WRITTEN QUESTION E-2908/96 by Alexandros Alavanos (GUE/NGL) to the Commission (31 October 1996)

Subject: Fraud involving Community subsidies for olive oil and wine

The Greek Minister for Agriculture has referred to the Public Prosecutor a number of cases of fraud involving Community and national subsidies for olive oil and wine over the last five years in Greece.

1. Have instances of fraud against the Community budget in the olive oil and wine sector been unearthed previously in Greece and, if so,

(a) what was the amount involved?

(b) what was the legal outcome?

(c) have the equivalent amounts been deducted from funding for Greece?

2. As regards the recent case of fraud:

(a) which enterprises are implicated in the case?

(b) what measures will the Commission take to cut down the incidence of fraud?

(c) will the Commission demand immediate repayment of the money?

Answer given by Mrs Gradin on behalf of the Commission (4 December 1996)

1. In accordance with the provisions of Regulation (EEC) No 595/91 ((OJ L 67, 14.3.1991. )), the Greek authorities have communicated to the Commission, from 1990 to 1995, 320 cases of irregularities in the olive oil sector for an amount of 19.6 MECU (2.2 MECU have been recovered from the operators). Administrative procedures have been initiated in a number of these cases. However, the Commission has not been informed of the opening of any court proceedings.

During the same period, 8 cases relating to the wine sector for an amount of less than 0.1 MECU have been communicated (half of which has already been recovered). For two of these cases, the Commission has been informed of the initiation of an administrative procedure in one case, and court proceedings in another.

In addition, inquiries carried out by the Commission have resulted in the discovery of further fraud cases in the olive oil sector (including fraud on traditional own resources) as well as in the wine sector ((Last Commission annual reports on the fight against fraud; COM(94)92 final, COM(95)98 final, COM(96)173 final. )). Court proceedings have, where appropriate, been initiated.

2. Both in cases reported by the Greek authorities and in those detected by the Commission, the Commission is bound by confidentiality rules and is not in a position to disclose the identity of the operators involved.

The task group created in the olive oil sector ((Commission 1995 and 1996 anti-fraud work programmes; COM(95)23 final and COM(96)17 final. )) centralizes information at the European level so that inquiries can be carried out with, where appropriate, the participation of Commission officials. Moreover, as indicated in its 1996 work programme ((OJ C 282, 26.9.1996. )), the Commission is currently examining how to reform the common organization market for olive oil with a view to reducing to a minimum the scope for irregularities. The anti-fraud work programmes3 contain further general measures which are applicable both to the olive oil and wine sectors.

In the first instance it is the responsibility of the Member States concerned to recover the amounts involved in an irregularity. If a Member State fails to take the necessary steps or is to be held responsible for the irregularity, the Commission may look to the Member State ((Article 8 of Regulation (EEC) No 729/70 (OJ L 94, 28.4.1970), as lastly amended by Regulation (EC) No 1287/95 (OJ L 125, 8.6.1995). Article 17¶2 of Regulation (EEC, Euratom) No 1552/89 (OJ L 155, 7.6.1989), as lastly amended by Regulation (Euratom, EC) No 1355/96 (OJ L 175, 13.7.1996). )) to reimburse the loss to Community funds. Failures by Member States to implement control systems which are effective in preventing irregularities are the subject of financial consequences under the clearance of annual accounts.