WRITTEN QUESTION P-0895/96 by Herbert Bösch (PSE) to the Commission (11 April 1996)

Subject: Fight against fraud

On page 13 of the Fight Against Fraud Work Programme 1996, the Commission says that it will evaluate all positive and negative incentives to the Member States to detect and report fraud and irregularity cases to ascertain whether these incentives are adequate.

1. What positive and negative incentives for the Member States currently exist?

2. What incentives of this nature are currently in the pipeline?

Answer given by Mrs Gradin on behalf of the Commission (20 May 1996)

Member States report more than 4 000 cases of irregularities to the Commission each year. The question of incentives to report such cases must be seen in the context of the Member States' legal obligations in this area. Reporting obligations exist for traditional own resources (irregularities involving more than ECU 10 000) as well as for expenditure in European agricultural guidance and guarantee fund - guarantee section (EAGGF-guarantee), structural policies and the Cohesion fund (irregularities involving more than ECU 4 000).

As far as EAGGF-guarantee expenditure is concerned, Member States may retain 20% of the amounts recovered and placed at the fund's disposal ((Article 7¶1 of Regulation (EEC) No 595/91, OJ L 67, 14.3.1991. )). In the area of structural policies, Member States can re-allocate the amounts recovered provided they have reported the case to the Commission. For EAGGF-guarantee, structural policies and the Cohesion fund, where a Member State initiates or continues proceedings, at the request of the Commission and with a view to recovering amounts wrongly paid, the Commission may reimburse to it all or part of the costs arising from the proceedings ((Article 7¶2 of Regulation (EEC) No 595/91; article 7 of Regulations (EEC) No 1681/94 (OJ L 178, 12.7.1994) and in (EEC) No 1831/94 (OJ L 191, 27.7.1994). )). Moreover, in the framework of the clearance of accounts procedure for EAGGF-guarantee expenditure, the Commission may reduce payments to Member States which did not fulfil their obligation to control expenditure effectively, to detect and report irregularities as well as to recover the amounts involved. In the area of structural policies, the Commission may reduce or suspend assistance under certain conditions ((Article 24 of Regulation (EEC) 4253/88 as amended by Regulation (EEC) No 2082/93 (OJ L 193, 31.7.1993). )).

The legislation currently in force ((Regulation (EEC) No 1552/89, OJ L 155, 7.6.1989. )) in the area of traditional own resources does not include any direct incentives. An amendment proposed by the Commission could change this situation by authorizing Member States to retain 10% of the amounts recovered in reported cases. The Council has not yet accepted the Commission's proposal.

The Commission would also point out that, for all sectors, if a Member State fails to fulfil its obligation in relation to the detection and reporting of fraud or irregularities, the Commission may bring the matter before the Court of Justice (Article 169 of the EC Treaty). The Court may impose a lump sum or penalty payment if a Member State is found to have failed to fulfil its obligation and not to have taken the necessary measures to comply with the previous judgement of the Court (Article 171 of the EC Treaty).

A detailed evaluation of the effectiveness of the existing incentives will take place during 1996 as indicated in the Commission's 1996 anti-fraud work programme. Where appropriate, the 1997 work programme will contain concrete proposals.