1.49% 3,071,622 3.87% 
  1,294,245 4.00% 29,691,223 37.43% 
 Total 32,384,953 100.00% 79,318,207 100.00%
  
5.3. Specific analysis 
5.3.1.  Irregularities affecting different funds 
The total number of cases changed in co mparison to 2006 (-15.9%).  Just as during 
previous years most irregularities we re communicated for PHARE and SAPARD. 
Those two funds made 74% of  irregularities reported. 
As demonstrated by Chart PA 4 the high est number of cases reported in 2007 
concerned SAPARD and made almost half of the total cases reported in numbers. 
The biggest share of irregular amount was reported for PHARE (49% of the total).  
                                                 
70 - 3,92% presents a total sum of the number of re ported cases including an element of fraud. The 
share of some separate modus operandi is rather smal l and is not reflected in the table PA 11 of most 
frequent types. 
 
EN 103   EN Chart PA 4: Distribution of co mmunications per fund in 2007 
Taking a closer look at ISPA 
reports one observes that the number of cas es does not correlate with the irregular 
amounts reported. Usually ISPA projects are huge in value but the irregular amounts 
reported are relatively little (no reporting threshold) and someti mes not indicated at 
all.  
It is similar for SAPARD as in some cases irregular amounts are under calculation. 
However the ones indicated almost coinci de with the amounts to be recovered. 
Consequently most of SAPARD cases were  detected after the payments had been 
made. This could be related to the f act that SAPARD was closed in 200771 but not 
for Romania and Bulgaria which reported highest numbers of irregularities. The 
checks can be carried out 5 y ears after the final payments had been made, so it is 
likely that some new irregularities will st ill be detected in the coming years. 
The situation is different for PHARE as the share of the number of cases is smaller 
than the share of irregular amount. The r eason could be related to a rather high 
reporting threshold of EUR 10,000. 
Chart PA 5 presents the fluctuation of th e number of cases throughout a period of 6 
years. The lowest numbers of cases continue to be detected in ISPA with a drastic increase in 2007. For PHARE and SAPARD th e numbers were steadily growing till 
2007. The overall trend had changed as PH ARE cases decreased in numbers, but 
SAPARD remained relatively stable. So far the trend was dominated by PHARE and SAPARD, but there was a significant incr ease for ISPA which was likely to be 
underreported. However, the greater part of ISPA cases in 2007 were reported by 
Romania. 
After the accession of 10 Member States , no more allocations were given under 
PHARE programme; however, financial assistance was provided under Transition 
Facility in 2004-2006. 2006 was the final pr ogramming year for the Transition 
Facility, although contracting is envisage d to continue until 2008 and payment of 
                                                
 
71 Chech Republic (in 2006), Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia, and Slovakia; Cyprus 
and Malta did not benefit from SAPARD. N umber of cases 2007
26%
29%45%
ISPA PHARE SAPARDCases by irregular amount
18%
49%33%
ISPA PHARE SAPARD
 
EN 104   EN funds until 2009. 10 Member States have not detected any Transiti on Facility related 
cases. This could be explained by the fact th at final project bene ficiaries have been 
Member States’ institutions and relevant s upervision has been insured at different 
stages of the project cycle. However it is pos sible that some of them were reported as 
PHARE. 
Chart PA 5: Distribution of cases by number  
2668151205
150
6 1886
25 26
05296
0164165
133
34
050100150200250
2002 2003 2004 2005 2006 2007No of cases
ISPA PHARE SAPARD
 
5.3.2.  Irregularity vs suspected fraud  
In general reporting countries are rath er reluctant to classify the reported 
irregularities as proved by  Table PA 7 representing 56.6%  compliance. In 2007 cases 
classified as suspected fraud made up 9.1%  (30) of irregularities and 15.5% of 
irregular amount. For the sake of transpar ency it is worth me ntioning that these 
figures result from OLAF classification.  According to the reporting countries’ 
classification, the share of suspected fra ud cases is 6.3% (21). Bulgaria, Romania, 
and Poland classified some cases as suspected fraud. There was an increase in comparison with 2006. It indicates that larger scale projects were reported as 
allegedly fraudulent. 
Distribution of fraud cases across the funds  is not adequate. There are no suspected 
fraud cases in ISPA in any years. Fo r SAPARD 6 suspected fraud cases were 
reported in 2007 and 67 for all the years. For PHARE 24 reported in 2007 and 97 in 
total. 
3.9% of cases reported in 2007 had an elem ent of fraud i.e. falsified supporting 
documents, declarations. In PHARE they make 10%, SAPARD 2% of the reported 
cases. This has to be inte rpreted with caution as re porting countries sometimes 
classify the case as fraud but  indicate the modus operandi which is more likely to be 
an administrative infringement than crim inal offence. An in depth analysis is 
necessary of a case basis. 
 
EN 105   EN Relatively low figures justify the argument that the major part of reported 
irregularities is not fra udulent and is undergoing corr ective actions. The cases 
classified as suspected fraud do not imply actual losses for the EU budget. On the contrary, they reflect adequate measures ta ken by the national authorities to prevent 
malpractices. The real pre-accession assistance related losses for EU budget could only be estimated when the programmes and the reported cases are closed (when deductions are made, recoveries are finalize d, or final court rulings are published). 
Chart PA 6: Share of suspected  fraud in reported cases 
0.00%13.16%
8.07%7.53%12.47%15.55%
0.00%16.90%
14.22%
9.01%15.63%
9.12%
0.00%2.00%4.00%6.00%8.00%10.00%12.00%14.00%16.00%18.00%
2002 2003 2004 2005 2006 2007% amount % cases
 
The share of amount of cases classified as suspected fraud in relation to the total 
eligible amount of the repor ted projects is 0.23%. The to tal irregular amount of all 
the reported projects in rela tion to the total el igible amount is 1.92%. The percentage 
of the sum of suspected fraud in relati on to the total allocated amount for period 
2002-2006 is 0.06% (EUR 9 million). For the year 2007 alone, it is 5 million euros, that is to say 0.38% of the annual budget, but the impact  on the annual budget has the 
same limits highlighted in paragraph 5.2.2.. Th e figure is twice as high in comparison 
to 2006 report data. This is a natural outcome as no new a llocations were given to the 
reporting countries for PHARE, SAPARD, and ISPA but follow up reports were 
received and the financial aspects were  specified. In addition, new cases were 
detected in 2007. 
5.4. Recovery 
The estimation of proportion of irregularities  detected before any payments had been 
made reveals the extent of preventive acti ons taken by the reporting countries at the 
early stages.  
 
EN 106   EN Chart PA 7: Detection after payment 
41.11%
17.38%46.62%44.04%90.40%
72.26%
0.00%10.00%20.00%30.00%40.00%50.00%60.00%70.00%80.00%90.00%100.00%
2002 2003 2004 2005 2006 2007  
Chart PA 7 reveals the tendency that most of  the reported irregular ities were detected 
after payments had been made. It is ch aracteristic to the recent years and is a 
consequence of the final stages of the projects. A decrease in comparison to 2006 
could be explained by Croatian and Turkis h cases detected before payment during 
the contracting period. 
Table PA 13 demonstrates the recovery situ ation per country. The table comprises of 
all the years and all the funds. It presents the recovery rate  which is the percentage of 
the total amount recovered and th e total amount to be recovered. 
The lowest amount to be recovered for a ll years is in ISPA – EUR 2.8 million. For 
2007 the situation is different as the lowest  amount to be recovered concerns PHARE 
- EUR 1.9 million. The highest amount to  be recovered in 2007 comes from 
SAPARD. 
ISPA has the highest recove ry rate of 68.6% talking a bout the total amount to be 
recovered, while for SAPARD the ra te is 22.7% and for PHARE – 32.8%. 
Table PA 13: Recovery by reporting country 
 
EN 107   EN Country Amount recovered Amount to be recovered Recovery rate
BG 492,282 6,978,801 6.59%
CY 00 # D I V / 0 !
CZ 375,724 1,230,998 23.38%
EE 2,639,872 886,853 74.85%
HR 00 # D I V / 0 !
HU 1,382,043 984,537 58.40%
LT 180,786 530,484 25.42%
LV 52,719 258,454 16.94%
MT 33,927 65,961 33.97%
PL 1,853,276 1,496,184 55.33%
RO 13,238,375 11,994,889 52.46%
SI 0 52,294 0.00%
SK 922,184 3,287,345 21.91%
TR 0 360,898 0.00%
Total 21,171,186 28,127,698 42.94%Table PA 13
RECOVERIES
 
The overview in Table PA 14 points out dela ys in the recovery process. There are 
some amounts to be recovered detected in  2003 where the risk for losses is high. The 
highest recovery rate is for cases dated 2004. It might be influenced by a special procedure required by SAPARD Multiannual Financing Agreement. SAPARD related Community amounts which are to be recovered in accordan ce with Part 2.8 
Article 14 of MAFA have to be written off two years after recording in the debtors’ 
ledger and deducted from the next applicat ion for payment. The situation with 
respect to 2006 is unsatisfa ctory, although it is e xpected to improve in 2008. 
Reporting countries should undertake recovery  measures soon after the detection of 
irregularities and inform the Co mmission about deductions made.  
Table PA 14: Recovery rate by reporting year 
Year Amount recovered Amount to  be recovered Recovery rate
2002 6,122 0 100.00%
2003 588,258 340,562 63.33%
2004 3,393,179 1,467,346 69.81%
2005 4,603,118 3,047,978 60.16%
2006 3,397,973 9,053,849 27.29%
2007 9,182,537 14,217,963 39.24%
Total 21,171,186 28,127,698 42.94%Table PA 14
RECOVERIES
 
5.5. Conclusions 
Member States and Candidate Countries reported 332 new irregularities in 2007 
where the total financial amount af fected was around EUR 32 million. 
Reporting discipline 
The reporting countries tend to misinterpr et the obligatory fields in the form, 
therefore consistency and comparability of the reported information remains an issue. 
 
EN 108   EN A more responsible approach  towards the preparation of  reports by the reporting 
authorities is necessary to increase the reliability of the submitted information. 
The classification of irregularities is an  element of reporting which needs further 
improvement. In 2007 the compliance rate was only 56.6%. 
The rate of summary compliance wi th the reporting obligation is 82.4%. 
Low compliance with the reporting oblig ation might imply some weaknesses in 
administrative set up of the reporting mechanism in the Member States and Candidate Countries concerned. 
General trends 
The number of cases reported in 2007 decr eased but the amount affected increased.  
Irregularities are not dist ributed equally among the re porting countries due to 
different periods of eligibility of expenditure. 
The increase in the i rregular amounts is jus tified by the enhanced controls at the end 
of the project cycle and the growi ng number of reporting countries. 
The differences in the number of reporte d cases and irregular amounts do not imply 
higher vulnerability to irregularities by some countries. 
Most of the irregulari ties in 2007 were detected by means of ‘Control of documents’. 
Most common type of irregularity by nu mber of received cases in 2007 was ‘Non 
eligible expenditure’ just like in 2006. 
Countries benefiting from the biggest s upport (Romania, Poland, Bulgaria, Hungary) 
reported the highest number of irregular ities (164, 76, 44 and 7 respectively). The 
pattern is different with reference to i rregular amounts. Romania, Bulgaria, Hungary, 
and Slovakia reported the hi ghest irregular amounts. 
Specific trends 
The highest number of cases reported in  2007 concerned SAPARD and made almost 
half of the total cases reported in numbers.  The biggest share of irregular amount was 
reported for PHARE (48% of the total). 
Dominance by PHARE and SAPARD  irregularity reports is  observed but there was a 
significant increase for ISPA in 2007 whic h was likely to be underreported. 
In 2007 cases classified as suspected fra ud made up 9.1% of irregularities and 15.5% 
of irregular amount. 
Distribution of fraud cases across the funds  is not adequate. There are no suspected 
fraud cases in ISPA in any years. For SAPARD 6 suspected fraud cases were reported in 2007 and 67 for all the years. For PHARE 24 reported in 2007 and 97 in total. 
 
EN 109   EN Estimation of the impact on the budget is based on repo rted information and is 
inextricably linked to count ries’ approach to reporti ng and cooperation with the 
Commission. 
 
EN 110   EN 6. DIRECT  EXPENDITURE  – CENTRALISED DIRECT MANAGEMENT  
6.1. Methodology 
This chapter contains a descriptive analys is of information concerning irregularities 
and cases of suspected fraud relating to e xpenditure directly ma naged by staff in the 
Commission departments through ‘cen tralised direct management’72.  
Given that the changes to the Commission' s accounting system ABAC, as described 
in the main body of this report, only became operational in 2008 it was necessary to identify an interim solution for the 2007 re porting period in or der to provide an 
initial overview of irregular ities and fraud detected in the area of the budget managed 
by the Commission.  
It was important that any interim solution strike the right balance between providing 
a sufficient level of detail whilst not  imposing a disproportionate burden on 
Commission Services. It was decided that for this repor t the information should be 
based as much as possible on existing da ta sources already held within the 
Commission and particularly on “centralised di rect management”. This is one of four 
different implementation modes through which the Commission may implement the budget: 
Centralised Management – both directly when the budget is spent by the 
Commission services and indirectly when  the Commission delegates executive tasks 
to community agencies or National Agencies in the Member States such as is the case for a significant part of education programmes. 
In Shared Management the implementation of  the Budget is delega ted to the Member 
States as is the case for much the Ag riculture and Structural Funds budget.  
Under certain conditions financial manageme nt of parts of external aid programmes 
are (partly or totally) delegated to  third countries th rough Decentralised 
Management. 
And in limited circumstances Commission may delegate certain implementation 
tasks to intergovernmental and/or in ternational organisa tions under Joint 
Management. 
It was also decided that this year the data  should be restricted to irregularities where 
a recovery order or forecast of revenue has been established by the Commission 
service concerned, as i rregular amounts which were recovered via expense 
documents by offsetting subsequent payments have only been systematically captured in the Commission’s accounting sy stem from this year. Under these 
                                                
 
72 In accordance with Article 53a of the revision of Financial Regulation and its Implementing Rules, 
Council Regulation (EC, Euratom)  No 1995/2006 of 13 December 2006 amending Regulation (EC, 
Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European 
Communities (OJ L 390 of 30.12.2006, p. 1) and Commission Regulation no. 478/2007 of 23 April 
2007, amending Commission Regulation no. 2342/2002 (OJ L 111 of 28.4.2007, p.1) 
 
EN 111   EN conditions a number of irregularities will have been excluded from this exercise, 
notably those where the irregular amounts ha ve lead to reduced final payments. It 
should also be noted that many recovery orde rs are linked to neith er irregularities nor 
fraud and are therefore not covered in th is analysis and on some occasions the 
irregular amount is an estimation as the extent of the problem can only be determined 
following further verification. 
The relevant data was collated by means of a questionnaire sent to all Commission 
Directorates General in which they were re quested to provide qualifications for cases 
of irregularity and suspected  fraud detected in 2007 base d on recovery orders or 
forecasted recovery. However, in some cases it was necessary for operational services to estimate the amount involved as  the allegation was subject to an ongoing 
OLAF investigation. Given the nature of this kind of data capture and potential 
differences in interpreting the data requested the reliability and consistency of the information received should be treated with caution.  
6.2. General analysis 
In response to the survey a total of 411 cas es of irregularities and suspected fraud 
detected in 2007 were communicated to OLAF by Commission Services. The total 
value of contracts in whic h irregularities and suspected  fraud have been detected 
amounts to EUR 300 million of which EU R 33 million has been identified as 
irregular
73. 
6.2.1.  Method of detection 
The vast majority of cases (81%) were de tected by means of routine ex-post audit 
controls at community leve l; representing a tota l of 335 of the 411 cases reported to 
OLAF. Excluding those cases where the met hod of detection ha s been qualified as 
“other”, the next most common method of  detection was community level ex-ante 
and ex-post desk controls (accounting for 18 and 10 cases respectively). In 15 cases 
the irregularity/fraud was detected as a result of information received from an informant.  
Table DE1: Method of detection 
NO OF CONTRACTSIRREGULAR AMOUNT 
INVOLVED METHOD OF DETECTION 
   SHARE € SHARE 
Community audit control – ex-
post 335 81.5% 16,891,649.38 51.2% 
Informant 15 3.6% 8,657,960.13 26.3% 
Community desk control ex-
post 10 2.4% 5,032,090.15 15.2% 
Other 31 7.5% 676,771.00 2.1% 
National control 1 0.2% 740,226.00 2.2% 
Community desk control ex-
ante 18 4.3% 975,451.16 2.9% 
                                                 
73 In cases of suspected fraud, an initial determination of the financial impact can, usually, only be 
established following the conclusion of the OLAF investigation, and it is only when the judicial 
procedure has come to an end that the actual amount of fraud can be determined. 
 
EN 112   EN European Court of Auditors 1 0.2% 4,275.24 0.01% 
TOTAL 411 100%  32,978,423.06 100%  
However, when looking at the irregular amount s of the contracts, the share resulting 
from community ex-post audit controls drops to 51.2% (EUR 16.9 million) of the 
total irregular amounts, followed closely by informants 26.3% (EUR 8.7 million) and 
community ex-post desk controls 15.2% (EUR 5 million). 
If differentiated between cases of irregul arities and suspected fraud, Community ex-
post audit control was the most common meth od of detection of cases classified as 
irregularity; 256 cases  were detected by these m eans (93% of cases). When 
compared by irregular amount, in those cases  classified as irregularity, Community 
ex-post audit control still re mains the main method of det ection but its share drops to 
72%, followed by informant 12%. Among the cas es classified as suspected fraud, 
both Informant and Community audit cont rol ex-post were the most frequent 
methods of detection by ir regular amount (respectively 38% and 34% of irregular 
amount detected). However by number of o ccurrence, cases detected by Community 
ex-post audit controls were six fold more fr equent than cases detected via informant. 
Among 136 cases of suspected fraud 79 we re detected by the Community audit 
control ex-post (58%). In 23% of suspect ed fraud cases the Commission services 
indicated method of detection as “other”. 
Table DE2: Method of detection by  qualification of  irregularity 
NO OF 
CONTRACTS IRREGULAR AMOUNT 
INVOLVED QUALIFICATION 
OF 
IRREGULARITYMETHOD OF DETECTION 
  SHARE € SHARE
Community audit control – ex-post 256 93.1% 10,683,779.82 71.9% 
Informant 2 0.7% 1,840,815.00 12.4% 
Community desk control ex-post 5 1.8% 1,774,224.20 11.9% 
Community desk control ex-ante 11 4.0% 559,213.91 3.8% Irregularity  
European Court of Auditors 1 0.4% 4,275.24 0.0% 
TOTAL OF IRREGULARITY 275  14,862,308.17   
Informant 13 9.6% 6,817,145.13 37.6% 
Community audit control – ex-post 79 58.1% 6,207,869.56 34.3% 
Community desk control ex-post 5 3.7% 3,257,865.95 18.0% 
National control 1 0.7% 740,226.00 4.1% 
Other 31 22.8% 676,771.00 3.7% Suspected 
fraud/OLAF 
notified 
Community desk control ex-ante 7 5.1% 416,237.25 2.3% 
TOTAL OF SUSPECTED FRAUD/OLAF NOTIFIED 136   18,116,114.89   
6.2.2.  Types of irregularity 
By number of cases, by far the most co mmon type of irregular ity is non-eligible 
expenditure (315 cases repres enting 77% of all cases); a lthough this is significantly 
reduced in terms of irregular amounts to onl y 42% of the total amount affected (EUR 
13.9 million). Missing or incomplete document is the next most common type of irregularity by number (37 cases or 9% of  all cases), this again is reduced when 
looking at the amounts concerned as it ac counts for only EUR 2.3 million or 6.9% of 
the total affected amount. 
 
EN 113   EN Table DE 3: Type of irre gularity/suspected fraud type74 
NO OF CONTRACTSIRREGULAR AMOUNT 
INVOLVED TYPE OF IRREGULARITY 
 SHARE € SHARE 
Non-eligible expenditure75 315 76.6% 13,867,501.90 42.1% 
Documents falsified 11 2.7% 7,338,921.60 22.3% 
Corruption 7 1.7% 4,198,767.00 12.7% 
Other 24 5.8% 2,493,229.32 7.6% 
Documents missing or incomplete 37 9.0% 2,289,464.68 6.9% 
Action not in accordance with rules 5 1.2% 2,260,592.49 6.9% 
Action not implemented 6 1.5% 381,231.10 1.2% 
Public procurement infringements 3 0.7% 82,747.00 0.3% 
Operator/beneficia ry below quality 2 0.5% 45,497.97 0.1% 
Incompatible accumulation of aid 1 0.2% 20,470.00 0.1% 
TOTAL 411   32,978,423.06  
Among cases classified as ir regularities non-eligible expe nditure was identified in 
315 cases (77%). Next most frequent t ypology in this category was missing or 
incomplete documents, 37 cases. Together th ey constitute almost  90% of types of 
irregularity in this category. If analysed by irregular amount the share of non-eligible 
expenditure drops to 42%, followed by th e falsified documents 22%. Missing 
documents and actions not in accordance with rules both constitute 7% of the modus 
operandi  by irregular amount. 
Table DE 4: Type of irregularity by qualification of irregularity 
NO OF 
CONTRACTS IRREGULAR AMOUNT 
INVOLVED QUALIFICATION 
OF 
IRREGULARITYTYPE OF IRREGULARITY 
 SHARE € SHARE
Non-eligible expenditure 205 74.5% 8,414,021.69 56.6% 
Documents missing or incomplete 37 13.5% 2,289,464.68 15.4% 
Action not in accordance with rules 2 0.7% 2,002,815.00 13.5% 
Other 20 7.3% 1,708,807.73 11.5% 
Action not implemented 6 2.2% 381,231.10 2.6% 
Operator/beneficiary below quality 2 0.7% 45,497.97 0.3% 
Incompatible accumulation of aid 1 0.4% 20,470.00 0.1% Irregularity 
Public procurement infringements 2 0.7% 0.00 0.0% 
Total of Irregularity 275   14,862,308.17   
Documents falsified 11 8.1% 7,338,921.60 40.5% 
Non-eligible expenditure 110 80.9% 5,453,480.21 30.1% 
Corruption 7 5.1% 4,198,767.00 23.2% 
Other 4 2.9% 784,421.59 4.3% 
Action not in accordance with rules 3 2.2% 257,777.49 1.4% Suspected 
fraud/OLAF 
notified 
Public procurement infringements 1 0.7% 82,747.00 0.5% 
Total of Suspected fraud/OLAF notified 136   18,116,114.89   
                                                 
74 It should be noted that these classifications have been  used solely within the context of this exercise and 
it was not always possible to retrospectively qualify into the sub-categories of non-eligible expenditure.  
75 The entirety of irregularities related to Eurostat has been reported under the generic qualification of 
“non-eligible expenditure”, without providing furt her specifications about the reasons of the non-
eligibility (as, for example, the absence of documents or an incomplete documentation). 
 
EN 114   EN Non-eligible expenditures had a similarly high share among suspected fraud cases as 
among irregular amount; representing 81% of  cases occurring in 110 notifications of 
suspected fraud. Documents falsificat ion was identified on 11 occasions and 
corruption was suspected in 7 cases. By  irregular amount the three indicated modus 
operandi  represent 94% of case by irregular amount, but thei r distribution is much 
more balanced if compared by number of re ports. Document falsification made up to 
41% of irregular amount, followed by non-e ligible expenditure 30% and Corruption 
23%76. 
Non-eligible expenditure remains the most frequently identified type of irregularity, 
followed by missing or incomplete documents in those cases qualified as Irregularity and by falsified documents in those cases qualified as suspected fraud. 
6.2.3.  Amounts involved 
The presumed financial impact of the i rregularities was about EUR 33 million of 
which suspected fraud amounted to EUR 18.1 million as notified in 136 cases. The amounts notified in the sector of extern al actions amounted to EUR 19.1 million and 
in the area of internal  policies to EUR 13.7 million. The financial impact of 
suspected fraud cases identified in 2007 amou nted to 0.17% of the total value of 
contracts managed on a centralised direct basis by the Commission.  
Table DE 5: Irregularities by budget heading 
IRREGULAR AMOUNT 
IRREGULARITY SUSPECTED FRAUD BUDGET 
HEADING ELIGIBLE 
AMOUNT77 
CONTRACTS € CONTRACTS € 
External 
action 173,551,989.81 158 5,076,279.25 53 14,065,045.08
Internal 
policies 127,290,795.12 117 9,786,028.92 83 4,051,069.81
TOTAL 300,842,784.93 275 14,862,308.17 136 18,116,114.89 
 
                                                 
76 For the purposes of this analysis a broad definition of corruption (including conflicts of interests and 
favouritism) has been used. 
77 It should be noted that in the column referred to “Eligible amount”, Eurostat reported paid amounts and 
not eligible amounts. 
 
EN 115   EN Table DE 6: Irregularities/su spected fraud by budget title78 
IRREGULAR AMOUNT 
IRREGULARITY SUSPECTED FRAUD 
BUDGET TITLE ELIGIBLE 
AMOUNT7980 
CONTRACTS € CONTRACTS € 
Agriculture and rural 
development 18,911,010.30 14 1,602,084.66 1 224,997.46 
Communication 1,251,198.05 2 46,402.43     
Development and ACP 275,000.00 3 190,000.00     
Economic and financial 
affairs 617,587.00 3 129,488.00     
Education and culture 73,606,808.10 32 914,719.23 2 240,028.00 
Employment and social 
affairs 7,831,077.03 21 1,114,781.99 5 451,915.69 
Energy and transport 10,123,268.65 9 792,338.11     
Enlargement 11,364,225.60 4 75,038.41 1 740,226.00 
Enterprise 881,871.88 7 281,810.68 11 281,423.00 
Environment 514,313.09 3 187,700.41 681 187,118.49 
External relations82 56,326,161.21 7 3,512,937.90 21 12,648,048.08 
Fisheries and maritime 
affairs 4,477,862.00 4 324,931.35     
Health and consumer 
protection 266,167.16     2 200.00 
Humanitarian aid 105,586,603.00 144 1,298,302.94 31 676,771.00 
Information society and 
media 50,450.77     1 11,822.69 
Regional policy 835,473.05 1 706,260.00 4 81,132.77 
Research 568,428.60     4 346,368.99 
Statistics83 7,251,774.44 20 3,670,014.09 47 2,226,062.72 
Trade 103,505.00 1 15,497.97     
TOTAL 300,842,784.93 275 14,862,308.17 136 18,116,114.89 
Amounts involved by country  
This section looks at the country in which the economic  operator concerned in the 
cases of irregularly/fraud are established.  
                                                 
78 It should be noted that there is not necessar ily a correlation between the budgetline title and the 
Directorate General (DG) in charge of the correspond ing European policy, as in some cases more than 
one service implement a given budget line. Therefore, the figu res in the table do not refer to the number 
of irregularity/fraud cases and amounts involved per DG. 
79 Eligible amount refers to the total amount of the contracts (concerned by an irregularity/suspected 
fraud) allocated to a beneficiary. 
80 See footnote n. 76 
81 The six contracts involved in cases of suspected fra uds are, in fact, related to a single contractor, 
benefiting from six contracts. 
82 Development Aid – all funds except EDF 
83 Figures provided by Eurostat may give a distorted image of reality. They tend to over-represent the 
importance of cases of suspected frauds and, doing so, of irregularities in general in the domain of 
statistics. In reality, ex-post contro ls carried out in 2006 were concentrated on a particular beneficiary 
already visited before and that had already raisen a suspicion of fraud and the transfer of the file to 
OLAF. On the basis of this situation, the same benefi ciary was visited a second time, in order to enlarge 
the controlled population. Likewise, on a hundred of contracts controlled in 2006 (corresponding to about ten controls), 65 contracts concerned this beneficiary who made the object of ad hoc controls and 
not of a “routine” control. Being this a targeted control, its results could induce a distorted and not 
favourable perception of reality. 
 
EN 116   EN The vast majority (95%) of beneficiaries concerned are based within the EU. Outside 
the EU, only 14 cases of irregularities we re detected, although this accounted for 
over 50% of the total irregular amounts am ounting to EUR 18.2 million. Over half of 
the irregularities by amount related to non-EU beneficiaries were in countries eligible 
for assistance under the Neighbourhood Policies which account for EUR 5.1 million, followed closely by ACP countries (EUR 4.2 million). 
Table DE 7: Irregularities by beneficiary region of origin 
IRREGULAR AMOUNT 
IRREGULARITY SUSPECTED FRAUD CONTRACTOR 
PLACE OF ORIGIN 
BY REGION84 ELIGIBLE 
AMOUNT85 
CONTRACTS € CONTRACTS € 
EU 225,291,697.95 262 11,175,815.71 122 8,260,233.34 
EFTA 13,085,318.30 7 93,554.56     
ACP 16,498,538.65 1 80,000.00 3 4,191,123.56 
Asia 1,374,855.00 1 567,550.00 1 379,755.00 
Latin America 3,010,756.85 2 2,945,387.90 2 213,484.90 
NEP 41,498,871.18 2 0.00 8 5,137,187.04 
TOTAL 300,842,784.93 275 14,862,308.17 136 18,198,861.89 
Whilst reported irregularities are largely evenly spread among the Member States, 
there were above average reports involvi ng Portugal (21%), Italy (17%) and the 
United Kingdom (14%). There is a greate r discrepancy when looking at cases of 
suspected fraud; where beneficiaries based in Portugal account for 59% of all cases. 
It should be noted however th at the Portuguese contracts co ncerned relate to only one 
beneficiary who is suspected of fraudulent activity in multiple contacts. A similar 
situation can be observed regarding Italy, where one beneficiary accounted for nearly 
half of all contracts concerned. 
However by irregular amount beneficiaries from  the EU represent close to 60% of all 
irregularities and suspected frauds, accounting for EUR 19.4 million. Again, whilst irregularities are largely evenly spread among the Me mber States, higher than 
average irregular amounts were  detected relating to Sp ain (22% or EUR 4.3 million), 
Portugal (17% or EUR 3.3 million), Italy (13% or EUR 3.3 million), Germany (12% 
or EUR 2.3 million), and the United Ki ngdom (9% or EUR 2.8 million). Together 
beneficiaries from these five  Member States represent 73% of all irregularities by 
amount. These observations are largely mirro red when looking at amounts affected 
in cases of suspected fraud.  
                                                
 
84 EU – European Union, EFTA – European Free Trade Association, ACP – Africa, Caribbean and 
Pacific; NEP – European Neighbourhood Policy. 
85 See footnote 76. 
 
EN 117   EN Table DE 8: Irregularities by Member  State of origin of beneficiary 
IRREGULAR AMOUNT 
IRREGULARITY SUSPECTED FRAUD CONTRACTOR 
PLACE OF ORIGIN ELIGIBLE 
AMOUNT86 
CONTRACTS € CONTRACTS € 
AT 2,445,268.40 2 91,622.37 2 844,654.56 
BE 74,768,382.02 23 226,440.64 3 215,028.00 
CY 675,940.10 1 273,482.85 1 273,482.85 
CZ 880,505.00 4 83,437.23     
DE 15,702,486.26 27 2,172,455.01 2 165,970.00 
DK 12,595,485.07 8 66,022.11     
EE 658,391.60 3 51,310.99     
EL 3,792,045.30 4 144,627.84     
ES 14,269,589.93 30 2,100,569.02 2 2,226,358.54 
FI 3,717,171.50 9 194,840.18     
FR 20,704,514.89 30 1,355,695.42 2 120,133.39 
HU 65,127.99 1 61,960.68     
IE 4,712,268.00 11 660,905.17     
IT 33,869,329.85 32 1,768,234.44 33 676,971.00 
NL 2,147,006.44 7 165,701.36     
PL 240,908.10 3 46,171.92 1 10,736.00 
PT 7,789,217.47 10 199,090.05 72 3,117,479.76 
SE 2,278,153.05 8 324,016.56     
UK 23,919,950.98 48 1,189,231.87 4 609,419.24 
EU TOTAL 225,231,741.95 261 11,175,815.71 122 8,260,233.34 
6.3. Specific analysis 
Irregularity versus Suspected fraud Of the total of 411 contracts identified, 33% had been qualified by the Commission 
services as suspected fraud. The share of suspected fraud cases increases to 55%, when comparing the irregular amounts. In f act, the average irregular amount per case 
was 2.4 times higher in suspected fraud cases than in cases of irregularity and amounted to an average of EUR 133,207 pe r case, compared to EUR 54,045 for all 
cases. It should be noted that  it is possible that the fi nancial impact of suspected 
fraud cases could be revi sed during the course of OLAF's investigations. 
Table DE 9: Irregularity and Suspected fraud cases 
 NUMBER OF 
COMMUNICATIONS ELIGIBLE 
AMOUNT87 IRREGULAR 
AMOUNT IRREGULAR 
SHARE IN 
ELIGIBLE 
Irregularity 275 223,902,497.35 14,86 2,308.17 6.64% 
Suspected Fraud 136 76,940,287.58 18,116,114.89 23.55% 
TOTAL 411 300,842,784.93 32,978,423.06 10.96% 
                                                 
86 See footnote 76. 
87 See footnote 76. 
 
EN 118   EN It is clear that the ratio between cases of suspected fraud and irregularity within this 
data set is relatively high. This can be larg ely explained by two fact ors, firstly that as 
this results are based on irregularities which resulted in recovery order or forecast of 
recovery it has excluded th ese irregular amounts which have been recovered via 
expense documents by offsetting subsequent payments; secondly it is likely that the irregular amounts relate d to cases of suspected fraud will be amended during the 
course of OLAF’s investigations, ind eed some allegations may prove to be 
unfounded and subsequently reclassified as e ither an irregularity, error or correct 
payment. 
6.4. Recovery 
In those cases detected in 2007 full or part ial recovery has already been reported in 
226 cases. Commission Services have r ecovered EUR 3.7 million. In 184 cases the 
full irregular amount has been recovered, in  223 cases the amount to be recovered 
has yet to be determined as they are curr ently subject to an OL AF investigation. In 
204 cases there is an outs tanding amount to be rec overed, corresponding to EUR 
10.7 million. 
Table DE 10: Amount Recovered and to be Recovered 
RECOVERED TO BE RECOVERED 
  
 NO OF 
CONTRACTS AMOUNT NO OF 
CONTRACTS AMOUNT 
Irregularity 170 3,070,394.81 123 6,732,399.10 
Suspected Fraud 56 678,435.49 81 3,977,885.90 
TOTAL 226 3,748,830.30 204 10,710,285.00 
The recovery rate for all notifications is 26% and is higher in the cases identified as 
irregularities (31%) than in cases qualified as suspect ed fraud (15%). 
6.5. Conclusions  
Given that this exercise was a first at tempt to integrate the areas of the budget 
managed by the Commission into this report  and the limited scope of the analysis, 
these initial findings, as with other areas of  the report, should be treated with extreme 
caution and not as empirical evidence of the level of fraud and irregularity.  
It is likely that a number of  irregularities de tected during 2007 we re excluded from 
the data provided by Commission Services as th ey fell outside the ti ght criteria set in 
terms of management mode and linkage to recovery actions.  
Concerning cases of suspected fraud th e accuracy of the amounts affected is 
questionable as a final qualification of i rregular or fraud can only be established 
following the OLAF investigation and, in sensu stricto  only once a final judicial 
decision has been pronounced.  
For the next reporting year more comprehe nsive data will be made available as a 
result of the changes made to the Commission’s reporting system.  
 
EN 119   EN ANNEXES 
 
EN 120   EN ANNEX 1 – NUMBER OF CASES OWNRES AND AMOUNTS – PERIOD  2004-2007 PER MEMBER STATE 
Number of cases OWNRES and amounts period 2004-2007 per Member State 
Member 2004 2005 2006 2007  % Change 
cases   % Change 
amount 
State Cases Amount € Cases Amount € Cases Amount € Cases Amount € 2006 - 2007 2006 - 2007 
AT 74 7.605.154 83 5.168.629 75 6.316.745 91 5.500.312 21,33% -12,92% 
BE 805 17.639.660 662 9.118.723 415 11.763.052 395 22.307.864 -4,82% 89,64% 
DE 506 29.346.355 1.181 72.204.696 997 55.797.373 998 54.472.872 0,10% -2,37% 
DK 80 6.979.600 64 6.884.838 64 5.142.048 54 7.256.158 -15,63% 41,11% 
ES 267 18.666.974 501 48.911.216 625 30.362.995 403 12.925.302 -35,52% -57,43% 
FI 29 1.597.791 34 1.992.413 28 1.464.957 34 1.714.218 21,43% 17,01% 
FR 277 20.863.377 349 34.950.733 314 33.304.670 321 33.315.774 2,23% 0,03% 
GR 50 4.099.877 54 8.063.290 46 11.457.617 53 2.744.851 15,22% -76,04% 
IE 10 401.444 22 671.846 47 2.820.593 35 2.482.972 -25,53% -11,97% 
IT 218 25.867.816 296 30.384.553 346 70.888.871 275 31.048.300 -20,52% -56,20% 
LU 0 0 0 0 1 49.291 0 0 N/A N/A 
NL 596 41.072.383 1.789 29.837.391 1.409 38.902.390 1.052 57.072.423 -25,34% 46,71% 
PT 15 630.533 20 1.652.095 17 818.261 23 393.960 35,29% -51,85% 
SE 68 6.021.599 60 3.265.267 47 2.164.111 42 2.398.254 -10,64% 10,82% 
UK 325 27.705.224 698 59.395.121 895 61.715.364 1.069 115.284.887 19,44% 86,80% 
EUR-15 
TOTAL 3.320 208.497.787 5.813 312.500.811 5.326 332.968.338 4.845 348.918.147 -9,03% 4,79% 
CY 2 54.136 16 380.408 9 193.532 11 750.402 22,22% 287,74% 
CZ 4 481.813 19 526.638 63 2.237.307 39 1.424.688 -38,10% -36,32% 
EE 3 54.900 3 165.287 5 178.010 12 455.754 140,00% 156,03% 
HU 29 1.692.522 70 1.932.201 103 7.867.072 67 6.027.841 -34,95% -23,38% 
LT 8 205.209 35 1.515.325 39 1.599.918 40 1.286.472 2,56% -19,59% 
LV 7 252.392 9 526.732 28 1.886.170 40 2.254.487 42,86% 19,53% 
MT 2 125.735 6 882.756 11 1.226.978 10 404.949 -9,09% -67,00% 
PL 17 652.034 55 1.211.436 69 1.807.599 158 8.569.400 128,99% 374,08% 
SI 7 586.361 22 618.272 24 950.848 27 1.589.490 12,50% 67,17% 
SK 3 318.119 4 68.348 28 1.561.967 20 1.070.723 -28,57% -31,45% 
EUR-10 
TOTAL 82 4.423.221 239 7.827.403 379 19.509.401 424 23.834.206 11,87% 22,17% 
BG 0 0 0 0 0 0 15 471.173 N/A N/A 
RO 0 0 0 0 0 0 37 3.837.168 N/A N/A 
EUR-2 TOTAL 0 0 0 0 0 0 52 4.308.341 N/A N/A 
EUR-27 
TOTAL 3.402 212.921.008 6.052 320.328.214 5.705 352.477.739 5.321 377.060.694 -6,73% 6,97% 
 
EN 121   EN ANNEX 2 – OWNRES CAS ES PER MEMBER STATE 
OWNRES CASES PER MEMBER STATE
02004006008001.0001.2001.4001.6001.8002.000
AT BE DE DK ES FI FR GR IE IT LU NL PT SE UK CY CZ EE HU LT LV M T PL SI SK BL RO
ME MB E R  STATENUMBER OF CASES 
2004 2005 2006 2007
 
EN 122   EN ANNEX 3 – IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 
IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 
YEAR CASES IMPACT CASES % 
OF TOTAL AMOUNTS 
ESTABLISHED IMPACT AMOUNTS 
ESTABLISHED % OF 
TOTAL 
2003 2168 66,38% 211.026.810 78,89%
2004 2223 65,34% 176.236.140 82,77%
2005 3216 53,14% 259.434.116 80,99%
2006 3601 63,12% 262.000.678 74,33%
2007 3428 64,42% 290.654.592 77,08%
 
EN 123   EN ANNEX 4 – TOP 10 CHAPTER HEADINGS 
TOP 10 CHAPTER HEADINGS 
2005  2006  2007 
CN PRODUCT AMOUNT 
€ CASES   CN PRODUCT AMOUNT 
€ CASES   CN PRODUCT AMOUNT 
€ CASES 
85 TVs and monitors etc. 65.241.373 1.102   85 TVs and monitors etc. 65.276.360 1031   85 TVs and monitors etc. 93.490.696  932 
24 Tobacco / cigarettes 29.805.629 380   24 Tobacco / cigarettes 39.768.154 327   24 Tobacco / cigarettes 28.107.416  337 
61 Clothing 25.517.843 378   15 Oils and fats 22.925.458 85   07 Edible vegetables 22.111.479  88 
17 Sugar / sugar-products 23.450.987 70   61 Clothing 20.032.799 224   87 (Parts of) cars / motors 22.057.814  296 
84 Machines 18.347.223 446   10 Cereals 15.016.504 48   84 Machines 19.499.287  348 
87 (Parts of) cars / motors 16.414.124 262   02 Meat 14.769.586 327   64 Footwear 17.934.315  260 
62 Clothing 13.816.231 687   87 (Parts of) cars / motors 13.208.052 303   61 Clothing 16.830.881  336 
07 Edible vegetables 13.302.629 123   73 Articles of iron and steel 12.934.065 125   62 Clothing 15.372.188  377 
03 Fish etc. 8.533.337 164   84 Machines 12.773.323 383   20 Preparations of vegetables 13.215.632  85 
73 Articles of iron and steel 7.784.044 139   07 Edible vegetables 12.692.785 118   63 Other textile articles 9.980.149  69 
 
EN 124   EN ANNEX 5 – GOOD AFFECTED BY FRAUD AND IRREGULARITY – PERIOD 2005-2007 
GOODS AFFECTED BY FRAUD AND IR REGULARITY PERIOD 2005-2007 
2005  2006  2007 
TARIFF 
CODES CASESAMOUNTS 
€  TARIFF 
CODES CASESAMOUNTS 
€  TARIFF 
CODES CASESAMOUNTS 
€ 
24022090 291 21.662.136   24022090 275 31.869.145   85282190 69 24.288.573
17019910 48 21.621.784   85254099 24 16.174.767   07032000 48 20.471.185
07032000 99 12.737.519   07032000 81 11.703.340   24022090 237 15.398.049
85282190 97 12.585.283   15091010 15 11.258.441   85281298 4 13.282.138
84089071 3 8.827.262   85393190 103 9.401.239   85281294 41 10.337.447
85281252 13 8.266.042   61103099 27 8.176.350   87031018 47 9.799.781
85219000 133 7.009.142   10062098 8 7.333.373   64030000 6 6.706.330
61101130 46 6.069.265   85219000 147 6.652.975   63039118 1 6.468.283
61103099 47 5.286.291   73121071 1 6.376.418   44121310 6 5.948.919
85281294 33 5.152.674   15091090 16 6.090.434   84119190 7 5.246.096
62021100 5 4.926.722   10063000 1 5.818.641   20059081 1 4.590.327
85393190 87 4.624.195   17029099 27 5.550.293   85393190 88 4.384.171
03061380 49 4.283.024   96131000 15 5.529.776   24012010 9 3.798.535
83051000 10 3.676.416   17019910 20 5.355.341   24031010 42 3.697.450
61102099 65 3.635.415   24022000 2 5.189.984   61103099 74 3.441.751
85254099 25 3.510.702   02023090 53 5.017.135   62034231 17 3.239.738
24022000 7 3.468.348   02072710 132 4.923.363   32159080 14 3.116.692
21069098 57 3.326.372   08030019 50 4.304.781   85219000 96 3.078.920
87032319 14 3.262.751   02071410 105 4.285.771   04051000 1 3.071.722
02072710 44 2.709.319   85281294 76 4.106.123   61101190 13 3.071.468
74261200 1 2.227.132   36799690 1 3.679.969   20031030 42 3.051.009
73121086 1 2.157.282   84149000 4 2.773.172   96131000 8 2.642.807
84821090 10 2.146.241   85282190 65 2.700.782   84733010 55 2.616.431
08030019 35 2.111.777   85281220 16 2.611.463   85369010 2 2.549.674
76011000 14 2.106.650   90013000 2 2.600.076   64039938 3 2.548.693
 
EN 125   EN ANNEX 6 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 
FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF THE GOODS DURING 2005-2007 
2005  2006  2007 
COUNTRY CASES €  COUNTRY CASES €  COUNTRY CASES € 
China 1.299  133.197.283  China 1.389 132.541.927  China 1.499 214.148.157 
USA 694  48.397.838  Thailand 78 50.711.140  USA 658 72.269.945 
Japan 299  40.629.242  USA 652 48.341.881  Japan 228 55.650.876 
Canada 60  26.496.963  Japan 293 46.029.984  Thailand 85 45.055.846 
Not specified  1.140  21.059.368  Tunisia 47 39.156.655  South Korea 160 25.463.553 
South Korea 115  19.735.416  Brazil 350 38.966.283  Taiwan 128 24.051.934 
Jamaica 162  14.663.084  Turkey 81 26.430.425  Not specified  668 22.073.986 
Thailand 76  12.784.877  Not specified 794 22.438.823  Turkey 72 20.549.890 
Brazil 141  12.590.799  South Korea 151 18.891.443  Vietnam 49 16.406.006 
India 82  11.801.950  Bangladesh 52 17.111.836  Bangladesh 176 15.674.333 
 
EN 126   EN ANNEX 7 – RECOVERY RATES OWNRES 
RECOVERY RATES TRADITIO NAL OWN RESOURCES (RR)           
2006 2007 
MEMBER 
STATES AMOUNT € 
2006 RECOVERED € 
2006 RR 2006 AMOUNT € 
IN 2007 RECOVERED 
€ IN 2007 RR for 
2006 in 
2007 AMOUNT € 
2007 RECOVERED 
€ 2007 RR 2007 
AT 6.857.684  2.299.000 33,52% 6.316.745 2.493.559 39,48% 5.500.312 1.600.436 29,10% 
BE 12.387.812  1.537.940 12,41% 11.763.052 3.478.927 29,58% 22.307.864 1.415.487 6,35% 
BG 0  0 N/A 0 0 N/A 471.173 236.994 50,30% 
CY 193.604  91.749 47,39% 193.532 102.412 52,92% 750.402 59.090 7,87% 
CZ 2.287.699  1.430.251 62,52% 2.237.307 1.464.630 65,46% 1.424.688 1.080.783 75,86% 
DE 46.345.172  28.722.922 61,98% 55.797.373 36.130.422 64,75% 54.472.872 39.064.385 71,71% 
DK 6.067.958  4.617.533 76,10% 5.142.048 3.706.014 72,07% 7.256.158 6.334.705 87,30% 
EE 178.010  32.457 18,23% 178.010 156.384 87,85% 455.754 231.635 50,82% 
ES 27.590.199  13.535.077 49,06% 30.362.995 15.765.145 51,92% 12.925.302 9.378.359 72,56% 
FI 1.464.957  241.489 16,48% 1.464.957 268.130 18,30% 1.714.218 654.884 38,20% 
FR 33.387.673  11.654.263 34,91% 33.304.670 11.779.383 35,37% 33.315.774 11.487.611 34,48% 
GR 442.048  342.322 77,44% 11.457.617 789.125 6,89% 2.744.851 151.948 5,54% 
HU 7.428.526  753.265 10,14% 7.867.072 990.619 12,59% 6.027.841 1.283.280 21,29% 
IE 2.604.534  2.561.438 98,35% 2.820.593 2.604.534 92,34% 2.482.972 1.987.124 80,03% 
IT 69.882.133  1.913.057 2,74% 70.888.871 3.618.267 5,10% 31.048.300 3.528.907 11,37% 
LT 1.634.868  763.832 46,72% 1.599.918 1.278.473 79,91% 1.286.472 408.342 31,74% 
LU 49.291  49.291 100,00% 49.291 49.291 100,00% 0 0 N/A 
LV 1.422.325  375.539 26,40% 1.886.170 407.725 21,62% 2.254.487 874.726 38,80% 
MT 574.945  0 0,00% 1.226.978 28.314 2,31% 404.949 156.232 38,58% 
NL 63.284.120  6.215.407 9,82% 38.902.390 17.275.689 44,41% 57.072.423 8.436.879 14,78% 
PL 2.067.153  1.102.239 53,32% 1.807.599 1.220.406 67,52% 8.569.400 2.430.412 28,36% 
PT 835.319  255.621 30,60% 818.261 255.621 31,24% 393.960 239.516 60,80% 
RO 0  0 N/A 0 0 N/A 3.837.168 393.829 10,26% 
SE 2.164.111  2.001.858 92,50% 2.164.111 2.001.858 92,50% 2.398.254 1.201.561 50,10% 
SI 950.848  304.093 31,98% 950.848 310.684 32,67% 1.589.490 1.299.872 81,78% 
SK 1.527.433  510.713 33,44% 1.561.967 545.247 34,91% 1.070.723 300.113 28,03% 
UK 61.250.909  32.057.182 52,34% 61.715.364 32.520.765 52,69% 115.284.887 56.252.454 48,79% 
EUR-27 TOTAL 352.879.331  113.368.538 32,13% 352.477.739 139.241.624 39,50% 377.060.694 150.489.564 39,91% 
 
EN 127   EN ANNEX 8 – SEIZED AND CONFISCATED GOODS 
SEIZED AND CONFISCATED GOODS (cigarettes CN 24022090) 
2005 2006 2007 
MEMBER 
STATES CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € CASES ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € 
AT 5 435.499 4 97.191 2 89.954 
BE 23 2.021.266 15 752.736 5 269.912 
DE 11 377.347 11 442.643 0 0 
DK 0 0 3 78.122 0 0 
ES 0 0 0 0 0 0 
FI 4 379.152 7 223.516 9 154.145 
FR 8 1.093.927 26 1.264.583 28 1.597.259 
GR 11 1.219.395 15 3.214.309 12 1.692.483 
IE 0 0 3 216.059 5 803.923 
IT 0 0 0 0 4 345.497 
LU 0 0 0 0 0 0 
NL 3 148.077 0 0 0 0 
PT 0 0 1 691.200 0 0 
SE 4 78.515 3 48.760 3 385.600 
UK 1 248.488 0 0 41 4.153.116 
EUR-15 TOTAL 70 6.001.666 88 7.029.119 109 9.491.889 
BG 0 0 0 0 0 0 
CY 0 0 2 364.685 1 33.673 
CZ 0 0 0 0 0 0 
EE 1 140.655 0 0 1 41.304 
HU 12 552.809 14 456.445 6 193.168 
LT 3 43.336 5 109.526 0 0 
LV 0 0 2 490.904 4 693.930 
MT 5 435.521 7 780.914 2 205.013 
PL 12 335.117 17 403.059 33 786.077 
RO 0 0 0 0 19 3.243.636 
SI 6 411.201 9 549.900 6 187.055 
SK 0 0 3 397.874 1 144.760 
EUR-12 TOTAL 39 1.918.639 59 3.553.307 73 5.528.616 
EUR-27 TOTAL 109 7.920.305 147 10.582.426 182 15.020.505 
 
EN 128   EN ANNEX 9 – PERCENTAGE CLASSIFICATI ON OF FRAUD PER MEMBER STATE 
PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 
2005-2007
0,00%20,00%40,00%60,00%80,00%100,00%120,00%
AT BE DE DK ES FI FR GR IE IT LU NL PT SE UK BG CY CZ EE HU LT LV MT PL RO SI SK
MEMBER STATE% FRAUD CASES
2005 2006 2007
 
 
EN 129   EN ANNEX 10 – AMOUNTS INVOLVED IN FRAUD 
AMOUNTS INVOLVED IN FRAUD PER MEMBER STATE PERIOD 2005-2007 
2005 2006 2007 
MEMBER STATE CASES FRAUD 
CASES FRAUD IN € CASES FRAUD 
CASES FRAUD IN € CASES FRAUD 
CASES FRAUD IN € 
AT 83 40 4.073.367 75 25 2.568.695 91 30 3.218.983 
BE 662 60 3.307.008 415 47 3.045.442 395 41 2.049.238 
DE 1.181 171 22.373.635 997 104 12.118.133 998 91 10.609.832 
DK 64 6 2.490.966 64 14 2.433.934 54 2 213.813 
ES 501 272 30.578.821 625 244 20.098.581 403 144 4.699.076 
FI 34 12 273.779 28 24 1.267.261 34 21 1.101.219 
FR 349 16 1.399.642 314 32 119.450 321 149 6.567.014 
GR 54 51 7.910.055 46 46 11.457.617 53 53 2.744.851 
IE 22 0 0 47 0 0 35 4 134.805 
IT 296 135 15.931.062 346 210 62.422.053 275 92 16.337.234 
LU 0 0 0 1 1 49.291 0 0 0 
NL 1.789 382 23.970.804 1.409 448 34.572.089 1.052 338 35.895.551 
PT 20 10 565.484 17 8 280.718 23 1 66.670 
SE 60 4 0 47 3 0 42 3 0 
UK 698 6 1.329.561 895 1 24.726 1.069 103 9.799.472 
EUR-15 TOTAL 5.813 1.165 114.204.184 5.326 1.207 150.457.990 4.845 1.072 93.437.758 
BG 0 0 0 0 0 0 15 8 242.517 
CY 16 4 71.582 9 3 21.855 11 3 26.483 
CZ 19 1 21.097 63 5 80.204 39 2 222.161 
EE 3 1 140.655 5 0 0 12 1 41.304 
HU 70 37 664.525 103 59 4.562.332 67 16 2.556.971 
LT 35 1 16.287 39 3 414.212 40 7 77.313 
LV 9 0 0 28 1 130.892 40 0 0 
MT 6 6 882.756 11 11 1.226.978 10 5 285.766 
PL 55 16 419.773 69 19 403.059 158 67 5.933.961 
RO 0 0 0 0 0 0 37 19 3.243.636 
SI 22 14 476.207 24 11 579.346 27 6 187.055 
SK 4 0 0   
28 8 477.049   
20 9 311.511 
EUR-12 TOTAL 239 80 2.692.882   379 120 7.895.927   476 143 13.128.678 
EUR-27 TOTAL 6.052 1.245 116.897.066   5.705 1.327 158.353.917   5.321 1.215 106.566.436 
 
EN 130   EN update 22/05/2008
Year Cases Amounts affected% of Agricultural 
expenditureAgricultural 
expenditure
2007 1,548 154,993 0.33 46,920,972
2006 3,249 86,825 0.17 49,742,890
2005 3,193 102,112 0.21 47,819,5092004 3,401 82,064 0.19 42,934,711
2003 3,237 169,724 0.39 43,606,858
2002 3,285 198,079 0.46 42,781,8982001 2,415 140,685 0.34 41,866,940
2000 2,967 474,562 1.17 40,437,400
*) The concept "irregularity" includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure.ANNEX 11
IRREGULARITIES
UNDER
(amounts in € 1,000)YEARS 2000 - 2007COMMUNICATED BY MEMBER STATES
Reg. 1848/2006AGRICULTURAL SECTOR
EAGF & EAFRD
0.000.200.400.600.801.001.201.40
2007 2006 2005 2004 2003 2002 2001 2000
yearBudgetary impact
05001,0001,5002,0002,5003,0003,5004,000N° of cases
Agricultural expenditure
Cases
 
EN 131   EN update 22/05/2008
Member 
StatesNumber of cases 
involved in 
irregularitiesAmounts affected by 
irregularities% of agricultural 
expenditure
AT 27 402 0.05
BE 34 13,866 1.62
BG 0 0 0.00
CY 6 83 0.18
CZ 10 103 0.02
DE 94 2,855 0.05
DK 20 15,258 1.40
EE 16 84 0.11
EL 86 4,185 0.15
ES 335 23,609 0.40
FI 20 339 0.04
FR 147 32,637 0.34
HU 12 233 0.04
IE 26 490 0.03
IT 237 43,063 0.82
LT 10 232 0.07
LU 0 0 0.00
LV 11 142 0.09
MT 0 0 0.00
NL 64 4,349 0.38
PL 62 1,099 0.05PT 190 5,570 0.68
RO 0 0 0.00
SE 14 285 0.03
SI 9 233 0.14
SK 23 1,707 0.56
UK 95 4,168 0.10
TOTAL 1,548 154,993 0.33(amounts in € 1,000)ANNEX 12
COMMUNICATED BY MEMBER STATES
UNDERAGRICULTURAL SECTOR
IRREGULARITIES
Reg. 1848/2006
2007
 
EN 132   EN ANNEX 13 
STRUCTURAL MEASURES (INCLUDI NG THE COHESION FUND) 
IRREGULARITIES* COMMUNICATED  BY MEMBER STATES 1998-2006 
Financial amounts Total budget
(x €1,000) (x €1,000,000)
2007 3,832 827,654 45,327 1.83%
2006 3,216 703,302 38,430 1.83%
2005 3,570 600,816 37,192 1.62%
2004 3,339 695,611 35,665 1.95%
2003 2,487 482,215 30,764 1.57%
2002 4,656 614,094 30,556 2.01%2001 1,194 201,549 29,823 0.68%
2000 1,217 114,227 25,556 0.45%
1999 698 120,633 30,654 0.39%
1998 407 42,838 28,366 0.15%Impact on budget Year N° of irregularities
 
 
0100.000200.000300.000400.000500.000600.000700.000800.000900.000
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998
Year
Irregular amounts (in 1,000 €)
05001.0001.5002.0002.5003.0003.5004.0004.5005.000N° of irregularities
Financial amounts (x €1,000) N° of irregularities
 
*The concept of irregularity includes fraud. The qualificatio n as fraud, meaning 
criminal behaviour, can only be made following a penal procedure. 
 
EN 133   EN ANNEX 14 
COHESION FUND 
IRREGULARITIES* COMMUNICATED  BY MEMBER STATES 1998-2006 
YEAR N° OF IRREGULARITIES FINANCIAL AMOUNTS (x 1,000 €)
1998 0 0
1999 3 914
2000 2 36
2001 4 2,5342002 4 9,6282003 48 132,9142004 292 192,7552005 211 134,2652006 224 184,483
2007 92 110,223
TOTAL 880 767,752
 
050100150200250300350
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007YearN° of irregularities
050000100000150000200000250000
Irregular amounts (in 1, 000 €)
N° of irregularities Financial amounts (x 1,000€)
 
*The concept of irregularity includes fraud. The qualificatio n as fraud, meaning 
criminal behaviour, can only be made following a penal procedure. 
 
EN 134   EN ANNEX 15 
PART 1 
STRUCTURAL FUNDS 
IRREGULARITIES REPORTED BY MEMBER STATES - 2007 
REGULATION N. 1681/94 
N° OF IRREGULARITIES 
MEMBER STATE ERDF ESF EAGGF FIFG TOTAL
AT 21 6 1 28
BE 16 12 28CY 1 1
CZ 3 32 35
DE 228 143 39 2 412
DK 6 3 2 11
EE 12 14 3 3 32
EL 34 15 17 66
ES 391 134 70 18 613
FI 11 24 8 43
FR 56 77 5 2 140
HU 15 10 10 35
IE 32 32
IT 307 208 133 10 658
LT 4 4 8
LU 8 8
L
V 16 1 8
MT 1 1 2
NL 20 122 4 146
PL 150 38 94 282
PT 263 224 47 6 540
SE 32 44 3 79
SI 2 2 4
SK 21 3 3 27
UK 280 170 41 11 502
TOTAL 1,906 1,290 484 60 3,740  
 
EN 135   EN ANNEX 15 
PART 2 
STRUCTURAL FUNDS 
IRREGULARITIES REPORTED BY MEMBER STATES - 2007 
REGULATION N. 1681/94 
FINANCIAL AMOUNTS INVOLVED IN IRREGULARITIES 
MS ERDF ESF EAGGF FIFG TOTAL
AT 3,973,989 329,587 450,200 4,753,776
BE 1,210,452 354,967 1,565,419CY 3,328 3,328
CZ 1,451,237 3,434,609 4,885,846
DE 41,427,446 4,946,112 2,915,785 240,125 49,529,468
DK 271,986 34,745 26,949 333,680
EE 739,855 333,098 101,417 82,626 1,256,996
EL 16,499,726 1,739,808 7,344,106 25,583,640
ES 162,978,075 11,048,658 6,471,810 803,933 181,302,476
FI 902,784 1,036,381 445,852 2,385,017
FR 3,060,703 2,852,579 87,430 178,451 6,179,163
HU 1,272,917 476,835 951,681 2,701,433
IE 2,082,358 2,082,358
IT 121,849,034 20,780,619 14,356,625 1,403,182 158,389,460
LT 27,137 83,686 110,823
LU 248,458 248,458
L
V 574,435 1,199,656 89,434 1,863,525
MT 10,139 22,162 32,301
NL 2,855,759 23,770,253 550,337 27,176,349
PL 25,920,315 1,753,712 2,578,614 30,252,641
PT 29,019,574 14,688,154 4,454,450 1,754,315 49,916,493
SE 2,293,994 1,265,443 35,200 3,594,637
SI 92,127 36,666 128,793
SK 1,381,428 578,639 15,334 1,975,401
UK 114,467,369 24,406,231 21,317,642 988,665 161,179,907
TOTAL 534,362,839 114,137,716 62,874,424 6,056,408 717,431,387 
 
EN 136   EN ANNEX 16 
STRUCTURAL FUNDS 
IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1681/94 
SITUATION OF RECOVERY 
PART 1 – AMOUNTS RECOVERED IN 2007 
MS ERDF ESF EAGGF FIFG total
AT 1,999,106 125,094 0 2,124,200
BE 176,520 339,236 515,756CY 0 0
CZ 44 86,038 86,082
DE 12,549,186 1,149,631 615,651 0 14,314,468
DK 59,725 0 26,949 86,674
EE 542,335 309,943 0 1,780 854,058
EL 13,088,213 224,167 998,284 14,310,664
ES 31,101,789 775,393 2,195,201 261,879 34,334,262
FI 203,956 70,286 339,176 613,418
FR 2,159,954 2,386,647 87,430 0 4,634,031
HU 138,008 0 32,147 170,155
IE 2,082,358 2,082,358
IT 8,270,726 1,110,827 300,622 0 9,682,175
LT 12,830 0 12,830
LU 248,458 248,458
L
V 00 0 0
MT 10,139 22,162 32,301
NL 63,041 1,219,094 0 1,282,135
PL 832,040 151,263 40,329 1,023,632
PT 10,088,845 4,166,258 17,364 0 14,272,467
SE 749,234 14,309 0 763,543
SI 74,209 0 74,209
SK 102,511 0 514 103,025
UK 40,931,541 10,555,281 314,822 43,303 51,844,947
total 125,236,310 22,954,087 4,941,540 333,911 153,465,848
 
EN 137   EN ANNEX 16 
STRUCTURAL FUNDS 
IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1681/94 
SITUATION OF RECOVERY 
PART 2 – AMOUNTS TO BE RECOVERED 
MS Amounts to be 
recovered before 
2007Amounts to be 
recovered 2007Amounts in 
Justice*Amounts 
declared 
irrecoverable**
AT 11,997,828 2,450,683 555,005 4,265,015
BE 14,897,869 837,720 637,859 12,953,460CY 0 3,328 0
CZ 119,366 422,481 0
DE 558,410,431 19,989,792 68,359,534 101,380,165
DK 9,909,481 247,006 110,946 8,599,731
EE 314,733 181,901 19,608
EL 20,479,150 11,246,693 3,733,119 328,716
ES 61,275,993 146,972,065 6,564,042 374,005
FI 2,237,774 814,088 832,221 786,901
FR 7,381,028 1,313,872 268,274 1,904,559
HU 138,708 414,625 322,867
IE 1,183,869 0 552,660 32,944
IT 332,847,956 101,245,439 362,928,052 1,197,227
LT 0 0 0
LU 52,932 0 0
L
V 143,966 1,863,525 709,750
MT 0 0 0
NL 11,973,220 3,004,360 1,221,925 1,023,551
PL 682,314 14,987,701 5,661,885
PT 39,390,295 28,666,161 7,373,376 2,055,972
SE 1,545,164 733,336 159,225 515,590
SI 1,158,265 54,584 36,043
SK 102,347 207,088 0
UK 97,011,047 82,574,951 423,616 3,928,932
TOTAL 1,173,253,736 418,231,399 460,470,006 139,346,769  
* In justice: awaiting outcome of judi cial procedures in national courts. 
**Amounts irrecoverable: awaiting formal  decision according to the procedure 
set out in art. 5§2 of Regulation No. 1681/94. 
 
EN 138   EN ANNEX 17 
COHESION FUND 
IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 
MS N° OF 
IRREGULARITIESIRREGULAR 
AMOUNTSAMOUNTS AWAITING 
RECOVERY
CZ 5 0 0
EE 2 66,915 32,040
EL 26 67,259,450 8,955,956
ES 34 32,624,604 27,968,582
HU 3 631,256 631,256
IE 1 6,638,190 0
LT 4 773,682 676,728
LV 1 45,754 45,754
PL 9 590,638 269,068
PT 4 865,435 0
SK 3 726,899 719,080
total 92 110,222,823 39,298,464
 
EN 139   EN ANNEX 18 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED IN 2007 
Table 1 
€  All Funds 2007  
Country No of Reports Eligible amount88Irregular amount  Amount to be recovered 
BG 76 17,416,609 10,320,728 5,336,730 
CZ 7 791,611 477,435 389,812 
EE 8 4,380,663 440,503 438,562 
HR 2 2,975,000 1,100,000 0 
HU 7 2,296,983 2,285,112 379,696 
LV 2 71,821 26,500 26,216 
MT 2 415,648 91,288 65,961 
PL 44 14,069,397 1,218,020 948,096 
RO 164 1,980,201,603 14,340,780 5,758,364 
SI 1 58,682 17,295 17,295 
SK 13 2,225,008 1,830,788 644,150 
TR 6 1,253,092 236,504 213,082 
Total 332 2,026,156,117 32,384,953 14,217,963 
Table 2 
€  PHARE 2007 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 30 7,600,100 5,190,959 518,278 
CZ 1 230,375 86,826 0 
EE 3 4,226,333 364,021 364,021 
HR 2 2,975,000 1,100,000 0 
HU 3 1,983,196 1,978,587 73,171 
LV 1 46,548 1,227 943 
MT 2 415,648 91,288 65,961 
PL 12 10,544,714 223,650 89,530 
RO 28 27,079,758 5,290,905 471,200 
SK 8 1,355,133 1,223,259 143,984 
TR 6 1,253,092 236,504 213,082 
Total 96 57,709,897 15,787,226 1,940,170 
                                                 
88 If the amount was reported in national currency the Commission monthly exchange rate was used. 
 
EN 140   EN Table 3 
€  SAPARD 2007 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 42 9,555,210 4,970,288 4,818,452 
CZ 6 561,236 390,609 389,812 
EE 5 154,330 76,482 74,541 
HU 4 313,787 306,525 306,525 
LV 1 25,273 25,273 25,273 
PL 32 3,524,683 994,370 858,566 
RO 54 22,396,152 3,401,248 2,734,512 
SI 1 58,682 17,295 17,295 
SK 5 869,875 607,529 500,166 
Total 150 37,459,228 10,789,619 9,725,141 
Table 4 
€  ISPA 2007 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 4 261,299 159,481 0 
RO 82 1,930,725,693 5,648,627 2,552,652 
Total 86 1,930,986,992 5,808,108 2,552,652 
 
EN 141   EN ANNEX 19 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED  IN 2007 BELOW REPORTING 
THRESHOLD 
Table 1 
€  2007 cases below reporting threshold all funds 
Country No of 
Reports Eligible 
amount Irregular 
amount Amount to be 
recovered 
BG 25 3,215,329 92,169 61,479 
CZ 1 164,033 798 0 
EE 3 13,492 4,787 2,846 
LV 1 46,548 1,227 943 
PL 2 18,757 6,745 6,745 
RO 1 40,878 1,436 0 
SK 3 371,309 12,180 6,716 
Total 36 3,870,346 119,342 78,729 
Table 2 
€  2007 PHARE  
Country No of 
Reports Eligible 
amount Irregular 
amount Amount to be 
recovered 
BG 16 355,089 85,177 57,509 
LV 1 46,548 1,227 943 
PL 2 18,757 6,745 6,745 
RO 1 40,878 1,436 0 
SK 2 143,998 12,115 6,716 
Total 22 605,270 106,700 71,913 
Table 3 
€  2007 SAPARD  
Country No of 
Reports Eligible 
amount Irregular 
amount Amount to be 
recovered 
BG 9 2,860,240 6,992 3,970 
CZ 1 164,033 798 0 
EE 3 13,492 4,787 2,846 
SK 1 227,311 65 0 
Total 14 3,265,076 12,642 6,816 
 
EN 142   EN ANNEX 20 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES REPORTED – ALL YEARS 
Table 1 
€  All funds for all years 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 140 33,400,452 17,662,240 6,978,801 
CY 5 5,624,616 23,807 0 
CZ 35 23,083,006 2,229,411 1,230,998 
EE 36 27,932,873 6,366,218 886,853 
HR 2 2,975,000 1,100,000 0 
HU 97 15,614,959 6,072,888 984,537 
LT 40 102,993,517 884,358 530,484 
LV 33 2,460,923 336,041 258,454 
MT 7 1,562,935 99,888 65,961 
PL 258 981,995,407 4,201,205 1,496,184 
RO 609 2,872,079,000 31,023,324 11,994,889 
SI 37 3,672,896 1,463,975 52,294 
SK 99 46,252,063 7,470,532 3,287,345 
TR 7 1,400,908 384,320 360,898 
Total 1405 4,121,048,555 79,318,207 28,127,698 
Table 2 
€  PHARE all years 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 53 14,556,238 5,519,210 749,691 
CY 5 5,624,616 23,807 0 
CZ 16 2,060,567 545,061 432,660 
EE 17 11,069,315 3,240,853 365,701 
HR 2 2,975,000 1,100,000 0 
HU 45 12,560,823 4,126,778 652,714 
LT 20 912,091 566,694 426,960 
LV 18 859,521 91,833 42,354 
MT 7 1,562,935 99,888 65,961 
PL 108 352,992,325 2,352,424 507,162 
RO 182 279,334,087 11,968,483 5,688,111 
SI 6 2,115,949 158,791 30,214 
SK 86 17,319,469 6,018,922 2,027,099 
TR 7 1,400,908 384,320 360,898 
Total 572 705,343,843 36,197,065 11,349,525 
 
EN 143   EN Table 3 
€  SAPARD all years 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 80 13,589,134 7,430,823 6,229,110 
CZ 18 1,024,688 840,290 798,337 
EE 15 3,640,066 2,954,588 351,838 
HU 52 3,054,136 1,946,110 331,823 
LT 13 5,232,846 315,332 103,048 
LV 15 1,601,402 244,208 216,100 
PL 129 11,442,308 1,779,038 966,415 
RO 281 150,335,466 10,624,314 3,752,076 
SI 31 1,556,948 1,305,184 22,080 
SK 12 1,783,394 1,402,556 1,211,192 
Total 646 193,260,388 28,842,443 13,982,020 
Table 4 
€  ISPA all years 
Country No of Reports Eligible amount Irregular amount  Amount to be recovered 
BG 7 5,255,080 4,712,207 0 
CZ 1 19,997,751 844,059 0 
EE 4 13,223,492 170,777 169,314 
LT 7 96,848,580 2,332 476 
PL 21 617,560,774 69,743 22,607 
RO 146 2,442,409,447 8,430,527 2,554,702 
SK 1 27,149,200 49,054 49,054 
Total 187 3,222,444,324 14,278,699 2,796,153 
 
EN 144   EN ANNEX 21 
PRE-ACCESSION ASSISTANCE 
IRREGULARITIES COMMUNICATED BY MEMB ER STATES AND CANDIDATE COUNTRIES 
€  ISPA PHARE SAPARD 
Year No of 
ReportsEligible 
amount Irregular 
amount  Amount to 
be recoveredNo of 
Reports Eligible 
amount Irregular 
amount  Amount to 
be recoveredNo of 
Reports Eligible 
amount Irregular 
amount  Amount to 
be recovered 
2002 6 131,861 14,890 0 0 0 0 0 0 0 0 0 
2003 18 281,385,122 894,732 17,151 52 320,162,659 632,293 299,719 34 5,963,143 3,817,914 23,692 
2004 26 470,031,997 251,987 223,824 68 12,674,275 4,141,466 982,976 133 50,512,707 6,033,190 260,546 
2005 25 177,042,030 6,160,535 476 151 65,252,501 7,488,049 2,509,571 165 54,336,183 3,723,955 537,931 
2006 26 362,866,322 1,148,447 2,050 205 249,544,511 8,148,031 5,617,089 164 44,989,126 4,477,766 3,434,710 
2007 86 1,930,986,992 5,808,108 2,552,652 96 57,709,897 15,787,226 1,940,170 150 37,459,228 10,789,619 9,725,141 
Total 187 3,222,444,324 14,278,699 2,796,153 572 705,343,843 36,197,065 11,349,525 646 193,260,388 28,842,443 13,982,020 
 
EN 145   EN ANNEX 22 
IRREGULARITIES REPORTED BY MEMB ER STATES IN 2007 – AGRICULTURE, STRUCTURAL AND CO HESION FUNDS, 
OWN RESOURCES 
 AGRICULTURE STRUCTURAL FUNDS COHESION FUND OWN RESOURCES TOTAL 
 CASES TOTAL AMOUNTS CASES TOTAL AMOUNTS CASES TOTAL AMOUNTS CASES TOTAL AMOUNTS CASES TOTAL AMOUNTS 
AT 27 401,511 28 4,753,776     91 5,500,312 146 10,655,599 
BE 34 13,866,333 28 1,565,419     395 22,307,864 457 37,739,616 
BG           15 471,173 15 471,173 
CY 6 83,362 1 3,328     11 750,402 18 837,091 
CZ 10 103,168 35 4,885,846 5 0 39 1,424,688 89 6,413,702 
DE 94 2,854,876 412 49,529,468     998 54,472,872 1,504 106,857,216 
DK 20 15,257,984 11 333,680     54 7,256,158 85 22,847,822 
EE 16 83,985 32 1,256,996 2 66,915 12 455,754 62 1,863,650 
EL 86 4,185,084 66 25,583,640 26 67,259,450 53 2,744,851 231 99,773,025 
ES 335 23,609,346 613 181,302,476 34 32,624,604 403 12,925,302 1,385 250,461,728 
FI 20 338,508 43 2,385,017     34 1,714,218 97 4,437,743 
FR 147 32,637,233 140 6,179,163     321 33,315,774 608 72,132,170 
HU 12 233,052 35 2,701,433 3 631,256 67 6,027,841 117 9,593,581 
IE 26 490,043 32 2,082,358 1 6,638,190 35 2,482,972 94 11,693,563 
IT 237 43,063,210 658 158,389,460     275 31,048,300 1,170 232,500,970 
LT 10 232,242 8 110,823 4 773,682 40 1,286,472 62 2,403,219 
LU   8 248,458     0 0 8 248,458 
LV 11 141,835 8 1,863,525 1 45,754 40 2,254,487 60 4,305,601 
MT   2 32,301     10 404,949 12 437,250 
NL 64 4,349,283 146 27,176,349     1,052 57,072,423 1,262 88,598,055 
PL 62 1,099,347 282 30,252,641 9 590,638 158 8,569,400 511 40,512,026 
PT 190 5,570,368 540 49,916,493 4 865,435 23 393,960 757 56,746,256 
RO           37 3,837,168 37 3,837,168 
SE 14 284,714 79 3,594,637     42 2,398,254 135 6,277,605 
SI 9 232,894 4 128,793     27 1,589,490 40 1,951,177 
SK 23 1,707,309 27 1,975,401 3 726,899 20 1,070,723 73 5,480,332 
UK 95 4,167,640 502 161,179,907     1,069 115,284,887 1,666 280,632,434 
 
EN 146   EN TOTAL 1,548 154,993,326 3,740 717,431,387 92 110,222,823 5,321 377,060,694 10,701 1,359,708,231