EUROOPAN YHTEISÖJEN KOMISSIO 
Bryssel, 29.03.1995 
KOM(95)98 lopull. 
YHTEISÖN TALOUDELLISTEN ETUJEN SUOJELEMINEN 
PETOLLISTEN MENETTELYTAPOJEN TORJUMINEN 
VUOSIKERTOMUS 1994 
YHTEENVETO 
(komission esittämä) 

SISÄLTÖ 
Sivu 
Johdanto 3 
YHTEISÖN TALOUDELLISTEN ETUJEN SUOJELEMINEN: SÄÄDÖSKEHITYS 
VUONNA 1994 JA ENNALTAEHKÄISY 4 
Yhteisön eri toiminta-aloilla tapahtunut merkittävä kehitys 4 
Yhteisön taloudellisten etujen oikeudellinen suojaaminen 5 
MUU KEHITYS YHTEISÖN TASOLLA 5 
Komissio 5 
1. Osastojen sisäinen organisaatio 5 
2. "Älykkään tietojärjestelmän" kehittäminen 6 
Muut toimielimet 6 
TUTKIMUKSET 7 
Komission tavoitteet 7 
TILASTOT JA ANALYYSIT 8 
Jäsenvaltioiden ilmoitukset sääntöjenvastaisuuksista 8 
Yhteisön tietokantojen sisältämien tietojen analysointi 9 
Petollisten ia sääntöjenvastaisten menettelytapojen taloudellinen seuranta 9 
Liite: Kertomus kokonaisuudessaan englanninkielisenä (taulukoineen ja kaaviokuvineen) 
2&L 
JOHDANTO 
Yhteisön talousarvioon kohdistuvien petollisten menettelytapojen torjumisesta ovat ensisijaisesti 
vastuussa jäsenvaltiot, joilla ainoina on poiiisihallintoviranomaistensa välityksellä tarvittavat 
keinot petollisen käyttäytymisen valvomiseksi, paljastamiseksi, oikeudessa käsittelemiseksi ja 
rankaisutoimenpiteisiin ryhtymiseksi. Kuitenkin komissio toteuttaa täysipainoisesti 
perustamissopimuksen mukaiset yhteensovittamista, valvontaa, käynnistämistä, tukemista ja 
vieläpä korvaamista koskevat tehtävänsä, ja tämä tapahtuu toissijaisuusperiaatetta noudattaen. 
Eurooppa-neuvosto on Essenissä 9 ja 10 päivänä joulukuuta 1994 sitoutunut Euroopan unionin 
perustamissopimuksen mukaisesti antamaan tarvittavat poliittiset sysäykset toimielinten 
(komission, neuvoston ja Euroopan parlamentin) sekä jäsenvaltioiden välisen yhtenäisen 
toiminnan käynnistämiseksi, jonka tarkoituksena on tarmokkaiden toimenpiteiden toteuttaminen 
petollisten menettelytapojen torjumiseksi. 
Petollisten menettelytapojen torjuntapolitiikka on jo muutaman vuoden ajan ollut yhteisön 
täysipainoisesti harjoittamaa politiikkaa: tästä ovat todistuksena komission käytettävissä olevien 
toimintakeinojen (asetusten ja taloudellisten keinojen1) laajuus, tiedotusvälineiden vaikutus ja 
poliittisen sanoman tärkeys. Neuvosto talous- ja valtiovarainministerien muodostamassa 
kokoonpanossa on ottanut 11 päivänä heinäkuuta 1994 tekemillään petollisten menettelytapojen 
torjumista koskevilla päätöslauselmilla, joiden sisältö on vahvistettu Essenissä, tärkeän askelen 
kohti todellista sitoutumista, johon Euroopan kansalaisten tulee veronmaksajan ominaisuudessaan 
suhtautua myönteisesti. 
Talousarvion toimeenpanoon liittyvistä varainhoitovastuista vastaavat yhteisön toimielimet 
tekevät uudella innolla yhteistyötä petollisten menettelytapojen torjumiseksi. Jäsenvaltioiden 
kansallisilla hallintoviranomaisilla, joiden välityksellä yli 80 % yhteisön luotoista jaetaan 
edelleen, on ensiarvoisen tärkeä tehtävä paitsi vallan ja toimivallan osalta, myös 
vastuukysymyksissä unioniin nähden. Tässä suhteessa 1 päivänä marraskuuta 1993 voimaan 
tulleessa Euroopan unionin perustamissopimuksessa olevan EY:n perustamissopimuksen 209 a 
artikla loi perustan jäsenvaltioiden ja komission väliselle vahvistetulle yhteistyölle2 Euroopan 
varainhoidon suojaamiseksi mahdollisimman tehokkaasti. 
Komission toiminta täydentää luonnollisesti jäsenvaltioissa jo olemassa olevaa tai kehitteillä 
olevaa toimintaa, jolla pyritään torjumaan erityisesti talousrikollisuutta ja järjestäytyneiden 
verkostojen lisääntymistä, jotka pyrkivät käyttämään hyväkseen omaksi voitokseen Euroopan 
rakenteen mittasuhteiden muutoksia etenkin yhtenäismarkkinoiden tulemisesta lähtien. 
Komission maaliskuussa 1994 esittämä strateginen ohjelma petollisten menettelytapojen 
torjumiseksi ottaa nämä muutokset huomioon mitä suurimmassa määrin. Tämä strategia 
keskittyy neljään painopistealueeseen: toiminnallisen läsnäolon vahvistamiseen kentällä; 
yhteistyön vahvistamiseen jäsenvaltioiden kanssa ja tietoverkkojen kehittämiseen; yhteisön 
lainsäädäntökehyksen parantamiseen ennaltaehkäisyn alalla; kansallisten lainsäädäntöjen 
yhteensopivuuden parantamiseen rankaisutoimenpiteiden alalla. 
Näitä omia rahoituskeinoja analysoidaan kertomuksen luvussa 7. 
Euroopan unionin perustamisasiakirjan 209 a artiklan soveltamistilanteesta jäsenvaltioissa annetaan 
erityinen kertomus vuonna 199S. 
3 et 
s Tämän työohjelman puitteissa ja vuoden 1994 merkittävinä tapahtumina mainittakoon erityisesti 
rakennerahastojen ja koheesiorahastojen alalla esiintyneistä sääntöjenvastaisista tapauksista 
ilmoittamista koskevien uusien asetusten antaminen, komission toteuttama, yhteensovittamiseen 
petollisten menettelytapojen torjumisen alalla tähtäävän neuvoa-antavan komitean perustaminen, 
jonka pääasiallisena tehtävänä on kansallisten viranomaisten kanssa tehtävän yhteistyön 
sinetöimiseksi voimistaa ajattelua ja antaa tarvittava sysäys petollisten menettelytapojen 
torjumisen vahvistamiseksi. Mainittakoon vielä komission neuvostolle esittämät aloitteet 
hallinnollisten (vahvistetuin valvontatoimin) ja rikosoikeudellisten seuraamusten alalla petollisten 
menettelytapojen tehokkaaksi ennaltaehkäisemiseksi sekä sellaisten rankaisutoimenpiteiden 
aikaansaamiseksi, jotka ovat myös ehkäiseviä luonteeltaan. 
Lopuksi komission petollisten menettelytapojen torjumispolitiikan konkreettiset tulokset mitataan 
aina kentällä. Tänäkin vuonna tässä kertomuksessa esitetyt tutkimukset paljastavat sarjan 
toimintoja, jotka ovat edellyttäneet komission tutkintaryhmien aktiivista osallistumista. Tehdyt 
analyysit ja tilastot kuvastavat yhteisön halukkuutta käyttää kaikki nykyaikaiset torjumiskeinot, 
joilla pyritään paljastamaan petollisin menettelytapoihin syyllistyvien käyttämät, pitkälle 
kehittyneet menetelmät, tunnistamaan petoksille alttiit tuotteet, saamaan takaisin petosten tai 
välttelyjen kohteena olevat summat ja yhteisön vakaan talouden ja politiikan tulevaisuuden 
kulmakivenä syyllistämään ja rankaisemaan syyllisiä. 
YHTEISÖN TALOUDELLISTEN ETUJEN SUOJELEMINEN: 
SÄÄDÖSKEHITYS VUONNA 1994 JA ENNALTAEHKÄISY 
Komissio on keskittänyt lainsäädännöllisen toimintansa vuodelle 1994 laaditun strategisen 
työohjelmansa mukaisesti kahteen perustavoitteeseen: selkeyttää ja yksinkertaistaa alanmukaista 
lainsäädäntöä; ottaa järjestelmällisesti käyttöön yhteisön hallinnollisia seuraamuksia yhteisön 
taloudellisten etujen paremmaksi suojaamiseksi. 
YHTEISÖN ERI TOIMINTA-ALOILLA TAPAHTUNUT MERKTITAVA KEHITYS 
Vuonna 1994 säädöksissä tapahtunut kehitys koskee seuraavia aloja: 
omat varat, joita koskeva neuvoston asetuksen {ETY, EURATOM) N:o 1552/89 
muutosehdotus, jota on muutettu parlamentin ja tilintarkastustuomioistuimen 
kuulemisen johdosta, on esitetty neuvostolle siinä muodossa, kuin se on viimeksi 
ollut 3 päivänä marraskuuta 1994. Petollisten menettelytapojen torjumista koskevat 
määräykset liittyvät jäsenvaltioiden ilmoituksiin; 
maatalous (EMOTR-tuki), ala jolla on tehty useita muutoksia vuonna 1994 etenkin 
koskien joidenkin vientietujen (tukien) myöntämistä sekä joidenkin yhteisön 
tukijärjestelmien piiriin kuulumiseen liittyvän valvonnan (fyysisten tarkastusten, 
tilintarkastusten) yksityiskohdista säätäviä asetuksia; 
rakennetoiminta, jota varten on annettu kaksi uutta asetusta (toinen 
rakennerahastojen hyväksi ja toinen uuden koheesiorahaston hyväksi), jotka 
koskevat sääntöjenvastaisuuksiin ja perusteettomasti maksettujen summien 
takaisinperintää sekä tietojärjestelmän (ilmoitukset) perustamista näillä aloilla. 
4 <*. 
Näiden perinteisten budjettialojen lisäksi komissio on tehnyt myös ehdotuksia, jotka koskevat 
hallinnollisen yhteistyön menettelyjä (jäsenvaltioiden keskinäistä avunantoa ja niiden sekä 
komission välisen yhteistyön järjestämistä tulli- ja maataloussäädösten moitteettomaksi 
soveltamiseksi), erityisesti petollisten menettelytapojen torjumisen näkökulmasta (yhteisön 
ulkorajojen suojeleminen). Lisäksi eri kauttakuljetustullausjärjestelmät, menettelytavat jotka 
mahdollistavat tavaroiden liikkumisen paikasta toiseen yhteisön alueella tulleja kantamatta sekä 
hyötymättä yhteisön politiikan mukaisista toimenpiteistä ovat olleet erityisen huomion kohteena 
ottaen huomioon tiettyihin, niin sanottuihin alttiisiin tuotteisiin (korkeasti verotetut tuotteet tai 
tuotteet, joihin liittyy suuria summia yhteisen maatalouspolitiikan rahoituksen alalla) liittyvä 
petollisen menettelytavan vaara. 
YHTEISÖN TALOUDELLISTEN ETUJEN OIKEUDELLINEN SUOJAAMINEN 
Komissio on esittänyt kaksi tärkeää aloitetta yhteisön taloudellisten etujen oikeudelliseksi 
suojaamiseksi; ensimmäinen koskee yhteisön hallinnollisten seuraamusten käyttöönottoa (johon 
liittyy valvontamääräyksiä, joiden yleisten soveltamisperiaatteiden määrittäminen mahdollistaa 
näitä yksityiskohtia koskevan alanmukaisen lainsäädännön selkeyttämisen), joiden soveltamisala 
kattaa kaiken sääntöjenvastaisen toiminnan, joka vaarantaa yhteisön talouden. 
Toinen ehdotus koskee yhteisön taloudellisten etujen rikosoikeudellista suojaamista koskevan 
kansainvälisen sopimuksen laatimista. Neuvosto oikeus- ja sisäasiainministerien muodostamassa 
kokoonpanossa on 1 päivänä joulukuuta 1994 antanut päätöslauselman, jossa pyritään antamaan 
mahdollisimman pian vuonna 1995 oikeusväline, joka mahdollistaa yhteisön talousarvioon 
kohdistuvan petollisen menettelytavan yhteisen määritelmän käyttöönoton, erityisen 
syyttämisperiaatteen käyttöönoton ja määräykset, joilla oikeudellista yhteistyötä voidaan 
vauhdittaa etenkin, kun kyseessä on ylikansallinen petos. 
MUU KEHITYS YHTEISÖN TASOLLA 
Petollisten menettelytapojen torjumisen tehostaminen vaatii, sen lisäksi että aiheelliset 
oikeusvälineet ovat käytettävissä, myös sekä aineellisten keinojen (rakenteiden, suorituskykyisten 
analyysivälineiden) että käytettävissä olevien henkilöresurssien mukauttamista (korkeasti 
koulutettujen edustajien värvääminen; koulutuspolitiikan jatkaminen; seminaarien järjestäminen 
myös valvonnasta vastaavien kansallisten erikoistuneiden viranomaisten edustajille). 
Yhteisön eri toimielinten välinen yhteistyö petollisten menettelytapojen torjumisen alalla ilmenee 
neuvoston antamien yhä selvempien poliittisten sysäysten, Euroopan parlamentin tiiviin tuen 
sekä tilintarkastustuomioistuimen merkittävän roolin muodossa. 
KOMISSIO 
1. Osastojen sisäinen organisaatio 
Komissio on ottaen huomioon myös Euroopan parlamentin tahdon vahvistanut petollisten 
menettelytapojen torjumista hoitavaa keskusyksikköään (SGAJCLAF) 50:llä henkilöstösääntöjen 
mukaisella lisäviralla, joiden tarkoituksena on täydentää toiminnallisten tutkimusyksiköiden 
pätevää henkilökuntaa. 
5<x 
Komission muut petollisten menettelytapojen torjumista hoitavat osastot, erityisesti maatalouden 
pääosastossa (pääosasto VI) sekä tulliliittoa ja välillistä verotusta hoitavassa pääosastossa 
(pääosasto XXI) ovat jatkaneet omia erityistehtäviään varainhoidon valvontaa hoitavan 
pääosaston (pääosaston XX) tuella. 
2. "Älykkään tietojärjestelmän" kehittyminen 
Tämä termi kuvaa menetelmien tarkkuutta ja yhtäältä petollisiin menettelytapoihin ja niihin 
syyllistyviin liittyvien tietojen keräämiseksi ja toisaalta näiden tietojen järjestelmälliseksi 
käsittelemiseksi käytettyjen menettelyjen toisiaan täydentävää luonnetta. Tässä mielessä "älykäs 
tietojärjestelmä" merkitsee sellaisten tietojen tutkimista ja keräämistä, joita ei vielä ole 
käytettävissä, mutta myös kaikentyyppisten jo olemassaolevien tietojen yhdistämistä, jotka 
erillisinä olisivat hyödyttömiä tai merkityksettömiä, mutta jotka yhdessä kokonaisuutena 
muodostaisivat petollisten menettelytapojen paljastamiseen tarvittavat osaset. 
Komission olemassa olevien sisäisten tietokantojen kehittämisen ja hyväksikäytön rinnalla 
vuonna 1994 on tehty sarja aloitteita "älykkään tietojärjestelmän" kehittämiseksi läheisessä 
yhteistyössä jäsenvaltioiden erikoistuneiden hallintoviranomaisten kanssa. Mainittakoon 
erityisesti sellaisten hankkeiden tutkiminen, jotka tähtäävät tiedon integroituun käsittelemiseen, 
siten että se olisi kansallisten ja yhteisön tutkintaosastojen välittömästi hyödynnettävissä, jotta 
perinteinen valvonta pystyttäisiin kohdentamaan tarkemmin ennaltaehkäisevässä mielessä ja 
mahdollistettaisiin tutkimusten tuloksellisuus niiden ehkäisevän vaikutuksen korostamiseksi 
(syyllisten rankaiseminen ja kyseessä olevien summien takaisinsaanti). 
Komissio on myös ottanut käyttöön järjestelmän (toiminnassa marraskuussa 1994), joka 
mahdollistaa yhteisön petollisiin menettelytapoihin liittyvien tietojen ilmoittamisen suoraan sen 
erikoisosastoille luomalla ilmaisen puhelinnumeron jokaiseen jäsenvaltioon. Tämän järjestelmän 
avulla Euroopan kansalaiset voivat joissakin jäsenvaltioissa mahdollisesti olemassa olevan 
käytännön mukaisesti myötävaikuttaa yhteisten taloudellisten etujensa suojelemiseen 
ilmoittamalla komissiolle, halutessaan nimettömänä ja omalla kielellään, yhteisön talousarvioon 
kohdistuvista petollisista menettelytavoista, joista he luulevat tietävänsä. 
MUUT TOIMIELIMET 
Euroopan parlamentti ja neuvosto muodostavat budjettivallan kaksi haaraa. 
Euroopan parlamentin varainhoidon valvontakomitea hoitaa poliittista valvontatehtäväänsä, joka 
kattaa komission toiminnan yhteisön julkiseen rahoitukseen liittyvissä asioissa. Vuonna 1994 se 
on erityisesti pyrkinyt vahvistamaan toimielinten suhteita komissioon ja petollisten 
menettelytapojen torjumisessa se on etenkin saanut Euroopan parlamentin antamaan 
päätöslauselmia, joissa tätä ongelmanasettelua korostetaan ja joissa vaaditaan sen 
vahvistamiseksi käytettävien keinojen mukauttamista. 
Neuvosto on käsitellyt petollisten menettelytapojen torjumiseen liittyvää aineistoa 
erikoiskokoonpanoissaan (neuvosto talous- ja valtiovarainministerien muodostamassa 
kokoonpanossa3 ja neuvosto oikeus- ja sisäasiainministerien muodostamassa kokoonpanossa). 
Neuvoston talous-ja valtiovarainministerien muodostamassa kokoonpanossa käymät keskustelut on 
valmistellut etenkin petollisten menettelytapojen torjumisen alalla suoritettavaa yhteensovittamista 
varten asetettu neuvoa-antava komitea, joka perustettiin virallisesti komission 23.2.1994 antamalla 
6 CK. 
Lopuksi tilintarkastustuomiostuin tutkii vuosikertomuksissaan yhteisön kaikkien tulojen ja 
menojen säännönmukaisuutta ja moitteetonta hoitoa. Niistä voidaan kerätä osatietoja, jotka 
liittyvät petollisten menettelytapojen torjumiseen ja joista on hyötyä komission harjoittamalle 
politiikalle, jolla se pyrkii vahvistamaan sitä; sama pätee tämän toimielimen erityisillä hallinnon 
osa-alueilla laatimiin erityisiin kertomuksiin (kuten meijerialan vientituet tai 
naudanlihamarkkinoiden yhteisen järjestön suunnittelemat interventiotoimenpiteet, jotka 
molemmat kuuluvat EMOTR-tuesta maksettavien menojen piiriin, tai koheesion rahoitusvälinettä 
koskeva erityinen kertomus4). 
TUTKIMUKSET 
Tällä luvulla on erityinen asema komission vuosikertomuksessa. Se on kohta, jossa ilmaistaan 
yhteisön talousarvioon kohdistuvien petollisten menettelytapojen todellisuus kuvaamalla tarkasti 
ja tavanomaisin termein joidenkin mahdollisesti verkkoontuneiden ja siten järjestäytyneiden ja 
keskitettyjen organisaatioiden kehittämät joskus monimutkaiset mekanismit. 
KOMISSION TAVOntEET 
Yhteisön talousarvioon kohdistuvat petolliset menettelytavat voidaan erottaa kyseessä olevan 
budjettialan mukaan (menot tai tulot). Kyseessä voivat olla ylikansalliset ja/tai eri alojen väliset 
petolliset menettelytavat, joissa on mukana useita jäsenvaltioita ja/tai samalla sekä perinteisiä 
omia varoja (tulleja ja maatalousmaksuja)3 että menoja (EMOTR-tuki). Muissa petollisissa tai 
sääntöjenvastaisissa tapauksissa kyseessä ovat rakennetoimintaan liittyvät menot (EMOTR-
ohjaus, Euroopan sosiaalirahasto, Euroopan aluekehitysrahastot, kalatalouden ohjauksen 
rahoitusväline) tai muut niin sanotut välittömät menot6, joissa komissio on sopimuspuolena, ja 
jotka liittyvät välittömästi lopullisiin edunsaajiin jäsenvaltioissa. 
Kertomuksessa esitetyt tapaukset on valittu useiden eri kriteerien mukaan etenkin, jotta voitaisiin 
löytää radikaaleja ratkaisuja, joilla petollisten menettelytapojen prosessi voitaisiin rajata 
eliminoimalla tällaisen käyttäytymisen mahdollistaneet olosuhteet ja vahvistamalla ehkäisevää 
vaikutusta, mikä merkitsisi uusien petosyritysten tekijöille raskaita seurauksia. 
Kertomuksen tutkimuksia käsittelevän luvun rakenne on seuraava: 
esimerkkitapausten esittely niin sanottujen ylikansallisten tutkimusten alalla 
(tuonti/vienti); 
päätöksellä (tämä komitea oli toiminut epämuodollisesti muutaman vuoden ajan ennen sitä). 
Koheesion rahoitusvälineestä annettu neuvoston asetus (ETY) N:o 792/93 on kumottu neuvoston 
asetuksella (EY) N:o 1164/94, EYVL N:o L 130, 25.5.1994, jolla säädetään koheesiorahaston 
perustamisesta. 
Tärkeimmän budjettivaran, arvonlisäveron alalla tapahtuneista sääntöjenvastaisuuksista jäsenvaltiot 
eivät ilmoita muodollisesti komissiolle, sillä yhteisön edut vaarantuvat tässä oletetussa tapauksessa 
ainoastaan toissijaisesti. 
Kyseessä ovat tutkimukseen, ympäristöön, turismiin, liikenteeseen jne. liittyvän politiikan puitteissa 
syntyvät menot. 
7<x 
joidenkin yhteisen maatalouspolitiikan rahoittamiseen kuuluvien tutkimusten 
esittely (osuus talousarvion "menoista" 50 prosenttia, josta 30 prosenttia 
vientitukena); 
perinteisiin omiin varoihin liittyvien tapausten (20 % talousarvion "tuloista") sekä 
muiden keskinäistä avunantoa koskevien tapausten (erityisesti tutkimukset, joita on 
tehty joissakin kolmansissa maissa yhteistyössä paikallisten viranomaisten kanssa 
voimassa olevien yhteistyösopimusten puitteissa) esittely*; 
tutkimusten esittely rakennepolitiikan alalla; 
lopuksi komission sisäiseen politiikkaan kuuluvien sopimusten hallinnossa 
esiintyneiden sääntöjenvastaisuuksien (niin sanottujen välittömien menojen) esittely. 
TILASTOT JA ANALYYSIT 
Kaikki kertomuksen tässä luvussa analysoidut tiedot ovat peräisin komission erikoisosastojen 
ylläpitämistä tietokannoista, jotka sisältävät jäsenvaltioiden tekemät ilmoitukset ja joista 
ilmenevät paljastuneiden tapausten määrä aloittain sekä kyseessä olevien summien suuruus. 
Tapausten lukumäärä ja vastaavat summat kasvavat. Komission mukaan tämä johtuu ensisijaisesti 
paljastamismenetelmien tehostamisesta. 
Näiden paljastamismenetelmien kehitykseen liittyvä uusien tietolähteiden kehittäminen on tehnyt 
komissiolle mahdolliseksi toteuttaa joitakin paljastuneita petollisiin ja sääntöjenvastaisiin 
menettelytapoihin liittyviä tutkimuksia omilla osastoillaan ja perustaa erityisen tietokannan, joka 
sisältää toisaalta tietoa tutkimuksen alaisina olevien tapausten määrästä ja toisaalta kyseessä 
olevista rahasummista. Tämän tietokannan strateginen tärkeys on varma, varsinkin kun kirjatut 
summat ovat usein suuria. 
Täten kansallisten osastojen ja komission tutkimuksen alaisina olevien petollisten ja 
sääntöjenvastaisten tapausten määrän taloudelliseen seurantaan liittyvä osa-alue vaati erityistä 
kehittämistä, mitä osaltaan on tukenut myös budjettivallan käyttäjän osoittama mielenkiinto sitä 
ongelmakenttää kohtaan, joka liittyy rahasummien takaisinsaantiin sekä niiden todelliseen 
perintään yhteisön talousarvion hyväksi. 
JÄSENVALTIOIDEN ILMOITUKSET SÄÄNTÖJENVASTAISUUKSISTA 
Jäsenvaltioiden eri asetusten mukaisesti vuonna 1994 tekemät ilmoitukset ovat IRENE-
tietokannassa (IRrégularités, ENquêtes, Exploitation -"Sääntöjenvastaisuudet, tutkimukset, 
hyväksikäyttö). Kertomuksen täydellisessä versiossa esitetyt taulukot antavat joitakin 
suuntaviivoja komission tulevalle yhtenäiselle toiminnalle jäsenvaltioiden kanssa, mutta ne eivät 
kuitenkaan anna aihetta kovin lopullisiin tai ehdottomiin johtopäätöksiin. 
Siten tulee esiin mielenkiintoisia tietoja, jotka liittyvät esimerkiksi EMOTR-tuen alalla 
petollisista ja sääntöjenvastaisista tapauksista tehtyihin ilmoituksiin, jotka analysoituina vuonna 
1994 paljastuneiden tapausten aikaisemmuuden näkökulmasta (taulukko 1) osoittavat, että 
paikallisten hallintoviranomaisten käytettävissä olevat perintämenettelyt kyseessä olevien 
summien takaisinsaamiseksi kestävät kauan. 
8cx 
Taulukosta 2 näkyvät vuoden ensimmäisen puoliskon aikana tehdyt ilmoitukset jäsenvaltioittain 
omien varojen alalla, lisäksi mainitaan kyseessä olevat summat ja kunkin jäsenvaltion edustava 
osuus näiden ilmoitusten kokonaismäärästä. 
Taulukoista 3 ja 4 ilmenee rakennerahaston alalla saatujen ilmoitusten tilanne ensimmäisten alaa 
koskevien asetusten voimaantulosta lähtien. 
Kaaviokuvat (1-4) esittävät eri aloilla tehtyihin ilmoituksiin liittyvien tietojen kehitystä 
(tapausten määrä ja summien suuruus) pitemmällä ajanjaksolla (neljän viime vuoden ajalta). 
Kaaviokuvissa 3 ja 4 nämä luvut on eritelty tarkemmin tuloiksi ja menoiksi. 
Kaaviokuvassa 5 pyritään osoittamaan jäsenvaltioille myönnetyn yhteisön rahoituksen 
(UEMOTR-tuen ja rakennerahaston ala) ja näiden samojen jäsenvaltioiden näillä aloilla 
ilmoittamien sääntöjenvastaisuuksien välinen yhteys. Tämä rinnakkaisuus koskee myös 
jäsenvaltioiden yhteisön laskuun saamia perinteisiä omia varoja ja ilmoitettuja tapauksia tällä 
alalla. 
YHTEISÖN TIETOKANTOJEN SISÄLTÄMIEN TIETOJEN ANALYSOINTI 
IRENE-tietokannan ohella Pré-IRENE-tietokanta sisältää tiedot sellaisista komission 
paljastamista tapauksista, joista jäsenvaltiot eivät ole vielä ilmoittaneet. Komission osastot ovat 
tietoisia myös muista tapauksista, joista on vaihdettu tietoja keskinäisen avunannon7 yhteydessä, 
vaikka jäsenvaltiot eivät ole muodollisesti ilmoittaneet niistäkään voimassa olevien 
alanmukaisten asetusten mukaisesti. 
Kaikkien käytettävissä olevien tietojen tarkempi analysointi on parhaillaan käynnissä komission 
yhteisessä tutkimuskeskuksessa Isprassa. On kuitenkin mahdollista saada kokonaiskuva komission 
tiedossa olevista tapauksista kaikilla aloilla (taulukko 6) ja todeta, että suuressa osassa joihinkin 
välittömiin tukijärjestelmiin liittyvistä tapauksista (EMOTR-tuen ala, taulukko 7) on kyseessä 
suhteellisen vaatimattomia summia verrattuna joihinkin muihin harvemmin esiintyviin, 
vientitukijärjestelmään liittyviin tapauksiin, joissa on kyseessä paljon suurempia summia ja jotka 
edellyttävät vilpillisen toiminnan järjestämistä joidenkin tuotteiden osalta, joiden yksilölliset 
vientituet ovat suuret. Taulukko 8 puolestaan osoittaa jälkikäteen suoritettavan asiakirjojen 
valvonnan tärkeyttä näiden tapausten tärkeimpänä paljastamiskeinona edelleen EMOTR-tuen 
alalla. 
PETOLLISTEN JA SÄÄNTÖJENVASTAISTEN MENETTELYTAPOJEN 
TALOUDELLINEN SEURANTA 
Tässä osassa erotetaan yhtäältä komission harjoittama seuranta niiden tapausten osalta, jotka 
liittyvät omien varojen alaan ja joita varten talousarvioiden pääosasto (pääosasto XIX) on 
kehittänyt otoksiin perustuvan seurantamenetelmän, jonka tehokkuus lisääntyy neuvoston 
antaessa neuvoston asetusta (ETY, EURATOM) N:o 1552/898 koskevan muutosehdotuksen. 
Toisaalta komissio harjoittaa seurantaa EMOTR-tukeen liittyvien tapausten osalta, joissa 
jäsenvaltiot eivät ole, toisin kuin omiin varoihin liittyvissä tapauksissa, velvollisia pitämään 
Katso tämän kertomuksen sivu 5. 
8 Katso tämän kertomuksen sivu 4. 
9<x 
kirjaa kyseessä olevista todetuista (toisin sanoen arvioiduista ja velalliselle asianmukaisesti 
ilmoitetuista), mutta ei vielä perityistä summista. Siksi järjestelmän parantamista tutkitaan 
etenkin ottamalla käyttöön tällainen kirjanpito ja kirjanpito-otteiden ilmoittaminen komissiolle; 
samoin kuin uudistamalla tilien tarkastaminen ja hyväksyminen, vuosittain suoritettu menettely, 
jossa takaisinsaadut summat pienentävät rahaston menoja9, varta vasten tähän tarkoitukseen 
kehitettyjen menettelytapojen tutkimiseksi, jotka mahdollistavat tiettyjen petostapausten 
ratkaisemisen. 
Lopuksi rakennerahastojen tehokas seuranta ei ole ollut mahdollista, koska vanhoja tapauksia ei 
ole ajantasaistettu (ilmoituksia koskevissa uusissa säädöksissä säädetään tällaisesta 
ajantasaistamisesta), mutta on otettava huomioon, että näillä aloilla jäsenvaltioiden lopullisilta 
edunsaajilta takaisinperimät summat saattavat pienentää yhteisön maksuosuutta ilman että nämä 
summat tosiasiallisesti tulevat yhteisön talousarvion hyväksi. 
Taulukoista 9, 10 ja 11 ilmenee tilanne sellaisten eri aloilla ilmoitettujen petollisten ja 
sääntöjenvastaisten tapausten paljastumiseen liittyvien summien osalta, jotka jäsenvaltiot ovat 
tiettävästi perineet takaisin. 
Summat, joita ei saada takaisin kyseessä olevan jäsenvaltion laiminlyönnin johdosta, lankeavat 
jäsenvaltion maksettaviksi. 
10*v 
CONTENTS 
Foreword Page 
3 
Chapter 1 
Section 1 
Section 2 
Section 3 
Section 4 
Section 5 
Section 6 
Chapter 2 
Section 1 
Section 2 
Section 3 
Section 4 
Chapter 3 
Section 1 
Section 2 Protection of the Community's financial interests -
Developments in the regulatory framework and 
prevention work in 1994 
Own resources 
Agriculture 
Structural operations 
Administrative cooperation 
Customs transit arrangements: 
the common/Community and TIR procedures 
Commission initiatives on legal protection for 
the Community's financial interests 
1. Proposal for a Regulation on Community 
controls, measures and administrative penalties 
2. Proposal for a Council instrument establishing 
a Convention for the protection under criminal 
law of the Community's financial interests 
3. Prospects opened up by the Council Resolution 
of 1 December 1994 
Other new developments at Community level 
The Commission 
1. Organizational changes 
2. Intelligence 
3. Risk analysis 
The European Parliament 
The Council 
The Court of Auditors 
1. Annual reports 
2. Special reports 
Developments in the Member States 
National structures to combat fraud affecting 
Community finances 
Concerted action with Commission departments 6 
7 
9 
11 
12 
15 
15 
16 
18 
21 
21 
21 
22 
27 
29 
30 
31 
32 
32 
33 
33 
33 
Chapter 4 Cooperation and partnership with the Member States • 
Section 1 The Advisory Committee for the coordination of 
fraud prevention 
Section 2 Training and exchanges of officials 
1. Seminars 
2. Exchanges of officials 
Section 3 Organizing operational cooperation 
1. Within the Community 
2. Agreements with non-member countries 
Chapter 5 Investigations ( Commission) 
Section 1 Cross-border (import/export) fraud 
Section! Financing the common agricultural policy 
Section 3 Traditional own resources and other cases of 
mutual assistance 
Section 4 The Structural Funds 
Section 5 Direct expenditure ' 
Chapter 6 Statistics and analysis 
Section 1 Reports of irregularities from Member States 
Section 2 Analysis of data in the Commisson databases 
Section 3 Financial monitoring of fraud cases - Recovery 
1. Monitoring in respect of traditional 
own resources •-'. 
2. Monitoring in respect of EAGGF 
Guarantee Section expenditure 
3. Monitoring in respect of structural 
measures and other expenditure 
Chapter 7 Anti-fraud appropriations 
Section! Budget implementation 1994 
1.: Utilization of anti-fraud appropriations 
in the agricultural sector 
2. Financial analysis 
Section 2 1995 appropriations 
Annexés 1. Summary of regulations in force on 
1 January 1994 
2. List of freephone numbers in the Member States 35 
35 
36 
37 
38 
39 
39 
40 
42 
43 
48 
53 
62 
65 
67 
67 
69 
70 
70 
73 
75 
77 
77 
78 
79 
81 
83 
86 
Tables and figures 
FOREWORD 
The European citizens want value for money as tax-payers and efficient well-managed 
and corruption free distribution of Community funds. It is the duty of the Commission 
and Member States to ensure that this happens. The Essen European Council took a firm 
stand on combatting fraud and mismanagement in December 1994. And it is the intention 
of the Santer-Commission to do its utmost to qualify for the trust of the European citizens 
in this respect. 
Fight against fraud as described in the present report is one important - but not the only * 
element of the Commission's strategy. Efficient delivery of Community funds necessitate 
action, both at the level of the Union and at the level of the Member States, in at-least 
three areas: 
First of all, sound financial management should be promoted. This, involves correct 
application of existing legislation, smooth and efficient execution of programmes and 
policies, better evaluation of the results and an efficient feed-back of experience on 
policies and procedures. 
Secondly, the legislation should promote sound financial management and deter fraud. 
This involves first of all a screening of existing legislation with that aim in view. It also. 
involves strengthening of the protection of the Union's financial interests through a 
uniform approach across all Member States as regards definitions and prosecution of fraud 
*to the detriment of the Community. Two very important pieces of legislation in this area 
will have to be adopted soon by the Council. Only then would fraud investigators be 
given the necessary instrument to support their work. 
Thirdly, the fight against fraud has to be strengthened. Hie present report describes 
developments in this area in 1994. 
_ oOo—-
The action foreseen for this year is reflected in the work programme for 1995 adopted 
in February. This work programme fits into the comprehensive strategy based on four 
elements: 
- reinforcing the presence on the ground and concentrating on high-risk 
sectors; > 
- strengthening the partnership with the Member States, in particular, by 
extending information networks to improve the exploitation of intelligence; 
improving the Community legislative framework by tightening up areas 
most vulnerable to fraud and focusing on its prevention; 
- securing greater compatibility between national legislation with regard to 
punitive measures to deter fraud. 
Already in 1994 the Commission stepped up the fight against fraud. It set up new 
sources of information, notably the so-called Freephone, and it launched more enquiries 
on its own initiative to be compiled on a special database (PRE-IRENE). Member States' 
obligations to communicate any case of irregularity in the Structural Funds and the 
Cohesion Fund were strengthened. A closer partnership with the tompetent authorities of 
the Member States was also put in place bu establishing of an Advisory Committee for 
the Coordination of Fraud Prevention. 
These efforts have begun to bear fruit. 
Cases and amounts involving irregularities and fraud detected in 1994 by the Member 
States and the Commission have increased compared to 1993. They represent all together 
an amount equivalent to 1-2 percent of the Community budget. 
Of the total amount concerned, the Member States' communications in 1994 account for 
about two thirds and the Commission's account for about one third. This reflects the 
increased operational role of the Commission in the fight against fraud, notably in linking 
intelligence form various sources across Member States. •-"'" 
Detection has to be followed by sanctions if fraud has to be deterred. Member States have 
an important responsibility in this respect. This was recognized in Maastricht by 
introducing a new Article 209A in the EC-Treaty. 
Existing national laws do not as yet contain sufficiently precise rules to which allow for 
systematic and comparable prosecution and sanctions in Member States. This impedes 
investigations and weakens the legal proceedings. The Commission has put forward 
proposals concerning both administrative and penal sanctions, which involve some very 
necessary changes in national rules and pratices. If fraud to the detriment of the 
Community is to be combatted effectively, the penal law of all Member States must 
contain specific legal provisions. The European Council has set a June deadline for a 
decision by the Council. 
Recovery of all income due to the Community budget and of all Community funds which 
have been acquired fraudulently is another high priority. Virtually all own resources are 
collected by the Member States and about 80% of Community funds are paid out to the 
final beneficiaries by the Member States. This is why recovery in the first instance is a 
task of the Member States. 
The recovery procedures still need to be greatly improved. One means of speeding up the 
recovery procedure would be the adoption of the Commission's proposal on amending the 
Regulation on Own Resources (Regulation n* 1552/89). Another means is the more 
systematic use of the "clearance of accounts" procedure, where agricultural expenditure 
is affected by irregularities and deficiencies of control. Here again, the Commission has 
proposed an amendment to the existing rules. 
For its part the Commission has reorganized and centralized its anti-fraud services and 
has recruited the additional 50 staff voted by the European Parliament. It is further 
developing its intelligence and information systems in order to be able to cope with even 
^ the most, sophisticated types of fraud. -
oOo 
The Commission calls on the Council, the European Parliament and the Court of Auditors 
to cooperate with it in order to ensure a maximum of protection for the financial interests 
of the Community. It is nothing less than the credibility of the Union in the eyes of its 
citizens and taxpayers which is at stake. 
CHAPTER 1: PROTECTION OF THE COMMUNITY'S FINANCIAL 
INTERESTS - DEVELOPMENTS IN THE REGULATORY 
FRAMEWORK AND PREVENTION WORK IN 1994 
It is now accepted that national government departments play a primary role in combating 
fraud against the Community budget.1 Through their police authorities and the courts, 
Member States have the means to monitor, detect, prosecute and punish any fraudulent 
act. Their cooperation with the Commission is governed by the principle of subsidiarity 
to ensure that the finances of Europe are afforded the highest possible degree of 
protection. 
The Commission itself has based its legislative activities on one of the priorities laid 
down in its strategy programme for 19942, concentrating on a fundamental twofold 
objective: first, to clarify and simplify Community legislation in individual policy areas 
and improve the regulations by the systematic inclusion of administrative penalties; and, 
second, to make all legislative provisions which have a financial impact as resistant to 
fraud as possible. 
In adopting this guiding principle for its action, the Commission is laying great emphasis 
on prevention, in line with the political determination it has always shown to strengthen 
both ex ante and ex post controls. To this end, it encourages the work of horizontal 
groups for the simplification and revision of agricultural legislation. 
SECTION 1: OWN RESOURCES 
A proposal to amend Council Regulation (EEC, Euratom) No 1552/89* was presented by 
the Commission on 11 December 1992. It has since been amended following the 
consultation of Parliament4 and the Court of Auditors.3 The amended proposal was sent 
to the Council on 3 November 1994.* 
The rules on notifications and inspections in force on 1 January 1994 are in Annex 1. 
COM(94) 92 final. 
OJ L 155, 7.6.1989. See also the annual report on the fight against fraud for 1993, 
COM(94) 94 final. 
One of Parliament's proposals was that Member States be given a financial incentive to help them 
bear the additional costs arising from ex post recovery in cases of fraud and irregularities already 
notified, by allowing them to keep 10% of sums recovered in such cases (new Article 10(la) for 
cases notified under the new Article 6(4)). 
Opinion No 1/93, OJ C 170, 21.6.1993. 
COM(94) 458 final, OJ C 382, 31.12.1994. 
However, these amendments have not affected the rules in the proposal concerning the 
notification of fraud and irregularities, including one that provides for the regular 
transmission of reports on cases already notified (state of play, accounting statement of 
amounts recovered, etc.) and the new version of Article 6(4), which describes in detail 
the content of reports (compared with the "brief description" referred to in the present 
Article 6(3)) and includes a subparagraph on the possibility of the same cases being 
notified under the mutual assistance arrangements.7 
In its conclusions on combating fraud of 11 July 1994 the Council put further discussion 
of this proposal high on its list of priorities. 
SECTION 2: AGRICULTURE 
Work is continuing on the revision of Community legislation with a view to reducing its 
susceptibility to fraud. The exercise concerns mainly the regulations governing control 
procedures for the granting of certain benefits in respect of agricultural products covered 
by the EAGGF-Guarantee Section, notably export refunds.8 
For example, the Commission clarified the provisions of Council Regulation 
No 163/949 amending Regulation No 386/90 on the monitoring carried out at the 
time of export of agricultural products receiving refunds or other amounts by 
laying down basic criteria for the application of risk analysis by the Member 
States (a 5% rule with a minimum rate of 2% for each product sector).10 
The Commission is at present drawing up rules for the implementation of this 
Regulation with regard to actual physical checks. 
After conducting a study of the case law of the Court of Justice concerning the 
general principles of the right to refunds, the Commission concluded that the 
Court had taken a consistent line in a number of judgments. In the light of this 
study, the findings of which were confirmed by the Court's judgment in 
10 This will allow the Commission's specialized departments to identify links between follow-up 
measures under Regulation (EEC) No 1468/81 and those reported under Article 6(3) of Regulation 
(EEC, Euratom) No 1552/89, especially from a financial angle, as reports on mutual assistance 
cases do not systematically refer to the amounts at stake. See also Chapter 6, Section 3 "Financial 
monitoring of fraud cases", page 70 et seq. 
See Chapter 1, Section 5 "The customs transit arrangements", page 12. 
OJ L 24, 29.1.1994. See also the annual report on the fight against fraud for 1993, cited above. 
Commission Regulation (EC) No ,3122/94 of 20 December 1994 laying down criteria for risk 
analysis as regards agricultural products receiving refunds, OJ L 330, 21.12.1994. 
12 
13 
14 
IS 
16 Case C 347/93 Boterlux" the Commission could see no need to amend. Article 5 
of Commission Regulation No 3665/87 on the right to refunds.12 
Given the economic objective of export refunds, which is to allow agricultural 
products from the Community to compete with goods from non-member countries 
on international markets, the exporter's responsibility is clear in all cases: to 
receive payment of the refund, he must prove, at the request of the relevant 
national authorities, that the products in question are exported to and placed on 
the market in a non-member country. This is an important point, as it implies that 
the products must actually be marketed in the country of import. 
The Commission also put forward a proposal on measures to be taken in dealing 
with certain beneficiaries of operations financed by the EAGGF Guarantee Section 
who present a risk of unreliability.13 The aim of this proposal is to establish a 
permanent mechanism for identifying such beneficiaries by stepping up 
cooperation between national government departments. The proposal, commonly 
referred to as "the blacklist Regulation", was sent to the Council on 26 April 1994. 
The Council (Agriculture) reached agreement on it at its meeting on 6 December. 
Once it has been adopted, the Commission will draw up specific implementing 
rules. 
Council Regulation (EEC) No 4045/89 of 21 December 1989 on ex post scrutiny 
by Member States of the commercial documents of firms receiving funds from the 
Guarantee Section of the EAGGF14 was amended by Council Regulation (EC) 
No 3094/9415 to include rules for selecting firms for scrutiny, in particular taking 
into account the risk-analysis techniques applied, to specify the commercial 
documents to be inspected and the courses of action open to Member States when 
commercial documents are inadequate or located outside the Community territory 
and to strengthen mutual assistance procedures. 
The Council adopted Regulation (EC) No 165/9416 on the co-financing by the 
Community of remote sensing checks and amending Regulation (EEC) 
No 3508/92 establishing an integrated administration and control system for 
OJ C 275, 1.10.1994. In this judgment the Court restated the general principles of the right to 
refund which, on the basis of its own case law, had gradually been incorporated into existing 
legislation. 
Regulation laying down common detailed rules for the application of the system of export refunds 
on agricultural products, OJ L 351, 14.12.1987. 
COM(94) 122. 
OJ L 388, 30.12.1989. 
OJL 328, 20.12.1994. 
OJL 24, 29.1.1994. * ;w 
certain Community aid schemes.17 The checks in question are surveys of 
agricultural land by remote sensing from the air or space and the Community 
share of financing may not exceed 50% of the actual expenditure by the Member 
State concerned in a given budget year. The new Regulation therefore alters the 
scope of Article 10 of Regulation (EEC) No 3508/92, which covers both the 
co-financing of expenditure on control infrastructure under the integrated system 
and spending on aerial or space photography and subsequent analyses. 
Accordingly, the Commission laid before the Council a new proposal for a 
Regulation amending Regulation No 3508/92 with a view to extending the 
Community contribution provided for in Article 10 until the end of 1996. This 
proposal was adopted as Council Regulation (EC) No 3233/94.18 
Finally, the Council adopted Council Regulation (EC) No 3235/94 amending, as 
a result of the accession of Austria, Finland and Sweden, certain rules providing 
for part-financing of measures in the agricultural sector, in favour of the new 
Member States.19 The provisions in question are Regulations (EEC) Nos 4045/89 
and 307/91 and Article 10(2) of Regulation (EEC) No 3508/92.20 
SECTION 3: STRUCTURAL OPERATIONS 
From the outset, the legislation on the Structural Funds defined the roles of the Member 
States and the Commission with regard to the verification of operations and the 
f prevention and prosecution of irregularities. The division of powers was laid down in 
symmetrical fashion in Article 23 of: Council Regulation (EEC) No 4253/88 as follows; 
the Member States bear prime responsibility and are required to "prevent and take 
action against irregularities", "recover any amounts lost" and "inform the 
Commission of the measures taken for those purposes and, in particular, of the 
progress of administrative and judicial proceedings" (Article 23(1)); 
the Commission has powers at its disposal to check that these responsibilities are 
carried out (Article 23(2)).21 
However, the Code of Conduct drawn up by the Commission to lay down the detailed 
rules for notification of irregularities by the Member States was declared void by the 
17 
is 
19 
20 
21 OJ L 355; 5.11.1992. See also the annual report on the fight against fraud for 1993, cited above. 
OJ L 338, 28.12.1994, p. 13. 
OJ L 338, 28.12.1994, p. 16. 
For the financial rules laid down in these three Regulations and the results obtained in 1994, see 
Chapter 7 "Anti-fraud appropriations", Section 1 "Budget implementation 1994", page 77. 
OJ L 374,31.12.1978; amended by Council Regulation (EEC) No 2082/93, OJ L 193, 31.7.1993. 
Court of Justice22 on the grounds that its provisions went beyond those of Article 23(1) 
of Regulation (EEC) No 4253/88. Although the Court's judgment did not call into 
question the legal basis of the Member States' obligation to report cases of fraud, its 
effect was to curb the flow of information. 
The Commission's first response was to take advantage of the general revision of 
Structural Funds legislation in 1993 to enshrine the need for detailed arrangements for 
notification in Council Regulation No 2082/93,23 which amended Regulation (EEC) 
No 4253/88. As a result, the final indent of Article 23(1) of Regulation (EEC) 
No 4253/88 now states that the Commission will draw up detailed arrangements for 
implementing that paragraph. 
As a second step, the Commission followed the normal procedure for adopting legislation 
applicable to the Structural Funds and the cohesion financial instrument, including 
mandatory consultation of the various committees. The result was the adoption of 
Commission Regulation (EC) No 1681/94 concerning irregularities and the recovery of 
sums wrongly paid in- connection with the financing of the structural policies and the 
organization of an information system in this field.24 
A similar Regulation was then drawn up for the Cohesion Fund25 — which had since 
succeeded the cohesion financial instrument26 — albeit following a simplified procedure. 
The two Regulations are modelled on Council Regulation (EEC) No 595/91, which 
applies to the EAGGF Guarantee Section,27 but differ from it in some respects, as they 
are tailored to specific areas of expenditure. 
They provide in particular for the following: 
notification by the Member States of the relevant provisions laid down by law and 
regulation and the list of authorities and bodies responsible for applying them; 
notification by the Member States of irregularities, to be described in detail; 
22 
23 
24 
25 
26 
27 Case 303/90 France v Commission* judgment given on 13 November 1991. See also the annual 
report on the.fight against fraud for 1992, COM(93) 141 final. 
OJL 193,31.7.1993. • . ' 
OJL 178, 12.7.1994. 
Commission Regulation (EC) No 1831/94, OJ L 191, 27.7.1994. 
•Council Regulation (EEC) No 792/93 establishing a cohesion financial instrument was repealed 
by Council Regulation (EC) No 1164/94, OJ L 130, 25.5.1994. 
OJL 67, 14.3.1991. 
10 
three-monthly reports by the Member States on developments, in cases of 
irregularities already notified, in particular the proceedings instituted as a result; 
information from the Member States to the Commission on the amounts at stake 
in irregularities which have been detected and on the various categories of 
irregularities. 
Unlike Regulation (EEC) No 595/91, Regulations (EC) Nos 1681/94 and 1831/94 make 
no provision for a "reward" for national government departments amounting to 20% of 
sums recovered,28 but they do allow the possibility of amounts recovered being entirely 
reassigned for the benefit of operations or final beneficiaries other than those involved in 
the irregularity, subject to the constraints of transparency and budgetary discipline. 
Implementation of these new rules, which entered into force in the third quarter of 1994, 
requires: 
the introduction of appropriate means of communication (forms, electronic media), 
to be agreed by the Commission and the Member States; 
training for the staff of national government departments responsible for reporting, 
with technical assistance from the Commission;29 
the establishment of procedures in the Commission's departments for 
administering the reports. 
SECTION 4: ADMINISTRATIVE COOPERATION 
The proposal for a European Parliament and Council Regulation (EC) on mutual 
assistance between the administrative authorities of the Member States and cooperation 
between them and the Commission to ensure the correct application of the law on customs 
and agricultural matters30 is to replace Council Regulation (EEC) No 1468/81,31 which at 
present governs the procedures for mutual assistance between the national authorities and 
the Commission in the customs and agricultural sectors. 
The aim of the proposal is to improve the organization of measures to combat fraud 
affecting the Community budget in the agricultural and customs fields, which are 
particularly vulnerable, and to guarantee consistent protection of the Community's 
28 
29 
30 
31 Cf. the principle of a financial incentive laid down in Article 7 of Council Regulation (EEC) 
No 595/91. 
See Chapter 7, Section 1 "Budget implementation 1994", page 77. 
COM(94) 34 final, OJ C 80, 17.3.1994. 
OJL 144, 2.6.1981. 
11 
t external borders by stepping up mutual assistance and administrative cooperation. The 
text will also serve as a legal basis for creating and implementing a central database 
accessible to both national departments and the Commission. The new base will form the 
second stage in the establishment of the Customs Information System (CIS).32 It will 
allow the various users to exchange information and hence improve their effectiveness in 
tackling fraudulent practices. 
On 5 December 1994 the Council (Economic and Financial Affairs) reached unanimous 
agreement on the proposal. In so doing, the Council demonstrated its resolve to ensure 
the proper application of customs and agricultural legislation - for which primary 
responsibility lies with the Member States - through mutual assistance between the 
administrative authorities of the Member States and cooperation between these authorities 
and the Commission. 
In line with the Commission's strategy, administrative cooperation between the Member 
States needs to be stepped up further, particularly with regard to controls on the 
Community's external borders, as there are still too many divergences between the various 
surveillance methods employed by customs authorities. The Commission has also drawn 
up a special programme entitled "Customs 2000" to serve as a basis for discussion in the 
Council, 
The purpose of this programme is to produce a uniform external Community border by 
developing new working methods such as the use of company account audit techniques 
and risk analysis, the development of simplified customs clearance procedures and the 
coordinated development of the use of computerized customs procedures. 
Following a specialized study on customs infringements, the Commission is at present 
examining with the Member States in the Customs Policy Committee a possible 
classification of the various categories of customs infringements and penalties. 
SECTION 5: CUSTOMS TRANSIT ARRANGEMENTS: 
THE COMMON/COMMUNITY AND TIR PROCEDURES 
The Community transit procedure allows goods to be moved under customs supervision 
between two points in the Community territory, while remaining exempt from taxes and 
duties and ineligible for any other measures resulting from Community policies. The 
cornerstone of the procedure is the designation of a natural or legal person as principal, 
whose main responsibilities are: 
to lodge a guarantee to cover the collection of duties or other charges due in the 
event of irregularities; 
to present the goods in good condition at the customs office of destination within 
a time limit set by the office of departure. 
32 See the annual report on the fight against fraud for 1993, cited above. 
12 
f The procedure begins with the presentation of the goods and validation of the transit 
document-at the customs office of departure in the Community. A copy is kept there so 
that the authorities can check whether the operation is properly conducted. The goods are 
transported through Community territory with the transit document, which must be 
produced at the customs office of destination by the prescribed deadline. After the office 
of destination has carried out the necessary inspections on the spot, it returns a copy of 
the customs document, together with a report on these inspections, to the office of 
departure. If the transit operation is considered to have been properly discharged, the 
principal is released from his obligations. 
However, in the event of fraud or irregularities, the perpetrator of the infringement, if he 
or she can be identified, is held liable for any duties and taxes which are payable. Failing 
this, payment is demanded from the principal; finally, if the latter is unable to fulfil this 
obligation, the guarantee covering the operation will be seized. Recovery of these 
amounts therefore depends to a large extent on whether the guarantee is sufficient to 
cover the risks incurred. 
The Community transit arrangements were incorporated wholesale into the Convention 
on a common transit procedure with the EFTA countries. It has also been proposed that 
the scope of the common transit arrangements be broadened to cover the countries of 
Central and Eastern Europe.33 As things stand at present, it is obvious that the transit 
scheme has become a prime target for organized criminal networks seeking to develop 
a highly-profitable line in fraudulent transactions. 
In this context products which are particularly sensitive to fraud have been put under 
special surveillance in the transit procedure: the movement of highly-taxed goods such 
as cigarettes or other products covered by the common agricultural policy undoubtedly 
presents a high risk. 
The most common types of fraud are: 
failure to present goods at the customs office of destination; 
falsification of customs documents certifying the presentation of goods at the 
office of destination by using stolen or counterfeit stamps on the copy of the 
transit document returned to the office of departure. 
In both cases the goods in question are introduced and released on to the Community 
market illegally, without payment of the duties and taxes which are due. 
In 1994 a number of measures were taken under the Commission's anti-fraud strategy 
programme, in both the legislative and operational fields: 
See Chapter 4, Section 3, "Organizing international cooperation/Agreements with non-member 
countries", page 39. 
.13 
a list was drawn up of sensitive products for which there is a high risk of fraud 
in transit operations;34 
measures were adopted to increase the minimum amount of the comprehensive 
guarantee required to cover duties and charges relating to certain sensitive 
products;35 
the transit period was adjusted according to the distance to be covered for the 
delivery of goods; 
operational measures coordinated by the Commission were stepped up to 
strengthen cooperation between national and Community investigation 
departments, in particular through an increase in missions to non-member 
countries; 
an advance warning system was introduced 'for the exchange of information 
relating to consignments of sensitive goods between the office of departure and 
the office of destination. 
In addition to these immediate measures, a feasibility study and a cost-benefit analysis 
were carried out with an eye to the computerization of the transit arrangements as an 
effective response to the defects in the present system. Computerization will close certain 
loopholes and provide customs authorities with an effective tool to prevent fraud, by 
allowing them to detect cases early enough to take appropriate protective measures. 
Besides the Community and common transit arrangements, there is also an international 
transit scheme which provides for the movement of goods under the Customs Convention 
on the international transport of goods by road (TIR Convention), whose guarantee 
scheme is managed by the International Road Transport Union (IRU) in Geneva and is 
mainly used for the transport of goods by road from or to the countries of Central and 
Eastern Europe and the Commonwealth of Independent States. 
As the Community has forged closer links with these countries, new opportunities have 
emerged which certain unscrupulous traders and known criminal organizations have 
exploited. The high incidence of fraud in this field led the IRU to suspend the use of 
TIR carnets for the transport of cigarettes and alcohol from 1 December 1994. Customs 
authorities have introduced tighter controls, in particular an advance warning system for 
sensitive goods. 
34 
35 Decision No 2/94 of the EEC-EFTA Joint Committee on Common Transit (94/948/EC) of 
8 December 1994, OJ L 371, 31.12.1994. 
Decision No 3/94 of the EEC-EFTA Joint Committee on Common Transit (94/949/EC) of 
8 December 1994, OJ L 371, 31.12.1994. 
14 
SECTION 6: COMMISSION INITIATIVES ON LEGAL PROTECTION FOR THE 
COMMUNITY'S FINANCIAL INTERESTS 
The protection of the Community's financial interests has been a special priority for the 
Community institutions for several years. From the 1970s, when the Commission 
proposed a draft treaty,36 to the Resolution of the Council (Justice) on 13 November 199 f 
and, more recently, on 1 December 1994,37 it has been clear that the introduction of 
heavier penalties for failure to observe Community law in the financial field has become 
a top political priority. In spite of all its statements of intent, the Council has not yet 
made decisive progress in its discussion of the Commission's proposals. 
If the Community's financial interests are to be afforded consistent and effective 
protection, actions and conduct which harm the Community budget must be identified in 
law, through instruments which are directly applicable by the Member States, and 
conditions must 4>e laid down for the application of controls and measures and the 
imposition of administrative penalties in Community law and the imposition of criminal 
penalties in national law. 
1. Proposal for a Regulation on Community controls, measures and 
administrative penalties 
In order to enhance the effectiveness of Community law and strengthen the preventive 
aspects of its anti-fraud strategy, the Commission has. opted to propose to the Council a 
horizontal instrument on Community controls, measures and administrative penalties." 38 
The proposal for a regulation includes, for the first time, a clear definition of 
"irregularity" and "fraud". The scope of this proposal for a Regulation covers irregularities 
of all kinds: fraud, abuse of law and any other failure to discharge obligations under 
Community legislation which jeopardizes the finances of the institutions, whether on the 
revenue or on the expenditure side. 
Apart from the recovery of any benefits granted, the proposal stipulates the conditions in 
which measures may be taken and Community administrative penalties may be imposed 
in the event of any such failure. 
It also provides for a control mechanism, setting out the general framework for 
inspections, with the detailed arrangements being spelled out in the regulations on 
notification in individual sectors.39 In this respect it seemed appropriate to bring together 
36 
37 
38 
39 Draft Treaty for common rules on the protection under criminal law of the Community's financial 
interests and the prosecution of infringements of the Treaty, presented on 10, August 1976, 
OJ C 222, 22.9.1976, and finally withdrawn by Commission decision of 15 June 1994, 
(Min(94) 1206). 
OJ C 335, 14.12.1994. 
OJ C 216, 6.8.1994. 
See the annual report on the fight against fraud for 1993, cited above. 
15 
f in one text all the principles which should govern the organization of inspections by the 
Member States and the Commission; once these general principles have been laid down, 
the Community legislator may draw on them to clarify and define the various sectoral 
regulations. 
The proposal lays down the principles to apply to any administrative measures or 
penalties to be provided for in Community sectoral regulations. The possibility of 
financial penalties is also provided for. These administrative measures and penalties are 
to apply to the legal and natural persons who commit the offence. In addition to the 
measures having direct effect, such as those relating to abuse of law and limitation, this 
instrument, with its general principles, will have a knock-on effect to promote the 
development of such mechanisms in the various areas where a need exists. Given the 
nature and specific purpose of these mechanisms, their application will have no bearing 
on obligations relating to the principle of assimilation and the need for Member States to 
afford effective, proportionate and dissuasive protection for the Community's financial 
interests. 
In adopting conclusions on the fight against fraud at the Essen European Council on 9 
and 10 December and following initial discussions in the Council's Budget Committee, 
the Heads of State and Government invited the Council (Ecofin) to adopt the Regulation 
on the protection of the Community's financial interests as quickly as possible. 
Furthermore, the Commission has deliberately stressed the need to make criminal-law 
protection for the Community's financial interests a matter for Member States, in order 
to provide appropriate, penalties for fradulent conduct affecting Europe's finances. -•. • 
2. Proposal for a Council instrument establishing a Convention for the 
protection under criminal law of the Community's financial interests 
In the context of its anti-fraud policy, the Commission considers that the legal protection 
of the Community's financial interests must be clearly identified in the Member States' 
armoury of criminal-law measures. A specific legal instrument should be drawn up to 
enhance protection under criminal law - an approach which is vital if anti-fraud measures 
are to be effective, transparent and deterrent. It is not only individual defrauders who 
seek to profit from the financial opportunities offered by Community legislation, but 
organized networks capable of mounting sophisticated illicit operations. Neither one nor 
the other can be countered unless all Member States have effective and homogenous legal 
penalties to ensure that there are no weak points in the Community's protective armour. 
Combating fraud on an international scale is one of the matters of general interest 
specified in Title VI of the Treaty on European Union (the third pillar) ~ "Cooperation 
in the fields of justice and home affairs" (Article K.1.5).40 Using Article K.3.2 as a legal 
base, the Commission has presented a proposal for a Council instrument establishing a 
Convention for the protection of the Community's financial interests under criminal law.41 
40 
See the annual report on the fight against fraud for 1993, cited above. 
41 OJC 216, 6.8.1994. 
16 
t On 1 December 1994, as an interim step, the Council (Justice) passed a resolution 
envisaging the adoption of a legal instrument as early as possible in 1995. At the Essen 
European Council of 9 and 10 December the Council was urged to press on with its 
deliberations so that joint measures could be adopted or a convention drawn up in the first 
half of 1995.42 In a resolution passed on 15 December, Parliament asked the Commission 
to withdraw its proposal for a Convention, on the grounds that the institutional approach 
it had chosen divested Parliament of its power to act and conferred exclusive decision­
making powers on the Council.43 Parliament feared that this could lead to a considerable 
deterioration in the protection of the Community's financial interests. 
The purpose of the Commission proposal is not only to establish a common definition of 
fraud against the Community budget and enshrine the principle of a specific offence in 
the criminal law of the Member States, but also to introduce provisions aimed at speeding 
up judicial cooperation.44 A specific offence is the only way of meeting the requirements 
of Article 209a EC in full.45 The precise scope of the concept of fraud affecting the 
financial interests of the Community needs to be defined, as it constitutes one of the 
components of international fraud referred to in Article K.1.5 TEU on which the 
Commission's initiative is based. 
A key feature of the definition of fraud in the Commission proposal is the concept of 
"gross negligence" in respect of the rninimum duty of care which, from a professional and 
ethical point of view, is incumbent on those who administer or benefit from Community 
financing. 
In this context, it follows from the notion of the "liability" of defrauders acting on behalf 
of or under cover of a body corporate, which corresponds in fact to the decision-making 
powers of its legal agents and bodies (e.g. the board of directors, management board, 
etc.), that the business in question bears responsibility and should clearly be held liable 
under criminal law. Provision is also made for decision-making bodies to be held liable 
for offences committed by a member of an undertaking on its behalf. The Commission 
proposal is based on current trends in the practice and theory of law in certain Member 
42 
43 
44 
45 In March 1994 the United Kingdom presented a proposal for joint action on criminal penalties. 
The working party on criminal law and Community law set up in the framework of judicial 
cooperation to assist the K4 Committee was given a brief by the Council (Justice) on 21 June, later 
endorsed by the Corfu European Council on 23 and 24 June, to continue its comparative study of 
the formal proposals put forward by the United Kingdom and the Commission. 
PE 185 379, 15.12.1994. 
This particular Commission initiative was included in its work programme for 1994 under one of 
the four major priorities. 
Cf the first indent of Article 209a, "Member States shall take the same measures to counter fraud 
affecting the financial interests of the Community as they take to counter fraud affecting their own 
financial interests." 
17 
States and aims to establish the existence of independent liability, from the standpoint of 
the legal duties incumbent on those who exercise power or have tasks conferred on them. 
With a view to building a minimum platform of basic principles for the protection of the 
Community's finances and purely on the grounds of efficiency, the Commission has 
adopted the concept of "priority jurisdiction" for the purposes of prosecuting fraudulent 
conduct. This principle is essentially designed to come into play in complex cases of 
transnational fraud, allowing punitive measures to be centralized in the Member State 
where the essential factual elements of the fraud occurred, without however relieving the 
authorities of the other Member States concerned of their duty to investigate and provide 
assistance. This concept is a vital factor in the fight against fraud at Community level 
and particularly useful for preventing a conflict of responsibilities and above all distortion 
in the simultaneous application of punitive measures by the Member States. 
Judicial cooperation in criminal matters, which is essential in cases of transnational fraud 
involving organized crime, is expressly mentioned in Article K.1.7 of the Treaty, which 
at present falls outside the scope of the Commission's right of initiative. Nevertheless, 
in order to present a full document, the Commission deemed it necessary to add to its 
proposal a set of minimum rules for the establishment of direct and efficient judicial 
collaboration, in line with the actual institutional situation in the Community. Ways must 
be found of encouraging the Member States to make the vital quantum leap, in judicial 
collaboration as in other fields, so that the authorities have a level of operational 
efficiency commensurate with the measures to be taken to combat transnational 
Community fraud. The Commission must be fully integrated into the flow of information 
concerning requests for judicial collaboration so that it can bring its expertise to bear at 
any time and provide any coordination that is necessary to counter transnational crime, 
which itself is organized in a highly coordinated and centralized manner. 
The approach to be followed in drawing up a legal instrument under Title VI of the 
Treaty on European Union, as requested by the Essen European Council, must 
complement the initiatives on administrative penalties. In the final analysis, a 
comprehensive approach of this kind is the only way of satisfying the need for greater 
efficiency in anti-fraud mechanisms so as to form a coherent and complementary body 
of measures that guarantees the protection of Europe's finances. This also means that the 
legal instrument adopted under the third pillar must provide for the Court of Justice, in 
accordance with Article K.3 of the Union Treaty, to give a preliminary ruling on any 
dispute regarding application of the Convention or its interpretation and in particular on 
the question of the concept of fraud under the first pillar (Article 290a EC). 
3. Prospects opened up by the Council Resolution of 1 December 1994 
In July 1994 substantive discussion began in the Council on the initiatives on criminal 
matters put forward by the Commission and the United Kingdom. However, the scope 
of this discussion was extended, notably at the suggestion of the Presidency, to areas not 
covered by the initiatives themselves, so that corruption involving officials of the 
European institutions and the laundering of the proceeds of Community fraud could also 
be dealt with from the standpoint of the legal protection of the Community's financial 
interests. 
18 
The Council Resolution of 1 December repeats the idea of a common definition of fraud 
against the Community budget, for which appropriate penalties should exist in the various 
criminal-law armouries. For the Commission, this constitutes the minimum platform on 
which to continue working in accordance with the conclusions of the Essen European 
Council of 9 and 10 December, which stated quite categorically that fight against fraud 
should be waged with utmost vigour. For the Commission, this will require a clear and 
precise definition of the concept of fraud, including gross negligence, which the Member 
States must then make a specific offence under their criminal law. 
The resolution also refers to the need to consider the subjects of corruption and 
laundering of the proceeds of fraud in drawing up the instrument in question. 
3.1. Corruption 
In the introduction to this section on legal protection, reference was made to the draft for 
a Treaty on protection under criminal law presented by the Commission in 1976.46 The 
Commission had accompanied this draft with a second instrument concerning the 
responsibilities under criminal law of officials and other servants of the European 
Communities. This second instrument is still before the Council. This problem is still 
high on the political agenda: in a resolution passed on 11 March 1994 Parliament asked 
the Commission, under Article 138b of the Treaty, to draw up a legal instrument dealing 
with the liability of officials in charge of expenditure from the Community budget.47 
In addition to mis proposal made in 1976 concerning corruption, the Commission has 
launched a study of its impact, particularly in connection with cases of fraud which inflict 
considerable damage on the financial interests of the European Union. 
3.2. Money laundering 
Pursuant to Article 17 of Council Directive 91/308/EEC on prevention of the use of the 
financial system for the purpose of money laundering,48 the Commission has drawn up 
a first report on the application of this Directive, to be laid before Parliament and the 
Council. 
The report concludes that the Directive has clearly had an impact in establishing 
mechanisms in the Member States to combat money laundering, which is now assimilated 
to a criminal offence in all twelve Member States, eight of which have criminalized the 
laundering of the proceeds of any criminal activity or serious criminal offence, and not 
just the proceeds of drug trafficking. 
Af. 
See footnote 37. 
47 OJ C 91, 28.3.1994. 
48 OJ L 166, 28.6.1991. 
19 
If there is to be a crackdown on the laundering of funds in Europe, one of the steps 
which must be taken is to extend criminal and administrative penalties to the proceeds of 
fraud against the Community's financial interests. 
In its Resolution of 1 December the Council of Justice Ministers called for legislation on 
money laundering to be extended to the legal protection of the Community's financial 
interests. 
To this end, all possible legal measures under the Treaty on European Union, including 
those available under Title VI, should be exploited to the full. 
^-
20 
CHAPTER 2: OTHER NEW DEVELOPMENTS AT COMMUNITY LEVEL 
The fight against fraud cannot be stepped up unless appropriate legal instruments and 
enforcement possibilities are available. Resources also need adjusting - structures need to 
be made more effective and human resources need to be more highly qualified, while 
analysis tools must be of a performance level commensurate with the scale and difficulty 
of the task. 
The Union institutions work together to protect the Community budget against fraud in 
the same way as when they develop and monitor policies in other areas. The political 
impulse from the Council, the support of Parliament and the role played by the Court of 
Auditors with its new post-Maastricht status as a full institution are all aspects of the new 
scene for the pursuit of a coherent and effective anti-fraud policy. 
SECTION 1: THE COMMISSION 
The Commission, having regard as always to the concerns expressed by the European 
Parliament and the pointers it gives,49 strengthened its central fraud prevention units by 
selecting and recruiting national civil servants with the requisite experience and 
qualifications. It also reorganized some departments, as envisaged in the strategy 
programme, to boost operational activities and support the action taken by the Member 
States, the aim being to optimize the deployment of the human resources allocated to the 
fight against fraud. 
The reorganization was, accompanied by changes in working methods, particularly as 
regards data gathering and analysis. Responsibility for checking the consistency of data 
and drawing conclusions is shared between the Member States and the Commission; this 
kind of partnership is essential for any attempt to improve the fight against fraud at 
source. 
1. Organizational changes 
The Commission strengthened its central fraud prevention department - SGAJCLAF -
using the 50 new posts made available by the budgetary authority. 
UCLAÎ7 was restructured into four units - three operational units (EAGGF. Guarantee 
Section and agricultural imports, Structural Funds and other areas, and own resources) and 
one horizontal support unit (general matters, coordination, intelligence and legal 
questions) - and the 50 posts were allocated to reinforce the operational units. Of these 
posts, 35 were filled by temporary staff selected and engaged between April and 
September. Recruitment procedures are in hand; administrative complications inherent in 
seconding the relevant staff from their national departments mean that they will not be 
completed until 1995. 
49 See the annual report on the fight against fraud for 1993, cited above. 
21 
The Commission's other departments with anti-fraud responsibilities, in particular the 
Directorates-General for Agriculture (DG VI) and Customs and Indirect Taxation 
(DG XXI), continued to play their specific roles. The Directorate-General for Budgets 
(DG XIX) built up a monitoring technique based on selected cases of fraud affecting 
substantial amounts of traditional own resources, focusing on accounting aspects in 
relation to the prospects for recovery of the amounts evaded.50 
Financial Control (DG XX) maintained the intensity of its work on recovery of amounts 
in general and amounts defrauded in particular51 and launched two major studies on 
whistle-blowers and on out-of-court settlements.52 Financial Control also maintains 
specially close contacts with the highly active network of national associations of 
lawyers.53 Contacts have also been made for setting up associations in the new Member 
States. 
2. Intelligence 
If the question of fraud against the Community budget is to be tackled thoroughly, the 
systematic gathering and analysis of the requisite data must be developed. The 
Commission's strategy programme published in March 1994 was especially attentive to 
this issue. 
Intelligence basically means seeking and gathering hitherto unavailable information 
relating to the fight against fraud, exploiting information that is available but in other 
contexts and combining information from different sources into coherent sets. The aim 
is to obtain every possible aid in the fight against fraud. The main user of intelligence is 
the investigator on the ground; his needs determine what is sought for. 
The Commission has launched a series of initiatives to develop intelligence in close 
cooperation with the Member States; they are heavily influenced by measures taken 
nationally (e.g. by the Zollkriminalamt in Germany) and by firms in the private sector. 
so 
SI 
52 
/ 
S3 See Chapter 6, Section 3 "Financial monitoring of fraud cases - recovery", page 70. 
Last report of Financial Control on recovery of debts due to the Community - SEC(94)512. 
The purpose of the study is to examine carefully each Member State's rules governing settlements 
and similar arrangements and their application to Community expenditure under the EAGGF 
Guarantee Section and the Structural Funds. It will seek to assess to what extent a harmonized 
approach can be devised at Community level for recovery by Member States of amounts wrongly 
paid. 
The quarterly review AGON reports regularly on new measures for the legal protection of the 
Community's financial interests and the proceedings of the seminars organized in this framework 
are discussed in many publications. 
22 I 
2.1 The UCLA F Integrated Information Management System (UIMS) 
The Commission has begun studying the implementation of an integrated information 
management system to serve as the basis for intelligence gathering and exploitation and 
for investigations. 
The object of the exercise is to associate and interpret all information that is available for 
intelligence and investigation purposes in every area of Community activity. If the project 
is successful, UIMS should provide a two-way communication facility between the system 
itself and users of directly exploitable information without experts intervening. It will 
facilitate and improve the work of the investigators, who will themselves have fed it with 
fraud data. Specific interactive data-processing facilities will complement other existing 
or innovative practices. 
2.2 Developing the databases 
IRENE 
The base now contains about 15 000 cases of fraud and irregularities reported by the 
Member States: 9 300 concern the EAGGF Guarantee Section, 4 900 concern own 
resources, 700 concern mutual assistance and 100 are Structural Funds cases. 
The main progress in 1994 was on the following points: 
increase in numbers of potential users (50 or so) who are starting to use the base 
regularly; 
consolidation of the base as an information retrieval and analysis facility for the 
Commission's anti-fraud policy; 
extension of Macros to different areas so as to facilitate input of cases notified by 
the Member States;54 ^ 
statistical study launched by the Joint Research Centre on existing cases; 
commencement of prior analysis work needed to carry through the migration from 
the current technical environment, with the twin objectives of establishing an 
environment that is more user-friendly and efficient arid of opening it up to the 
Member States. 
Much remains to be done, however, in various fields: the possibility should be provided 
of updating the own resources reports sent in under Article 6(3) of Regulation (EEC, 
Euratom) No 1552/89 so that Member States' action to recover the amounts involved can 
54 For the Structural Funds and the Cohesion Fund, the Macro is already in use; for the EAGGF 
Guarantee Section it has enriched the quality of the data by adding the text of notifications. Macros 
are being devised for own resources and mutual assistance. 
23 
be monitored; similarly the input of reports under Article 4 of Regulation (EEC) 
No 595/91 following investigations by Member States55 should be improved. 
Pre-IRENE 
This base contains information on cases which have not (yet) been formally notified by 
the Member States. It describes the progresr of UCLAF investigations. It is now 
operational but still on an experimental basis, and further changes will have to be made 
to it in 1995. 
On 9 February 1995, 127 cases were under management in this database - 65 relating to 
the Structural Funds and other areas, 58 to the formed arrangements for financing the 
common agricultural policy (22 of these involving own resources in the shape of 
agricultural levies) and 4 to non-agricultural own resources (customs duties). 
The information supplied relates not only to identification of the case (category, type of 
product or programme, country or region, type of irregularity, amount involved) but also 
to particulars of the fraud technique or the irregularity and the proceedings in motion. 
The emphasis has initially been on describing measures taken. The base should soon 
evolve into a valuable management tool enabling investigators to manage their cases 
autonomously and those in charge to manage the generality of investigation business and 
produce summary tables. 
Latest developments have sought to improve updating and retrieval procedures and data 
harmonization so as to enhance user-friendliness while securing the confidentiality of files 
handled by investigators. 
Following analysis of these cases, Pre-IRENE will be the starting point for targeted 
operational measures; it will be at the core of an intelligence-based strategy with 
centralized information management in which combined management. 
Anti-fraud Documentation (DAF) 
In 1994 the Commission consolidated work already done on DAF. Four electronic 
registers for Member States were set up - for the United Kingdom, Spain, Portugal and 
Greece - to display the fraud prevention and detection systems set up there for the various 
expenditure and revenue instruments. The system contains answers to a series of queries 
regarding the basic national and Community legislation applicable to each of these 
financial instruments (known as domains for DAF purposes) plus the bodies responsible 
for general policy, management, checks and controls and, in particular, fraud investigation 
bodies. The ultimate aim is that Commission staff should know whom to contact in a 
55 Article 4 reads: "Each Member State shall forthwith communicate to the other Member States 
concerned and to the Commission any irregularities that have been discovered or that are 
suspected which it is feared may have effects outside its territory very quickly or which show that 
a new fraudulent practice has been adopted" -
24 
given situation and to demarcate the respective investigation functions *of the Member 
States and the Commission; arrangements for mutual assistance, recovery procedures and 
provisions for out-of-court settlements are also to be described. The final benefit of the 
system will be that stock can be taken of Community and national penalties, both 
administrative and criminal, applicable in each domain. 
The Commission presented a preliminary draft of the DAF information system when the 
Advisory Committee for the Coordination of Fraud Prevention met in Brussels on 
30 November 1994. Delegations reacted broadly in favour, but the Member States rightly 
pointed out that the major outstanding difficulties lay firstly in data verification and 
updating and secondly in the translation effort needed for data exchange within the 
European Union. A cost/benefit analysis will be needed here. 
The Commission has offered to prepare a CD-ROM containing the four electronic 
registers to allow the Member States to make their own detailed analyses.56 
APSO (Anti-fraud Policy Support Office) programme 
The Commission's strategy programme generated a considerable need for information 
which the Commission (UCLAF) has endeavoured to meet in conjunction with the JRC 
in Ispra. 
This programme's data coverage extends to the old Irene base (Member States' 
irregularity reports), Pre-Irene (investigations in progress or on the waiting list, with input 
from the Freephone),57 and the DAF system that is intended in the long run to describe 
the legal and organizational framework for a given expenditure or revenue domain, the 
respective investigation functions of the Member States and the Commission and 
provisions for out-of-court settlements and administrative and criminal penalties. Analysis 
also extends to databases such as Celex, EC1, Comext and Dun & Bradstreet,58 which can 
be particularly useful when data is gathered for an investigation. 
These new resources should enable the Commission to migrate to a computer environment 
that is better adapted to the increased requirements. 
2.3 The Customs Information System (CIS)59 , 
CIS is a component of SCENT (System Customs Enforcement Network), a 313-terminal60 
56 
57 
58 
59 
60 At the Committee meeting of 12.1995, the CD-ROM was given to Member States for evaluation. 
See below The new information sources". 
The first three are Community databases (Community law, Commission general documentation and 
Community external trade); the fourth is an international economic database. 
See also Chapter 1, Section 4 "Administrative cooperation", page 11 and earlier annual reports. 
Situation at 31.12.1994. 
25 
data network running controls at various sensitive places on the Community's external 
frontiers. It operates 24 hours a day, 7 days a week; it is accessible to national and 
Commission departments. . 
CIS operates as an electronic communications system61 for SCENT;62 standardized screen 
layouts are used in a variety of situations (data on persons, vehicles, goods, patterns of 
fraud, etc.). In 1994 a series of new functions were added, partly as a result of the 
development of new management tools that boosted the programme's performance. 
The Commission provides user support in technical matters and looks after training for 
users in the Member States (in 1994, 35 weeks of courses were put on in Brussels, 
attended by 291 users drawn from all the Member States). 
CIS was also used for specific operations (surveillance of consignments of sensitive goods 
in the transit procedure,63 maritime surveillance and so on). In September 1994, for 
instance, the Member States used it, with logistical support from DG XXI (Customs and 
Indirect Taxation), to run a two-week Community-level airborne maritime surveillance 
operation targeted on the drugs trade, in the course of which about 4000 messages were 
exchanged. 
2.4 The new information sources 
In November 1994 the Commission set up a permanent system for direct notification of 
information relating to Community fraud to the departments needing it by a freephone in 
each.Member Statel The various numbers64 connect thé caller to a recording centre in 
protected premises at the Commission's fraud unit, which automatically identifies the 
country from which the call is being made and relays a pre-recorded message in that 
country's language. The information received by this system is processed as it arrives; it 
is entered in a database if it prompts operational action. The system is protected at both 
input and output levels to prevent hacking, and absolute anonymity of both call and caller 
is guaranteed. 
This round-the-clock facility is based on practices existing in some Member States; they 
have proved their worth as means of protecting the public interest. The public, can 
contribute to safeguarding the Community's financial interests wherever they may be,65 
61 
62 
63 
64 
65 To give a general idea, 17 293 messages were exchanged in 1994. 
SCENT fiscal is for the exchange of information on indirect taxation between the Member States' 
tax departments and with the Commission via the same network. 
See Chapter 1, Section 5, page 12. 
It was technically impossible to establish a single number valid throughout the Community. 
The numbers are listed in Annex 2. 
26 [ 
anonymously if need be and without needing to know foreign languages, by informing 
the Commission of fraud against the Community budget. 
The system is to be reviewed after a one-year running-in period. Initial results are 
encouraging. 
3. Risk analysis } 
The Commission is no different from the national administrative authorities in having but 
limited resources to deploy on anti-fraud work. To comply with the cost/effectiveness 
principle,66 efforts need to be concentrated on areas of activity or categories of firms and 
persons that present a high risk potential, while at the same time ensuring that most trade 
flows are able to cross frontiers relatively easily. 
Risk analysis techniques are applied to: 
ex ante evaluation of new legislation; 
development and exploitation of intelligence; 
presence on the ground (targeting checks and investigations); 
routine management (processing new files); 
changes to existing.legislation in response to repeated findings of,fraud in a given 
area. 
Basically there are two distinct approaches to evaluating fraud risks: 
theoretical analysis of factors in play (definition of financial and other criteria, 
size of recipient firms, etc.); 
practical evaluation on the basis of known fraud cases (notably through analysis 
of data in bases such as IRENE and Pre-IRENE67). 
In practice the two approaches need to be combined at both Community and national 
levels. 
66 
67 Described in Article 2 of the Financial Regulation applicable to the general budget of the European 
Communities (basic Regulation published in OfficialJournal L 356 on 31.12.1977). 
See preceding item on the development of intelligence and databases, page 24. 
27 
1.1 Risk analysis applied to controls 
The technique is used to schedule controls. The largest possible volume of information 
on a given line of business is compiled and analysed so that controls can be targeted on 
the areas most vulnerable to fraud. 
Given that all authorities are under a general duty to assist with the sound implementation 
of Community policies by virtue of Article 5 of the Treaty, it is for the Member States 
to undertake these controls as regards expenditure or revenue managed in partnership 
between them and the Commission. The national authorities are accordingly required to 
apply these techniques, with Commission help where necessary, in compliance with the 
subsidiarity principle. 
« 
Account has been taken of the possibilities for use of the technique in controls undertaken 
by national authorities both by Council Regulation (EEC) No 163/94 and the 
accompanying regulation on the details, of the physical controls provided for by it and by 
the amendments to Regulation No 4045/89 as regards accounting checks (EAGGF 
Guarantee Section).68 
The national authorities' attention has been drawn to the importance of targeting controls 
at a series of meetings of committees responsible for specific areas (e.g. the Advisory 
Committee on Own Resources and the EAGGF Guarantee Section Committee) and now, 
of course, of the Advisory Committee for the Coordination of Fraud Prevention. This 
policy of raising awareness was pursued also in relation to expenditure areas not yet 
covered by specific measures in this respect: regarding the Structural and Cohesion Funds, 
apart from the fact that a separate unit was set up in the Commission,69 regulations were 
recently enacted on irregularity reporting and information systems, which involve these 
techniques. And the Commission has clearly expressed its determination to develop 
comparable techniques for use in respect of direct expenditure.70 
1-2 Risk analysis as a means of targeting controls 
The object of the exercise here is different. There is, admittedly, an obvious interaction 
with the technique applied to routine controls/since the point is to identify vulnerable 
areas (and high-risk firms or persons), but the idea this time is to prompt specific 
investigations with better prospects of actually recovering amounts evaded or wrongly 
paid while going for the maximum penalties with the highest exemplary effect. In this 
context risk analysis is both deterrent and preventive. 
6S 
69 
70 See Chapter 1, Section 2 "Agriculture", page 7. 
See item on internal organizational changes, page 21. 
This covers transport, education, environment, culture, energy, the internal market, industrial 
policy, research and technological development, cooperation with developing countries and other 
non-member countries, the European Development Fund, ECSC budget operations etc. 
28 
But there are other factors that prompt fraud investigations, which can-be targeted by 
means of the new information sources used by the Commission to organize its own 
investigations.71 The Commission must ensure that the Member States afford the 
Community's financial interests at least the same level of protection as their own financial 
interests. For this it is essential that Commission departments be kept informed about the 
progress of investigations undertaken by national authorities, which have to be monitored 
carefully by the Commission (DG XIX does this as regards recovery of traditional own 
resources).72 
There is also complementarity through the organization of cooperation between national 
and Community departments. 
SECTION 2: THE EUROPEAN PARLIAMENT 
The Community has its own financial system that is quite properly subject to political 
supervision by Parliament, which, with the Council, is one of the two arms of the 
budgetary authority. Political control by Parliament is exercised in practice by the 
Committee on Budgetary Control. 
Members of that Parliamentary Committee consequently exercise the fullest control and 
monitoring powers over the Commission's anti-fraud strategy. 
The Committee has played a major role in strengthening interinstitutional relations with 
the Commission. It has always stated that it wanted a single contact in the Commission 
that would report to it regularly on work done and results achieved in the fight against 
fraud and has often argued that the protection of the Community's financial interests 
demanded a reinforcement of the human and material resources available to the 
Commission's central fraud departments, most recently in 1993.73 In 1994 SG/UCLAF 
was given 50 new posts and a whole series of new items were entered in the budget to 
finance fraud strategy.74 
The Commission was thus equipped to perform that part of its programme that consisted 
in supplying technical assistance to the Member States for boosting the efficiency of 
national operational measures relating to the EAGGF Guarantee Section, the Structural 
Funds and research.75 Parliament was also anxious to reinforce the administrative 
71 
72 
73 
74 
75 See previous item on the development of intelligence and new information sources, page 27. 
See the annual report on the fight against fraud for 1993, cited above, and Chapter 6 "Statistics 
and analysis", page 67 of this report. 
See the annual report on the fight against fraud for 1993, cited above, and the item on 
organizational changes within the Commission, page 22 in this report. 
See Chapter 7, Section 1 "Budget implementation 1994", page 77. 
This policy will be pursued in 1995 in relation to traditional own resources. 
29 
resources available to the Commission to develop the frequency and effectiveness of its 
own investigations in the same areas. 
Recent Parliament resolutions regarding the fight against fraud highlight the need both to 
tighten coordination and enhance the Commission's investigatory powers and to enact 
tough legislation to provide the Community's financial interests with the full protection 
of the criminal law.76 
Lastly, Parliament has announced its intention of holding a public hearing on protection 
of the Community's financial interests in the first half of 1995; a number of major 
questions are to be treated, notably the recovery of amounts defrauded. 
SECTION 3: THE COUNCIL 
The Council took note of the new anti-fraud strategy and work programme77 transmitted 
by the Commission in response to the conclusions of the Ecofin Council of 7 June 1993 
and the Copenhagen European Council of the same month. The Commission's annual 
report for 1993 was also well received. 
The Council's proceedings are prepared by the Budgetary Committee and the Permanent 
Representatives Committee. Both bodies this year stated that the Advisory Committee for 
the Coordination of Fraud Prevention78 should be the place for dealing with these matters 
so that the Budgetary Committee's work of preparing debates in the full Council could 
be facilitated. 
The conclusions of the Ecofin Council meeting of 11 July 1994 regarding the fight 
against fraud were published in the Official Journal.. This was the first time it had been 
done, thus bearing witness to the importance of the matter. Not that there is anything truly 
novel about the issue itself or the importance attached to it; it is simply that the public 
accountability and openness flowing from easy access to official Community 
documentation mean that the general public is more closely involved. 
An ad hoc working party of the Council's Budget Committee was set up79 to monitor the 
Commission's work on controls and penalties.80 The Council's work on third-pillar 
76 
77 
78 
79 
SO Resolutions of 11.3.1994 and 15.12.1994. See Chapter 1, Section 6, page 16 for the draft 
Convention. 
Conclusions of 11 July 1994 on the fight against fraud; OJ C 292, 20.10.1994. 
See Chapter 4, Section 1, page 35. 
By decision of the Permanent Representatives Committee. 
See Chapter 1, Section 6 "Commission initiatives on legal protection for the Community's financial 
interests", page 15. 
30 
f matters under Title VI of the Union Treaty is prepared by a Coordinating. Committee (the 
K.4 Committee81), which is assisted by three steering committees. Steering Committee III 
(judicial cooperation) has set up a number of working parties,82 one of which is on 
Criminal Law and Community Law. This working party met several times in 1994; it 
reports back to the steering committee, which then reports via the K.4 Committee to 
Coreper, which coordinates third-pillar matters generally and ensures the requisite degree 
of consistency with the work of the Ecofin Council on first-pillar aspects of protection 
of the Community's financial interests against fraud. 
The Council meeting (Justice) of 1 December 1994 passed a Resolution83 agreeing to the 
principle of establishing a specific legal instrument to offer the Community's financial 
interests the legal protection of the Member States' criminal law. The Ecofin Council 
meeting of 5 December agreed that the Council should rapidly take the measures needed 
to improve the Community legal framework for fraud prevention. And the Essen 
European Council on 9 and 10 December 1994 agreed with all that. 
As indicated above, the Council has not yet been able to adopt the proposals of the 
Commission concerning administrative and penal sanctions. This is also the case for the 
proposals concerning the replacement of Council regulation (EEC) N° 1468/81 as well as 
the amendment of Council regulation (EEC) N" 1552/89. 
SECTION 4: THE COURT OF AUDITORS 
The Court's annual reports, the latest of which was for 1993,84 and its special reports are 
evidence of its vital role in the external control of the Community's finances. 
The Court and the Commission are visibly on the same wavelength as regards anti-fraud 
policy and strategy. The specific practical measures in the Commission's work programme 
take the fullest account of the Court's recommendations. 
The Court's elevation to full institution status has had a manifest impact on its relations 
with the Commission, particularly as Article 188c of the EC Treaty inserted by the Union 
Treaty requires the Court to provide Parliament and the Council with a statement of 
assurance as to the reliability of the accounts and the legality and regularity of the 
underlying transactions. The new institutional procedure imposes duties on the Court that 
effectively require the Commission to keep it informed, particularly as regards the 
financial monitoring of fraud cases. 
81 
82 
83 
84 See the annual report on the fight against fraud for 1993, cited above. 
Under the programme adopted at the Council (Justice) meeting of 29 and 30.11.1993. 
OJ C 355, 14.12.1994. 
OJC 327, 24.11.1994. 
31 
f 1. Annual reports 
The Court's annual reports are on the legality, regularity and sound management of all 
Community revenue and expenditure. They verify whether revenue.and expenditure are 
fully in conformity with all the rules and procedures and comply with the principles of 
sound financial management. 
These are not strictly anti-fraud reports but they do provide the Commission with a 
valuable source of information, provoking useful reactions not only from the Commission 
but also from the Member States. 
The remarks about financial circuits made at points 6.11 to 6.14 in the Court's 1993 
report are wholly consistent with the Commission's own view that the channels followed 
by Community funds need streamlining. 
2. Special reports 
In addition to its annual reports, the Court may issue special reports at any time on 
specific areas. 
In 1994 the Court adopted special report No 1/94,85 which follows up special report No 
2/92w and pursues the Court's investigations of export refunds paid to major dairies. 
Special report No 3/9487 of 6 October relates to beef and veal intervention measures and 
report No 5/94 of 20 December to the cohesion financial instrument. 
K OJ C 75, 12.3.1994. 
86 OJ C 101, 22.4.1992. 
87 OJ C 356, 14.12.1994. 
[ 
32 
CHAPTER 3: DEVELOPMENTS IN THE MEMBER STATES 
Relations between the Commission and the Member States' national fraud prevention 
authorities are developing into a solid partnership. This development has highlighted the 
importance of the creation and operation of central coordination structures at national 
level and the identification of specific national departments to organize jointly with the 
Commission the monitoring of matters concerning fraud against Community finances. 
The recent establishment of the Advisory Committee for the Coordination of Fraud 
Prevention88 is one of the most telling signs, and an illustration of "co-responsibility" or 
responsibility shared between the Commission and the Member States in fraud prevention, 
as now laid down explicitly in Article 209a of the EC Treaty. 
SECTION 1: NATIONAL STRUCTURES TO COMBAT FRAUD AFFECTING 
COMMUNITY FINANCES 
The Member States possess administrative and financial structures whose task it is to 
monitor the execution of their national budgets. The fact that fraud takes place at the 
expense of the.Community budget raises the question of adapting these structures to fit 
the new context; the reallocation of funding and subsidy management, delegating power 
to collect Community resources (own resources) as laid down in the Treaty, regulatory 
obligations to monitor and prosecute offenders and recover sums lost - all these are 
specialist tasks which, if they are to be carried out more efficiently, require coordination 
at national level as well as between national authorities and with the Commission. 
Examples of newly established structures are the Office central de lutte contre la 
délinquance économique et financière organisée (Belgium) and the Office central pour 
la répression de la grande délinquence financière and the Office central de prévention de 
la corruption (France), while an existing structure is the Guardia di Finanza (Italy).89 
SECTION 2: CONCERTED ACTION WITH COMMISSION DEPARTMENTS 
Links with the national authorities have emerged from the purely institutional framework 
and started to develop into a more flexible pattern of bilateral meetings. In 1994 the 
Commission took a number of steps to develop targeted, high-level contacts with certain 
national authorities, particularly those with a central coordinating structure which operates 
in the field in much the same way as the Community, which is very gratifying to the 
Commission. These contacts have also been an opportunity to acquaint the Commission's 
opposite numbers with its anti-fraud strategy, illustrating it with specific practical 
examples, and thereby to encourage operational cooperation in carrying out investigations. 
88 
89 See Chapter 4, Section 1, page 35. 
The Commission has contributed financially to the operation of some of these national structures 
or co-financed operations undertaken in cooperation with other national agencies. See Chapter 7, 
Section 1, Item 2 "Financial analysis", page 79. 
33 
Outside these institutional forums,90 direct and worthwhile contacts have been established 
between the Commission and national, especially multidisciplinary, authorities, in an 
attempt to put up effective and firm resistance to criminal organizations which often form 
trans-national networks and channels.91 
These contacts take place via the Commission's central fraud prevention structure 
(SG/UCLAF) and give promise of effective collaboration in future years, and not just 
from the strictly operational point of view.92 
From now on reports will have to be produced on the work done by national authorities 
as required by the Essen European Council in December 1994. This can only strengthen 
collaboration with the Commission, as its experience in this field will be of practical help 
to the Member States. 
In its conclusions on action to combat fraud, the Essen European Council of 9 and 
10 December 1994 urged the institutional partners to take joint action with the Member 
States and called on national authorities to submit reports on whatever domestic steps they 
took to combat waste and diversion of Community resources. These reports will be 
considered at the Ecofin Council meeting in June 1995 and, leading up to that, the 
Advisory Committee is the ideal forum for drafting the reports in a uniform manner, a 
task with which the Commission can usefully help.93 
90 
91 
92 
93 The advisory committee already mentioned and the various special committees. 
Given the new strategic context, the technical assistance policy can only be properly reviewed in 
the relatively medium term (one or two years). 
A good example is a fraud case under investigation in Ireland on which a report was drawn up in 
1991 and published on 29.7.1994 so that allegations of illegal activity in the beef and veal industry 
in Ireland (EAGGF, Guarantee Section) could be looked into. Since the report was published, 
Commission departments have been continuing their inquiries, with due regard for the findings of 
the Irish court involved, for the purpose of carrying out the proper financial corrections as part of 
the procedure for clearance of the accounts. Parallel investigations are under way in Ireland, and 
details of any irregularities which come to light will be passed on to the Commission pursuant to 
Council Regulation {EEC) No 595/91 (for details of which see Annex 1). 
The Ecofin Council of 16.1.1995 in fact hoped that a consensus would emerge on the form and 
content Of these reports, so as to make the best possible use of the surveys contained in them, 
including in the report on the implementation of Article 209a of the Treaty by the Member States 
which the Ecofin Council of 11 July 1994 asked the Commission to produce. 
34 
f CHAPTER 4: COOPERATION AND PARTNERSHIP WITH THE MEMBER 
STATES 
The policy for combating fraud will also depend for its effectiveness, its visibility and its 
credibility on the extent to which a sharing of responsibilities and information with the 
corresponding departments in the Member States is achieved. 
Thus, for example, the Commission has taken steps to develop its contacts with national 
organizations which specialize in the field or are multidisciplinary and/or interministerial 
in character (the very establishment of such bodies or the widening of their fields of 
activity in response to changing circumstances are prime examples of developments which 
fit well in a context of international cooperation), with the object of combating all forms 
of organized financial crime, including fraud against the Community budget. The 
advantage of gradually establishing bilateral contacts of this kind and then increasing the 
number is that it can be done in a framework primarily of institutional partnership but at 
the same time with the proper degree of flexibility, vital if the steps taken are to 
complement one another, particularly when it comes to organizing checks, targeting 
investigations and sharing results.94 
In the same spirit of institutional partnership, the Commission has also continued its work 
on stepping up cooperation with non-member countries. 
SECTION 1: THE ADVISORY COMMITTEE FOR THE COORDINATION 
OF FRAUD PREVENTION 
On 23 February 1994 the Commission adopted a Decision setting up this Committee.95 
The function of the new body, pursuant to Article 209a of the Treaty, is to advise the 
Commission on the broad lines of its policy for protecting the Community's financial 
interests and organizing action to combat fraud. The Committee, which met for the first 
time on 1 July and then in October and November, is, as a setting for constructive 
exchanges, to become the main forum for discussion and assessment of the Commission's 
work programme and for keeping abreast of any matter involving legal protection of the 
Community's financial interests. 
The Member States, too, have been urged to bring matters before this body as often as 
possible.96 
Underpinning the smooth running of a multidisciplinary body of this kind, whose purpose 
includes facilitating discussion linked to the drafting of Council conclusions,97 there must 
94 
95 
96 
97 See the item on intelligence in Chapter 2, Section 1, page 21. 
Decision 94/140/EC, OJ L 61, 232.1994. 
Details of the right of initiative are given in Article 2 of the Decision of 23 February 1994. 
Concerning the Council, see Chapter 2, Section 3, page 30. 
-35 
be tight and lasting coordination between all the partners, both at the Commission and in 
the Member States. 
At its first meetings the committee was kept informed of progress in carrying out the 
Commission's programme for 1994 and put forward its own suggestions. The 
Commission also uses the committee as the preferred setting in which, on its own 
initiative, it can raise any question connected with developments in exchanges of 
information98 and the strengthening of ties between the authorities concerned with these 
matters and its own specialist departments. 
Thus, for example, the Commission has been able, stage-by-stage, to set out and develop 
the main features of its anti-fraud strategy, in response to the clearly expressed wish of 
its opposite numbers to see a pooling of know-how with a view to ensuring that initiatives 
now under way and respective powers complement each other.still further. The 
Commission, with the support of the European Parliament, in fact intends to establish a 
new Community policy of financial support and technical assistance for action to combat 
fraud99 for the benefit of national bodies which so request; the plan was at once approved 
by most of the delegations to which it was submitted. In that sense, the Advisory 
Committee is the right setting in which to define a common fraud prevention strategy and 
assess whether it is worthwhile going ahead with appropriate measures in that field on a 
long-term basis. 
SECTION 2: TRAINING AND EXCHANGES OF OFFICIALS 
The Council meeting (Economic and financial affairs) of 11 July 1994 rightly pointed out 
that where fraud prevention is concerned the organization of special, targeted training and 
information schemes for officials from the Commission and the Member States is an 
effective course of action which ought to be stepped up. 
The seminars held for this purpose by or with the help of the Commission are an 
important part of efforts to strengthen partnership with the Member States. Depending 
on the number of participants or the aim in view (to train national officials in a specific 
subject area at their request or bring together a few senior national officials responsible 
for passing the message on to officials in their own countries), the seminars are held in 
the countries concerned or in Brussels. Thus, where operations of this kind have to be 
carried out in the Member States and on their own initiative, the national authorities may 
tend to ask Commission departments for logistical assistance (in the form of a financial 
9S See the item concerning developments in the intelligence field (databases) in Chapter 2, Section 1, 
page 22. 
99 See Chapter 7, Section 1, "Budget implementation 1994", page 77, and Section 2 "1995 
appropriations", page 81. 
36 
f contribution)100 or, if the method of organization so provides, they may ask for a number 
of the Commission's experts actually to take part by addressing the seminars. 
Programmes of exchanges of officials have also developed on the basis of the existing 
rules and regulations governing customs and taxation. 
1. Seminars 
11- General'seminars 
These are attended by between 150 and 200 people from multidisciplinary departments 
and authorities responsible for organizing action to combat fraud against the Community 
budget in the Member States; these include operational customs and agriculture 
departments, taxation experts, auditors and lawyers. 
The purpose of these "major" seminars is, or was, to make the bodies and authorities 
involved in national plans to prevent fraud against the Community even more aware of 
the fact that operators committing fraudulent acts always aim, by resorting to increasingly 
sophisticated techniques, to attract European subsidies to which they are not entitled or 
evade payment of certain taxes. At the same time the seminars were an opportunity for 
national officials responsible for fraud prevention to meet each other and lay the 
foundations for direct, regular and productive collaboration. 
Two seminars of this kind were held in 1994, one in Brighton, UK, on 15 and 16 March 
and one in Noordwijk, Netherlands, on 14 and 15 September. 
1.2 The new policy 
Over the last few years general seminars have been held successfully in most Member 
States.101 More subject-oriented operations can now legitimately follow. In 1994 
seminars attended by smaller numbers (30 to a maximum of 65) have been held in 
Brussels on 3 and 4 May for BEF (Bundesamt fur Ernahrung und Fortwirtschaft) 
inspectors, Genval, Belgium on 8 and 9 June for OCDEFO (Office Central de lutte contre 
la Délinquance Economique et Financière) investigators and Lisbon on 20 and 
21 October for senior officials of IGA (Inspecçâo-Geral e Auditorio de Gestäo). 
More select working parties are set up at these special-subject seminars to work for a 
fixed period, as part of the seminar, on a particular topic (in workshop form) and report 
back to the plenary session. 
iot too 
This policy falls within the framework of the technical assistance which the Commission gives the 
Member States; see Chapters 3 and 7. 
See the annual reports on fraud prevention for 1989 - SEC(90) 156 final, 1990 already cited, 
1991 - SEC(92) 943 final, and 1992 and 1993, cited above. 
.37 
Besides working with national authorities to develop these types of seminars, following 
a strictly defined procedure which involves making contact and then drafting an official 
request, allowing enough time for it to be considered, particularly from the point of view 
of the funds available - the Commission plans to organize special briefings for the new 
Member States at the beginning of next year. The main focus of these will be awareness-
raising for a number of senior officials from the police, tax, customs, agricultural and 
legal departments, thereby creating an opportunity for making the first official contacts 
so that the requisite conditions can then be established for a proper understanding and 
effective cooperation. Creating a climate of trust is absolutely vital if policies which 
demand full cooperation are to be carried out and produce results, especially where jointly 
conducted investigations are concerned. 
Other special-subject seminars were held in 1994: the entry into force of the new 
Commission rules for reporting irregularities in the field of the Structural Funds and the 
Cohesion Fund102 require prior and regular awareness-raising among the departments 
concerned in the Member States - and this is also carried out through the Advisory 
Committee for the Coordination of Fraud Prevention. 
In 1995, similarly, the Commission plans to hold seminars for exchanges of ideas, 
particularly as regards analysing the implementation of Regulation (EEC) No 4Ô45/89103 
(post-clearance checking of commercial documents) as it affects the high-risk sectors; 
these will be limited to a maximum of 35 participants. 
The Advisory Committee for the Coordination of Fraud Prevention has been kept 
informed in detail of training schemes run by the Commission in 1994 in the areas of 
inspection, cooperation and fraud prevention in general, and future schemes will be 
discussed and planned in the Committee. 
This year the Commission's experts have again taken part in events organized locally by 
the Member States' national authorities and relating to fraud prevention in the various 
sectoral fields associated with it and to legal protection for the Community's financial 
interests. Nineteen such events were recorded in 1994. 
2. Exchanges of officials 
Following the pattern of the Matthaeus and Matthaeus-Tax programmes,104 which concern 
customs and tax administration, some Member States expressed a wish to extend the 
procedures for exchanges of national officials responsible for inspection and investigation 
in certain specific fields relating to the EAGGF-Guarantee Section, and in the Structural 
Fund field. 
102 
103 
104 See Chapter 1, Section 3, "Structural operations", page 10. 
See Chapter 1, Section 2, "Agriculture", page 8. 
See annual reports on the fight against fraud, cited above. 
38 
Experience with the Matthaeus programme (with 2000 participants) is a good background 
for considering these proposals, particularly from the angle of the objectives in view -
to be worked out with the officials actually concerned, with the agreement of their 
superiors and the host departments - and the expected effects, not just for the participants 
but for their home departments at operational level (feedback). 
SECTION 3: ORGANIZING OPERATIONAL COOPERATION 
1. Within the Community 
Stepping up operations and providing support for the Member States in this area form the 
first major strategic axis of the Commission's programme for 1994 and future years. The 
resources brought into play for this purpose must be shaped to allow for the trans-national 
character of fraud, especially in the areas of customs and agriculture, and setting up the 
Task Forces is in line with this approach, as indeed are the implementation and operation 
of the TAFI (Textile Anti-Fraud Initiative) programme, though in a specific industrial 
sector which is particularly vulnerable to large-scale trafficking. 
1.1. The Task Forces 
In 1994, following the first contacts with Member States as part of stepping up its 
operational presence in the field, and with their full cooperation and agreement, the 
Commission set up a Task Group in a particularly sensitive area, tobacco, the object of 
which is to combat large-scale sophisticated fraud under the Community transit 
arrangements more effectively. 
The aim is to strengthen the official system, prevent major losses of customs duty and 
national excise revenue and smash the criminal organizations responsible for fraud. 
Existing experience has shown that fraud involves trans-national and international factors 
which require special machinery at Community level. 
The Commission's strategic approach in the tobacco sector comprises measures which 
have to be carried through simultaneously on four different fronts - the legal, the 
administrative, the technical and the operational. 
By adopting a programme which takes these different aspects into account, the Task 
Group will make it possible for the Commission to make all its resources available to the 
Member States in the interests of proper coordination, and as a contribution and support 
at both the political level, with due regard for subsidiarity, and the practical level, in the 
knowledge that in practical terms the work will be carried out in strictest confidence. 
1-2 The TAFI programme 
The basic aim when this programme was set up in 1993 was to step up the battle against 
fraud at Community level in respect of the implementation of textile agreements; this 
includes making sure that the rules and regulations governing relations with non-member 
countries are being properly applied (to prevent the limits on quantity being 
39 
f circumvented), at a time when the Community's textile industry is in recession and the 
limits on quantity are due to disappear gradually. To achieve this, an interdepartmental 
group in the Commission known as the TAFI Task Force decides which measures are to 
be charged to the budget heading for TAFI,105 covering among other things the costs of 
officials from the Member States taking part in on-the-spot investigations into textile 
fraud.106 Other measures which come under this programme involve inspecting and 
improving the checks carried out by the relevant departments in the Member States (a 
monitoring exercise is to be concluded in 1995) and non-member countries, as well as 
study trips to the United States by Community investigators and a subsidy for a body 
responsible for combating counterfeiting. 
One of the most visible results of Community action on textiles must be the holding of 
joint consultations with certain non-member countries to discuss evidence obtained during 
Community missions and secure an adjustment in the limits on quantity where they have 
been circumvented, which, in terms of rectifying the situation regarding such limits, is 
equivalent to recovering duties where own resources have not been collected. 
The main purpose of contacts with non-member countries as part of these checks and/or 
investigations is to maintain a high level of international cooperation, whether agreements 
to that effect have been reached with the Community or are still being negotiated, as is 
the case with a customs agreement with the United States at the end of 1994. 
2. Agreements with non-member countries 
The following agreements containing such provisions were concluded or came into force 
in 1994: 
the "shared competence" agreement (mutual assistance covering both national and 
Community aspects) on the European Economic Area (EEA)107 includes a protocol 
on mutual assistance in the customs field, as do the agreements, again of "shared 
competence" type, with the Central and Eastern European Countries (CEEC),'08 
with which interim agreements have been concluded in respect of the part which 
falls within the Community's sphere of competence, pending ratification by the 
national parliaments;109 
free-trade agreements with the Baltic states1,0 (exclusive Community competence) 
105 
106 
107 
108 
109 
110 See Chapter 7, "Anti-fraud appropriations/Budget implementation 1994", page 77. 
See Chapter 5, Section 3 concerning investigations in the field of traditional own resources, 
page 54. 
Austria, Iceland, Finland, Sweden, Norway and Liechtenstein. 
Poland, Hungary, the Czech Republic, Slovakia, Romania and Bulgaria. 
"Shared competence" type Europe agreements with Poland and Hungary came into force on 
12.1994. 
Estonia, Lithuania and Latvia. 
40 
were signed on 18 July 1994 and entered into force on 1 January 1995. They 
contain a protocol on CEEC-type mutual assistance in customs matters. 
Paternship and cooperation agreements have also been signed with a number of 
CIS countries (Russia, Ukraine and Moldova) containing a protocol on mutual 
assistance in customs matters; 
the Commission continued negotiations on mutual assistance protocols to be 
incorporated into the preferential agreements with other CIS states, Turkey, Israel, 
Morocco and Tunisia, and on customs cooperation agreements with the United 
States, Canada and South Korea; 
as well as the detailed provisions governing administrative cooperation or mutual 
assistance, the Community's framework cooperation agreements with certain 
non-member countries included references to customs cooperation. 
41 
CHAPTER 5: INVESTIGATIONS (COMMISSION) 
The number of cases detected is rising. In the Commission's view, the first conclusion 
to be drawn from this is that detection systems are now more effective. The following 
factors should also be taken into account: 
the overall volume of the Community budget has grown; 
sophisticated fraud often spans several Member States, which means that the 
Member State which detected the fraud and reported it to the Commission is not 
necessarily the country where the fraud is based; 
when evaluating the effectiveness of action against fraud, longer-term trends are 
more significant than lists of figures, however spectacular, for a single year. 
Action against fraud cannot and should not be restricted to detecting individual cases and 
imposing penalties. It is just as important, if not more so, that it should help eliminate 
the factors that make fraud possible or even encourage it. Therefore, our purpose in 
recounting individual cases in this chapter is as follows: 
to alert the relevant authorities in the Member States and draw their attention to 
particular areas and scenarios; 
t - to make it more difficult for the types'of fraud described to be repeated, since 
they would be more easily detected; 
• > 
to prepare the ground for action with a view to eventually eliminating the 
circumstances which currently provide opportunities for fraud to be committed and 
flourish; 
to make more of the desired deterrent effect by leaving potential defrauders in no 
doubt as to the very serious consequences awaiting anyone committing an illegal 
act of this type. 
The choice of cases was dictated by these objectives rather than by any attempt at 
geographical or sectoral balance. 
Procedures subsequent to an investigation can be very lengthy, whether they are 
accounting procedures to recover the amounts or court proceedings to punish acts of 
fraud. The same is true of measures to follow up success in the field, for example the 
time it takes to make the appropriate changes to Community legislation most vulnerable 
to fraud. In this context, it must be noted that it is the responsibility of the Member 
States111 and not the Community to bring actions before the courts to recover amounts and 
prosecute persons guilty of fraud. By the same token, it is the responsibility of the 
Except in the case of direct expenditure (see Section 5 of this chapter, page 66 ). 
42 
Community legislator (the Council and Parliament) to amend and/or supplement the legal 
arsenal, since the Commission's powers are merely to submit proposals for this. 
As in the 1993 activity report, the investigations discussed here are broken down into 
sections according to main case type or budget heading and relate fo: 
investigations into cross-border (import/export) fraud affecting Community 
revenue or a particular area of budget expenditure and, therefore, requiring 
internal coordination within the Commission; 
investigations relating to the financing of the common agricultural policy; 
investigations involving traditional own resources; 
investigations involving structural policies; 
investigations into irregularities involving direct expenditure managed by the 
Commission.112 
Each section will deal with developments in the major on-going cases discussed in 
previous annual reports and describe the main significant files opened in 1994. Major 
cases under investigation by the Commission subject to special monitoring by SG/UCLAF 
are stored in the pre-IRENE database,113 which can perform a whole range of analyses 
as is done with cases reported by Member States where the necessary investigations are 
the responsibility of the national authorities. 
SECTION 1: CROSS-BORDER (IMPORT/EXPORT) FRAUD 
This section covers cases affecting several Member States involving both revenue 
(customs duties, import levies on products from non-member countries) and expenditure 
(export refunds).114 These are complicated cases which have to be handled in close 
cooperation with the national authorities of the country where the fraud was detected and 
of the countries to which it may have spread in cases -where organized smuggling 
networks are operating. Organized financial rackets make use of sophisticated procedures 
to set up fraud circuits for transporting goods, in particular involving substitution of 
certain products depending on which measure they are designed to abuse. The response 
to this must be suitably targeted and in proportion to the crime, which is the thinking 
behind the Commission's new policy, incorporated in the anti-fraud strategy, of supplying 
112 
113 
114 This refers to contracts concluded directly between the Commission and end-beneficiaries in 
Member States which are not the .esponsibility of national administrations as regards management, 
monitoring or control. 
See the item concerning the developments in intelligence (databases) in Chapter 2, Section 1, 
page 24. 
Cases of cross-border fraud not involving import or export are dealt with in other relevant sections. 
.43 
technical assistance to operational units in the Member States backed up by the provision 
of extra resources to the equivalent departments in the Commission. The latter must have 
available the necessary instruments in both the technical (information networks, databases 
remote sensing systems,) and legal fields (powers of investigation, specific offence). 
Interaction between Commission departments and national departments and sound 
cooperation with non-member countries which are also involved is based on systematic 
exploitation of an "intelligence" strategy.115 Cooperation with national authorities is now 
operating effectively and efficiently, although an assessment of the results will only be 
possible in the long term. 
1. New cases 
1-1 Imports of milk powder into the Community 
Checks carried out in 1992 on customs documents drawn up in Antwerp 
(Belgium) for consignments of milk powder from non-member countries (Austria, 
Czech Republic, Poland and Slovakia) via Spain revealed that transit documents 
had been wrongly discharged for about 4 000 tons (or approximately 200 
lorry-loads) of the product which was not subsequently released for sale at the 
import destination. The amount of agricultural levies evaded in this way is in the 
region of ECU 9.5 million. It was noticed that there had been an increase in 
Spanish exports of milk powder between 1991 and 1993, so inspections were 
organized on businesses entitled to export refunds for quantities of milk powder 
outside the external Community transit procedure.116 
Checks carried out on the selected businesses by the Spanish authorities further 
revealed that two of the businesses had been importing milk powder under false 
goods descriptions. A product called "SILITIR MMP" coming from Austria had 
been declared as "silicon soil". 
The latter case of fraudulent importation involved 8 300 tons of milk powder 
being wrongly granted customs duty exemption. The amount of duties evaded is 
ECU 15 million. 
Furthermore, various cases of fraudulent importation into Spain of milk powder 
intended for export to non-member countries outside the external Community 
transit procedure involve British, Dutch, French and German companies and 
account for ECU 4.5 million in evaded duties. 
115 
116 See the item concerning intelligence in Chapter 2, Section 1, page 23 and Chapter 4 "Cooperation 
and partnership with Member States", Sections 1 and 2, page 36 et seq. 
See Chapter 1, Section 5, page 13 regarding this .procedure. 
44 [ 
All together these fraudulent operations involving milk powder account for 
ECU 45 million in evaded duties. The Spanish authorities are continuing their 
investigations in conjunction with the Commission departments. 
These cases highlight three key issues: 
a priority for the Commission in 1995 is to improve the Community transit 
procedure; this will involve raising political awareness of the risk of fraud in 
this area; 
the case involving SILITIR MMP illustrates how important and worthwhile it 
is to carry out physical checks on imports and analyses of imported products; 
the fraud mechanisms and techniques used as well as the complexity of the 
operations are proof that they were masterminded by criminal organizations. 
1.2 Butter-based food product carousel 
This fraud involved imports of a butter-based food product into the Community via 
San Marino from certain Eastern European countries. The product was imported into 
San Marino and Italy under a false description so as to evade payment of duties. This 
channel was organized within the Community itself, since the goods were never intended 
for sale in San Marino. It was discovered that the goods were exported to various 
Member States, converted into butter oil (98% liquid butter concentrate) .and re-exported 
outside the Community with payment of refunds. 
The levies evaded are estimated to be in the region of ECU 6.8 million, but the amounts 
wrongly paid are not yet fully known. 
The Italian authorities, which are the principal party involved, are continuing their 
inquiries in conjunction with other Member States importing the product and with the 
assistance of the Commission. The main purpose of the inquiries is to establish the real 
destination of the products after they are imported into the Community: 300 tons of butter 
(with a value öf approximately ECU 1 million) and 24 tons of milk powder have been 
seized and 17 people have been indicted. 
Following their inquiries, the Italian authorities do not rule out the possibility that 
the perpetrators of the fraud have links with organized crime. 
1.3 , Butter, milk powder and sugar from the Czech Republic 
Several cases are under investigation: 
Firstly, there are consignments of butter, sugar and milk powder to Morocco and 
Algeria via Spain with TIR carnets issued in the Czech Republic. The carnets had 
been discharged with false stamps from a Spanish customs office, giving the 
impression that the products had arrived at a Community exit point, whereas in 
45 
t fact they had been placed on the Community market without completion of the 
necessary formalities. 
An administrative cooperation mission carried out in the Czech Republic under the 
protocol on mutual assistance established that own resources worth ECU 20 million 
were involved. 
Secondly, consignments of butter were found to have been sent from the Czech 
Republic to the Netherlands, from where they were re-dispatched after storage to 
Italy via Switzerland. 
The butter, which appeared to be of Czech origin, entered Italy under a false 
description and was placed on the market as margarine, thus avoiding the payment 
of levies. At the same time, Community margarine had been put in the place of 
this butter in the warehouse and then exported to Russia receiving the refunds 
applicable to this product. 
According to preliminary information, 500 tons of products are involved, accounting for 
evaded duties and levies of ECU 1.5 million for the consignments discovered to date. 
1-4 Export of cheese, meat and dairy products 
These products were exported from Denmark and Germany to non-member countries and 
tnen re-imported into Greece. 
Checks carried out by the Greek authorities at the Commission's request showed the 
administrative documents to be false; the import certificates referred to exports to 
Bulgaria, Jordan and Lebanon, for which larger refunds had been received. The 
documents proving that the consignments had reached their place of destination were 
discovered to be false, for the goods had been re-dispatched to Greece under cover of 
false certificates. 
The refunds in question are in the region of ECU 1.8 million in the case of Germany 
and ECU 2.1 million in the case of Denmark. Investigations are continuing to 
identify the perpetrators and bring them to justice. 
2. Old cases 
2.1 Refined sugar 
Here is a summary of the further developments in this case in 1994, in particular 
the legal and financial outcome: 
One of the perpetrators was sentenced to a year and a half in prison in the 
Netherlands, while the cases against other suspects are still continuing. The 
case involves a total of 3 448 750 kg of sugar in 140 consignments. The 
Netherlands has already initiated procedures for recovering the duties 
evaded, which amount to ECU 2 078 138; 
46 
Three people were arrested in Italy and one in France- A total oi nine 
people are under investigation in Italy and the court is to decide on 
possible indictments in April 1995. 
The quantity of sugar seized in Italy in 1993 was 97 237 kg. A total of 
3 226 513 kg of sugar was fraudulently placed on the market, including 
2 552 763 kg in Italy and 673 750 kilos in the south of France, and 
therefore could not be seized. 
The levies evaded total approximately ECU 1.4 million. 
It has not been possible to dismantle the organisation and origin of the contraband 
goods other than by recourse to investigation techniques especially adopted to 
combat this kind of organisation, in particular by surveillance of the sugar 
consignments. Legal proceedings are still under way, in particular in the Netherlands 
and Italy. 
t 2.2 Meat carousel 
This fraud involved importing live cattle from Eastern Europe into Italy under the inward 
processing arrangements and exporting beef to non-member countries. 
The Italian Guardia di Finanza are continuing their investigations in conjunction with the 
Commission. The financial implications of this fraud are now estimated to be in the 
region of ECU 15.7 million in terms of own resources evaded and ECU 29.4 million in 
terms of wrongly paid out refunds. 
In the course of the investigations the Commission conducted a mission in Malta together 
with the Italian authorities. Thanks to the cooperation of the Maltese authorities, proof 
was found that many container ships in Malta had been reloaded and sent on to Croatia 
via Italy. On-the-spot investigations in Croatia revealed that the goods never reached their 
destination. Furthermore, many of the containers imported into Malta were not even half 
full or contained only offal or low-quality offcuts. 
This fraud was committed by an organization with close links to organized crime in 
Italy. It was made possible by the corruption of numerous national ooficials. The 
dismantling of the organisation was achieved thanks to the close cooperation of the 
police, magistrates and Commission investigators. Prosecution proceedings against 60 
people are to begin in March 1995. 
2.3 Milk powder and cheese 
Investigations have been completed and a summary list of charges was issued on 
29 November 1994. Prosecutions are under way and procedures to recover the 
ECU 4.9 million of evaded levies from the importers can now be initiated by the Belgian 
customs authorities without having to wait for the final court judgment. 
2.4 Olive oil 
47 
The legal proceedings which were initiated in 1992 enabled the Italian authorities to indict 
five people for importing olive oil from non-member countries using false transit 
documents. During the proceedings a Commission investigator was able to give evidence 
of the established facts. Judgments are expected by the end of 1995 and the prospects of 
recovering the money are good, since the authorities managed to take all the appropriate 
distraining measures from the outset. 
The Guardia di Finanza has also launched several other enquiries into olive oil, 
particularly as regards granting of consumption aid (bottling). Several new cases of fraud 
have come to light: companies specializing in bottling had been issuing fake purchase 
invoices for olive oil which was in fact vegetable oil (sunflower oil, rape seed oil). These 
practices were borne out by on-the-spot investigations. 
As regards the new cases of fraud, it should be noted that the practices discovered in 
the course of investigations had already been identified by checks using risk analysis 
techniques.117 
2-5 Milk powder 
Here is an update on the proceedings against the accused company: 
on 11 April 1994 the examining magistrate at the court in Cremona drew up a 
request for two people to be indicted and appear before the preliminary 
investigation judge; 
on 11 May 1994 the preliminary investigation judge fixed the date for the first 
hearing for 12 October 1994; 
on 5 November 1994 the same judge decided that the trial would begin on 
21 February 1995. 
SECTION 2: FINANCING THE COMMON AGRICULTURAL POLICY 
These investigations mainly cover export refunds, which are the largest single item in the 
EAGGF-Guarantee budget, accounting for approximately 30% of total funding. Other 
significant illustrative cases have also been selected regarding specific aid measures, in 
particular production aid. 
1. New cases 
1-1 Butter and olive oil exports 
117 See the item concerning risk analysis in Chapter 2, Section 1, page 28. 
48 I 
During a Commission inspection visit to Hungary together with the Italian authorities, the 
Hungarian authorities carried out checks on the authenticity of certain documents which 
had been submitted to the Italian authorities for the purpose of obtaining refunds on butter 
exports. The documents were found to be fake. Evidence was collected on the spot 
indicating that the product that had been transported was not butter; armed with these 
facts, the Italian authorities were then able to identify other fake documents which had 
been submitted for olive oil export refunds. 
Investigations are continuing in Italy, in particular to establish the sums involved. 
The evidence collected proves the involvement of criminal organizations. The case 
highlights the need for local authorities (including payment agencies) to be on their 
guard when checking documents intended to prove that products have reached their 
destination. 
1-2 Abuse of the regulations on the special aid for hill and mountain areas and the 
suckler cow premium 
On the basis of information reaching the Commission, in particular the EAGGF 
departments, and subsequent examination of the files, several irregularities came to light, 
leading the EAGGF departments to organize an inspection visit to Haute-Corse (France) 
regarding implementation of the regulations on the special aid for hill and mountain areas 
and the suckler cow premium. 
". I • -
the special aid for bill and mountain regions was introduced in the Community in 
1975 and is intended for fanners with farming as their principal occupation who 
are permanently resident in a mountainous area where they keep their livestock 
eligible for premiums during wintering. Persons with farming as their secondary 
occupation may also be eligible, depending on their level of income and only in 
mountainous and extremely mountainous areas. In all cases the animals must be 
identified; 
the suckler cow premium, which was introduced in 1980, has become more 
important with the reform of the common agricultural policy; persons raising a 
herd of suckler cows for meat production are eligible. 
Since 1 February 1993 these aid arrangements have been implemented within the 
framework of Council Regulation (EEC) 3508/92 on the Integrated Management 
System.11* 
The purpose of the visit to Haute-Corse (8-16 September 1994) was to check what was 
behind the irregularities discovered in the dossiers and to establish whether there was any 
link between the aid received as special aid for hill and mountain areas and suckler cow 
premiums and the forest fires which have broken out in Corsica over recent years."9 
OJ L 355, 5.12.95. See the annual report on the fight against fraud for 1993, cited above. 
The Commission's departments dealing with the environment had received information suggesting 
49 
The results of the enquiries highlighted three points: 
The French authorities should take concrete steps against the people who 
committed the irregularities; 
As regards the special aid for hill and mountain areas, serious problems were 
discovered with the management and supervision of the system in 1993, 
which was the year on which the checks were carried out. There is, however, 
good reason to believe that the state of affairs discovered during the 
inspection visit was hot specific to 1993 as regards the management and 
supervision operated at the level of the département. The French authorities 
should therefore audit the terms on which the premiums were granted over 
the period 1988-92 by examining in detail the files on all recipients in Haute-
Corse. EAGGF advances and payments for 1993 have been-suspended in full 
pending the regularization of the individual cases referred to above. Advances 
and payments for 1994, and possibly subsequent years too, are also being 
suspended, until the French authorities have taken the necessary 
administrative steps to ensure that the system is applied in accordance with 
Community and national legislation. 
As regards the suckler cow premium, for 1994 the Commission is to make a 
50% across-the-board reduction for applications submitted in 1993 (on a base 
of approximately ECU 3.8 million, including premiums for extensive 
farming). 
The payment of premiums is being suspended for 1995 (applications lodged 
in 1994) and possibly also for subsequent years. The suspension will continue 
until the French authorities implement management and supervision structures 
that meet the requirements of Article 8 of Council Regulation (EEC) No 
729/70.120 
The Commission is quite prepared to assist the French authorities in researching and 
adopting specific solutions so that this affair will serve as an example for similar regions 
elsewhere in the European Union. 
1-3 Tobacco exports to Romania 
Between December 1992 and May 1993, sixty-three containers of tobacco were unloaded 
at the port of Constanfa. The tobacco, which was being exported by six Italian companies, 
was on its way to Bucharest and was stored in Constanfa waiting for customs procedures 
to be initiated. 
120 that the prospect of receiving these subsidies was behind the forest fires which broke out in Corsica 
in the summer of 1994. 
OJ L 94, 28.04.1970. See the annual report oh the fight against fraud for 1993, cited above. 
50 
« Since the plant health documents needed for customs clearance were not available, the 
company importing the tobacco in Bucharest did not submit an import declaration. The 
Romanian authorities therefore carried out checks on the goods so as to decide what 
should be done with them. 
The checks revealed that most of the containers were filled with waste paper and plastic 
and mouldy tobacco waste. So the Romanian authorities decided to reload the goods back 
onto the ship which had brought them from Italy. 
Commission departments are currently investigating the payment agency in Rome (AIMA) 
to ascertain what refunds and/or premiums may have been paid for this tobacco: as things 
stand, it looks as if about ECU 260 000 should be recovered as well as about ECU 2.2 
million in premiums. 
The Commission has decided to put an end to refunds for tobacco 
1-4 Grape must exports 
This case was discovered in the second half of 1993 when the Dutch authorities realized 
that large quantities of concentrated grape must had transited via Rotterdam. 
The investigations revealed that following an increase in production capacity Spain had 
increased its exports of this product by an high rate from November 1991 onwards. There 
were serious doubts concerning the real destination of the quantities shipped to Sweden. 
A mission in Sweden in March 1994 examined the supporting documents of three 
importers. It was found that at least a good part of the consignments sent to Sweden had 
immediately been re-exported to the United States and Canada, countries for which export 
refunds are not payable. 
It was clearly demonstrated that the Spanish exporters concerned had intended all along 
to send the must to the United States and Canada. The investigations are now in the 
closing stages and the procedure for recovering the amounts which the Spanish authorities 
have identified as having been wrongly paid (around ECU 17.7 million) has begun. 
Payment of refunds for Sweden was suspended as soon as the fraud was detected. The 
same flows were continuing via Norway, for which export refunds are also payable. As a 
result of these findings it was decided to halt all refunds for concentrated grape must. 
1.5 Wine exports to Croatia 
The Commission was tipped off that large quantities of wine exported from Spain to 
Croatia were actually ending up in Germany. 
A mission to Croatia in November 1994 found that Spanish concentrated grape must had 
been added to Croatian wine which had then been exported to Germany. What is more, 
51 
the grape must in question had been under a temporary import arrangement.in Croatia.121 
The requirements of Article 18 of Council Regulation (EEC) No 3665/87'22 had clearly 
not been met. 
The Spanish authorities have been requested to recover refunds wrongly paid. The other 
Member States concerned have also been informed. 
1.6 Beef exports to Egypt (rejection of certain consignments) 
The Egyptian authorities rejected certain consignments of beef exported from the 
Community for which full refunds had been paid. The Member States concerned are the 
Netherlands, France, Ireland, Germany, Italy and Belgium. 
An on-the-spot inspection revealed that 258 118 boxes in 48 consignments (a total net 
weight of 6 319.324 tonnes) between September 1991 and September 1993 had been 
rejected. 
The export operations concerned were identified. One of the reasons for rejection was 
that the meat was of poor quality and did not satisfy the health requirements (high level 
of bacteria). 
Recovery procedures have been initiated. 
2. Old cases 
Listed below are the main cases under investigation where'there were significant 
developments in 1994: 
21 Durum wheat: intervention stocks and pre-financing 
Checks carried out in May 1993 established the final amounts of storage cost advances 
to be recovered in connection with the clearance of accounts (Italy: 1993 financial year). 
A total of ECU 62.4 million has already been recovered by deduction from advances due 
to Italy. 
As regards payments made to pre-finance export refunds, the Italian Ministry of Finance 
has initiated the necessary proceedings to recover the amounts. 
In both cases, legal proceedings are under way in addition to the administrative 
procedures to recover the amounts. 
121 
This arrangement, which also applies to tobacco, allows imports at a very low rate of duty. It is 
open to abuse, in particular in countries currently experiencing serious economic problems. 
OJ L 351, 14.12.1987. This article concerns the provision of proof that the customs formalities 
relating to release for home use in the importing country have been satisfied. 
52 
Following the large-scale investigations carried out in Italy in May 1993, which revealed 
non-existent stocks, in December 1993 the Commission went on to conduct special 
investigations on the last group of warehouse owners who had not been inspected in 
Sicily and Sardinia. The investigations revealed discrepancies in the quality of the 
products being stored and the case is being examined with representatives of the parties 
involved to assess the financial impact of this fraud. 
2.2 Olive oil in intervention 
Investigations conducted in Italy on the 1991/92 and 1992/93 harvests finally established 
that 1 300 tons of the olive oil was of inferior quality. Since the findings revealed that 
the oil was not eligible for intervention, the Italian authorities have asked for a second 
expert opinion. 
The financial implications of the case will be settled when the 1993 accounts are 
cleared. 
2.3 Cotton production aid 
Since the audits conducted in Greece revealed that the inspection system operated by the 
Greek authorities was not sufficiently reliable, the Commission applied a 25% financial 
adjustment on the expenditure declared by Greece for 1992. 
A working party made up of officials from the Greek Ministry of Agriculture and 
the EAGGF was set up to examine improvements that could be made to the existing 
Greek inspection system. Regular meetings are to be held with a view to submitting 
a summary report towards the end of 1995. 
SECTION 3: TRADITIONAL OWN RESOURCES AND OTHER CASES OF 
MUTUAL ASSISTANCE 
The Community budget contains various types of revenue, including customs duties and 
agricultural levies (the "traditional own resources"), the VAT resource123 and the "fourth 
resource" based on the Member States' GNP. 
The cases discussed in this section concern, as regards the financial impact, only 
traditional own resources, which account for about 20% of all budget revenue. Cases of 
fraud and irregularities are not formally reported to the Commission by Member States 
as the Community's financial interests are only indirectly affected.124 
123 
124 See the three-yearly report prepared by DG XIX (Budgets) on VAT control and recovery 
procedures, produced pursuant to Article 12(3) of Council Regulation (EEC, Euratom) No 1553/89 
(OJ L 155, 7.6.1989). 
Reports on traditional own resources are provided for in Council Regulation (EEC, Euratom) 
No 1552/89. See Annex 1 for details. 
.53 
f Pursuing customs fraud cases in 1994, the Commission organized 13 .investigation 
missions to non-member countries125 by teams of Member State officials led by 
Commission officials and eight missions by teams composed solely of Commission 
officials. 
The Commission regularly had to remind certain Member States, firms and professional 
associations of their obligations as declarants (principals). Some claimed ignorance of 
them and neglected them when signing business contracts and insuring against risks. The 
declarant is liable to the customs of the importing Member State for payment of the duties 
ultimately found to be due by reason of the goods' origin, nature, value and so on, even 
if the declaration is made in good faith. 
The recovery of duties merely rectifies the situation of the goods in terms of the amounts 
lawfully due. It is not a penalty designed to punish misconduct by the importer. Sums are 
accordingly recovered from the declarant whether there was fraud or just an irregularity. 
The Commission routinely notifies the Member States of all information gathered in the 
exercise of its powers so as to facilitate their investigations and help them establish own 
resources that have been evaded.126 
1. New cases 
1-1 Industrial goods and textiles 
Cases handled here involve unwarranted applications for preferential schemes and 
attempts to circumvent common commercial policy measures, including anti-dumping 
duties and quantitative restrictions imposed under textile agreements. From the beginning 
of 1955, the Commission introduced an instrument enabling it to act more effectively to 
avoid circumvention of quantitative limits. 
The commonest fraud technique is to present false declarations of origin, especially for 
textiles from less-developed countries, GSP countries (e.g. Bangladesh), AC? countries 
(e.g. Lesotho or Kenya) or countries with which the Community has not signed textile 
agreements imposing quantitative restrictions or dual controls. 
The following investigations were conducted under the TAFI programme127 in 1994. 
Textiles and clothing from Kenya 
125 
126 
127 Under Council Regulation (EEC) No 1468/81. 
See Chapter 6, Section 3 "Financial monitoring of fraud cases - recovery", page 70. 
See the item concerning the TAFI programme in Chapter 4, Section 3 "Organizing operational 
cooperation - within the Community", page 40. 
54 
The Commission organized two missions to Kenya, the first in June/July to set up the 
investigation, which then took place in September and October. The object was to look 
into the validity of goods movement certificates issued in Kenya and presented upon 
importation of textile products into the Community. 
The Kenyan authorities subsequently acknowledged that over 200 certificates issued for 
T-shirts were invalid, as the T-shirts had never been in Kenya but were imported into the 
Community from the United Arab Emirates. Other, comparable goods had actually been 
manufactured in Kenya but from non-ACP materials (the impact here was primarily 
financial). 
Most of these imports were into Belgium, France, Germany, the Netherlands and the 
United Kingdom. 
The amount of own resources at stake was of the order of ECU 2 million. The Kenyan 
authorities were asked to continue their investigations into manufacturers that had 
admitted having bought non-originating materials so as to ascertain whether the resultant 
end products had been exported with false certificates of origin. The figures may have 
to be revised upwards, but the true origin of the goods cannot be finally established until 
further investigations have been carried out, notably in the UAE. 
The information yielded by the investigations provides the Member States with the 
means to commence their own investigations into the importers and to recover the 
amounts evaded. The Dutch authorities have already informed the Commission that 
they have recovered about ECU 900 000. The Dutch importer has been sentenced to 
6 months in prison plus a further 6 months suspended, and ordered to pay a fine. 
Textile goods and bed linen from Bangladesh 
A Community administrative cooperation mission went to Bangladesh in December to 
work with local authorities on checking the validity of a large number of GSP certificates 
of origin issued there and presented with goods being imported into the Community. It 
was found that 115 certificates relating to 1200 tonnes of bed linen were entirely false, 
as the goods were exported from Pakistan or other non-member countries via Hong Kong 
or Singapore and never even passed through Bangladesh. A further 88 certificates were 
issued by the Bangladeshi authorities but for goods not complying with GSP rules of 
origin. 
Investigations are still in motion to determine the true origin of goods not manufactured 
in Bangladesh and ascertain the own resources impact (estimated at ECU 2 million). 
Investigations of this type always require the full cooperation of the country or 
countries concerned. Bangladesh has been exemplary in this respect. 
Textile goods from Pakistan 
55 
A mission to Pakistan in January 1994 to investigate a source of fraudulent imports 
revealed that about 2000 tonnes of products originating there had been declared as 
originating in Bangladesh and the United Arab Emirates when imported into the 
Community. The goods included T-shirts for the United Kingdom and bed linen for 
Belgium (false certificates issued in Switzerland) and the Netherlands. 
Own resources of around ECU 1 million are involved. 
In 1995 the Commission is planning to open consultations for the adjustment of 
quantitative limits to take account of quantities that had been proved by documentary 
evidence to have originated in Pakistan. _^^ 
Textile goods from Lesotho 
Following joint inquiries conducted with the Lesotho authorities in February 1994, 
Lesotho agreed to withdraw over 600 certificates of origin for textile products, notably 
jeans and trousers, where there was no evidence of preferential origin, but without impact 
on the textile agreements since the country of origin for the purposes of the agreements 
would have been either Lesotho or Ciskei. 
Germany is to recover the own resources evaded, running to over ECU 1 million. 
Other products: cigarettes 
The chief aim of the Tobacco Task Force128 is to combat the fraudulent machinations of 
organized crime. Through cooperation with the Member States the Commission has been 
able to establish a common strategy in this matter involving action on four fronts -
administrative, legal, technical and operational. Regarding the operational angle, work 
done in 1994 revealed six new cases in which cigarettes evaded the normal transit 
arrangements (Community/common and TIR); the duties evaded come to over 
ECU 116 million. 
An administrative cooperation mission to Hungary in December revealed 70 consignments 
totalling about 10 million cigarettes exported from Hungary to the Community with TIR 
carnets discharged with false stamps so that the cigarettes evade the normal procedures. 
This case alone involved the evasion of around ECU 69 million in customs and excise 
duties and VAT. 
The comprehensive strategic approach is more effective than a country-by-country 
case-by-case approach; it illustrates the usefulness of the task force technique. In the 
case in issue, investigations are continuing with a view to obtaining the requisite 
evidence for use against those who, often outside the Community, are responsible for 
setting up the fraud. 
128 
See Chapter 4, Section 3 "Organizing operational cooperation", page 40. 
56 L 
1.2 Agricultural and fishery products 
There is a long tradition of abuse of preferential import arrangements for fisheries 
products obtained from fish caught by ships not having an eligible nationality, and every 
annual Commission report describes irregularity cases. But this year for the first time 
falsified certificates of authenticity of beef products were found.129 
Abuse of transit schemes has become common since 1990 in agricultural import and 
export business with Central and Eastern Europe; there were as usual several such cases 
in 1994, though fraud techniques have evolved, particularly as regards false descriptions 
of nature. 
These cases point up the need for close cooperation with the authorities in countries in 
the European Economic Area and Central and Eastern Europe, with which the Community 
has agreements containing mutual assistance clauses. There is still a problem with 
Switzerland, which is where many fraud schemes are based. The Community has enjoyed 
the assistance of the Geneva-based International Road Union (IRU), which is responsible 
for managing the TIR (International Road Transport) scheme.130 
Canned tuna from Ecuador and Colombia 
Three administrative cooperation missions went to these countries (two to Ecuador and 
one to Colombia) to investigate certain canned tuna products imported into the 
Community with GSP certificates of preferential origin. 
<.. • .. . 
There were doubts about some of the products, which had been manufactured from fish 
caught by vessels not having Ecuadorian or Colombian nationality as required by 
•Community legislation. Suspicions were substantially borne out; the own resources evaded 
are estimated at around ECU 6 million in each country, a total of ECU 12 million in all. 
A part-solution emerged with the entry into operation of the Andean regional 
cumulation of origin on 15 December 1992 and the cumulation with the Community 
on 7 January 1995. 
Orange juice from Israel 
Analyses run at the Commission's request and expense revealed that samples of goods 
imported from Israel and labelled 4orange juice' either were not eligible for the 
description or were not manufactured exclusively from oranges and concentrates of Israeli 
origin. This proves that the preferential scheme set up by the EC/Israel cooperation 
agreement was being abused. 
129 
See the discussion of this case under "Old cases (Agricultural and fishery products)", page 62. 
130 See Chapter 1, Section 5, page 14. 
57 
The administrative cooperation provisions will have to be activated to clarify the 
situation. 
2: Old cases 
2.1 Industrial goods and textiles 
The Commission sent the Member States' investigation departments 33 additional reports 
on cases commenced in recent years, the most important of which are summed up below. 
Car radios from Indonesia 
The Member States commenced recovery proceedings following investigations undertaken 
in 1993 (including the mission on the spot) and 1994. 
Radios were assembled in Indonesia from components mostly imported from other 
countries (especially South Korea). They were thus ineligible for generalized preferences. 
Many of them had actually to be regarded as originating in Korea, making them subject 
to anti-dumping duties. 
There were a number of difficulties in administrative cooperation with the Indonesian 
authorities. The total amount of duties involved is estimated at ECU 16 million. 
Two points are worth noting: 
the potential problem was detected by Commission staff on the basis of an 
analysis of intelligence (examination of statistics of exports from Korea and 
Indonesia; investigations began very early and the fraud was halted very 
quickly (case solved in a year); 
where the Member States' customs authorities require securities to be lodged 
for anti-dumping duties well before the investigation is at an end, recovery is 
all the easier. 
Turkish TV sets 
The Commission has reminded the Member States that the existing regulation required 
them to recover customs duties chargeable on goods not eligible for free movement under 
the Association Agreement with Turkey and accordingly not eligible for the preferential 
treatment applied for by Community importers. 
The Commission has pursued its efforts to persuade the Turkish authorities of the need 
for practical measures to ensure proper application of the agreement to all industrial 
goods. 
The Commission has reminded Member States where importers are established of the 
need to issue the regulations required by the Community Customs Code131 regarding 
13 ' Council Regulation (EEC) No 2913/92: OJ L 302, 19.10.1992. 
58 
recovery of the customs debt. It wrote asking them to collect duties evaded forthwith, 
subject to any limitation periods that might be applicable. 132 
Apart from the anti-dumping duties payable, given that the goods concerned were of 
Korean origin, the total sum at stake was more than ECU 45 million. 
The real problem is that an individual case has highlighted a basic shortcoming in 
that the Turkish authorities manifestly failed to comply with signed agreements by 
not setting up proper inspection arrangements and by not collecting sums due. 
This case highlighted the importance of implementing and monitoring the customs 
provisions in agreements with non-member countries. Nor did the case do anything 
to answer the question of other goods traded between Turkey and the Community. 
These matters will need clarifying to provide an assurance as to the future of trade 
with Turkey before the customs union can be completed. 
Video cassettes from Macao 
Following a ruling from the Customs Code Committee in May, it was officially 
determined that the relevant goods had benefited unduly from GSP treatment and that the 
imports had been made in such a manner as to circumvent anti-dumping duties applicable 
to goods originating in China. 
The duties evaded on imports over three years are estimated at ECU 48 million (of which 
anti-dumping duties account for ECU 45 million). 
Textile products of Chinese origin circumventing quantitative limits 
Textile negotiations with China (silk,...) have begun. There were consultations in 1994 
on adjustments to quantitative limits for certain product categories to reflect patterns of 
imports into the Community between 1990 and 1993 from various origins. Proof of 
Chinese origin of these products (T-shirts and pullovers) was gathered in the course of 
investigations conducted in the Community and a number of non-member countries. 
China has agreed that 9.3 million items may be charged to its quantitative limits over 
a three-year period. 
132 Importers having contractual relations with Turkish exporters must insure against normal 
international trade risks but can, of course, claim compensation from their Turkish correspondents 
for any loss sustained as a result of ex post recovery of the Community customs debt and in future 
include clauses in their contracts providing explicitly for such compensation in such cases (failure 
to abide by bilateral agreements). 
59 
Textile goods from the United Arab Emirates 
There were several investigations relating to textile goods imported from the United Arab 
Emirates into the Community; they all concerned trans-shipments, notably of: 
T-shirts declared to originate in the UAE (a non-preferential origin) but suspected 
of actually coming from China, India or Pakistan; 
T-shirts declared to originate in various ACP countries (Kenya, etc.) and GSP 
countries (Nepal, etc.) but suspected of actually coming.from China, India or 
Pakistan. About 20 million items are involved, the own resources impact being 
estimated at ECU 5 million); 
bed linen imported via Switzerland and declared to originate in the UAE but 
suspected of actually coming from Pakistan (suspicion confirmed in part).. 
Investigations in these cases were pursued in connection with missions undertaken in 
Pakistan and Kenya in 1994.133 
2.2 Agricultural and fishery products 
Fishery products from Norway 
lit was agreed in March 1993 that the Norwegian authorities would undertake the 
necessary investigations to check the position of fishery products exported to the 
Community under a preferential arrangement where some of the ingredients were 
non-originating. 
An interim report was received in January 1994. The Norwegian authorities subsequently 
cancelled lists of certificates of origin issued because the products did not have originating 
status. 
All the Member States, but especially Portugal, are involved in recovering own 
resources, the amount of which has not yet been determined. 
Canned tuna from Thailand 
Proceedings are currently in progress before the courts in the Netherlands, Germany and 
Denmark for the recovery of duties on imports of canned tuna accompanied by certificates 
of origin issued by the Thai authorities for canned bonito (Sarda spp). 
133 See the account of the mission to Kenya above. 
60 
The Commission removed canned bonito (Sarda spp) from its proposed GSP 
scheme for 1995 which was adopted by the Council on 19 December 1994. Abuse 
of the generalized system of preferences is therefore no longer possible. 
Hilton beef from Argentina 
The Argentine authorities contacted the Commission services in May 1993 about the 
possibility of a fraud in the area of import of beef meat into Germany. Following the on-
the-spot mission carried out at the time, two further Community missions to Argentina, 
organized in conjunction with the authorities there in November 1993 and April-May 
1994, established that more than 460 certificates of authenticity of Hilton beef presented 
in the Community in 1991 and 1992 were forged. Germany is by far the largest importing 
country in the Community, taking 80% of all Hilton beef imported from Argentina, but 
false certificates were also presented in the United Kingdom, Spain and the Netherlands. 
In all over 4500 tonnes of falsely certified beef was imported into the Community, with 
a loss of own resources amounting to about ECU 18 million. 
The documents gathered in the course of these missions and passed on to the 
Member States have provided them with the means of recovering duties evaded on 
the falsely certified beef. Investigations are continuing in both the Community and 
Argentina to elucidate the full circumstances of the fraud. 
Cattle and beef from Eastern Europe 
There has been much press coverage and many parliamentary questions concerning this 
major case of fraud against the transit arrangements which went on between 1988 and 
1992. The cattle and beef theoretically intended for non-member countries were in fact 
removed from the transit arrangements and fraudulently place on the market in the 
Community without payment of any import duties. 
The estimate of amounts evaded has been raised from the initial ECU 17 million to 
ECU 33 million. Investigations are continuing in Germany, France, the Netherlands and 
Belgium. 
This case prompted an amendment to the transit arrangements to restrict the use of the 
overall guarantee for certain sensitive products.134 
134 
See Chapter 1, Section 5, "The customs transit arrangements", page 13. 
61 
While the financial aspect of recovery measures should not be neglected, the primary 
object of any fraud investigation must be to ensure that fraud does not happen and to 
break up fraud rings. Turning the spotlight on fraud and its perpetrators is a valuable 
deterrent; but the value of litigation, however resolutely it must be pursued, should not 
be blown up out of all proportion. 
SECTION 4: THE STRUCTURAL FUNDS 
1. New cases 
1.1 European Social Fund 
The Commission is in contact with the prosecuting authorities at Lanusei 
(Sardinia), who have had proceedings in hand since early 1993 concerning 
suspected fraud cases involving vocational training courses (via Contratti di 
Formazione-Lavoro) financed by the ESF and managed by the Sardinian regional 
authorities. 
Several individuals, including a number of politicians and civil servants, are 
implicated. A mission there confirmed that there were a number of anomalies in 
the contract management procedures operated by recipient companies. Apart from 
-' anything else, there was no way of distinguishing training costs (if indeed there 
were any) and wage and salary costs. • 
An investigation was also commenced regarding a training scheme operated in the 
new Lander of Germany where an operator with a network of establishments in 
several Member States had misused funds. 
A case now under investigation in Belgium originated in statements made in a 
weekly newspaper by the former director of ah institute to the effect that he had 
made false declarations under duress in order to obtain ESF funds for the institute. 
Between 1989 and 1993 the institute received the equivalent of ECU 760 000 by 
way of co-financing for training schemes. But, he stated, these schemes never took 
place. The instructors mentioned in the file were research workers who had never 
done any teaching. The alleged trainees were institute staff working on routine 
analysis work sold commercially by the institute. The fictitious co-financing was 
drawn from the annual budget set aside by the provincial authorities for the 
institute. 
The ESF is a specially sensitive area where the Commission has identified cases of 
fraud which are now being investigated; the problem is primarily, of course, that the 
services subsidized tend to be intangible. 
62 
1.2 EAGGF Guidance Section 
in September 1994, when undertaking an on-the-spot inspection in Haute-Corse 
of the compensatory allowances scheme for stock farmers in mountain areas,lj5 the 
Commission discovered that the scheme was operating in a somewhat 
unsatisfactory manner. 
It forthwith suspended all payments under the Corsican SPD (single programming 
document), acting in accordance with Council Regulation (EEC) No 4253/88.136 The 
French authorities have been asked to undertake further investigations to assess the 
scale of the problem and rectify the financial situation. 
An investigation mission in Italy in September 1994 revealed a major fraud worth 
an estimated ECU 1.8 million affecting three projects running, under Council 
Regulation (EEC) No 355/77.137 The projects were for modernization of fruit and 
vegetable establishments belonging to the same company. 
Community legislation was found to have been disregarded in a variety of 
respects: the projects had been altered without Commission approval, ineligible 
expenditure had been charged and the premises once constructed had been 
abandoned. Following the mission the Italian Ministry of Agriculture, Food and 
Forestry asked the Commission to disallow two of the three projects. 
The Rome prosecution service has started an investigation. 
1.3 European Regional Development Fund 
One suspected case of fraud was detected in connection with a public works contract in 
Reunion. Payments have been suspended and the French authorities have been asked to 
conduct an administrative inquiry. They are looking into the matter. 
This case suggests that a close watch should be kept on public procurement, 
particularly in the construction and civil engineering industries. 
2. Old cases 
What follows is a survey of main developments in cases announced in previous years" 
reports. 
135 Operating under Articles 17 to 19 of Council Regulation (EEC) No 2328/91: OJ L 218, 6.8.1991. 
136 OJ L 374, 13.12.1988; amended by Council Regulation (EEC) No 2082/93: OJ L 193, 31.7.1993. 
137 OJL 51, 132.1977. 
63 
2.1 European Social Fund 
The proceedings in the Milan courts concerning irregularities detected in ESF-
financed projects in Lombardy are still in hand; they will take some time as there 
are 47 defendants and the procedure is inevitably complicated as a result. As was 
stated in the 1993 report, the Commission's partie civile status has enabled it to 
recover some of the money paid from the ESF even before the proceedings are 
terminated. So far it has recovered ECU 319 608. 
The working group set up in 1992 to settle the ESF-Portugal case is continuing 
its business, though the case is a complex one involving hundreds of files. The 
deadline is 30 September 1995.138 
The case against the company accused of diverting ECU 2.7 million in Belgium, 
in which the Commission has joined partie civile proceedings,'is still before the 
courts. Hearings were completed in 1994, but judgment has yet to be given. 
Following investigations ordered by the Naples courts, a request has been made 
for seven airline officials, among others, to be indicted on financial charges (false 
accounting and invoicing, fraudulent overcharging by listing fictitious students and 
. teachers and charging ineligible expenditure) in the execution of training schemes 
financed by the ESF and the EIB. 
The investigation revealed that the company received financial support worth 
about ECU 5 million between 1985 and 1992; the exact amount unduly paid still 
has to be determined. 
2.2 EAGGF Guidance Section 
As a result of cooperation with the magistrates at Reggio Calabria and an on-the-spot 
investigation in January 1994, it was established that serious irregularities extended to 
olive oil storage and bottling facilities other than the Calabria regional centre at San 
Lorenzo, and specifically to the storage centres at Castri (Puglia) and Eboli (Campania). 
The three centres had visibly never actually operated, for at both Castri and Eboli 
buildings were dilapidated, access roads were impassable and bottling machinery was 
neither bolted to the floor nor connected to vats. 
The Commission commenced the procedure for halting assistance and recovering sums 
already paid out (approx. ECU 3 185 000); it joined partie civile proceedings to the 
prosecution at San Lorenzo. 
13* By virtue of Council Regulation (EEC) No 2052/88, as amended by Council Regulation (EEC) No 
2081/93: OJL 193, 31.7.1993. 
64 
2.3 Multi-fund Operational Programme 
The court at L'Aquila, after 38 hearings, gave judgment on 21 June in the Abruzzi case; 
the 11 members of the four-party Regional Council were convicted of abuse of public 
office (cronyism) and sentenced variously to three years' imprisonment plus a further five 
years' disqualification from public office (the President of the Council) and to two years' 
imprisonment plus three years' disqualification (the ten Vice-Presidents). The President 
was further convicted of constructive forgery, since the official decision falsely recorded 
that the 2000 applications made had been subjected to comparative examination and that 
460 had been selected as a result. The three Councillors were acquitted for lack of 
evidence. 
The defendants have appealed. It should be noted here that the defendants were not 
discharged on the accusations of attempts to defraud the Community budget (Italian 
Criminal Code, Article 640bis). 
SECTION 5: DIRECT EXPENDITURE 
This new section deals with expenditure managed directly by the Commission itself under 
contract without any formal obligations being incumbent on the Member States as regards 
financial reporting or monitoring along traditional lines.. 
1. Environment 
• • v '••••. > 
The Commission conducted an investigation in Italy when a firm failed to perform a 
Medspa contract139 to set up a plant to recycle waste polyurethane varnish and sawdust 
into new materials within the period prescribed by the contract. The firm concerned had 
moved to another part of Italy and its sole Director had been replaced. 
The project was never carried through and there were serious suspicions, based on 
information gathered in Italy, that the changes in the firm's location and management, for 
which there was no apparent reason, were made solely to shift the burden of the contract 
on to another person, who consistently denied all knowledge of it. The Commission has 
issued a recovery order in respect of the advances already paid out. 
This case clearly illustrates the problem of subsidized projects that are executed 
inadequately or not at all. The Commission must recover advances paid in such 
cases. 
2. Development cooperation 
The Commission received a request for assistance from the German judicial authorities 
in connection with an investigation into alleged fraud against the Community budget by 
139 Under Council Regulation (EEC) No 563/91: OJ L 63, 9.3.1991. 
65 
those in charge of a non-governmental organization promoting two development projects 
financed by the Community and the German Government. The Commission had paid 
ECU 480 000 towards the projects, and was particularly keen to help the German 
authorities with their inquiries. The trial is in progress. 
This is an exemplary case in that the Commission was answering a call for assistance 
from a Member State whose investigation into an NGO had revealed that 
Community money was involved. 
3. Science, research and development 
'. Several investigations are in hand in response to problems related to invoicing. 
These investigations concern some contracts in all the Member States. 
An investigation has been launched in the Netherlands concerning irregularities in 
a project running under the Action Plan for the introduction of advanced television 
services in Europe. 
4. Tourism 
Investigations have revealed the existence of networks, apparently organized in all 12 
Member States, set up to take advantage of Community funds by over-invoicing and by 
$ use of fictitious sub-contractors. 
The Commission has asked several Member States under Article 209a of the EC Treaty 
to see that the proper authorities take the requisite action to pursue the investigations. 
This is the first time that Member States have received such a request in accordance 
with the second paragraph of Article 209a of the EC Treaty as inserted by the Union 
Treaty, which reads: 'Without prejudice to other provisions of this Treaty, Member 
States shall coordinate their action aimed at protecting the financial interests of the 
Community against fraud. To this end they shall organize, with the help of the 
Commission, close and regular cooperation between the competent departments of 
their administrations.* 
To conclude this section, the Commission is regularly at pains to see that investigations 
extend to new areas of direct expenditure where there is a risk of fraud or irregularities, 
notably where organized crime might be involved. 
66 
f CHAPTER 6: STATISTICS AND ANALYSIS 
The information in this chapter derives from the databases set up and managed by the 
Commission. The Commission, in conjunction with sectoral committees and specialized 
services in the Member States working within the framework of the Advisory Committee 
for the Coordination of Fraud Prevention140 uses the information in coordinating and 
supporting action taken at national level, particularly against major cases of fraud. 
The first section deals with the reports supplied by Member States under the sectoral 
regulations currently in force. The second section looks at the resulting data in the context 
of the development of the Commission's new sources of information such as the free 
phone141 or in the framework of exchanges of information in the area of "Mutual 
Assistance" in order to be able to asses the global financial impact of all irregularities. 
This is followed by an analysis of the comparative significance of irregularities in the 
different areas and different Member States. This will give an indication of the direction 
of, future measures in the area of fraud prevention. 
All the sections are accompanied by tables and figures illustrating the response of 
Member States and the Commission to the discovery of fraud or irregularities. 
SECTION 1: REPORTS OF IRREGULARITIES FROM MEMBER 
STATES IN 1994 
The cases of fraud and irregularities reported by Member States during 1994 under the 
current regulations142 are shown in Table 1 (EAGGF - Guarantee Section), Table 2 
(Traditional own resources), and Tables 3 and 4 (Structural Funds). 
Brief remarks on tables and figures 
The number of cases reported is on the increase in all areas. 
Table 1 shows all cases of fraud reported in 1994 involving the EAGGF - Guarantee 
Section, broken down by the year in which the fraud started, ail of which were in fact 
140 
141 
142 See Chapter 4, Section 1, page 36. 
See the item on the development of "intelligence" (new sources of information) in Chapter 2, 
Section 1, page 27. 
See Annex 1 for the relevant regulations and Chapter 1, Section 3 "Structural operations -
major developments", page 10. 
67 
detected in 1994. The length of time involved in the recovery procedures operated by 
national administrations is plain to see.143 
Table 2 lists the reports made in the first half of 1994 relating to own resources, showing 
the amounts involved and the breakdown of cases and amounts by Member State. 
Reports concerning all structural measures are grouped together in Table 3 (Table 4 
shows the corresponding amounts), and reflect recent legislative developments. A few 
points should be made concerning reporting requirements: 
Member States are required to report irregularities by Article 23 of Council 
Regulation (EEC) No 4253/88, but because the Code of Conduct detailing the 
practical arrangements was annulled by the Court of Justice in 1991144 new cases 
(or progress on old ones) were reported rarely if at all. By way of illustration, 
only 58 cases were reported between 1990 and 1993;145 
the adoption of Commission Regulation (EEC) No 1681/94 on 11 July 1994 
marked the resumption of the reporting of cases of fraud and irregularities. In the 
first three months after the new Regulation came into effect, 22 cases were 
reported (the corresponding figure for the period of 1994 up to the new 
Regulation was 20); 
the reports under Commission Regulation (EEC) No 1831/94 indicated that there 
were no cases of fraud. This was because Council Regulation (EEC) 
No 1164/94146 setting up the Cohesion Fund only entered into force on 
26 May 1994. 
Figure 1 shows the total number of fraud cases reported involving traditional own 
resources and expenditure, as well as the amounts involved and the trend over the last 
four years. . 
Figure 2 shows, for each Member State, the number of cases notified over the last four 
years and the corresponding amounts (revenue and expenditure). 
Figure 3 shows the various categories of own resources referred to in the reports received 
by the Commission. 
Figure 4 provides the same detailed information in respect of the broad categories of 
expenditure under the EAGGF - Guarantee Section. 
143 
144 
14S 
146 See Section 3 below. 
See the annual report on the fight against fraud for 1991 (SEC(92)943 final). 
See the annual report on the fight against fraud for 1993, cited above. 
See Chapter 1, Section 3 "Structural operations - major developments", page 10. 
68 L 
Table 5_compares the cases notified by a Member State with the level of Community 
expenditure on the same Member State (EAGGF-Guarantee, Structural Funds). The same 
comparison is made for traditional own resources paid by a Member State into the 
Community's accounts and the cases notified in the same area. 
SECTION 2: ANALYSIS OF DATA IN THE COMMISSION DATA BASES 
Informations on cases of irregularity is contained in the following databases: 
the IRENE base contains the reports from Member States concerning cases of fraud 
and irregularities in the field of traditional own resources, the EAGGF - Guarantee 
Section and the Structural Funds; 
the pre-IRENE base contains information on cases detected by the Commission and 
not reported by Member States; 
. the "Mutual Assistance" base contains information on cases which have been the 
subject of an exchange of information in the mutual assistance framework147 but 
which have not been formally reported in accordance with the Council regulations148 
concerned. ' • . 
Table 6 shows irregularities detected in 1994. Taking into account the fact that 
information on 27% of the cases contained in the "Mutual Assistance" base originated 
from the Commission services, the formal reports from the Member States cover two 
thirds of the total amounts involved. 
A more detailed statistical analysis of this data is being undertaken by the Joint Research 
Centre at Ispra. However, even a rough analysis of the data produces some interesting 
results, as the tables below show. 
Sectoral analysis of the cases detected in 1994 involving the EAGGF - Guarantee Section 
indicates that some types of financing are highly vulnerable to fraud. Table 6 provides 
a more detailed picture of the measures concerned, where the aggregate sums involved 
exceed ECU 1 million. A large number of the cases reported concern direct aid schemes 
involving relatively small sums; a small number of cases, however, involve refunds (see 
table) where large amounts are at stake. 
Table 8 shows how EAGGF - Guarantee Section frauds were detected in 1994; 42% of 
the total cases reported (accounting for 35% of the amounts involved) were detected 
147 Council Regulation (EEC) No 1468/81, cited above. 
us Regulation (EEC) No 595/91 for the EAGGF Guarantee Section and Regulation (EEC, Euratom) 
No 1552/89 for traditional own resources, both cited above. 
69 
thanks to ex post document controls. Risk analysis149 has an important rolé to play here 
in improving the targeting and effectiveness of controls. 
SECTION 3: FINANCIAL MONITORING OF FRAUD CASES --
RECOVERY 
Member States alone have the power to recover outstanding own resources or amounts 
wrongly paid under Community financing policies. For its part, in 1994 the Commission 
set about strengthening its operational activities and, under its strategy programme for 
1994, embarked on positive action to ensure that procedures for recovering monies owed 
to the Community are properly monitored. The result is still not satisfactory. 
The IRENE database should help make monitoring more systematic. Unfortunately there 
are still some areas where the regulations relating to financial monitoring of fraud or 
irregularities either do not exist or are insufficient. In 1994 the Commission therefore 
adopted various measures relating to the EAGGF - Guarantee Section and the Structural 
Funds;150 a proposal for amending the own resources regulation still awaits a decision 
from the Council. 
Shortcomings in the financial monitoring of expenditure led Financial Control (DG XX) 
to widen the scope of its report on the management of the Commission's direct debts151 
to the recovery of indirect debts, responsibility for which lies in the first instance with 
t Member States .{own resources, EAGGF - Guarantee Section, Structural Funds). The 
report also deals with specific matters relating to the recovery of Community debts where 
cases of fraud or irregularity are involved. Some of the observations, recommendations 
and proposals in this report are dealt with below in so far as they concern the monitoring 
of recovery procedures. 
1. Monitoring in respect of traditional own resources 
1.1 Principles 
The own resources Decision and its implementing Regulation (EEC, Euratom) 
No 1552/89 require Member States to establish, enter in the accounts and recover any 
amounts due in cases where fraud or irregularity has been established. The Commission's 
role is to ensure that recovery procedures are indeed initiated and completed by national 
authorities so that Member States can be given a discharge when their management is 
149 
150 
151 See Chapter 1, Section 2 on developments in agricultural regulations, and in particular the 
reference to the amendment to Council Regulation (EEC) No 4045/89, page 9. 
18th report of the Financial Controller, the conclusions of which were formally adopted by the 
Commission on 28 April 1994. 
See also the item on changes in the Commission's departmental organization in Chapter 2, 
Section 1, page 22. 
70 [ 
satisfactory. If sums are not recoverable owing, for example, to bankruptcy or lapse of 
time, the onus is on the Member State to show that it has done everything possible_to 
recover them if it is to be exempted from making them available to the Community. 
IRENE is a documentary database containing information which can be used by the 
services concerned in the fight against fraud. Regulation (EEC, Euratom) No 1552/89 
lays down that established entitlements that have not yet been recovered must be shown 
in a separate account ("B" account) and incorporated annually in the Commission's 
balance sheet and revenue and expenditure account. The quarterly statement which 
national authorities have to send the Commission allows it to verify that Member States 
are correctly recording in a separate account established entitlements that have not yet 
been recovered. The "B" account should also cover cases of fraud or irregularities 
involving entitlements of over ECU 10 000 reported under Article 6(3) of the Regulation 
as well as cases involving lower amounts. The accounts may also include amounts 
disputed by taxpayers, which may result subsequently in corrections to established 
entitlements. 
The main difficulty in ensuring effective financial monitoring is that it involves two areas 
of competence: the investigation and reporting of fraud, and the entry of the amounts in 
the accounts (usually the responsibility of accounting departments). As a result, it is often 
difficult to establish a proper connection with the reports received from Member States. 
In other words, data obtained from IRENE cannot easily be compared with data from the 
B accounts kept by Member States; the latter correspond to established amounts, whilst 
the former are simply extracted from a report without the amounts in question having 
necessarily been established. «- . 
A further difficulty lies in the fact that there is no binding obligation on the part of the 
Member States to update regularly their reports. This obligation is part of the 
Commission's proposal on the amendment of the Council Regulation (EEC, Euratom) N" 
1552/89. 
Another problem stems from the incompatibility of the data stroed in the three bases. The 
Commisison will take the appropriate measures in 1995 to remedy this. 
71 
1.2 Methodology 
At the end of 1992 the Commission proposed an amendment to Regulation (EEC, 
Euratom) No 1552/89, one aim of which was to provide for updating of reports of cases 
of fraud and irregularity and improved financial monitoring of recovery .,52 However, 
the Council has not yet taken a decision on the proposal. 
In the meantime, DG XIX (Budgets) has developed the following method based mainly 
on experience acquired since Regulation (EEC, Euratom) No 1552/89 came into force.153 
The two basic principles of the method are: 
to make the best use of the information available to the Commission; this information 
comes mainly from Member States, either in the context of administrative assistance, 
or in fulfilment of their obligations under Regulation (EEC, Euratom) No 1552/89 in 
respect of the establishment, entry in the accounts and the making available of own 
resources (quarterly statements and monthly statements of account,154 reports on 
irrecoverable amounts);155 ( 
risk analysis156 and sampling. 
In its monitoring, the Commission therefore uses risk analysis in sampling cases of fraud 
and irregularities, since it cannot possibly follow up all the cases detected by Member 
States. Significant-size samples have been determined and the Member States' authorities 
are questioned until the case has been settled. 
Cases involving sums in excess of ECU 500 000 which have been reported under the 
regulations are monitored very closely. In money terms, such cases account for over 
80% of the fraud and irregularities reported by Member States. 
Cases of which the Commission is cognizant, in particular under Regulation (EEC) 
No 1468/89 on mutual assistance (MA), are similarly monitored if they involve own 
resources in excess of ECU 1 million and meet a number of other criteria. This 
treatment is therefore reserved for cases of particular interest to the budgetary 
authority or the Court of Auditors, or for other cases which meet at least one of the 
following criteria (in addition to the financial one mentioned above): the involvement 
132 
153 
154 
155 
156 See the item on developments in own resources legislation in Chapter 1, Section 1, page 7. 
See the corresponding section in the annual report on the ftght against fraud for 1993. 
First subparagraph of Article 6(3) of Regulation (EEC, Euratom) No 1552/89. 
Article 17(2) of Regulation (EEC, Euratom) No 1552/89. 
See Chapter 2, Section 1, items 2 and 3, page 23 et seq. . 
72 
of several Member States, investigation initiated by the Commission, or imminent 
expiry of the period of limitation. 
The first sample ("Article 6(3) reports") has produced 99 cases for monitoring, and the 
second sample (MA and others) has produced a further six, relating to about 
5 000 documents wrongly discharged or presented in error.157 
1.3 Recovery 
Table 8 shows the situation as regards recovery of own resources, the total amount 
declared being given in Table 2. 
In the 99 cases of the first sample, involving ECU 276 million, the Commission was 
able to ascertain that ECU 22.5 million had been recovered and that corrections 
totalling ECU 21 million had been made after examination of the cases by 
administrative or judicial procedures. Some of the Member States' answers are being 
scrutinized. ' 
In the six cases of the second sample, the Commission has found that most of the 
amounts in question were entered in the accounts for amounts still outstanding (B 
accounts). A particularly close watch is kept on the situation concerning amounts 
actually recovered. 
I 2. Monitoring in respect of EAGGF - Guarantee Section expenditure 
'•.••• j . . 
2.1 Principles 
The regulations concerning this category of expenditure do not require Member States to 
record amounts established but not yet recovered. > 
Accounts are only kept in respect of the amounts actually recovered by Member States 
or recovered from them (e.g. in cases of negligence) following an ad hoc decision by the 
Commission. The amounts recovered by Member States in the case of irregularities 
(within the meaning of Council Regulation (EEC) No 595/91) are, in accordance with the 
provisions of the second subparagraph of Article 8(2) of Council Regulation (EEC) 
No 729/70,158 paid to the paying agencies and deducted by them from the expenditure 
financed by the Fund. Details of this accounting operation are given annually. 
157 This sample included the cases of the Turkish television sets and cattle and beef from Eastern 
Europe referred to in Chapter 5, pages 59 and 62. 
15S 
See Annex 1 on the regulations governing controls. 
73 
A distinction needs to be made between irregularities, where the national authorities retain 
20% of any amounts recovered,159 and amounts wrongly paid for any other reasons (e.gT 
negligence or mistaken beneficiary) where no such retention is made. 
The system could be improved by making two adjustments: 
The accounts are inadequate because they do not include amounts that have been 
established but not yet recovered. The Commission therefore proposes introducing a 
new procedure along the same lines as that for own resources described in Council 
Regulation (EEC, Euratom) No 1552/89, which stipulates that these amounts should 
be shown in a separate (B) account.160 
Statements of these accounts or of any other permanent record or list of Community 
debts would be communicated to the Commission; this information would be of help 
to both Member States and the Commission in managing and monitoring such debts. 
Individual files on cases of fraud and irregularities could be checked during the 
on-the-spot control missions to ensure that Member States are making the correct 
accounting entries, including amounts written off and amounts that are irrecoverable 
owing to lapse of time. Such missions would also provide an opportunity for 
comparing the accounting and document systems (i.e. the reports Member States are 
required to make under Article 5 of Regulation (EEC) No 595/91). 
Following the work of the Belle Group,161 the Commission has proposed an overhaul 
of the accounts clearance procedure162 in an attempt to address the growing 
difficulties encountered in implementing Fund expenditure. It has been decided to set 
up a Conciliation Body to reconcile the divergent positions of the Commission and 
Member States under this procedure.163 In addition, ad hoc solutions could be sought 
for certain types of fraud, possibly by resorting to ad hoc financial adjustment 
procedures which are not tied to the accounts clearance timetable. The ultimate 
objective is to physically recover funds which have been misappropriated or employed 
for the wrong purpose and to ensure that defrauders receive proper administrative 
and/or criminal punishment. 
159 
160 
161 
162 
163 As provided under Article 7 of Regulation (EEC) No 595/91 in respect of cases reported under 
Article 5 of that Regulation. See Annex 1 for the rules governing the reporting of cases of fraud and 
irregularities in respect of the EAGGF - Guarantee Section. 
See previous item on own resources. 
A group instructed by the Commission to propose improvements to the accounts clearance 
procedure. 
Charging certain amounts to Member States in accordance with Article 8 of Regulation (EEC) 
No 729/70. 
Commission Decision of 1 July 1994 (94/442/EC), OJ L 182, 16.7.1994. 
74 
2.2 Recovery 
Member States keep accounts only of amounts actually recovered, basic details of which 
are sent to the Commission (annual EAGGF Guarantee statements). They do not keep 
accounts of established amounts outstanding. The introduction of such accounts is one 
of the Commission's objectives, as stated above. Although the IRENE base is undeniably 
valuable from the documentary point of view, it cannot provide an accurate picture of the 
real situation regarding recovery in reported cases of fraud and irregularities. 
Table 10 shows amounts recovered by Member State, without distinguishing between old 
and new cases. The highest recovery rate obtained is around 40% for amounts at national 
level, though the total at Community level for cases reported in 1994 is a mere 4%. 
3. Monitoring in respect of structural measures and other expenditure 
Table 11 below summarizes the situation as regards irregularities reported and amounts 
recovered by Member States: 
Table 10 
Number of cases 
Amount declared 
(ECU) 
Amount recovered 
(ECU) Before 1.7.94 * 
78 
4 292 595 
262 160 1.7.94 ** 
26 
1 086 622 
137 288 Total 
104 
5 379 217 
399 448 
* Prior to implementation of Regulation (EEC) No 1681/94. 
** Implementation of Regulation (EEC) No 1681/94. 
Care should be taken in interpreting the figures concerning recovery since Member States 
are no longer sending in new reports164 and the figures on earlier cases have not been 
updated. The situation will improve with the application of the abovementioned new 
regulation on irregularities and the recovery of sums wrongly paid in connection with the 
financing of the structural policies and the organization of an information system in this 
field. It must also be borne in mind that irregularities found may also give rise to 
recovery from the end recipient and hence to a reduction in the Community contribution, 
even though there is no recovery in the strict sense, i.e. repayment to the Community 
budget. The reason for this is that the amounts recovered by the national authorities are 
Teprogrammed and used for other projects. 
164 See Section 1 above, page 68. 
75 
As is the case for EAGGF - Guarantee Section expenditure, separate accounts are not kept 
for amounts established but not yet recovered. However, the matter is under study, 
particularly for cases reported after the reform of the Funds in 1989 and the general 
revision of 1993. 
76 
CHAPTER 7: ANTI-FRAUD APPROPRIATIONS 
SECTION 1: BUDGET IMPLEMENTATION 1994 
Anti-fraud appropriations in the 1994 budget totalled ECU 139.14 million in commitment 
appropriations and ECU 124.24 million in payment appropriations, including those entered 
in the reserve. 
Most go to the national government departments responsible for inspections and 
investigations. The percentage allocated to the Commission to cover the requirements of 
its own operational departments is still tiny.165 Nevertheless, the distinction between these 
two categories was more apparent in 1994, in line with the wishes of the budgetary 
authority. The anti-fraud appropriations allocated "exclusively" to the Commission 
included: 
appropriations for the functioning of the coordination unit (SG/UCLAF), including 
those assigned to internal operational support (a concept explained below); 
appropriations for the development of Community databases (IRENE and Pre-
IRENE), the SCENT system, the TAFI programme and various studies and reports; 
appropriations used to set up a conciliation body as part of the reform of the 
procedure for clearing the EAGGF accounts.166 
These accounted for around 3% of all commitment appropriations. Nevertheless, this 
proportion was higher than the previous year, reflecting the political resolve expressed by 
the budgetary authority since 1993 to give the Commission extra resources to carry out 
its tasks. 
While the initial allocation in the 1994 budget totalled ECU 139.14 million, this figure 
does not correspond to the appropriations actually available for use, as the Commission 
made various internal transfers over the financial year, subject to the approval of the 
budgetary authority and in accordance with the principle of sound financial management 
as laid down in Article 2 of the Financial Regulation.167 There were also variations in the 
rate at which the appropriations available were actually used in the course of the financial 
year. Detailed explanations are given in the section below on the utilization rate for anti-
fraud appropriations by heading and by sector. 
16S 
166 
167 See the annual report on the fight against fraud for 1993 (cited above) for the recent trend in this 
proportion. 
See Chapter 6, Section 3 "Financial monitoring of fraud cases"...MEAGGF Guarantee Section", page 
74. 
Basic Regulation of 21 December 1977, OJ L 356, 21.12.1977, last amended by Council Regulation 
(ECSC, EC, Euratom) No 2730/94, OJ L 293, 12.11.1994. 
77 
Before embarking on this detailed analysis, it is worth recalling that the operational 
appropriations in Part B of the budget are designed to benefit Member States in the form 
of technical assistance, a term which reflects the new thrust of the Commission's policy 
in this field, which has the encouragement and support of Parliament. 
The appropriations in Part A are intended for administrative purposes and in this respect 
they too cover expenditure which benefits the Member States, for example through the 
financing of seminars and special training courses and also in the form of general 
subisidies to specialized national government departments. 
1. Utilization of anti-fraud appropriations in the agricultural sector 
These appropriations made up 93% of all anti-fraud appropriations in the 1994 budget. 
A breakdown of utilization by heading and by project is set out ip Table 12. The 
comments below concern headings with a particularly large allocation, in respect of which 
appropriations were committed in accordance with the legal bases in force and in line 
with requests submitted by the Member States, the main beneficiaries. 
1.1 Item A-3S31 Controls, studies, analyses in connection with the fight against fraud 
This heading contains non-differentiated appropriations, with equal amounts of 
commitment and payment appropriations. It covers various measures which extend 
beyond the end of the calendar year, so that the figure for utilization of appropriations at 
31 December does not represent the final position for the budget year, which is not 
known until the third quarter of the following year. The corresponding tables therefore 
show only the utilization of appropriations at 31 December 1994, reflecting commitments 
in 1994 (Table 13). However, the final situation regarding appropriations paid from the 
1993 budget is already known and is given in Table 14. 
1.2 Article B1-360 Measures to combat fraud affecting the EAGGF Guarantee Section 
The appropriations in this heading are also non-differentiated and, for the same reasons 
as in the previous heading, Tables 15 and 16 show the interim results for utilization at 
31 December 1994 for the 1994 budget and the final outturn for 1993. 
1-3 Article B2-511 Inspection in agriculture 
The appropriations in this heading are differentiated. 
A large proportion of the commitment appropriations and payment appropriations in the 
initial budget were made available again. There are two main reasons for this -
non-utilization of the allocation earmarked for vineyard registers168 and a drop in 
expenditure in connection with the olive oil control agencies as a result of fluctuations 
in exchange rates and a squeeze on working capital. 
168 
See the annual report on the fight against fraud for 1993, cited above. 
78 
1.4 Article B2-519 Campaign against fraud in agriculture 
This heading was first entered in the 1994 budget, at Parliament's initiative, to boost the 
resources available to the Commission for combating fraud. The initial allocation was 
substantial (ECU 2.5 million in commitment appropriations and ECU 1.5 million in 
payment appropriations), but, as a "mini-budget" heading, it fell foul of earlier 
instructions issued by the budgetary authority and confirmed by internal Commission 
instructions. It was therefore very difficult to use the appropriations, and those which 
were used were, confined mainly to the financing of operational measures such as studies 
and the use of outside experts, etc. 
Faced with this paradoxical situation, which was the sole reason for under-utilization, 
those responsible for administering the chapter proposed that the unused appropriations 
be reallocated in the annual transfer procedure submitted to the budgetary authority. As 
the budgetary authority decided against the internal transfer, the appropriations remained 
in this heading. 
2. Financial analysis 
2.1. Utilization of appropriations intended for agriculture 
Council Regulation (EEC) No 307/91 provides for a system of co-financing by the 
Community to tighten controls on certain expenditure chargeable to the EAGGF 
Î Guarantee Section.169 The co-financing is subject to a time limit and an annual ceiling 
of ECU 20 million (total amount available). 
Expenditure declared by the Member States in 1993 totalled ECU 10.37 million, i.e. 52% 
of the total amount available (see Table 16). 
The rate of utilization of Community appropriations varied according to Member State: 
it was high in Ireland, Germany, France and Denmark (between 52% and 80%) and about 
average in Spain and Portugal (45% and 50% respectively), while the United Kingdom, 
Greece, Italy and Belgium used a mere 11 to 17% of the amounts at their disposal. The 
Netherlands was the only country to use all the appropriations available and received 
additional financing in accordance with Commission Regulation (EC) No 1116/94. 170 
The lion's share of expenditure declared by the Member States in 1993 (67% of the total 
eligible amount) went towards the cost of paying additional staff to carry out the 
inspections provided for in Regulation (EEC) No 307/91. Expenditure on training, 
including the cost of running courses on the various control methods for agricultural 
products, was still very low (2%), while spending on equipment accounted for 18%, some 
of which went towards the purchase of micro-computers and vehicles, vital operational 
169 OJL 37, 92.1991. 
170 OJ L 122, 17.5.1994. 
79 
tools for carrying out inspections. Finally, relatively large amounts were requested by 
Denmark, Greece, Ireland and Portugal to pay for analyses carried out by laboratories, 
particularly in connection with checks on exported goods. 
On 16 May, drawing on the experience gained during the first three years of application 
of Regulation (EEC) No 307/91, the Commission adopted Regulation (EC) No 1116/94,171 
which allows Member States to transfer unused Community funds from one budget article 
to another within the total amount of financing allocated and, in addition, to have access 
to unused amounts from allocations to other Member States. These new measures are a 
response to requests by certain Member States and will help ensure optimum management 
of the Community funds in question. 
Forecast expenditure for 1994, based on the statements submitted by the Member States, 
is ECU 7.2 million, or 36% of available appropriations (see Table 15).172 The final 
outturn will not be known until after 15 May 1995, when the Member States are due to 
submit statements of actual expenditure to the Commission. 
As regards the other forms of Community co-financing from this budget heading, for 
example the establishment of an integrated management and control system under Council 
Regulation (EEC) No 3508/92173 and expenditure on remote sensing, the utilization rate 
for 1993 and the forecast for 1994 can be regarded as satisfactory (see abovementioned 
tables). 
2.2 The Commission's new policy of technical assistance and subsidies 
Under this policy, which is supported by Parliament, the Community co-finances anti-
fraud measures by the relevant authorities in the Member States, with the aim of stepping 
up the fight against fraud in fields where the existing legal bases do not define the 
concept of technical assistance let alone lay down detailed implementing rules, as is the 
case in the agricultural sector. 
The scope of technical assistance to the Member States is governed by the principle of 
subsidiarity. The appropriations in question are intended to help Member States 
implement Community anti-fraud policy, in particular in developing inspections, for 
which national government departments do not have the necessary administrative or 
technical capacity. The aid may assume different forms depending on the nature of the 
requests submitted by Member States, for example subsidies for the purchase of special 
equipment for combating fraud on the ground or, at the specific request of national 
government departments, financing to cover the use of experts in national investigations 
or joint investigations with the Commission. 
171 
172 
173 Regulation cited above, amending Commission Regulation (EEC) No 967/91, OJ L 100, 20.4.1991. 
For 1994 the .Commission committed only ECU 10 million instead of the projected ECU 20 million 
to allow for under-utilization in connection with Regulation (EEC) No 307/91. 
See the remarks on legislation in Chapter 1, Section 2 "Agriculture", page 8. 
80 
In the field of the Structural Funds (and the Cohesion Fund in 1995) assistance to 
Member States consists mainly of information seminars,174 intended initially to explain 
in detail the new arrangements for reporting irregularities already detected under the new 
legislation which entered into force in 1994'75 or to contribute more specifically to the 
organization of projects on irregularities in these fields.176 
Technical assistance for the Member States has an internal equivalent in the form of 
assistance for the Commission's own operational departments. Although national 
government departments are chiefly responsible for implementing anti-fraud policy, the 
task of formulating, monitoring and coordinating it falls to the Commission's own central 
unit (UCLAF in the Secretariat-General). Everything possible is done to ensure that this 
department has the necessary operational tools to accomplish its tasks (see Table 12 on 
the utilization of appropriations in Article B2-519).'77 
SECTION 2: 1995 APPROPRIATIONS 
The 1995 budget contained a total of ECU 132.618 million in commitment appropriations 
for anti-fraud measures (an increase of 5.2%) and ECU 121.568 million in payment 
appropriations. 
The increase on 1994 is apparent not only in the "traditional" anti-fraud headings in the 
agricultural sector, but also in new headings covering the Structural Funds, the Cohesion 
Fund, shared-cost research action and cooperation, which illustrate how a permanent 
mechanism is gradually being established to assist the specialized anti-fraud departments 
in the Member States, including central departments responsible for coordination, in the 
years ahead. 
Once the policy is in place, it will be assessed, and a special report will be sent to the 
budgetary authority on the use made of appropriations allocated to the Member States in 
the form of technical assistance and the use of appropriations by the Commission's own 
departments in the context of internal operational support aimed at stepping up anti-fraud 
174 
175 
176 
177 In 1994 a seminar was held for the Portuguese government departments responsible for the ERDF. 
See the comments on legislation in Chapter 1, Section 3 "Structural operations", page 10. 
In 1994 a seminar was held for the Dutch government departments responsible for the ESF. 
The level of resources has been adjusted to cover an increase in staff and the reorganization of the 
department in 1994. See Chapter 2, Section 1, item 1 "Organizational changes", page 22. 
81 
measures on the ground. As the fight against fraud is intensified, appropriate tools will 
be provided to analyse the data that is gathered, leading to more effective targeting of 
investigations and specific studies following these investigations.'79 
The sector-by-sector breakdown of anti-fraud appropriations for 1995 is given in Table 17 
and Figure 5. 
See the item on the development of intelligence in Chapter 2, Section 1, page 23. 
t 
82 
ANNEX 1 SUMMARY OF REGULATIONS IN FORCE ON 1 JANUARY 1994 
Under Article 5 of the EC Treaty Member States are required to implement Community 
law. In this context, they are responsible for ensuring that Community regulations are 
properly applied, for collecting revenue and for administering expenditure from the main 
European Funds placed at their disposal (EAGGF Guarantee Section, Structural Funds, 
etc.). 
Under Article 209a EC, as amended by the Treaty on European Union which entered into 
force on 1 November 1993, Member States are required to combat fraud affecting the 
Community budget with the same measures and the same vigour as if their own finances 
were at stake and, in so doing, to establish close cooperation between their administrative 
departments, with the help of the Commission. 
These Treaty provisions are clarified by regulations covering individual policy areas. 
1. Inspections 
Any policy providing for measures with financial implications must have an effective 
control system. Inspections are carried out primarily under the responsibility of the 
national authorities. The Commission's role is laid down in the EC Treaty, in particular 
Articles 155 and 205, and spelled out in the regulations covering individual sectors. In 
particular, it must ensure that the financial procedures for the collection of Community 
Tevenue are properly observed and that budget expenditure is correctly implemented and 
well used. 
The obligations of the Member States are laid down as follows: 
for traditional own resources, Article 18(1) of Regulation (EEC, Euratom) 
No 1552/89180 lays down the obligations of the Member States as regards the 
collection and scrutiny of revenue. Under Article 18(2) the Commission may be 
associated with inspections carried out by the Member States (joint inspections), while 
Article .18(3) provides for inspection measures to be carried out on the spot by 
authorized Commission officials, with the participation of national officials 
(autonomous inspections); 
for expenditure under the EAGGF Guarantee Section, Member States are required 
under Article 8 of Regulation (EEC) No 727/70 to ensure that transactions financed 
by the Fund are in order.181 Under Article 9(2) the Commission may take part in 
relevant inspections and inquiries by the Member States (joint inspections), while 
Article 9(1) provides for the Commission to undertake supervision where it considers 
it necessary (autonomous inspections). Furthermore, under Article 6(1) of Regulation 
ISO 
181 OJ L 155, 7.6.1989. 
OJ L 94, 28.4.1970. 
83 
(EEC) No 595/91,l82 the Commission may specifically request a Member State to 
carry out inquiries in the form of joint inspections conducted by national officials. 
for the Structural Funds, Article 23(1) of Regulation (EEC) No 4253/88,1*3 amended 
by Regulation (EEC) No 2082/93m provides for checks to ensure that operations 
financed by the Community are properly carried out. Under the first indent of 
Article 23(2), the Commission has the power to check certain operations on the spot 
(joint inspections), while under the third indent of the same Article the Commission 
may require Member States to carry out checks in which officials or other servants 
of the Commission may take part; 
for the Cohesion Fund the rules are similar to those applied to the Structural Funds: 
Article 12(1) of Regulation (EC) No 1164/94185 provides for the verification of 
operations financed by the Community; Article 12(4) allows the Commission to carry 
out on-the-spot checks on certain projects financed by the Fund; and under Article 
G the Commission may require a Member State to carry out an on-the-spot check in 
which officials or other servants of the Commission may take part; 
other specific regulations lay down special rules on inspections, notably in the wine 
sector and in respect of fruit and vegetables. 
finally, under Article 24 of the Financial Regulation applicable to the general budget 
of the Communities the Commission's Financial Controller is authorized to inspect 
files relating to expenditure and revenue, and to carry out checks on the spot if 
necessary.IM 
2. Reports .. . , 
On the basis of their inspection obligations, the Member States are required "to detect and 
punish cases of fraud or irregularity and inform the Commission of these cases and the 
action taken on them. This information is vital if the Commission is to carry out its 
coordination, surveillance and analysis work with a view to improving preventive 
measures and helping the relevant authorities in the Member States cany out their 
operational tasks. 
182 
183 
184 
185 OJ L 67, 14.3.1991. 
OJL 374, 31.12.1988. * 
OJ L 193, 31.7.1993. 
OJ L 130, 25.5.1994. This Regulation repealed Council Regulation (EEC) No 792/93 establishing a 
cohesion financial instrument. 
186 
The Financial Regulation guarantees the Financial Controller the autonomy and independence necessary 
for him to perform his duties. 
84 L 
The obligation of the Member States to report cases of fraud and irregularity detected by 
their administrative departments is spelled out in the Council Regulations for each field: 
for traditional own resources (customs duties and agricultural levies) in Article 6(3) 
of Regulation (EEC, Euratom) No 1552/89; 
for expenditure under the EAGGF Guarantee Section, in Articles 3 and 5 of 
Regulation (EEC) No 595/91; 
for the Structural Funds, in Article 23(1) of Regulation (EEC) No 4253/88; 
for the cohesion financial instrument, which became the Cohesion Fund with effect 
from 26 May 1994, in Articles 12(1) and (2) of Regulation (EC) No 1164/94; 
for information under the mutual assistance arrangements between the Member States 
on customs and agricultural matters, in Articles 14, 14a and 19 of Regulation (EEC) 
No 1468/81 (information of an operational nature relating to suspected cases of fraud 
or irregularities).187 
,S7 OJ L 144, 2.6.1981. 
85 
ANNEX 2. LIST OF FREEPHONE NUMBERS IN THE MEMBER STATES 
Belgium 080012426 
Denmark 80018495 
France 
Germany 
Greece 
Ireland ,-
Italy 
Luxembourg 
Netherlands 
Portugal 
Spain 05917295 
0130820595 
08003212595 
1800553295 
167878495 
08003595 
060224595 
0505329595 
9009932 
?t> 
EFE94DD XLS 
Table 1 
COMMUNICATIONS 
IRREGULARITIES OF MEMBER STATES ON 
EAGGF- GUARANTEE 1994 (*) 
Beginning of 
the irregularity 
unknown 
1983 
1984 
1985 
1986 
1987 
1988 
1989 
1990 
1991 
1992 
1993 
1994 
Total CASES 
NOTIFIED 
175 
2 
2 
3 
15 
15 
65 
116 
192 
258 
277 
318 
159 
1.597 CLOSED 
29 
1 
0 
3 
7 
7 
17 
21 
48 
73 
81 
131 
89 
507 OPEN 
146 
1 
2 
0 
8 
8 
48 
95 
144 
185 
196 
187 
70 
1.090 AMOUNT IN ECU 
COMMUNICATED 
190.997.081 
106.106 
16.843 
33.186 
3.163.360 
562.975 
23.369.701 
26.754.202 
16.815.274 
43.748.798 
23.711.896 
74.957.490 
7.675.456 
411.912.368 RECOVERED 
5.137.401 
101.400 
0 
33.186 
293.460 
62.495 
568.214 
1.845.082 
1.532.764 
3.593.496 
3.088.676 
4.782.451 
545.271 
21.583.896 
D Luxemburg had no irregularities to report / Belgium and Greece are represented only for the 1+2+3 Quarter 1994. 
Beginning ________ 
Of the CASES AMOUNT 
irregularity NOTIFIED NOTIFIED 
unknown 11% 46% 
1983 <1% <1% 
1984 <1% <1% 
1985 <1% <1% 
1986 1% 1% 
1987 1% <1% 
1988 4% 6% 
1989 7% 7% 
1990 12% 4% 
1991 16% 11% 
1992 17% 6% 
1993 20% 19% 
1994 10% 2% 
TOTAL I 100% 100% 
24/03/95 O 
ERP94.XLS 
COMMUNICATIONS OF MEMBER STATES ON IRREGULARITIES 
TRADITIONAL OWN RESOURCES 1994 
( only 1+2 quarter 1994) 
BELGIQUE 
DANMARK 
DEUTSCHLAND 
ELLAS 
ESPANA 
FRANCE . 
IRELAND 
ITALIA 
NEDERLAND 
PORTUGAL 
UNITED KINGDOM 
TOTAL CASES 
NOTIFIED 
1.221 AMOUNTS 
NOTIFIED (ECU) 
16.013.024 
540.235 
29.264.095 
1.442.947 
5.157.635 
9.482.976 
616.050 
24.061.295 
2.057.179 
637.380 
22.621.189 
111.894.005 CASES I AMOUNTS 
NOTIFIED I NOTIFIED 
4% | 14% 
1% 0% 
60% 26% 
1% 1% 
3% 5% 
6% 8% 
1% 1% 
7% 22% 
1% 2% 
b2% 1% 
16% 20% 
100% 100% 0* 
» 
STRUCTURAL FUNDS AND FINANCIAL INSTRUMENTS 
Cases reported under Article 3 of Reg. (EC) No 1681/94 
3rd quarter 1994 
& 
Cases reported under Article 23 of Reg. (EC) No 4253/88 
1990-30.06.1994 82580000.X60 
Table 3 
Number of cases by Member State 
Belgique/Belgie 
Danmark 
Deutschland 
EUas 
Espana 
France 
Ireland 
Italia 
Luxembourg 
Nederland 
Portugal 
United Kingdom 
TOTAL EAGGF Guid. 
9 
7 
9 
I 
1 
5 
0 
12 
2 
4 
30 ESF 
o" 
3 
25 
10 
1 
0 
0 
2 
0 
41 ERDF 
0 
0 
0 
1 
1 
0 
0 
2 
4 
8 FIFG 
0 
0 
0 
5. 
0 
0 
0 
0 
5 Cohesion Fin. Instr. , 
© tOO 
-TOTAL 
9 
10 
34 
17 
3 
5 
0 
12 
6 
8 
104 
- : No report received. 
0 : Reports recorded no cases. 
\cazm 
cr h B 
e -
e u 
at •> O s a Q s s 2 « â ? = a g S « 9 La 
S So o 
§ | * 2 
4J 
I Country y 
D EAGGF Guid. • ESF 
LS FIFG S CFI ERDF 
As the new legislation was introduced very recently (Reg. (EC) No 1681/94, see Ch. 1, section 2, point 3) 
a number of Member States have not yet sent in their reports. f '• 
Page 1 gfl 
STRUCTURAL FUNDS AND FINANCIAL INSTRUMENTS 
Cases reported under Article 3 or Reg. (EC) No 1681/94 
3rd quarter 1994 
& 
Cases reported under Article 23 of Reg. (EC) No 4253/88 
1990 - 30.06.1994 82580000.X59 
Table 4 
Amounts in ecu by Member State 
- : No report received. 
0 : Reports recorded no cases. 
D EAGGF Guid. • ESF ERDF El F1FG CF1 
As the new legislation was introduced very recently (Reg. (EC) No 1681/94, see Ch. 1, section 2. point 3) 
a number of Member States have not yet sent in their reports. 
Page 2 4 
Figure 1 * 
Member States' reports 1991-1994 
TRADITIONAL OWN RESOURCES 24 -Mar- 95 
y.'i'.'j. 
• 1001 
01602 
01909 
lot 084 YEAR 
1001 
1002 
1004 Number of casta 
702 
1110. 
1264 
1004 1223 
(first half-year only) 
TOTAL 4206 B1901 
at »02 
• 1093 
Q1&94 
YEAR 
1901 
1002 
1093 
1994 
TOTAL ÉAGGF GUARANTEE EXPENDITURE 
«50 
400 
350 
Amount (ECU million) 300 
250 Number ol case» 
622 
lose 
1605 
1597 
4660 I2t 
100 
300 
412 
942 200 
150 
100 
50 
0 
Figure 2 
Figure 3 
TRADITIONAL OWN RESOURCES 
Reports from the Member States for the period 1991-94* 
by type of Resource 
Number of cases 
1991 
1992 
1993 
1994 246 
S23 
540 
SSI 
1960 An «-dumping du ••• 
25 
29 
47 
20 
121 AgricultiHal tmnma 
9 
215 
62 
376 IndaHtminaki 
422 
351 
56S 
274 
1632 I oui 
702 
1116 
1264 
1221 
4296 
1400 
1200 
1000 
800 
600 
400 
200 
0 *apaBaaa|jBBaaB]« H 
'^CftÄ>:?<:?S?Ä?iSi 
1901 1692 1993 
Sum» involved (million ECU) 1994 D Indeterminate 
• Agriculture) levies 
• Anti-dumping duties 
• Customs duties 
1991 
1992 
1994 15 
24 
63 2 
35 
53 
32 96 
28 
60 
35 Total 
116 
95 
.101 
113 
146 18 122 219 
200 
160 
160 
140 
120 
100 
80 
60 
40 
20 
0 WSSSSft O Indeterminate 
• Agricultural levies 
• Anti-dumping duties 
•Customs duties 
1991 1992 1993 1994 
(*) 1994: figures cover only the test ah months. 
**3 
Figure A 
EAGGF-OJARANTEE 
Member States' reports 1991-19% 
by category of agricultural expenditure 
YEAR 
1991 
1992 
1993 
1994* 
TOTAL Number of cases 
REFUNDS AID CROP PRODUCTS AIO • ANIMAL PRODUCTS 
198 181 
213 
299 
365 
1058 606 
am 
2191 221 
226 
379 
432 
1258 TOTAL 
600 
1028 
1284 
1S97 
4509 
• REFUNDS 
QAID - CROP PRODUCTS 
0.AID - ANIMAL PRODUCTS 
1991 1992 1993 1994-
Amount - ECU million 
YEAR 
1991 
1992 
1993 
1994' 
TOTAL REFUNDS AK> • CHOP PRODUCTS AJO - ANMAl PRODUCTS 
78 
18 
173 
233 
502 34 
86 
94 
164 
378 9 
5 
35 
15 
64 TOTAL 
121 
109 
302 
412 
944 
250 T 
200 A 
150 4-
lOO -r 
50 + 
0 \ B REFUNDS 
QAID - CROP PRODUCTS 
QAID - ANIMAL PRODUCTS 
1991 1992 1993 1994* 
' ,rW4- 3qu,,rtor: 94 
9193AN4C.XLS Table 5 
Irregularities communicated by Member States during the period 1991 -1993 (million ECU) 
in relation to EAGGF -Guarantee expenditure granted to each Memjber State. 
Irregularities 
Year 1991 
Year 1992 
Year 1993 
Total B 
0,8 
2,0 
7,0 
9,8 DK 
1,4 
1,2 
4,8 
7,4 D 
5,0 
7,2 
20,3 
32.5 GR 
0,1 
1,3 
82,4 
83,8 E 
1,3 
4,0 
4,6 
9,9 F 
5,8 
6,7 
35,9 
48,4 IRL 
2,9 
1.0 
1,1 
5,0 1 
94,6 
68,9 
129,5 
293,0 L 
0.0 
0.0 
0,0 
0,0 NL 
3,6 
6.6 
6,0 
16,2 P 
0.1 
3,8 
4,8 
8.7 UK 
5.4 
6,3 
3,7 
15,4 
% of expenditure \ 0,24%\ 0,20%\ 0,22%\ 1,17%\ 0,09% \ 0,23% \ 0t11%\ 1,92%\ 0,00%\ 0,23%\ 0,71%\ 0,21% 
Irregularities communicated by Member States during the period 1991 -1993 (million ECU) 
in relation to Traditional Own Resources collected by each Member State 
Irregularities 
Year 1991 
Year 1992 
Year 1993 
Total B 
3.2 
9,9 
20,1 
33.2 DK 
0,9 
3,4 
2.0 
6,3 D 
75,2 
23.2 
43,8 
142,2 GR 
1,0 
0,4 
0.4 
1.8 E ' 
1,4 
0.6 
6.9 
8.9 F 
13.5 
12.7 
17,8 
44,0 IRL 
0.2 
4.4 
2.8 
7.4 1 
3,0 
19,2 
46,2 
68,4 L 
0,0 
0,0 
0,0 
0,1 NL 
0,4 
1,3 
5,8 
7,5 P 
0,4 
1,2 
0.7 
2.3 UK 
17,7 
18,1 
33,B 
69.5 
% of resources 1,23% 0,78%\ 1,19% 0,33% 0,41%\ 0,85% 1,50%\ 1,73% 0,21%\ 0,17%\ 0,38% 0,94% 
NUMBER AND FINANCIAL IMPACT OF CASES RECORDED BY AREA (1995) 
NUMBER OF CASES Table 6 
SOURCE 
Member States' Communications 
Commission inquiries 
Mutual assistance 
SOURCE 
Member States' Communications 
Commission inquiries 
Mutual assistance AGRICULTURE STRUCTURAL FUNDS 
1597 
26 42 
34 
FINANCIAL IMPACT (ECU million) 
AGRICULTURE 
412 
12 STRUCTURAL FUNDS 
1.5 
16 OTHER EXP. 
16 
OTHER EXP. 
23 OWN RESOURCES 
1221 
23 
122 
OWN RESOURCES 
112 
107 
18" 
Own Resouoes: only first half-year 
FINANCIAL IMPACT 
AGRICULTURE 
STRUCTURAL 
FUNDS 
ATM OTHER EXP Mutual assistance 
Commission inquiries 
Member States' Communications Sourca 
OWN 
RESOURCES 
L 
24/03/95 EDFEOMESXLS 
COMMUNICATIONS OF MEMBER STATES ON IRREGULARITIES 
EAGGF -GUARANTEE 1994 (*) 
MEASURES 
"SMALL MEASURES" in total 
CHEESE-refunds ' 
VINEYARDS - definitive cessation 
MILK • linear co-responsibilityJevy 
BOVINE MEAT-storage 
BUTTER - refunds _\ i 
EWE AND GOATS - premiums 
TABACCO 
CEREALS • other intervention 
POTATO STARCH - refunds 
CEREALS * co-responsibility levy 
COTON - production aid 
SCHOOL MILK 
SEEDS • production aid 
NON • ANNEX II PRODUCTS- refunds 
WINE-distillation 
TOMATOES - processing aid 
SET ASIDE ARABLE LAND - premiums 
CITRUS JUICES -financial compensation, 
MILK PRODUCTS-refunds. 
BARLEY-refunds 
BOVINE MEAT • intervention 
DRIED FODDER - production aid 
WINE PRODUCTS - refunds 
BOVINE MEAT - refunds 
OLIVE OIL - consumption aid 
CEREALS - storage 
CEREALS - refunds 
TOTAL CASES 
COMMUNICATED 
512 
21 
7 
36 
6 
8 
127 
1 
41 
16 
53 
14 
61 
11 
64 
17 
25 
241 
4 
14 
5 
2 
34 
20 
68 
141 
16 
32 
1.597 CLOSED 
211 
11 
0 
9 
0 
3 
16 
0 
0 
12 
27 
0 
41 
1 
34 
0 
3 
76 
1 
7 
0 
1 
12 
3 
16 
17 
0 
6 OPEN AMOUNT IN ECU 
COMMUNICATED 
301 
10 
7 
27 
6 
5 
111 
1 
41 
4 
26 
14 
20 
10 
30 
17 
22 
165 
3 
7 
5 
1 
22 
17 
52 
124 
16 
26 
1.090 iê.7ièJSi 
1.089.151 
1.110.256 
1.176.255 
1.313.251 
1.390.990 
1.497.138 
1.501.590 
1.722.657 
1.785.392 
1.911.518 
1.995,479 
2.136.927 
2.189.815 
2.260.328 
2.372.848 
2.909.326 
3.273.050 
3.350.071 
3.709.521 
4.502.880 
4.691.622 
5.569.943 
20.485.450 
53.217.980 
60.378.408 
65.414.319 
142.237.852 RECOVERED 
283.085 
0 
246.425 
0 
1.197.844 
141.129 
0 
0 
310.751 
497.407 
0 
714.746 
54.489 
629.308 
0 
151.234 
162.160 
0 
73.130 
0 
65.672 
262.696 
0 
410.582 
2.661.996 
4.840.740 
4.984.305 TO BE RECOVERED 
— .urniM 
806.066 
1.110.256 
929.830 
1.313.251 
193.146 
1.356.009 
1.501.590 
1.722.657 
1.474.641 
1.414.111 
1.995.479 
1.422.181 
2.135.326 
1.631.020 
2.372.848 
2.758.092 
3.110.890 
3.350.071 
3.636.391 
4.502.880 
4.625.950 
5.307.247 
20.485.450 
52.807.398 
57.716.412 
60.573.579 
137.253.547 rr 
(*) Luxemburg had no irregularities to report / Belgium and Greece are represented only for the 1+2+3 Quarter 1994. 
24 03 95 EFE123DXLS 
COMMUNICATIONS OF MEMBER STATES ON 
IRREGULARITIES EAGGF - GUARANTEE 1994 (*) 
METHOD OF DETECTION 
Miscellaneous methods (total) 
CUSTOM CONTROL 
FARM INSPECTION 
ROUTINE CHECK 
TAX INSPECTION 
ANALYSIS OF SAMPLES 
JUDICIAL INQUIRY 
COMMUNITY INITIATIVE 
EX POST DOCUMENTARY CONTROL 
TOTAL AMOUNT IN ECU 
NOTIFIED 
32.119.094 
11.443.717 
12.558.778 
24.144.948 
30.469.760 
43.086.972 
49.483.159 
63.512.818 
145.093.122 RECOVERED 
3.825.888 
680.348 
1.360.404 
524.514 
117.374 
191.089 
0 
5.219.411 
9.664.868 TO BE RECOVERED 
28.293.206 
10.763.369 
11.198.374 
23.620.434 
30.352.386 
42.895.883 
49.483.159 
58.293.407 
135.428.254 
i.Q9oj 411.912.3681 21.583.8961 390.328.472l 
(*) Luxemburg had no irregularities to report / Belgium and Greece are represented only for the 1 +2+3 Quarter 1994. 
-ft COMMUNICATIONS OF MEMBER STATES ON 
IRREGULARITIES EAGGF - GUARANTEE 1994 (*) 
(Percentages) 
METHOD OF DETECTION 
Miscellaneous methods (total) 
CUSTOM CONTROL 
FARM INSPECTION 
ROUTINE CHECK 
TAX INSPECTION 
ANALYSIS OF SAMPLES 
JUDICIAL INQUIRY 
COMMUNITY INITIATIVE 
EX POST DOCUMENTARY CONTROL 
TOTAL CASES I AMOUNT 
NOTIFIED I NOTIFIED 
20% 
5% 
6% 
19% 
3% 
3% 
1% 
1% 
41% 
100% 8% 
3% 
3% 
6% 
7% 
10% 
12% 
15% 
35% 
100% 0) 
oo 
Enrat 
COMMUNICATIONS OF MEMBER STATES ON IRREGULARITIES 
TRADITIONAL OWN RESOURCES 
period : 1991 -1994 ( 1+2 quarter) 
BELGIQUE 
DANMARK 
DEUTSCHLAND 
ELLAS 
ESPANA 
FRANCE 
IRELAND 
ITALIA 
LUXEMBOURG 
NEDERLAND 
PORTUGAL 
UNITED KINGDOM CASES 
noltficd 
328 
86 
1.548 
66 
192 
544 
32 
408 
2 
44 
84 
961 cloned 
203 
41 
115 
0 
15 
9 
13 
41 
1 
1 
39 
224 AMOUNT IN ECU 
notified 
49.205.846 
6.848.827 
171.442.258 
• 3.223.998 
14.051.855 
53.500.248 
8.001.875 
92.474.916 
85.220 
9.513.448 
2.969.940 
92.167.252 recovered 
7.267.239 
2.799.554 
7.715.408 
0 
1.025.938 
6.093.467 
1.183.211 
654.257 
45.417 
122.232 
579.444 
1.844.104 lobe recovered 
41.938.607 
4.049.273 
163.726.850 
3.223.998 
13.025.917 
48.406.781 
6.818.664 
91.820.659 
39.803 
9.391.216 
2.390.496 
90.323.148 
TOTAL 4.295 702 3.593 503.485.683 ,28.330.271 476.155.412 
[BELGIQUE 
DANMARft 
DEUTSCHLAND 
ELLAS 
ESPANA 
FRANCE 
IRELAND 
ITALIA 
LUXEMBOURG 
NEDERLAND 
PORTUGAL 
UNITED KINGDOM 
j[~ __JTÖJÄL " % OF THE AMOUNT NOTIFIED 
recovered 
15% 
41% 
5% 
0% 
7% 
10% 
15% 
1% 
53% 
1% 
20% 
2% 
6%' io be recovered 
85% 
59% 
95% 
100% 
93% 
90% 
85% 
99% 
47% 
99% 
80% 
98% 
94% cr 
-So 
:M/CJ<9: E9194FEO.XLS 
COMMUNICATIONS OF MEMBER STATES ON IRREGULARITIES 
EAGGF - GUARANTEE 1991 -1994 (*) 
BELGIQUE 
DANMARK 
DEUTSCHLA sD 
ELLAS (**) 
ESPANA 
FRANCE 
IRELAND 
ITALIA 
NEDERLAND 
PORTUGAL 
UNITED KINGDOM 
TOTAL CASES 
notified • 
119 
221 
546 
327 
519 
389 
65 
955 
428 
270 
670 
4.509 CLOSED 
58 
175 
265 
65 
218 
254 
48 
108 
331 
38 
466 
2.026 OPEN 
61 
46 
281 
262 
301 
135 
17 
847 
97 
232 
204 
2.483 AMOUNT IN ECU 
notified 
11.450.094 
10.503.868 
66.217.645 
86.353.034 
82.746.803 
54.252.457 
5.507.529 
560.685.454 
22.621.210 
14.961.534 
26.774.056 
942.073.684 RECOVERED 
734.154 
4.908.684 
12.301.686 
(**) 58.267.596 
2.263.922 
17.282.240 
2.137.890 
35.748.902 
11.093.595 
1.037.472 
11.006.035 
156.782.176 TO BE RECOVERED 
10.715.940 
5.595.184 
53.915.959 
28.085.438 
80.482.881 
36.970.217 
3.369.639 
524.936.552 
11.527.615 
13.924.062 
14.825.247 
784.348.734 
O Luxemburg -ac no Irregularities to report / Belgium and Greece are represented only for the 1+2+3 Quarter 1994. 
(*•) 56 Million EC . *-.ave been recovered by the Commission in the Clearance of Accounts 1991 
Cases Amount 
——————______ notified || notified-
(BELGIQUE 3% 1% 
DANMARK 5% 1% 
DEUTSCHLA s : 12% 7% 
ELLAS (*) 7% 9% 
ESPANA 12% 9% 
FRANCE 9% 6% 
IRELAND 1% 1% 
ITALIA 21% 60% 
NEDERLANC 9% 2% 
PORTUGAL 6% 2% 
[UNITED KING :OM | IS% I 3% | 
| TOTAL |j~100% j 100% | " % of the amount notified 
recovered I to be recovered 
6% 94% 
47% 53% 
19% 81% 
66% 33% 
3% 97% 
32% 68% 
39% 61% 
6% 94% 
49% 51% 
7% 93% 
41% 55% 
j 17% j 83% cr 
o 
UTILIZATION OF APPROPRIATIONS -1994 Table J\I 
BUDGET 
ARTICLE, ITEM 
A 2554 
A 3530 
A 3531 
A 3532 HEADING 
Conferences, congresses and meetings in 
connection with the activities of the 
associations of European lawyers for the 
protection of the financial interests of the 
Community 
Unit to coordinate action against fraud 
Controls, studies and analyses in connection 
with the fight against fraud 
Fraud suppression in the textiles sector 
(TAFI) MEASURES FINANCED 
Seminars, meetings and training 
courses in the Member States 
• Meetings, seminars, investigations 
- Databases 
- Reg. (EEC) No 4045/89 
- Legal seminars and studies 
- Customs and VAT seminars 
- Studies customs + indirect taxation 
- Investigations and missions 
• Other seminars 
- Report on the fight against fraud 
- Analyses 
• Computer systems and databases 
(IRENE and Pre-IRENE. DAF) 
- Subsidies 
- Conciliation body (EAGGF) 
- SCENT 
- Seminars, investigations 
- Subsidy 
- Co-financing a research unit 
TOTAL TO CARRY FORWARD APPROPRIATIONS 
AVAILABLE 
(INCLUDING 
TRANSFERS) 
240.000 
104.000 
4.145.000 
800.000 
5.289.000 APPROPRI­
ATIONS 
COMMITTED 
239.999 
102.095 
14.595 
87.500 
4.103.478 
1.690.000 
199.975 
462.848 
49.500 
250.770 
13.560 
50.000 
18.766 
256.900 
587.000 
414.040 
•110.119 
799.901 
449.901 
50.000 
300.000 
5.245.473 UTILIZ­
ATION 
100 
98,2 
99 
99.9 CARRY­
OVERS 
FROM 
1993 
130.997 
85.280 
2.473.019 
376.695 PAYMENTS 
AGAINST 
CARRY­
OVERS 
FROM 1993 
120.277 
91.8% 
62.939 
73.8% 
1.618.776 
65,5% 
314.126 
83.4% 
©• 
y 
-f st 
BUDGET 
ARTICLE, 
ITEM HEADING MEASURES FINANCED 
CARRIED FORWARD 
A 355 
B 1.360 
B2.102 
B2.111 
B2.121 
B2.131 European documentation, 
coordination and study network 
to control cross-border crime and 
fraud 
Measures to combat fraud 
affecting the European 
Agricultural Guidance and 
Guarantee Fund - Guarantee 
Section 
Measures to combat fraud 
affecting the European 
Agricultural Guidance and 
Guarantee Fund - Guidance 
Section 
Measures to combat fraud 
affecting the Financial Instrument 
for Fisheries Guidance 
Measures to combat fraud 
affecting the European Regional 
Development Fund 
Measures to combat fraud 
affecting" the European Social 
Fund Establishment of a foundation under 
Dutch law (legal structure of the network) 
involving five countries: D, I, GR, L, 
NL. 
- Reg. (EEC) No 307/91 
- Reg. (EC) No 165/94 (Remote sensing) 
- Remote sensing (images) 
- Reg.(EEC) No 3508/92 (IACS) 
- Integrated system (land register) 
- Expert costs (IACS) 
- Technical studies 
TOTAL TO CARRY FORWARD APPROPRI­
ATIONS 
AVAILABLE 
(INCLUDING 
TRANSFERS) 
5.289.000 
p.m. 
78.000.000 
200.000(*) 
50.000(*) 
300.000(*) 
200.000(*) 
84.039.000 APPROPRI­
ATIONS 
COMMITTED 
5.24S.000 
73,920,652. 
10.000.000 
12.000.000 
1.518.475 
50.000.000 
322.061 
200.300 
1.879.816 
-
15.000 
100.000 
81.281.125 UTILIZATIO 
N(%) 
97,33 
-
5 
50 
• CARRYOVERS 
FROM 1993 
-
30.624.834 
, PAYMENTS 
AGAINST 
CARRYOVE 
RS FROM 
1993 
375.000 
100% 
15024.860 
49.1% 
(*) The appropriations were entered in the reserve B0.40 (the headings carrying token entries). They could only be transferred to the headings by decision of the 
budgetary authority on the basis of a report by the Commission (SG/UCLAF). This decision was not taken until late November, thus not allowing optimum 
utilization in 1994. 
BUDGET 
ARTICLE, 
ITEM HEADING MEASURES FINANCED 
CARRIED FORWARD 
B2.5110 
B2.519 
B5.3051 
B6.840 
B7.530 Inspection in agriculture 
Campaign against fraud in 
agriculture 
Community action programme 
concerning vocational training for 
customs officials (Matthaeus) and tax 
officials (Matthaeus-Tax) 
Measures to combat fraud in die 
shared-cost research sector 
Measures to combat fraud in the 
cooperation sector • Controls and analyses 
• Olive oil agencies 
- Missions, investigations 
• Remote sensing (software) 
• Studies, analyses, controls 
- Expert costs 
- Operational resources 
(SG7UCLAF) 
- Purchase of miscellaneous 
equipment 
- Matthaeus 
- Matthaeus-Tax 
GRAND TOTAL APPROPRI­
ATIONS 
AVAILABLE 
(INCLUDING 
TRANSFERS) 
84.039.000 
28.500.000 
2.500.000 
2.900.000 
50.00(X») 
p.m. 
117.989.000 APPROPRI­
ATIONS 
COMMITTED 
81.281.125 
12.217.000 
217.000 
12.000.000 
637.038 
S6.229 
138.214 
138.750 
30.000 
260.000 
13.845 
2.899.985 
2.305.880 
594.105 
-
97.035.148 UTILIZATION 
(%) 
42.9 
25.5 
100 
-
82,2 CARRYOVERS 
FROM 1993 
885.469 PAYMENTS 
AGAINST 
CARRYOVERS 
FROM 1993 
520.159 
58,7% 
(*) The appropriations were entered in the reserve B0.40 (the headini 
budgetary authority on the basis of a report by the Commission (: 
utilization in 1994. ;s cany ing token entries). They could only be transferred to the headings by decision of the 
iG/UCLAF). This decision was not taken until late November, thus not allowing optimum 
a 
82580000.X74 
Table 13 
BUDGET ITEM AO-3531 - UTILIZATION OF BUDGET APPROPRIATIONS 1994 IDG VI share)' 
INITIAL APPROPRIA TION DG VI - ECU 2.880 million 
FINAL APPROPRIATION DG VI AFTER DISTRIBUTION - ECU 2.250 million 
MS 
BE 
DK 
DE 
EL 
ES 
FR 
IRL 
IT 
LU 
NL 
PT 
UK 
TOT. REG. 4045/89 
BUDGET 
0.150 
0.150 
0.300 
0,150 
0,300 
0,300 
0,150 
0,300 
0,030 
0,300 
0,150 
0.300 
2,580 Utilization 
C P % 
a b b/a 
0,072 
0,134 
0,298 
0,114 
0,295 
0.291 
0.029 
0.133 
0.000 
0.130 
0.150 
0.O44 
1.690 0.053 
0.100 
0.211 
0.042 
0.222 
0.216 
0.022 
0.000 
0.000 
0.064 
0,106 
0.033 
1.068 74% 
75% 
71 % 
36% 
75% 
74% 
74% 
0% 
0% 
50% 
71 % 
75% 
63% OTHER OPERATIONS {• V (1} 
BUDGET 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.300 Utilization 
C P % 
a b b/a 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.534 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.000 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0% TOTAL 
BUDGET 
0.150 
0.150 
0,300 
0.150 
0.300 
0.300 
0.150 
0.300 
0,030 
0.300 
0.150 
0,300 
2.580 
0.300 
2,880 Utilization 
C P % 
a b b/a 
0.072 
0,134 
0.298 
0.114 
0.295 
0.291 
0,029 
0.133 
0.000 
0.130 
0.150 
0.044 
1.690 
0.534 
2,224 0.053 
0.100 
0.211 
0.042 
0.222 
0.216 
0.022 
0.000 
0.000 
0.064 
0.106 
0.033 
1.068 
0 
1.068 74% 
75% 
71 % 
36% 
75 % 
74% 
74% 
0% 
0% 
50% 
71 % 
75% 
48% 
C) PROVISIONAL 
Notes: BUDGET: Appropriations available in budget: C: Commitments; P: Payments 
(* *) Agricultural simplification working party, SCENT, etc. 
ID Amount not distributed by country. 
Page 1 Ai>L, \ 
82580000.X74 
Table 14 
BUDGET ITEM AO-3531 - UTILIZATION OF BUOGET APPROPRIATIONS 1993 (DG VI sharer 
INITIAL APPROPRIA TION DG VI = ECU 2.880 million 
FINAL APPROPRIATION DG VI AFTER DISTRIBUTION « ECU 2.574 million 
MS 
BE 
DK 
DE 
EL 
FS 
FR 
IRL 
IT 
LU 
NL 
PT 
UK 
TOT. REG. 4045/89 
BUDGET 
0,150 
0,150 
0,300 
0,150 
0.300 
0.300 
0.150 
0,300 
0,030 
0,300 
0,150 
0,300 
2,580 Utilization 
C P % 
a b b/a 
0.076 
0.131 
0.278 
0.136 
0.286 
0.289 
0.031 
0.189 
0.000 
0.106 
0.13 
0.054 
1.706 0.095 
0.123 
0.28 
0.059 
0.248 
0.274 
0.026 
0.031 
0 
0.112 
0.116 
0.05 
1.413 125% 
94% 
101 % 
43% 
87 % 
95% 
84% 
16% 
0 % 
106% 
89 % 
93% 
83% OTHER OPERATIONS (* V (11 
BUDGET 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0,300 Utilization 
C P % 
a b b/a 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.4 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0,226 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
56% TOTAL 
BUDGET 
0.150 
0,150 
0.300 
0,150 
0,300 
0.300 
0.150 
0,300 
0,030 
0,300 
0,150 
0,300 
2.580 
0.300 
2,880 Utilization 
C P % 
a b b/a 
0.076 
0.131 
0.278 
0.136 
0.286 
0.289 
0.031 
0.133 
0,000 
0,130 
0,150 
0,044 
1.690 
0,534 
2,224 0.095 
0.123 
0,280 
0.059 
0.248 
0.274 
0.026 
0.031 
0,000 
0.112 
0.116 
0,050 
1,706 
0.400 
2.106 125% 
94% 
101% 
43% 
87% 
95% 
84% 
16% 
0% 
106% 
89% 
93% 
78% 
Notes: BUDGET: Appropriations available in budget; C: Commitments; P: Payments 
(* ') Agricultural simplification working party, investigations, etc. 
(1) Amount not distributed by country. 
Page 2 jeÇ 
82580000.X75 
BUDGET ITEM B 1-3600- UTILIZATION OF BUDGET APPROPRIATIONS 1994 IV Tabla H 
(ECU mBlhnl 
INITIAL APPROPRIATION OP: 71 + 15 In reserve - ECU 86 million 
FINAL APPROPRIATION C/p AFTER TRANSFER - ECU 78million 
BE 
DK 
DE 
EL 
ES 
FR 
IRL 
IT 
LU 
NL 
PT 
UK 
TOT. REG. 307/91 
BUDGET 
1.028 
0.967 
2 
2 
2 
4.424 
0.609 
3.282 
0 
1.843 
0.241 
1.663 
20 I 
C 
a 
0.164 
0.377 
1.163 
0.137 
1.910 
3.08 
0.185 
1.016 
0 
1.36 
0.241 
0.397 
10 ftUsath 
P 
b 
0.1 
0.3 
0.87 
0.09 
0.36 
1.94 
012 
0.44 
0 
0.84 
0.16 
0.25 
6.42 n 
% 
b/a 
63% 
79% 
74% 
63% 
19% 
63% 
63% 
43% 
0% 
62% 
63% 
62% 
64% REG. 3508/92 
BUDGET 
1.160 
1.200 
5.060 
4,360 
9,060 
7,300 
2.250 
10,060 
0.300 
1.600 
2.860 
4.960 
60.000 L 
C 
a 
1,150 
1,200 
8,050 
4.350 
9.06 
7.3 
2.260 
10,050 
0.300 
1,600 
2.86 
4,950 
60.000 tHltatht 
P 
b 
0.663 
0.851 
3.79 
3.26 
6.79 
6.48 
1.69 
7.64 
0.07 
1.13 
1.69 
3.71 
38.8 n 
% 
b/a 
76% 
71% 
75% 
76% 
76% 
76% 
76% 
76% 
24% 
76% 
66% 
76% 
74% REMOTE SENSING (REG. 165/94) 
BUDGET 
0.346 
0.36 
1.615 
1.306 
2.716 
2.19 
0.676 
3.016 
0090 
0.45 
0.855 
1.486 
16,000 
m -1 
c 
s 
0.276 
O 288 
1.212 
1.044 
2.172 
1.762 
640 
2.412 
0.072 
0.36 
O 684 
1.188 
1.690 
0,634 
2,224 JtWzatlot 
P 
b 
0.207 
0.216 
0,342 
0.78 
1.386 
0195 
0.267 
1.809 
0 
0.27 
0 
0.691 
12 t 
% 
bAt 
76% 
76% 
28% 
72% 
64% 
11% 
49% 
76% 
0% 
75% 
0% 
76% 
63% REMOTE SENSING 
IMAGES 
UOtzathn 
C P 
a b 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
1.616 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.701 % 
b/a 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
46% REG. 
3151/90 
SING A 12) 
BUD. 
p.m. 
p.m. LUE. 
C/P 
1.863 
1,863 REG. 596/91 
13) 
BUD. 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.500 UtM. 
C/P 
0 CONSULT. 
350bV92 
14) 
BUD. 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.600 Util. 
C/P 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.604 
0,204 TOTAL 
BUDGET 
2,623 
2.517 
8,814 
7,489 
1X675 
13,194 
3.634 
16.347 
0,390 
3,793 
3,946 
8,088 
66,000 
1.000 
86.000 Utilization 
C P 
a b 
1.680 
1.865 
7.416 
6.631 
13.132 
12.132 
2.975 
13.478 
0.372 
3.210 
6.638 
6.636 
7X863 
2,066 
'81.277 1.166 
1,366 
4.986 
4.098 
8.636 
7.606 
2.070 
9.781 
0.073 
2.231 
3.602 
4.882 
60.366 
0,911 
61.277 % 
b/a 
74% 
73% 
67% 
74% 
65% 
63% 
70% 
73% 
20% 
70% 
64% 
74% 
68% 
IV PROVISIONAL 
Notas: BUDGET: Appropriations avatabh In budgav CV Commhmants; Pi Payments 
11) Including appropriations for Images (Spot Image and Eurimagal. They wan m the reserve end transferred on 21.4.1994. 
12) This regulation concerns Portugal 
13) No atocathn by country. 
(41 Appropriation to cover costs of outside consultants. 
Page 1 
82580000.X75 
BUDGETfTEMB 1-3600 - UTILIZATIONOF BUDGET APPROPRIATIONS 19931V 
INITIAL APPROPRIATION C/P: 22 * 60 m reserve - ECU 62 mUton 
FINAL APPROPRIATION C/P AFTER TRANSFER - ECU 62 mMOon (ECU motion) Table lÇ 
BE 
DK 
DE 
EL 
ES 
FR 
IRL 
IT 
LU 
NL 
PT 
UK 
TOT. REG. 307/91 . 
BUDGET 
1.137 
0.878 
3 
2 
2 
4.127 
0.642 
. X36 
0 
1.749 
1.016 
1.636 
20 L 
C 
a 
1.137 
0,878 
2.626 
1.524 
1.605 
4.127 
0542 
3.36 
0 
1.749 
1.016 
1.636 
20 HWtath 
P 
b 
0.1» 
0.7 
1.6 
0,19 
0.8 
0.X3 
2 
0.26 
0.47 
0 
2.32 
0.46 
0,17 
104 n 
% 
b/e 
17% 
80% 
69% 
13% 
60% 
80% 
62% 
14% 
o% 
132% 
46% 
11% 
62% REG. 3608/92 
BUDGET 
1.180 
1.2O0 
6.060 
4.380 
9.060 
7,300 
2.260 
10.050 
0.300 
1.600 
2.880 
4.960 
60.000 
(1) L 
C 
e 
1,160 
1,200 
8.050 
4.360 
9.06 
7.3 
2,260 
10.080 
0.300 
1.600 
2,66 
4.960 
60.000 ftfttoaffe 
P 
b 
0.646 
1.200 
6.06 
1.93 
9.06 
7.3 
2.26 
tat 
0.04 
1.8 
0.62 
4.96 
46 n 
% 
b/a 
74% 
10O% 
100% 
44% 
100% 
100% 
100% 
100% 
12% 
100% 
29% 
100% 
90% REMOTE,SENSING 
BUDGET 
0.202 
0,211 
0.889 
0.766 
1.699 
1.266 
0.396 
f. 77 
0.063 
0.284 
0.602 
0.872 
8.604 
(11 C 
e 
0.202 
0.211 
0.889 
a 786 
1.893 
1.286 
0,396 
1.77 
0.069 
O 264 
0.602 
0.672 
8.804 Jtikxadon 
P '%• 
» bAt 
0.202 
0,211 
0.303 
0-
1.693 
0.616 
0,398 
1.77 
0 
0,284 
0.192 
D872 
6.618 100% 
100% 
34% 
0% 
100% 
66% 
100% 
100% 
0% 
100% 
38% 
100% REMOTE SENSING IMAGES 
BUDGET 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ . 
-A~ 11) (2) 
'* "" 1.197 Utitaetion 
C P 
e b 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
1.197 / 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
1.069 % 
bAt 
/ 
/ 
/ . 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
69% REG. 
3151/90 
SINQA(3I 
BUO. 
1.000 
1.000 Util. 
OP 
0 
0 REG. 595/91 
14) 
BUO. 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.600 UtM. 
OP 
0 CONSULT. 
3608/92 
(6) 
BUD. 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.500 Util. 
OP 
/ 
/. 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
/ 
0.121 
0.108 TOTAL 
BUDGET 
2.49 
2.289 
6.465 
6.64 
12.248 
12.712 
3.188 
16.18 
0363 
3.613 
6.368 
7.368 
79.803 
2.197 
82.000 C 
a 
2.49 
2.289 
8.466 
6,640 
1226 
12.71 
3.188 
18.18 
0.363 
X613 
4.368 
rtfffft 
1.318 
•81,12 Utmzatlon 
P % 
b b/a 
1.24 
2.11 
6.85 
2.12 
11.4 
11.3 
2.93 
12.3 
004 
4.08 
1.46 
6 
—sr— 
1,167 
M3J03. 60% 
92% 
81% 
32% 
93% 
89% 
92% 
81% 
10% 
116% 
34% 
81% 
78% 
Notas: BUDGET: Appropriations avatable m budget; C- Commitments; P: Payments 
(1) These appropriations were In the réserve end were transfamd. 
(21 No allocation by country. The appropriation Is for two companies. Spot Image and Eurimaga. 
(31 This regulation concerns Portugal. 
(4) No allocation by country. 
(5) Appropriation to cover costs of outside consultants. 
Page 2 
TABLE ?7 g^SSoooo. r% 
FRAUD FKEVENTION APPROPRUTIONS - 1995 BUDGET 
ITEM DESCRIPTION AMOUNT (ECU) 
A-2554 Conferences, congresses and meetings in connection with 
the activities of the associations of European lawyers for 
the protection of the financial interests of the Community 260.000 
A-3530 Unit to coofdinate action against fraud 200.000 
A-3531 Controls, stndies and analyses in connection with the fight 
against fraud 2.808.000 
A-3532 Fraud suppression in the textile sector (TAFI) 800.000 
A-355 European documentation, coordination and study network 
to control cross-border crime and fraud 350.000 
Bl-360 Measures to combat fraud affecting the European 
Agricultural Guidance and Guarantee Fund - Guarantee 
Section 85.000.000 
B2-101 Measures to combat fraud affecting the European 
Agricultural Guidance and Guarantee Fund - Guidance 
Section 200.0001 
B2-111 Measures to combat fraud affecting the Financial 
Instrument for Fisheries Guidance 50.0001 
B2-121 Measures M combat fraud affecting the European Regional 
Developme* Fund 300.0001 
B2-131 Measures to combat fraud affecting the European Social 
Fund 200.000' 
B2-301 Measures to combat fraud affecting the Cohesion Fund 300.000' 
B2-511 Inspection It agriculture' 32.500.000 
B2-519 Campaign against fraud in agriculture 1.500.0001 
B5-3051 Community action programme concerning vocational 
training for customs officials (Matthaeus) and tax officials 
(Matthaeus-Tax) 3.000.000 
B5-800 Cooperation in the fields of justice and home affairs S-cmouo1 
B6-910 Actions to combat fraud in the area of research 
(shared-cost) 50.0001 
B7-530 Measures to combat fraud in the cooperation sector 100.000» 
Appropriations entered entirely in Chapter BO-40 
Figure 5 
FRAUD PREVENTION APPROPRIATIONS 1995 
Breakdown by major areas 
Area 
EAGGF - Guarantee 
Agriculture (inspections) 
Cooperation justice 
• Training, miscetaneous 
• Information on customs and indirect taxation 
• Technical assistance and self-assistance concerning the 
Structural Funds, the Cohesion Fund, agriculture and other sectors Budget 
heading 
Bl-360 
82-511 
BS-8 
A 
BS-3 
B2 - B6 - B7 
TOTAL Amount 
«ECU thousand) 
85000 
32500 
5000 
4418 
3000 
2700 
132618 
/!*>•) 

ISSN 1024-4492 
KOM(95) 98 lopullinen^ 
ASIAKIRJAT 
FI 01 02 
LuettelotLumero : CB-CO-95-124-FI-C 
ISBN92-77-87189-X 
Euroopan yhteisöjen virallisten julkaisujen toimisto 
L-2985 Luxembourg 
ilo