WRITTEN QUESTION E-1590/99

by Hanja Maij-Weggen (PPE-DE) to the Commission

(1 September 1999)

Subject: Disappearance of money ( 40 million) from the ECIP programme of aid to businesses in developing countries (European Community Investment Partners programme)

Can the Commission confirm that some 40 million has disappeared from the ECIP aid programme?

When did this money disappear, and when did the Commission become aware of this problem?

Which Commissioners and Commission departments are primarily responsible for ECIP and for financial audits thereof?

What measures has the Commission taken to trace the money, what results have they had, and what has the Commission done to prevent such problems in future?

Joint answer to Written Questions E-1590/99 and E-1594/99 given by Mr Patten on behalf of the Commission

(26 October 1999)

Reports in the press that 42 million of European Communities investment partners (ECIP) funds have disappeared are incorrect. These reports were based on press mis-interpretation of a public Commission note distributed to the Parliament's budgetary commission which stated that 42 million relating to 1 348 completed ECIP actions is in the process of reimbursement by the financial institutions members of the ECIP network. Such reimbursement is a routine aspect of the operations of the ECIP instrument. The funds are held in financial institutions accredited to the ECIP network, each governed by a specific framework contract with the Commission. In conformity with the provisions of Council Regulation (EC) 0213/96 of 29 January 1996 on the implementation of the European Communities investment partners financial instrument for the countries of Latin America, Asia, Mediterranean region and South Africa(1) these funds have been audited. Should analysis of these audits reveal any suspicion of irregularities or possible fraud, OLAF will be informed immediately. The Commission increased its efforts in 1999 to close out those files and to recover the 42 million funds identified by the independent audit.

The Directorate general for external relations is responsible for the ECIP programme. The financial execution is ensured by the Common service for external relations.

The Commission provides to the Council and the Parliament each year a detailed progress report including statistical tables on the implementation of the ECIP programme. The Commission is sending direct to the Honourable Member and the Parliament's Secretariat a copy of the 1997 report and the 1998 overview.

In addition, in accordance with the ECIP Regulation, the Commission has placed, after open public international tender, a contract with Deloitte S.A. to execute an independent appraisal which is due for completion before the end of 1999 and will be communicated to the Council and Parliament as soon as available.

The measures introduced to further reinforce the management after 1995 of the ECIP programme were discussed and agreed with the Council and Parliament during 1994-1995 and are included in the present ECIP Regulation. These have been implemented fully by the Commission. They are independent evaluation appraisal studies (1990 Touche Ross, 1994 SEMA Group, 1999 Deloitte (in progress)), independent financial audits (1996 Coopers & Lybrand, 1997 Price Waterhouse Coopers), technical assistance units (1997 onwards), and specific anti-fraud provisions and penalty clauses in all contracts.

(1) OJ L 28, 6.2.1999.