WRITTEN QUESTION E-1894/01 by Konstantinos Hatzidakis (PPE-DE) to the Commission. Monitoring of projects jointly funded under the 2nd CSF in Greece.
Date: 2001-06-28
Institutions: European Parliament, Provisional data
Subjects: Community support framework, European Anti-fraud Office, Greece, Structural Funds, co-financing, financial control, management, public works

6.6.2002

EN

Official Journal of the European Communities

C 134 E/5

(2002/C 134 E/005)

WRITTEN QUESTION E-1846/01

by Esko Seppänen (GUE/NGL) to the Commission

Subject: Finnish system of tax credits on dividends

(26 June 2001)

It is clear that the system of tax credits on dividends applicable in Finland disproportionately favours
Finnish shareholders over foreign shareholders. Has the Commission considered this unusual system, and
does it intend to take any action to ensure the equal taxation of national and foreign shareholders?

Answer given by Mr Bolkestein on behalf of the Commission

(3 September 2001)

The question posed by the Honourable Member on the Finnish system of tax credits on dividends raises
the difficult issue of the compatibility of imputation systems with Community law.

In the light of recent case-law of the Court of Justice, there could be serious doubts about the compatibility
of some such systems with Community law insofar as they may entail restrictions on the right of
establishment and the free movement of capital. This would be the case where a domestic shareholder
obtains full or partial relief, for instance by means of a tax credit for the tax paid at corporate level,
whereas no corresponding relief is given to a foreign shareholder. The Commission is planning to discuss
this general issue with all Member States at a meeting in the autumn of 2001. Based on the outcome of
these discussions, the Commission will consider any further action to be taken, including, if necessary, the
opening of proceedings under Article 226 (ex Article 169) of the EC Treaty.

In this context it should also be noted that the issue of dividend taxation in general is one of the topics to
be covered in a study on company taxation which is currently being conducted by the Commission at the
request of the Council, and which is scheduled to be published in autumn 2001

(2002/C 134 E/006)

WRITTEN QUESTION E-1894/01

by Konstantinos Hatzidakis (PPE-DE) to the Commission

(28 June 2001)

Subject: Monitoring of projects jointly funded under the 2nd CSF in Greece

Is the Commission satisfied with the system of monitoring the proper management and transparency of
programmes jointly funded under the 2nd CSF in Greece? What is the extent of the infringements detected
and what penalties have been imposed?

In particular, does the Commission consider that the system works in a totally satisfactory way in respect
of penalties imposed for defective work in carrying out public contracts? Does OLAF (the Anti-Fraud
Office) have all information about defective work? What additional measures should the Greek authorities
take?

Answer given by Mr Barnier on behalf of the Commission

(17 September 2001)

For the 1994-1999 programming period, the Commission would remind the Honourable Member that,
under Article 23 of Council Regulation (EEC) No 2082/93 of 20 July 1993 (1), the Member States are
chiefly responsible for checking that part-financed operations are properly carried out, providing
supporting documents on the relevant expenditure, preventing and taking action against irregularities,
and recovering any amounts wrongly paid.

C 134 E/6

Official Journal of the European Communities

EN

6.6.2002

five
Where Greece is concerned, nine decisions on corrections were taken in 2000. During 1999,
corrections totalling € 837 334 were imposed on Greece. The payment period will run until the end of
2001 at national level, while controls may be carried out until 2004 under the rules in force.

It should however be recalled that, in view of the multi-annual nature of the Structural Fund programmes,
many other corrections are made by Member State authorities as a result of
the findings and
recommendations of national or Community audit bodies without the need for a formal Commission
decision, as they are made during the implementation period of the programmes.

The Commission would also emphasise that most of its corrections for the 1994-1999 programming
period will be made after 30 June 2002, when final payment claims are submitted. Member States will
then be required to append a statement by an independent service summarising the conclusions of the
audits carried out in previous years (2). At that point, if the Commission is not satisfied that adequate
action has been taken in respect of the findings of the audits (particularly regarding systemic errors or the
recovery of irregular payments), it may impose corrections.

In the meantime the Commission has intensified its audits in all Member States, including Greece, and is
actively promoting performance controls (value for money) and focusing on the development of an
improved audit culture and organisational capacity within the Greek administration.

Under Commission Regulation (EC) 1681/94 of 11 July 1994 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 (3), the European Anti-Fraud Office (OLAF) has indicated that it has
received thirty-three communications from the Greek authorities on shortcomings relating to public works
carried out under the Community support framework for Greece during the 1994-1999 programming
period. More precise details have been requested from the authorities, who have undertaken to provide
appropriate answers.

The Commission does not currently possess information on the action taken in respect of the different
cases in which shortcomings were noted in the context of public works part-financed under the Structural
Funds in Greece. The Commission formally requested this information from the Greek authorities on
29 January 2001. A reminder was sent recently.

During the new Structural Funds programming period (2000-2006), the Commission will exercise in full
its significant control responsibilities and powers, as they are described in Council Regulation (EC)
No 1260/1999 of 21 June 1999 laying down general provisions on the Structural Funds (4) and the
Regulations on its implementation (5) (6). These Regulations define the Member States’ duty to set up
properly functioning management and control systems and the Commission’s responsibility for checking
their effectiveness, suggesting improvements and imposing financial corrections if necessary.

The Commission considers that the above-mentioned measures constitute a sufficient framework to allow
it to verify the sound management of operations in all Member States, and to make financial corrections
when irregularities occur.

(1) Council Regulation (EEC) No 2082/93 of 20 July 1993 amending Regulation (EEC) No 4253/88 laying down
provisions for implementing Regulation (EEC) No 2052/88 as regards coordination of the activities of the different
Structural Funds between themselves and with the operations of the European Investment Bank and the other
existing financial instruments, OJ L 193, 31.7.1993.

(2) Under Article 8 of Commission Regulation (EC) No 2064/97 of 15 October 1997 establishing detailed
arrangements for the implementation of Council Regulation (EEC) No 4253/88 as regards the financial control by
Member States of operations co-financed by the Structural Funds, OJ L 290, 23.10.1997.

(3) OJ L 178, 12.7.1994.
(4) OJ L 161, 26.6.1999.
(5) Commission Regulation (EC) No 448/2001 of 2 March 2001 laying down detailed rules for the implementation of
Council Regulation (EC) No 1260/1999 as regards the procedure for making financial corrections to assistance
granted under the Structural Funds, OJ L 64, 6.3.2001.

(6) Commission Regulation (EC) No 438/2001 of 2 March 2001 laying down detailed rules for the implementation of
Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted
under the Structural Funds, OJ L 63, 3.3.2001.