Report from the Commission - Protection of the Financial Interests of the Communities and fight against Fraud - Annual Report 2001 -
Date: 2002-07-02
Institutions: European Commission
Subjects: EU control, action programme, activity report, cooperation policy, financial control, financial interests of members, financial policy, fraud, fraud against the EU, market protection, statistics

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 6.8.2002
COM(2002) 348 final/3

Corrigendum:
concerne les versions FR,DE,EN et DA
Points : 9.- 9.2.(2è. graphique, et paragraphes 2è. et dernier)-
10.2.(dernier paragraphe)–11.2.(prémier graphique, premier paragraphe
et 2è. paragraphe)
et les annexes 2, 3, 4 et 8.

REPORT FROM THE COMMISSION

PROTECTION OF THE FINANCIAL INTERESTS OF THE COMMUNITIES AND
FIGHT AGAINST FRAUD
- ANNUAL REPORT 2001 -

TABLE OF CONTENTS

Summary .................................................................................................................................... 5

Title 1 –The activities of the Community for the Protection of the Communities’ financial
interests and the fight against fraud............................................................................................ 6

1.

2.

2.1

2.2

2.3

2.4

3.

MAJOR DEVELOPMENTS IN COMMUNITY POLICY IN 2001 .......................... 6

EXAMPLES OF INTERNAL AND EXTERNAL COOPERATION AND
PARTNERSHIP WITH THE NATIONAL AUTHORITIES.................................... 13

Sugar export to the OCT and reimportation of sugar and sugar mixtures into the
European Community. ............................................................................................... 13

Abuse of the dairy quota systems. ............................................................................. 14

Investigation for alleged forgery and fraud by a group of NGOs (non-governmental
organisations) ............................................................................................................. 15

Past experience in the applicant countries: Poland .................................................... 16

MONITORING THE 2001-2003 ACTION PLAN ................................................... 17

Title II: Measures taken by the Member States for the implementation of Article 280 of the
EC Treaty ................................................................................................................................. 36

4.

4.1.

4.2.

4.3.

5.

5.1.

5.2.

6.

6.1.

6.2

TEXTS CONTRIBUTING TO THE IMPLEMENTATION OF ARTICLE EC 280 –
PRINCIPAL LEGISLATIVE DEVELOPMENTS ................................................... 37

Own resources: principal legislative developments................................................... 37

Agricultural expenditure: principal legislative developments ................................... 39

Structural measures: principal legislative developments ........................................... 41

COMPLEMENTARY TEXTS FOR THE PROTECTION OF COMMUNITY
FINANCIAL INTERESTS ........................................................................................ 43

What is the state of ratification by the Member State of the Convention of 26 July
1995 on the protection of the European Communities’ financial interests and its
protocols ? .................................................................................................................. 43

Where appropriate, has the Member State taken steps to transpose this Convention
and these protocols? (This relates to measures taken after the adoption of the 2000
Annual Report in May 2001). .................................................................................... 44

COORDINATION OF SERVICES CHARGED WITH THE PROTECTION OF
FINANCIAL INTERESTS WITHIN EACH MEMBER STATE............................. 47

Own resources: coordination and cooperation mechanisms, possible difficulties at
legislative or regulatory level..................................................................................... 48

Agricultural expenditure: coordination and cooperation mechanisms, possible
difficulties at legislative or regulatory level............................................................... 52

2

6.3.

7.

8.

8.1.

8.2.

Structural measures: coordination and cooperation mechanisms, possible difficulties
at legislative or regulatory level................................................................................. 62

COMMENTS ON COOPERATION BETWEEN THE COMPETENT
AUTHORITIES OF THE MEMBER STATES (Article 280(3), of the EC Treaty) . 69

RECOVERY .............................................................................................................. 69

Legislative mechanisms and administrative provisions for the judicial authorities to
communicate the outcome of criminal proceedings to the administration, for the
purposes of recovery .................................................................................................. 70

Measures to improve the recovery of resources and of undue expenditure –links
between the control and investigation authorities and those charged with recovery. 77

8.3.

Daily liaison between the control authorities and those responsible for recovery..... 82

Title III: STATISTICS AND ANALYSES ............................................................................. 87

INTRODUCTION.................................................................................................................... 87

9.

9.1

9.2

9.3

9.4

THE SITUATION IN 2001 ....................................................................................... 89

Traditional Own Resources........................................................................................ 89

Agricultural expenditure (EAGGF Guarantee).......................................................... 92

The field of structural measures................................................................................. 94

Cases under investigation by OLAF .......................................................................... 94

10. SPECIFIC ANALYSIS ...................................................................................................... 98

10.1

10.2

10.3

11

11.1

11.2

11.3

11.4

The field of traditional own resources ....................................................................... 98

Agricultural expenditure (EAGGF Guarantee).......................................................... 98

The field of structural measures................................................................................. 99

FINANCIAL FOLLOW-UP .................................................................................... 103

Traditional own resources ........................................................................................ 103

EAGGF Guarantee Expenditure .............................................................................. 105

Structural Actions .................................................................................................... 106

Direct Expenditure (including external aid)............................................................. 107

3

REPORT FROM THE COMMISSION

PROTECTION OF THE FINANCIAL INTERESTS OF THE COMMUNITIES AND
FIGHT AGAINST FRAUD - ANNUAL REPORT 2001

4

Summary

The  Commission  submits  herewith  its  third  annual  report  on  the  protection  of  financial
interests of the Communities and the fight against fraud, in accordance with Article 280(5) of
the EC Treaty. To give an account of the shared responsibility of the Member States and the
Community, the report presents in turn:

– 

– 

– 

an  evaluation  of  the  Community’s  legislative  and  regulatory  activity  in  2001,
accompanied by an illustration of cooperation with the Member States, the applicant
countries and the third countries (Title I);

a presentation of the measures taken by the Member States pursuant to Article 280 of
the  EC  Treaty,  in  particular  legislative  measures  and  measures  concerning  the
organisation of enforcement authorities (Title II);

a  statistical  evaluation  of  the  results  of  activities  to  protect  financial  interests  and
combat fraud undertaken by the Member States and the Commission in 2001 (Title
III).

The  aim  of  this  document  is  to  present  the  combined  action  of  all  those  involved  in  the
protection of the Community’s financial interests and to give concrete expression to the aims
of  general  and  shared  responsibility  of  the  Member  States  and  the  Community.  The  report
considers  the  action  undertaken  by  all  the  national  authorities  and  the  Commission,  both  in
prevention  terms  and  in  terms  of  the  fight  against  economic  and  financial  crime  to  the
detriment of the Community’s interests. It follows the broad approach of the Action Plan1 and
in this sense it is not strictly limited to actions based on art. 280 of the Treaty.

Lastly, it meets the need for permanent and transparent evaluation of Community policies to
which  the  Commission,  Parliament  and  the  Council  are  all  attached2.  Moreover,  the
Commission  regularly  meets  with  representatives  of  national  authorities  as  well  as  with
members of its own services in order to continue to improve the evaluation of the protection
of financial interests3.

1

2

3

Commission  Communication  –  Protection  of  the  Communities’  Financial  Interests  –  Fight  against
Fraud : Action Plan for 2001-2003 (COM(2001) 254 final).
Conclusions  of  the  ECOFIN  Council  of  7  May  2002  point  13  and  Resolution  of  the  European
Parliament on the Annual Report 2000, para. 2.
The Advisory Committee for Coordination for Fraud Prevention met three times in 2001, just like the
Working Group Article 280. The services of the Commission met twice to this purpose in 2001 as well.

5

                                                
TITLE 1 –THE ACTIVITIES OF THE COMMUNITY FOR THE PROTECTION OF THE
COMMUNITIES’ FINANCIAL INTERESTS AND THE FIGHT AGAINST FRAUD

1. 

MAJOR DEVELOPMENTS IN COMMUNITY POLICY IN 2001

The Commission established its general political objectives regarding the protection
of financial  interests  in the Overall Strategic Approach,  adopted  on  28  June  2000,4
the scope of which is multiannual (2001-2005). The aim of the Community approach
is to develop a legislative and regulatory framework covering all Community policies
and  allow  exchanges  and  cooperation  between  those  actively  involved  in  the
Commission  and  the  Member  States,  in  accordance  with  the  principle  of  shared
responsibility  laid  down  by  Article  280  of  the  EC  Treaty.  This  approach  was
approved  by  the  Economic  and  Financial  Affairs  Council  on  17  July  2000  and  by
Parliament in its Resolution of 13 December 20005.

On 15 May 2001, the Commission adopted a  2001-2003 Action  Plan  to implement
the political objectives defined by the Overall Strategy and allow the presentation of
tangible  and  measurable  results.  Parliament  and  the  Council  welcomed  the  method
followed in the Action Plan for the implementation of the Strategy and approval the
proposed formula of regular evaluation and monitoring.

1.1. Prevention provides the key to an overall and coherent anti-fraud policy. This is
why  the  Commission  developed  the  preventive  measures  to  take  into  account  the
protection of financial interests right from the legislative drafting stage, an approach
welcomed very warmly by Parliament and the Council.6 The Commission, under the
White Paper on Commission reform7 (Action 94), developed an approach intended to
ensure “fraud-proofing”  of instruments  or  measures  concerning  the  management  of
the  Community  funds.  This  action  seeks  to  identify  weaknesses  in  Community
legislation and contractual mechanisms which certain external operators are keen to
exploit8. These weaknesses are then corrected in the course of preliminary review of
sensitive legislative drafts, in the light of lessons learned on the ground, and OLAF is
routinely consulted.9

4

5

6

7

8

9

The  four  strategic  guidelines  are  to:  promote  an  overall  anti-fraud  policy;  promote  a  new  culture  of
cooperation  with  the  competent  authorities  of  the  Member  States;  encourage  an  inter-institutional
measure to prevent and combat corruption and strengthen the credibility  of  the  European  institutions;
strengthen  the  criminal  judicial  dimension  in  accordance  with  the  new  obligations  resulting  from  the
Treaties (COM(2000) 358 final, 28.6.2000).
Council conclusions of 17.7.2000 on the Commission communication concerning the protection of the
financial interests of the Communities - Fraud prevention: for an overall strategic approach (document
10344/00 FIN 273). Parliament Resolution of 13.12.2000 on “Strategic Overall  Approach” (Doc. A5-
0376/2000).
Conclusions of the Economic and Financial Affairs Council of 15.6.2001 (document 9270 FIN 169). In
its Resolution of 29.11.2001 on the annual Report 2000, European Parliament makes fraud-proofing of
new legislation one of the four major measures likely to bring a qualitative leap forward in the efforts to
combat (Doc A5-2001-393).
Commission Reform – White Paper (COM(2000) 200 final/2 of 5.4.2000).
Commission  Communication  concerning  fraud  proofing  of  the  legislation  and  contract  management
adopted on 07.11.2001 (SEC (2001)2029 final).
Parliament  Resolution  on  the  annual  Report  2000  and  Council  (Conclusions  of  15  June  2001)  have
noted the value added by involving OLAF in the fraud-proofing of legislation.

6

                                                
This  approach  is  concerned  as  a  priority  with  horizontal  initiatives  that  affect  all
Community policies and are of interest to all those involved in implementing them.
Among  those,  public  procurement  is  a  field  where  the  Commission  and  Member
States are equally interested in an effective dissuasion and warning mechanism. This
constitutes one of the issues of the proposal for a Parliament and Council Directive
on  the  coordination  of  procedures  for  the  award  of  public  contracts  and  of  the
specific initiative on an information exchange system between the Member States10.
Work on these proposals is continuing in the Council.  In addition, the Commission
has proposed specific antifraud provisions for the recast of the Financial Regulation
which has been adopted on 25 June 2002.

To protect the authenticity and credibility of the common currency, the Council, on a
Commission  proposal,  adopted  Regulations  Nos  1338/2001  and  1339/2001  on  28
June 200111. These Regulations provide the legislative basis for cooperation between
all  the  institutional  actors  concerned  (ECB,  Europol,  Commission/OLAF12),  the
central  offices  and  other  competent  authorities  of  the  Member  States,  and  non-
member  countries.  As  regards  the  protection  of  the  euro  by  the  criminal  law,  the
Commission  submitted  to  the  Council  a  first  report  on  the  implementation  by  the
Member States  of  the  provisions  of  the  framework  Decision.13  In  general,  Member
States  discharged  their  obligations.  In  December  2001,  the  Council  adopted  the
Pericles  programme14.  This  programme  co-finances  transnational  and  multi-
disciplinary projects on exchanges, assistance and training, for the protection of the
euro against counterfeiting.

2001  also  saw  the  adoption  of  the  Directive  on  the  prevention  of  the  use  of  the
financial  system  for  the  purposes  of  money  laundering15.  The  purpose  of  this
Directive  is  to  update  the  1991  Directive  and  extend  its  scope  by  a  number  of
amendments, the main ones of which are as follows: expansion of the prohibition of
money laundering to cover not only drug trafficking but also organised crime and a
wide variety of serious offences, on the other hand extension of the obligations of the
Directive to certain non-financial activities and professions.

10

11

12

13

14

15

In  compliance  with  the  action  programme  on  organised  crime  established  by  the  high  level  group
created  by  the  European  Council  of  Dublin  in  December  1996,  and  its  political  orientation  N°  13
(adopted by the Council on 28 April 1997, OJ C251 of 15.08.1997).
Council  Regulation  (EC)  No  1338/2001  of  28  June  2001  defining  the  measures  necessary  for  the
protection  of  the  euro  against  counterfeiting  -  OJ  L  181,  4.7.2001;  and  Council  Regulation  (EC)  No
1339/2001 of 28 June 2001 extending the effects of the Regulation No 1338/2001 defining the measures
necessary  for the protection of the euro against the false coining to the Member States  which did not
adopt the euro as a single currency - OJ L 181, 4.7.2001.
Concerning  false  euro  coins,  a  European  Technical  and  Scientific  Centre  (CTSE)  has  been  set  up  in
accordance with the exchange of letters between the President of the Council and the French Minister
for finance, managed by two Commission/OLAF officers.
Commission Report based on Article 11 of the Council Framework Decision of 29.5.2000 to strengthen
by  criminal  and  other  penalties  the  protection  against  counterfeiting  for  the  entry  into  service  of  the
euro (COM (2001) 771 final of 13.12.2001).
Council Decision of 17.12.2001 drawing up an action programme on exchanges, assistance and training
for the protection of the euro against counterfeiting (“Pericles “programme) (Decision 2001/923/EC) –
OJ L 339, 21.12.2001.
Directive  2001/97/EC  of  the  European  Parliament  and  the  Council  of  4.12.2001,  amending  Directive
91/308/CEE of the Council on prevention of the use of the financial system for the purpose of money
laundering.- OJ 344 of 28.12.2001

7

                                                
The  desired  overall  nature  of  the  approach  to  effective  protection  of  financial
interests requires the applicant states to take part in the Community policy to achieve
prevention aims. From this point of view 2001 was a year of consolidation of efforts
made  by  the  Commission  to  prepare  for  enlargement  by  encouraging  the
establishment  of  financial  management  and  control  structures,  including  internal
audit, in the relevant central and regional administrations. The emphasis in 2001 was
to  set  up  internal  audit  units  in  all  Community  funds  management  centres  in  both
central and regional administrations.

The correct use, control, monitoring and the evaluation of Community pre-accession
financing  (in  particular  under  the  PHARE,  ISPA  and  SAPARD  programmes)
constitute  the  key  indicator  of  the  applicant  countries’  capacity  to  implement  the
‘acquis  communautaire’  as  regards  financial  control.  With  regard  to  fraud
prevention,  the  constitution  in  Poland  of  a  specific  office  responsible  for  the
protection  of  the  Community’s  financial  interests  began  early  in  2001.  Experience
gained this year will be used when corresponding structures are established in all the
applicant countries.

In  addition,  the  conclusion  of  an  agreement  by  the  Community  and  the  Member
States  with  Switzerland  covering  the  fight  against  fraud  was  given  priority  status,
with a view in particular to remedying the difficulties of judicial assistance in tax and
customs matters. On 14 December 2000, the Commission had been given a mandate
to negotiate with the Swiss authorities. Negotiations took place during the whole year
2001, but they have not yet led to results.

For the aspect relating to the strengthening of legal instruments governing detection,
checks and inspections and penalties, as far as internal measures are concerned, the
majority of decisions in principle taken at the end of 2000 were implemented by the
Commission in 2001, in particular with a view to improving financial management16.
As  regards  direct  management  by  the  Commission  and  the  management  of
Community  funds  by  the  Member  States,  following  the  Communication  on  White
Paper action 96 (More effective management of the collection of unduly paid funds
in the field of direct expenditure), the principle of increased awareness of authorising
and accounting officers was laid down. The Commission is preparing implementing
provisions  to  ensure  a  sound  distribution  of  tasks  between  authorising  officers,
accounting officers, the Legal Service and OLAF.

The  Structural  Funds  (Action  97  of  the  White  Paper)  obtained  an  improved  legal
framework  for  financial  management  with  the  adoption  of  two  Regulations
applicable  to  the  new  programming  period  in  March  200117.  The  Member  States’
obligations  as regards  monitoring  of  projects  and  payments  were  specified  in  these
instruments. The strengthening of financial control for the new programming and the
finalisation of the interdepartmental protocols provided  for in the  recommendations
of  the  White  Paper  on  Reform  of  the  Commission  are  to  provide  a  solution  to

16

17

These measures are essentially based on Chapter V - XXIV of the White Paper on Commission Reform,
concerning renovation of financial circuits and financial  control  and  the  creation  of  an  Internal  Audit
Service and Internal Audit Capabilities (IAC).
Commission Regulations (CE) 438/2001 and 448/2001 of 2.3.2001 (OJ L 63, 3.3.2001, and OJ L 64,
6.3.2001) laying down the detailed rules for the application of Council Regulation (EC) 1260/1999 on
the systems of management and of control on the one hand, on the procedure of implementation of the
financial corrections on the other hand.

8

                                                
comments  made  by  the  Court  of  Auditors,18  in  particular  on  the  notification  and
monitoring of irregularity cases.

1.2.  The  aim  of  efforts  to  develop  a  new  co-operation  culture  with  the  Member
States  is  to  draw  the  conclusions  from  the  shared  responsibility  of  the  Community
and  the  Member  States  for  the  protection  of  financial  interests.  The  purpose  of  the
concept  of  the  OLAF  as  a  platform  of  services  is  to  set  up  a  genuine  long-term
partnership with the Member States,19 to facilitate synergy between the Community
and  national  levels,  having  regard  to  the  principles  of  proportionality,  subsidiarity
and effectiveness.

From the Community point of view, OLAF must be able to respond to the demand
from  the  Member  States  for  better  fraud  prevention.  To  achieve  this  objective,
without  prejudging  its  Community  prerogatives,  the  European  Anti-Fraud  Office  is
organising itself to give practical effect to the concept of the “Community platform
of  services”,  reflecting  its  responsibilities  and  tasks  in  organisational  terms  and
making the internal distribution of tasks more visible. Stabilised in these terms, the
added value that the Community level can supply will be more explicit and it will be
easier to satisfy the national authorities’ need for an interface.

An important step in consolidating OLAF was taken in 2001 with the establishment
of  an  Intelligence  Directorate  which,  by  developing  strategic  and  operational
analysis, will help to improve the Commission’s operational strategy and to assist the
national  administrations  to  define  their  priorities  in  the  fight  against  fraud.  With
regard to information on  the  detection  of  fraud  and  irregularities  from  the  Member
States, this new directorate should make it possible in the long term to improve the
quality of the information provided by the Member States. As explained at Title III
of this report, the setting up of new computer modules for the notification of frauds
and  irregularities  was  accompanied  by  training  activities  in  the  Member  States
throughout  2001.  OLAF  also  organised,  jointly  with  the  national  administrations,
some  twenty  training  sessions  on  different  aspects  of  the  fight  against  fraud,  to
enhance the exchange of best practices and to fulfil specific needs.

investigations,  among  other 

In  addition,  a  unit  of  magistrates  and  judicial  advisers  was  set  up  in  the  Office  to
the
monitor  OLAF 
administrative and judicial dimensions, this expertise will make it easier to integrate
the Office into the broader network of national actors concerned. This mainly means
the  customs  and  tax  authorities  and  the  police  and  prosecution  authorities,  whose
assistance  is  requested  by  the  Office  and  who  also  require  assistance,  if  financial
interests  are  to  be  given  the  fullest  possible  measure  of  protection,  including
protection by criminal law.

incorporating 

things.  By 

Moreover,  OLAF  is  pursuing  reflections  with  the  Member  States  to  give  the
Advisory  Committee  for  the  Coordination  of  Fraud  Prevention  (CoCoLaF)  its  full
dimension. The frequency of meetings and the structuring of the Committee’s work

18

19

Report 10/2001 relating  to  the  financial  control  of  the  Structural  Funds  (OJ  C  314,  8.11.2001). In  its
Resolution  on  the  Commission  2000  Annual  Report,  Parliament  was  alarmed  at  the  very  incomplete
character of information provided the Commission on the irregularities in certain fields of the Structural
Funds.
In  its  Conclusions  on  the  overall  Strategy,  the  Economic  and  Financial  Affairs  Council  stressed  its
importance.

9

                                                
increased notably in 2001, with a view in particular to deepening the dialogue with
national authorities. The ad hoc group of national experts on counterfeiting boosted
the  Commission’s  expertise  in  preparing  a  common  legislative  mechanism  in  this
field. And the ad hoc “Article 280” group made it possible to bring the experts of the
Member States together to work specifically on the annual report so as to make the
procedure  for  drawing  up  of  the  Report  provided  for  by  Article  280  of  the  Treaty
more  transparent  and  develop  the  participation  of  the  Member  States  in  this
procedure  more  fully.  In  addition  national  experts  on  counterfeiting  enhanced  the
Commission expertise to set a legal framework in this field.

The Commission recently joined with ten Member States in commencing an action in
the US courts to combat massive threats of cigarette smuggling and organised crime,
including money laundering, in the European Union. These illicit activities seriously
undermine the common vital interests of the Community and the Member States. In
this case the Commission acts as a service platform, by offering the Member States
its  assistance  in  proceedings  in  the  courts  of  a  non-member  country,  and  thus
facilitates a coordinated initiative by the Member States. The Commission serves as
the Member States’ legal representative in these proceedings, and is responsible for
coordinating  the  action  of  the  Member  States  and  liaison  with  the  U.S.  lawyers
representing the Community and the 10 Member States in the U.S. court.

In  addition,  within  the  framework  of  its  own  Resource  controls,  the  Commission
carried  out,  during  2001,  verification  missions  in  all  the  Member  States  on  the
specific  topic  of  the  Treatment  of  the  mutual  assistance  messages.  The  purpose  of
these missions was to check that the national systems and the procedures put in place
by  the  Member  States  ensure  adequate  protection  of  the  traditional  own  resources
while at the same time contributing to effective collaboration with the Commission.
The subject report made on this topic leads to a positive conclusion.

Additionally, in the field of the traditional own resources, the Commission, and more
particularly  the  Directorate-General  for  the  Budget,  continues  its  work  under  the
Joint  Audit  Arrangement20,  in  close  co-operation  with  the  internal  audit  services  of
the Member States. Member States take an active part in the work of the Audit sub-
group some of which are very closely involved in the development of audit modules.
With regard to the implementation of methodology by means of joint audits carried
out by the Member States, the assessment for 2001 is very positive, in particular in
view  of  the  results  which  confirm  the  method.  In  particular,  Denmark  and  Austria
carried  out  a  "joint  audit"  on  the  external  transit  procedure  and  the  Netherlands
continued  their  action  initiated  in  2000,  on  the  topic  of  “free  circulation”.  These
topics  had  been  decided  by,  mutual  agreement,  on  the  basis  of  the  audit  modules
approved by the Member States and the Commission.

Once the audit was completed, and on the basis of the audit reports which were sent
to it by these Member States, the Commission conducted, on the spot, an analysis of
all  the  work  undertaken,  with  close  attention  paid  to  the  evaluation  of  the  risk
analysis system, the validity of the conclusions, and any recommendations proposed,
having  regard  to  any  anomalies  identified  or  to  comments  made.  The  Commission
has  benefited  from  the  conclusions  of  the  reports  in  terms  of  impact  on  own
resources.  It will ensure that the  results of these  audits are  taken  into account  from

20

See report on the protection of the financial interests and fight against fraud, fiscal year 2000.

10

                                                
the  financial  point  of  view.  Of  course,  the  financial  consequences  were  officially
recognised  under  conditions  identical  to  those  which  would  result  had  the  control
been conducted by the Commission itself. Denmark, Austria and the Netherlands will
repeat the experience in 2002 .

1.3.  In  2001,  the  criminal  judicial  dimension  of  the  policy  of  protection  of  the
Community’s financial interests was itself strengthened at the operational level. The
judicial  advisers’  unit  provides  assistance,  advice  and  judicial  expertise  to  the
administrative  investigation  function  and  to  the  monitoring  of  investigations,  in
particular for effective cooperation with the national judicial and police authorities.

At the legislative level, since the European Council of Nice had not acted on its first
proposal,21  the  Commission  revived  the  debate  on  the  establishment  of  a  European
Prosecutor  responsible  for  the  criminal  protection  of  the  Communities’  financial
interests  by  adopting  a  Green  Paper22.  The  function  of  this  European  Prosecutor
would  be  to  coordinate  and  direct  the  investigation  and  prosecution  the  offences
against the financial interests of the Communities, subject to review by the national
courts, in order to remedy the fragmentation of the European law-enforcement area
and  the  relative  impunity  which  criminals  enjoy  as  a  result.  The  aim  of  the  Green
Paper  is  to  prompt  a  broad  public  debate,  the  results  of  which  will  be  sent  to  the
Convention on the Future of Europe for the next Intergovernmental Conference. This
initiative has for a long time been supported by Parliament23. Within the framework
of a Treaty amendment, it called for “a qualitative leap forward” in efforts to combat
fraud,  with  the  establishment  of  a  European  prosecutor  with  broad  jurisdiction  in
financial matters. The OLAF Supervisory Committee issued opinions supporting and
supplementing the Commission’s proposals.

In  addition,  in  spite  of  the  repeated  calls  from  the  Council24  the  ratification  of  the
Convention of 26 July 1995 concerning the protection of the financial interests of the
European Communities25 and the additional protocols to it is behind schedule, which
harms  effective  cooperation within the Union.  To  accelerate the  entry  into  force  of
these provisions, the Commission adopted a proposal for a Directive concerning the
criminal protection of the Community’s financial interests26. It aims to include in an
instrument  based  on  new  Article  280  of  the  EC  Treaty  all  the  provisions  of  the
Convention  and  its  protocols  which  relate  to  the  definition  of  offences,  liability,

21

22

23

24

25

26

Additional Commission contribution to the Intergovernmental Conference on Institutional Reform - The
Criminal Protection of the Community’s Financial Interests: a European Prosecutor, 29.9.2000, COM
(2000) 608 final. This contribution supplements the opinion of the Commission under Article 48 of the
Union Treaty on the meeting of a conference of the representatives of the governments of the Member
States with a view to amending the Treaties, adapting the institutions to make a success of enlargement,
of 26.1.2000, COM (2000) 34).
Green Paper on the criminal protection of the Community’s financial interests and the establishment of
a European Prosecutor, 11.12.2001 (COM (2001) 715 final). The site devoted to the green paper is as
follows: http://europa.eu.int/olaf/livre_vert.
Resolution  of  16.5.2000  on  the  Commission  Annual  Report  for  2000  (OJ  C  59,  23.02.2001),  and
Resolution  of  14  March  2001  on  the  Commission  Annual  Report  for  1999  (OJ  C  343,  5.12.2001),
asking the Commission to present such a proposal before 1 June 2001.
As in its conclusions of 17.7.2000 and its conclusions on the occasion of the Discharge 2000,
Council Act of 26 July 1995 drawing up the Convention on the protection of the financial interests of
the European Communities (OJ C 316, 27.11.1995).
Doc.COM(2001)272 final (OJ C240E of 28.08.01) adopted on 23.05.01.

11

                                                
penalties and cooperation with the Commission The European Parliament27 approved
the  Commission’s  proposal,  that  was  also  endorsed  by  the  European  Court  of
Auditors28. It is now for the Council to examine the proposal of the Commission.

A  permanent  structure  for  judicial  cooperation  was  set  up  (EUROJUST29)  and  the
decision  was  taken  to  extend  EUROPOL’s  remit  to  serious  forms  of  international
crime.30 The relationship between the respective powers of EUROPOL and OLAF in
the fight against certain forms of economic and financial crime is to  be determined
by a cooperation agreement between the two bodies. The institutions welcomed the
establishment  of  Eurojust  to  review  investigations  and  facilitate  proceedings  in  the
national courts. Regarding the substance of the matter, the Commission expressed a
clear opinion in the Council’s subordinate bodies as to the importance of organising
the close and regular  cooperation provided for by the Treaty (Article 280) with the
national  prosecution  authorities  and  cooperation  with  Eurojust.31  The  magistrates’
unit in OLAF is specifically responsible for this.

In addition, major progress was made with the strengthening of judicial cooperation,
in  particular  in  criminal  matters.  Political  agreement  was  reached  on  the
implementation  of  the  principles  of  mutual  recognition  of  judgements  (civil  and
criminal) and of harmonisation of criminal law in the priority fields identified by the
Tampere Summit (point 48 of the conclusions). The Commission presented proposals
for framework Decisions on the European arrest warrant32 and the harmonisation of
the  criminal  law  as  regards  trafficking  in  drugs33  and  terrorism34  (definitions  of
offences,  common  penalties).  In  addition,  in  the  context  of  action  to  combat  the
financing of terrorism and financial crime, a framework Decision on the freezing of
assets and assets deserves highlighting35.

1.4.  In  the  interinstitutional  fight  against  corruption,  it  is  important  to  maintain  a
sound  relationship  between  OLAF’s  main  tasks  under  the  legislation  and  of  the
current  disciplinary  and  financial  reforms  (Staff  Regulations,  and  Recast  of  the
Financial  Regulation).  In  this  context,  the  investigation  and  discipline  mechanism
will  be  complete  only  after  2001:  while  in  early  2002,  the  Commission  created  an

27

28

29

30

31

32

33

34

35

Legislative Resolution of 29.11.2001 on the proposal for a Directive of the European Parliament and the
Council on the criminal-law protection of the Community’s financial interests (doc. A5-390/2001, not
yet published in the OJ).
Opinion No 9/2001 of 8.11.2001 on a proposal for a Directive of the European Parliament and of the
Council on the criminal-law protection of the Community's financial interests (OJ C 14, 17.01.2002).
Council Decision 2002/187/JAI of 28.02.2002 establishing Eurojust to strengthen the fight against the
serious forms of crime (OJ L63, 6.3.2002), in particular Article 11.
Council Decision of 6.12.2001 (OJ C 362, 18.12.2001).
Commission  Declaration  39/02  on  Article  4,  para.1.b),  2nd  indent  and  Article  26(3)  of  Decision
2002/187/JAI.
Proposal  for  a  Council  Framework  Decision  concerning  the  European  arrest  warrant  and  surrender
procedures  between  Member  States  [COM(2001)  522  final  -  OJ  C  332  E,  27.11.2001].  The  Council
reached a political agreement on this subject in December 2001.
Proposal  for  a  Council  Framework  Decision  drawing  up  minimum  provisions  concerning  the
constituent  components  of  criminal  offences  and  the  applicable  penalties  in  the  field  of  the  drug
trafficking [COM(2001) 259 final, OJ C 304 E, 30.10.2001].
Proposal  for  a  Council  Framework  Decision  concerning  the  fight  against  terrorism  [COM(2001)  521
final, OJ C 332E, 27.11.2001].
Initiative  by  the  governments  of  the  French  Republic,  the  Kingdom  of  Sweden  and  the  Kingdom  of
Belgium  for  the  adoption  of  a  Council  Framework  Decision  concerning  the  implementation  in  the
European Union of orders freezing assets or evidence (OJ C 75, 7.3.2001).

12

                                                
Investigation and Disciplinary Office, the necessary amendments to the disciplinary
rules  in  the  Staff  Regulations  are  due  to  be  adopted  in  200336.  The  recast  of  the
Financial  Regulation,  adopted  on  25  June  2002,  provides  for  the  creation  of  an
instance specialised in questions regarding financial irregularities37 which will further
assist  enquiries  into  potential  financial  irregularities  without  infringing  on  OLAF’s
specific role in relation to fraud and serious professional wrong-doing.

Internal administrative investigations will be strengthened by the involvement of the
magistrates,  which  will  also  secure  the  protection  of  individual  rights.  All  the
institutions should now, therefore, be in a position to comply fully with Article 7 of
Regulation  No  1073/99  (exchange  of  information)38.  These  measures  are  likely  to
satisfy the concern expressed by Parliament and the Council39. In addition, the scope
of the internal investigations has been clarified by the Community courts40.

2. 

EXAMPLES  OF  INTERNAL  AND  EXTERNAL  COOPERATION  AND  PARTNERSHIP  WITH
THE NATIONAL AUTHORITIIES

Commission.

The  added  value  resulting  from  the  synergy  between  dispersed  sources  of
information in the Community and the broad scope of OLAF’s action are illustrated
below by examples of investigations and by the Commission’s actions in preparation
for enlargement..

2.1. 

Sugar export to the OCT41 and reimportation of sugar and sugar mixtures into
the European Community.

The Commission  launched investigations to  prevent a threatened malfunctioning of
the common organisation of the market in sugar and a diversion of the objectives of
the common commercial policy with certain OCT.

OLAF and the Dutch and Belgian authorities carried out an investigation in Aruba in
November  1999  concerning  exports  of  sugar  originating 
the  European
Community, on which export refunds were paid, reimported into the Community less

in 

36

37

38

39

40

41

Proposal  for  a  Council  Regulation  amending  the  Staff  Regulation  of  officials  and  the  conditions  of
employment  of  other  servants  of  the  European  Communities  (COM  (2002)  213  final  of  24.4.2002,
annex  IX,  Sections  1  and  2.).  Constitution  of  an  Office  of  Investigation  and  of  Discipline  within  the
Commission  (Commission  decision  on  the  conduct  of  administration  inquiries  and  disciplinary
proceedings adopted on 19 February 2002 (DOC.C(2002)540)).
Article 66, para.4 of the new Financial Regulation and the constitution of an office of investigation and
of discipline within the Commission.
OJ L 136, 31.5.1999.
Resolution on the Commission Annual Report for 2000. In its Resolution on the Commission  Annual
Report for 1999, Parliament pointed out the need for the OLAF “to obtain the unreserved cooperation of
the staff and institutions of the European Union, and the police and judicial authorities of the Member
States”.  Conclusions  of  the  Economic  and  Financial  Affairs  Council  of  7.5.2002,  Conclusions  of  the
European  Council  of  15  June  2001  (Doc.  9270  FIN169)  and  of  the  Economic  and  Financial  Affairs
Council of 17.7.2000 (Doc. 10344/00 FIN273).
See the Court of First Instance’s ruling in Case T-17/00 (“ Rothley et al. / Parliament “) of 26.2.2002.
Non-European  overseas  countries  and  territories  which  maintain  specific  relations  with  Denmark,
France,  the  Netherlands  and  the  United  Kingdom  (Greenland,  Aruba,  etc...)  cf.  Annex  II  to  the  EC
Treaty.

13

                                                
than  two  years  later  in  the  form  of  sugar  and  a  mixture  of  sugar  and  Aruba  cocoa
powder.

The investigation revealed that 4 500 tonnes of sugar had been exported with refunds
from Belgium and  France to  Aruba. The processing operations in Aruba  (the sugar
was cleaned and mixed with cocoa powder) do not constitute substantial processing
justifying payment of export subsidies.

The  Commission  consequently  asked  the  Belgian  and  French  authorities  to  initiate
proceedings  for  recovery  of  the  unduly  paid  export  refunds  in  accordance  with
Community case law (2 million euro in Belgium and 300 000 euro in France).

In  addition,  OLAF  launched  investigations  into  C  quota  sugar  (sugar  exported
without right to refund) exported to the OCT.

The  findings  of  these  investigations  prompted  the  Commission  to  adopt  safeguard
clauses on the rules governing Community imports of sugar originating in the OCT.42

2.2. 

Abuse of the dairy quota systems.

OLAF was informed of allegations concerning a possible abuse of the system of milk
quotas in Spain and of information concerning several Spanish companies allegedly
involved  in  this  irregular  activity.  On  the  basis  of  this  information,  an  external
investigation was opened and an action plan was agreed for a series of administrative
on-the-spot  checks  and  inspections  into  certain  economic  operators  on  the  basis  of
the Council Regulation (EC, Euratom) No 2185/96.

During  these  checks  and  inspections,  some  of  the  firms  refused  to  comply  with
OLAF’s request for copies of data on hard disk. In accordance with Article 9 of the
Regulation No 2185/96, which requires the Member State concerned according to the
national  provisions  to  provide  OLAF  with  the  assistance  it  needs  to  carry  out  its
functions,  the  Spanish  Payment  Agency  (FEGA)  was  asked  to  take  the  appropriate
measures.

After  obtaining  the  authorisation  of  the  Spanish  judicial  authorities,  the  complete
computer data were copied, giving access in particular to figures on these companies’
real production and sales of milk and milk products.

On  the  basis  of  the  objective  evidence  obtained  and  set  out  in  the  final  report  of
OLAF’s  investigation,  fraud  against  the  Community  budget  was  estimated  at  more
than  6  million  euro.  This  report  was  sent  to  the  FEGA  for  it  to  launch  the
administrative  procedures  for  recovery  of  this  amount  and  to  the  special  anti-
corruption Prosecutor’s office in Spain, on grounds of suspected false production and
sales  records.  The  report  also  shows  that  similar  practices  were  followed  by  other
Spanish firms, and the Spanish authorities have been asked to redefine their routine
controls in order to remedy these weaknesses in the general control system.

This case is an eloquent example of the value added by OLAF to a Member State’s
action against fraud, by concentrating its multidisciplinary expertise (investigations,

42

Commission  Regulation  (EC)  No  2423/1999  of  15.11.1999  (OJ  L  294,  16.11.1999)  and  Commission
Regulation (EC) No 465/2000 of 29.2.2000 (OJ L 65, 1.3.2000).

14

                                                
computer analysis of the evidence, judicial advice) on a fraud case with many facets.
The advice given by the magistrates’ unit was vital for obtaining the requisite court
order in the Member State for access to the companies’ computer files. A major share
of the merit should be attributed to the Spanish authorities whose aid proved valuable
in this case, proving beyond doubt what can be achieved when OLAF and Member
States  work  together  and  take  advantage  of  all  the  obligations  and  investigation
possibilities under the European regulations.

2.3. 

Investigation  for  alleged  forgery  and  fraud  by  a  group  of  NGOs  (non-
governmental organisations)

The  success  of  OLAF’s  investigations,  in  particular  with  regard  to  investigations
concerning  direct  expenditure,  depends  both  on  the  information  collected  and,  to  a
large  extent,  on  the  high  degree  of  cooperation  with  the  Member  States.  The
following case is a typical example of the difficulties in this field, and in particular
that of judicial cooperation between Member States.

In  August  1999,  OLAF  was  informed  by  a  Member  State  of  a  suspicion  of  dual
national and Community financing of projects in developing countries. The financing
to  various  donors  by  various  non-governmental
requests  were  submitted 
organisations in two Member States. The Ministry for Foreign Affairs at the source
of the information filed a complaint with the relevant prosecution service.

In  autumn  1999,  OLAF  started  investigations  and  highlighted  a  first  series  of  16
projects  were there was  a risk of dual financing (Asia,  Africa and  South America),
for which applications were being or had been examined by EuropeAid.

In  November 1999,  in  accordance  with  Regulation  (EC)  No  1073/99,  the  Director-
General  of  OLAF  referred  a  case  to  the  prosecution  service  in  one  of  the  Member
States  concerned.  Searches  conducted  by  the  local  authorities  in  February  2000
showed  that  the  NGO  acted  on  instructions  given  by  the  parent  NGO  located  in  a
third Member State.

Searches at the beginning of December 2000 at the head office of the parent NGO in
the  presence  of  OLAF  confirmed  the  suspicions.  The  double  financing  of  the  16
projects  identified  at  the  start  was  estimated  at  US$  4 262 633  (not  counting
financing  agreed  by  the  Community  but  blocked  following  OLAF’s  investigation).
Moreover,  the  authorities  of  the  third  Member  State  stated  that  they  could  not
prosecute on account of legal difficulties.

In  addition  to  the  intensity  of  the  efforts  made  by  each  of  the  national  authorities
involved, the role that the OLAF had to assume since 1999 must be stressed:

– 

analysing  and  identifying  the  multilingual  projects  suspected  of  being  over-
financed,  sometimes  with  other  donor  bodies  located  outside  the  European
Union (Worldbank, ADB,43 Norway, etc.), while mobilising the delegations of
the  Commission  in  non-member  countries;  and  identifying  documents  during
searches at the parent NGO;

43

African Development Bank.

15

                                                
– 

– 

making the national judicial authorities  aware, ensuring  coordination  between
technical  assistance
them,  providing 
(translations of reports, projects, etc.);

legal  advice  and 

the  necessary 

coordination  within  the  Commission  on  the  situation  of  the  case  for  the
question of joining civil proceedings to the criminal prosecution.

In  this  case  cooperation  between  the  Commission  and  the  national  criminal
prosecuting authorities made it possible to pursue a fraud at EU level in spite of the
legal  difficulties  which  had  appeared  in  the  country  of  the  parent  associations.
However,  it  was  necessary  to  OLAF  to  suggest  centralising  the  proceedings  at  the
judicial  authorities  in  one  of  the  Member  States  concerned  and  that  these  agree  to
take  the  case  over  from  the  other  national  investigation  authorities,  with  their
agreement  and  support.  If  this  had  not  been  done,  the  investigation  would  have
stopped. This file demonstrates the need to remedy the dispersal of investigations and
prosecutions  in  the  European  Community  and  the  obstacles  raised  by  the
fragmentation  of  the  European  criminal  law-enforcement  area.  In  the  light  of  this
experience  and  many  others,  the  Commission  considers  it  is  necessary  to  make
serious  progress  on  the  ideas  in  the  Green  Paper  on  the  criminal  protection  of  the
Community’s financial interests and the establishment of a European Prosecutor.

2.4. 

Past experience in the applicant countries: Poland

OLAF,  in  conjunction  with  Poland,  prepared  a  PHARE  project  to  help  with  the
establishment of an inter-ministerial anti-fraud structure. The implementation of this
project  began  in  January  2001.  The  prime  objective  was  to  create  an  anti-fraud
coordination  service  that  is  at  the  same  time  specialised,  independent  and
multidisciplinary,  to  enhance  the  Polish  authorities’  operational  capacities.  In
addition,  activities  launched  in  the  first  year  of  this  biannual  initiative  improved
awareness  of  the  fight  against  fraud  among  the  responsible  authorities  in  Poland.
This  coincides  with  the  government’s  overall  objectives  of  improving  transparency
and the integrity of the Polish public sector and of guaranteeing effective protection
of Community funds.

The complexity of the Polish administration, the constant changes in its structure for
accession  and  the  successive  amendments  made  to  Polish  legal  and  administrative
provisions do not make it easy to give effect to such a project quickly. Nevertheless,
Union financial support is a major factor in helping the Polish authorities to increase
their capacity to combat fraud against the Community budget. Follow-up projects are
consequently planned.

These  difficulties,  most  of  which  are  local,  do  not  all  apply  in  all  the  applicant
countries.  But  the  Polish  experience  once  again  highlights  the  need  for  permanent
investment  in  training  and  proper  working  conditions  in  the  applicant  countries,
including  the  development  of  effective  computer  systems  to  support  anti-fraud
activities aimed at protecting the Communities’ financial interests. It has also shown
that effective and equivalent protection of the Communities’ financial interests in the
applicant countries can be guaranteed only by tried and tested internal coordination
arrangements  between  all 
the  management,
the  authorities  concerned  with 
implementation or financial control of European Union financing.

16

3. 

MONITORING THE 2001-2003 ACTION PLAN

The  Commission  is  presenting  here  an  interim  report  on  the  implementation  of  the
Action Plan for the Protection of the financial interests of the Communities and the
fight against fraud for 2001-2003. The aim of this report is to show how the projects
provided for 2001 were actually executed, in compliance with the need to attain the
broad objectives laid down by the Strategic Approach of June 2000.

Progress in the measures provided for in the Action Plan is set out in tabular form44.
It indicates the relevant elements in terms of compliance with the tentative timetable,
the  pilot  services  and,  where  appropriate,  the  identification  of  legal  or  other
instruments.

44

The table does not show the projects for which no step is planned in 2001. As regards the columns of
the table:
(cid:1) 

the first two columns point out the objective and the action appearing in the action Plan as adopted
in May 2001;
the third column identifies the lead Directorate-General,
the fourth column indicates if and how the objective was reached; the elements of follow-up make
it possible to exceed the strictly annual horizon of the table,
the fifth column provides, if necessary, a brief explanation of the conditions of implementation and
of the impact of the initiative.

(cid:1) 
(cid:1) 

(cid:1) 

17

                                                
Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

1.1.1. Fraud
proofing of
legislation and of
the management of
contracts

Preliminary
analysis of certain
new legislative
initiatives (Action
94 of the White
Paper on Reform)

OLAF,
with the help of
a specifically
created
interdepartment
al group
(legislation
aspect)

BUDG with the
help of OLAF
and the Legal
Service

Deadline for action 2001 respected

On 7 November 2001, the Commission adopted its
Communication on fraud proofing of legislation and of
the management of contracts (SEC(2001) 2029). The
year 2002 will be devoted on the one hand to
implementation at the level of the services of this
legislation aspect of the communication (preventive
examination mechanism by OLAF, of sensitive
legislative proposals). On the other hand, standard public
procurement contracts, standard aid conventions and a
central database for contracts and contractors will be
provided to the Commission services.

In all cases, the Legal Service and OLAF should be
involved at the earliest possible stage of the procedure.

This action concerns the reinforcement of legislative
initiatives in all fields of the Community Budget
(own resources and expenditure) from a fraud
proofing perspective, on the basis of a selection by
OLAF and the specific interdepartmental group.

It also covers contract aspects, namely :

–  all expenditure directly managed by the

Commission and its services;

– certain types of contractors and operators, mainly
the  recipients  of  subsidies  under  the  Community
programmes.

MARKT,
OLAF, BUDG,
JAI

Action ongoing

1.1.2. Greater
security for key
sectors

Development of an
information system
on the procedures
for the exclusion of
non-reliable
operators from
public contracts,
implementing
article 46 of the
draft Directive on
public contracts of
May 2000

Two proposals for a Directive from 10 of May 2000
are being studied within the Council COM(2000)275
final of 10.5.2000 (OJ C 29 E of 30.01.2001).

An important aim is in particular to improve
information between the Member States on the
decisions on the exclusion of non-reliable operators
(tenderers convicted for participation in a criminal
organisation, corruption or fraud detrimental to the
Communities’ financial interests.). The first reading
by Parliament was put back to 2002. The adoption of
Article 46 is a precondition to the setting up of the
system.

18

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

This action aims at reducing the circulation of
counterfeit euro and at enhancing the effectiveness of
the fight against the counterfeiting.

Its beneficiaries are the services responsible for the
detection of counterfeiting information services and
central bank representatives, or any other
professional class concerned, including in the
Member States which are not part of the euro zone.

OLAF, ECFIN,
JAI, SJ, ECB,
Europol

Protection of the
euro against
counterfeiting: co-
operation
strengthened
between the
Member States, the
Commission, the
ECB and Europol

Objective achieved

The  Council  adopted  Regulations  (EC)  1338/2001
(laying  down  measures  necessary  for  the  protection  of
the  euro  against  counterfeiting)  and  1339/2001
(extending the effects of Regulation (EC) No 1338/2001
laying down measures necessary for the protection of the
euro  against  counterfeiting  to  those  Member  States
which have not adopted the euro as their single currency)
on 28.6.2001 (OJ L 181 of 4.7.2001).

Follow-up:

–  monitoring the measures taken by the Member States

for the application of Article 6 of Regulation
1338/2001, on the obligations of credit institutions;

– 

implementation of Article 9 of Regulation
1338/2001, on cooperation with third countries and
accession countries;

–  publication in the Official Journal of the lists of the
responsible national authorities, provided for in
Article 10 of Regulation 1338/2001.

19

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

1.1.2. Greater
security for key
sectors

Training,
programme for
exchange and
assistance

OLAF, ECFIN

Objective achieved

The Council adopted Decisions 2001/923/EC and
2001/924/EC on 17.12.2001 (OJ L 339 of 21.12.2001).

Follow-up: implementation of the programme; selection
and financing of the programmes

Setting in place and
development of the
role of the
European scientific
and technical
Centre for the
protection of the
euro

OLAF, ECFIN

Objective achieved

The ECOFIN Council and the Member States agreed, on
28 February 2000, on a technical scheme for handling
counterfeit coins, involving notably the establishment of:

–  national  analysis  centres  (national  coin  analysis
centres  –  CNACs)  linked  with  a  database  at  the
European Central Bank (ECB)

–  The European Technical and Scientific Centre

(ETSC), reponsible for analysis and classification of
new classes of counterfeit euro coins.

On the basis of an exchange of letters between the
President of the Council and the French Minister, the
Centre was temporarily established at the Paris Mint
from October 2001.

20

Council decision 2001/923/EC establishes an
exchange, assistance and training programme, for the
protection of the euro against counterfeiting
("Pericles" programme). Council Decision
2001/924/EC extends the effects of the decision
establishing the "Pericles" programme to the Member
States which did not adopt the euro as a single
currency.

The financial reference amount for the
implementation of the Pericles programme for the
period 1 January 2002 – 31 December 2005 is set at 4
million euro.

Member States and the ECB complied with the
commitments taken.

The ETSC is managed by two Commission (OLAF)
officials.

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

The action plan envisages actions in the following
sectors:
– 
– 
– 

technological improvements;
exchange of information;
training 
programme, 
equipment and cooperation;
– 
other fraud prevention measures;
– 
relations with non-Member countries.
These actions will proceed in partnership with all
parties concerned, such as governments, banks,
traders, holders of payment instruments.

educational

Prevention of fraud
and counterfeiting
of the means of
payment other than
cash

MARKT, JAI

Objective achieved

On 9.2.2001, the Commission adopted a Communication
and Action Plan on prevention, fraud and counterfeiting
the means of payment other than cash (COM (2001) 11
final).

Implementation is foreseen by the end of 2003.

A group of experts at EU level was established to assist
the Commission in overseeing the implementation of the
Plan, discuss new fraud prevention issues and identify
further preventive measures. The Group includes
representatives of banks, ministries, Central banks, law
enforcement agencies (including Europol and Interpol),
retailers, consumer groups and network operators.

A Working Group composed of enforcement bodies and
professionals in payment systems was established within
the Forum on the prevention of organised crime45.

45

See http://europa.eu.int/comm/justice_home/news/forum_crimen/workshop/en/workshp2_1_en.html

21

                                                
Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

1.1.3. Involving the
candidate countries
in fraud prevention

ELAR, OLAF,
BUDG

Creation of anti-
fraud structures
within the candidate
countries,
strengthening of
controls

Objective partly achieved

New standard anti-fraud clauses have been adopted for
the PHARE financing proposals.

Anti-fraud coordination structures or services,
responsible for the coordination of all legislative,
administrative and operational aspects of the protection
of the Communities’ financial interests, have been
designated or established in several applicant countries
(Hungary, Czech Republic, Slovak Republic, Poland) in
2001.

Other applicant countries are assisted with the
establishment or designation of similar anti-fraud
coordinating structures or services.

These measures are aimed at associating the
candidate countries in fraud prevention, in order to
ensure effective and equivalent protection of the
Community's financial interests in the future Member
States, not only after accession but also during the
pre-accession period.

Total amount of aid provided for in 2002 under the
three pre-accession instruments (Phare, Ispa and
Sapard) for all the candidate countries amounts to
3.349 million euro in appropriation funds (General
Budget of the European Union for the Financial Year
2002, OJ L 29 , 31.1.2002).

22

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

 1 AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.1. Develop a culture of prevention and strengthen regulations

1.1.4. Involving
trade circles in
prevention

Awareness-raising,
on the model of the
Charter for the fight
against organised
crime of 27.7.1999

OLAF, JAI

Action ongoing

On 17/18 May 2001, the Commission launched the EU
Forum on the prevention of the organised crime.

Two meetings were held, respectively on 17/18 May
2001 and 30 October 2001.

Follow-up: launching of Pilot projects, training,
awareness-raising and studies on the prevention of
criminality (cf. Communication COM(2000) 786 final of
29.11.2000).

In the Forum’s workshop on the role of the private sector
in the prevention of economic and financial
criminality46, the Charter was presented as an example
of the "practice of excellence", with its implementation
by the European association of conveyancing solicitors.

This action aims to associate professional circles and
private companies, the academic world and civil
society with the prevention of organised crime.

With regard to the Charter, its implementation by the
conveyancing solicitors is satisfactory, the other
groups received two reminders to report on progress
at European and national level; accountants and
auditors sent questionnaires, the answers to which are
awaited from the tax consultants and lawyers.

46

http://europa.eu.int/comm/justice_home/news/forum_crimen/workshop/en/workshop3_1_en.html

23

                                                
Objectives

Actions

Lead dept.

Implementation and follow-up

Comments

1. AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.2. Strengthen means of detection, controls and sanctions

1.2.1. Improving
detection and
control in the
financial field,
including at
international level

Computerisation
of the movements
and controls of
products subject
to indirect taxes

TAXUD

Deadline for action respected

The Commission has adopted a Proposal for a Council
Decision, based on Article 95 of the EC Treaty [COM
(2001) 466 final of 19.11.2001 (OJ C 51E of 26.2.2002].

Conclusion of a
cooperation
agreement with
Switzerland
covering the fight
against fraud

OLAF, RELEX

Action ongoing

On 14 December 2000, the Council gave a negotiating
mandate to the Commission.

Contacts are entertained on a regular basis with the Swiss
authorities.

The Commission will continue the negotiations.

The objective of this measure is to replace the
existing paper-based system with a computerized
system for monitoring the movement of excisable
goods. Such a system will allow Member States to
obtain real-time information on those movements and
to carry out the requisite checks, including checks
during movement of products.

The setting-up of a computer system should also
allow the intra-Community movement of goods
under suspension of excise duties to be simplified.

This action aims at establishing a legal framework for
the introduction and acceptance of requests for
administrative and judicial mutual assistance, in order
to avoid refusal of judicial assistance for tax and
customs matters and delays of up to three years in
assistance procedures.

The Swiss authorities have so far adopted a
restrictive position in the negotiations.

24

Objectives

Actions

Lead dept.

Implementation and follow-up

Comments

1. AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.2. Strengthen means of detection, controls and sanctions

1.2.2. Improving
financial follow-
up and penalties

BUDG, OLAF,
ADMIN, AGRI,
REGIO,
EMPLOI,
RELEX, SJ

Implementation of
the
Communication to
the Commission
of 13.12.2000 on
Action 96 of the
White Paper on
recovery of
unduly paid funds
(SEC (2000) 2204

This action concerns all authorising, accounting and
managing services insofar as direct expenditure is
concerned. It aims at improving financial follow-up
and sanctions in order to:

– 

– 

–

the  automatic  nature  of 

reinforce 
the
establishment  of  recovery  orders  for  any
certain liquid debt due;

enhance  the  effectiveness  of  means  of
recovery  by  compensation  and  use  of
enforced recovery

clarify  on  this  occasion  the  role  of  the
various actors

Objective partly achieved

On 25/06/2002, the Council is to adopt the new Financial
Regulation  .  The  Commission  should  then  adopt  its
proposal  for  a  Commission  Regulation  laying  down  the
Implementing  rules  of  the  new  Financial  Regulation  by
the  end  of  July  2002,  to  be  submitted  to  all  the  other
institutions  and  finally  enter  into  force  on  01/01/2003
along with the new Financial Regulation.

the  application  of 

the  Commission  adopted
On  21  November  2001, 
guidelines  on 
the  principle  of
proportionality  to  the  waiving  of  recovery  of  debts
(SEC(2001)  1857  final),  partly  amending  the  2001
internal  rules  on  the  implementation  of  the  budget.  This
amendment  is  now  consolidated  in  the  Internal  rules  for
2002 adopted on 08/04/2002

A  Draft  Commission  Decision  on  the  consolidation  and
revision  of  provisions  for  internal  procedures  on  the
recovery of debts as regards direct expenditure has been
prepared.

Other regulatory aspects of recovery will be addressed,
such as enhancing related information technology tools.

A further Communication on recovery matters is
expected in the second semester of 2002.

25

Objectives

Actions

Lead dept.

Implementation and follow-up

Comments

1. AN OVERALL ANTI-FRAUD LEGISLATIVE POLICY

1.2. Strengthen means of detection, controls and sanctions

Action 97:
improved
financial
monitoring and
control of
structural funds

Integration of
administrative
measures and
sanctions in the
field of direct
expenditure

REGIO

Objective achieved

On 7 August 2001, the Commission adopted its
Communication C(2001) 2517 concerning administrative
reform of the Commission : Action 97 - improved
financial monitoring and control of structural funds.

OLAF, INFSO,
RDT, other
Services

Action ongoing

This initiative raises several legal questions, i.e.
concerning the scope of new rules and procedural
aspects.

Concerning Actions 73 (Advice on contracting), 74
(Contracts database) and 94 ("Fraud proofing” of
legislation and contract management), a process of
revision of contracts is under way in order to include
clear clauses for the protection of financial interests
(standard clauses, concerning checks and sanctions,
making them more effective).

In 2000, the Member States communicated cases of
fraud and irregularities in this field amounting to
114.2 million euro (Annual Report 2000 on the
protection of the Communities’ financial interests
and the fight against fraud, COM (2001) 255 final of
23.5.2001).

Regulations (EC) 438/2001 and 448/2001, which
provide for the separation of the management and
control tasks and the acceleration of financial
corrections, have been adopted.

This measure aims to provide the possibility to
impose administrative measures and sanctions in the
field of direct expenditure.

26

Objectives

Actions

Lead dept.

Implementation and follow-up

Comments

2. NEW COOPERATION CULTURE

2.1. Setting-up of a Community service platform

2.1.1. Rationalising
and making better
use of cooperation
structures

Examination of the
services that the
Commission/OLAF
can give within the
framework of its
missions to those
involved in the
protection of
financial interests

Reinforcement of
the current
coordination
structures

OLAF

Objective not yet achieved :

The consolidation of the Office was still ongoing in
2001. Therefore, an exhaustive inventory of supplies and
services that the Commission (OLAF) can offer could
not be delivered.

This inventory, currently ongoing, will be discussed,
once finalised, with the Member States in 2002.
Conclusions with regard to the setting up of this service
platform and cooperation between OLAF, the Member
States and the other Institutions will be drawn up.

OLAF

Evaluation ongoing

Follow-up: amendment of the Commission Decision
94/140/EC establishing the CoCoLaF (the Advisory
Committee for the Coordination of Fraud Prevention (OJ
L 61 of 4.3.94) is planned for the second half of 2002.

This action is aimed at the rationalisation and
enhancement of the cooperation structures, as well as
at the identification of synergies with regard to:

–  exchange of information and the activity of
intelligence in cooperation with the national
specialised services;

– 

investigation activity;

–  Community advice and assistance, in particular at

legislative, legal and political level.

The main objective of this measure is to improve
cooperation with the national administrations and
cooperation bodies.

27

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

2. NEW COOPERATION CULTURE

2.2. Developing a closer partnership with Member States

2.2.1.
Reinforcement of
cooperation to
prevent and combat
money laundering
and VAT and
customs fraud

Assistance and
mutual information
between the
Commission and
the Member States
to protect the
financial interests
of the Community
against illegal
activities

Administrative
cooperation
between the
Member States and
mutual assistance.

OLAF,
TAXUD,
MARKT, JAI

Work ongoing

The issue is under examination.

The aim is to provide a framework for a cooperation
mechanism between the competent national
authorities of the Member States and the Commission
with a view to ensuring the protection of the financial
interests of the Communities against illegal activities.

TAXUD

Deadline for action respected

On 18 June 2001, the Commission adopted a proposal
for a Regulation of the European Parliament and of the
Council on administrative cooperation in the field of
value added tax (COM (2001) 294 final, OJ C 270E,
25.9.2001).

The draft Regulation aims to enhance mutual
assistance between Member States in VAT matters
and to provide a sound legal basis for operational
cooperation between the Member States.

28

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

2. NEW COOPERATION CULTURE

2.2. Developing a closer partnership with Member States

2.2.2. A policy of
evaluation and
forward planning

Inventory of the
new measures of
the Member States
in 1999-2000

OLAF

Deadline for action respected

The Annual Report 2000 on the protection of the
Communities’ financial interests and the fight against
fraud, COM(2001) 255 final of 23.5.2001) provided for
by Article 280-5 of the EC Treaty summarises both the
Community initiatives and the measures taken by the
Member States and presents the major fraud trends,
broken down by Community policy.

Future actions by the Commission are foreseen in its
Action Plan 2001 – 2003 on the protection of the
Communities’ financial interests and the fight against
fraud of 15.05.2001 (COM(2001) 254 final).

Annual evaluation
of the operational
activities of OLAF

Definition of
OLAF’s operational
priorities

OLAF

Deadline respected

The Report provided for in Articles 11 and 12 of
Regulations n° 1073/1999 and 1074/1999 (Official
Journal L 136 , 31.5.1999) was communicated to the
institutions on 18.10.2001.

OLAF

Action ongoing

The definition of OLAF’s operational priorities can
follow the establishment of an actual intelligence
capacity in the Office. The intelligence structure was set
up in 2001.

The aim of the Annual Report and the Action Plan is
to provide a policy of evaluation and long-term
planning and present an overall image of the efforts
of those involved in the protection of financial
interests.

As from 2001, the Commission ensures a follow-up
and an update of its Action Plan via its Annual
Report on the protection of the Communities’
financial interests.

The Annual Activity Report forms an essential part
of OLAF’s policy of evaluation and long-term
planning.

29

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

3. AN INTER-INSTITUTIONAL APPROACH TO PREVENT AND COMBAT CORRUPTION

3.1. Make all agents of the institutions aware of the principles of sound project management

3.1.1. Improving
coordination and
cooperation
between OLAF and
other Commission
departments

Conclusion of
protocols between
OLAF and the
specialised financial
services

(Action 93 of the
White Paper)

OLAF, IAS, SG,
CFS, ADMIN
(IDOC), other
Services

3.1.2. Drawing up
guidelines for
sound financial
management
(Action 92)

Typology of risky
behaviour

OLAF, IAS,
BUDG, SG,
ADMIN

Training plan,
codes of conduct

OLAF, IAS,
BUDG, ADMIN,
SG

Action ongoing

A Protocol between OLAF and the Commission’s
Internal Audit Service (IAS), describing their respective
areas of activity and the specific level of independence
under which each service operates, was signed on
25.7.2001.

It defines the fields for exchange of information and
expertise while respecting the respective missions and
the independence of each service (internal
investigations/checks as defined by Regulations
1073/99 and 1074/99).

Action ongoing

The Practical Guide to prevent any conduct prejudicial
to the financial interests at different stages of
programmes and projects should be adopted in Summer
2002.

Fusion with the above-mentioned action

Cooperation between the services will be implemented
in order to incorporate the protection of the
Communities’ financial interests and sound financial
management into training programmes.

This measure aims to reinforce cooperation between
OLAF and the other Commission departments.

This action is aimed at awareness-raising and
prevention of risky behaviour of officials, servants
and members of the Commission.

30

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

3. AN INTER-INSTITUTIONAL APPROACH TO PREVENT AND COMBAT CORRUPTION

3.2. Improve the legal framework of the administrative ivestigations

The main objective of the proposal to amend the Staff
Regulations is to reform the disciplinary proceedings
(Actions 57 and 58), in order to:

– 

increase 
administrative 
proceedings;

the  efficiency  and  speed  of 

enquiries 

and 

the
disciplinary

– strengthen  prevention  and 
regard to disciplinary matters.

transparency  with

3.2.1. Reforming
disciplinary
procedures (Actions
57 and 58)

Adaptation of
administrative
practices,
amendment of the
disciplinary rules
laid down in the
Staff regulations

ADMIN (IDOC),
OLAF, SG

Objective achieved

The Commission adopted a Proposal for a Council
Regulation amending the Staff Regulation for officials
and other servants of the EC (COM(2002) 213/3) on
24.4.2002.

A legal base was introduced in the recasting of the
Financial Regulaion for an Advisory Instance on
financial irregularities (Action 66 of the White Paper
on the Reform).

On 19.2.2002, the Commission adopted Decision C
(2002) 540 concerning the conduct of the
administrative investigation and disciplinary
proceedings.

31

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

4. THE ENLARGEMENT OF THE PENAL JUDICIAL DIMENSION  

4.1. Ensure the follow-up of the Commission communication on the penal protection of the Community’s financial interests

Reviving the debate
on the criminal law
protection of
financial interests

Continuation of
reflection on the
methods of
implementation of a
European Public
prosecutor for the
Protection of the
financial interests

OLAF, JAI

Objective achieved

The Green paper announced in Commission
communication of 29.09.2000 (COM(2000) 608) was
adopted by the Commission on 11.12.2001
(COM(2001) 715).

Various meetings on this topic have taken place at
national level in 2002;a public hearing is scheduled in
Brussels, in mid-September 2002.

Reactions to the public consultation are in the process
of being collected and analysed (deadline for
comments: 1 June 2002).

On the basis of the answers received, the Commission
will establish a synthesis of the debate and will submit
a new contribution by early 2003, within the
framework of the preparation of the amendment of the
Treaties.

32

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

4. THE ENLARGEMENT OF THE PENAL JUDICIAL DIMENSION  

4.1. Ensure the follow-up of the Commission communication on the penal protection of the Community’s financial interests

OLAF

Deadline for action respected

Speeding up the
entry into force of
legal protection in
criminal matters

Implementation of
certain provisions of
the PIF convention
and its protocols on
the basis of new
Article 280 EC

OLAF, ECFIN,
JAI

Monitoring the
protection by
criminal penalties
and other sanctions
against
counterfeiting of the
euro

This action is aimed at the implementation of the
provisions of substantive criminal law (definitions of
illegal behaviour, responsibilities and sanctions,
cooperation with the Commission) which exist in the
third pillar instruments (not ratified).

On the basis of the Report, the Council concluded
that, in general, Member States complied with the
provisions of the framework decision, thus achieving
the objective of providing for a more efficient
protection against counterfeiting through penal and
other sanctions. However, some Member States have
not yet complied with some of the provisions.

A proposal for a Directive concerning the penal
protection of the financial interests of the Community
(COM(2001) 272 final OJ C 240E 28.08.01) was
adopted on 23.5.01 and submitted to the Council and
to the European Parliament.

The European Parliament adopted its opinion
(favourable) in first reading on 29 November 2001,
while the Court of Auditors delivered its opinion
(favourable) on 8 November 2001.

The Commission intends to present an amended
proposal in Summer 2002.

The joint ECFIN/JAI Council of 16 October 2001
concluded that “a report on the implementation by the
Member States of the Council Framework Decision of
29 May 2000 will be submitted to the Council in the
near future”.

The Commission issued a report on 13.12.2001 “based
on Article 11 of the Council’s framework Decision of
29 May 2000 on increasing protection by penalties and
other sanctions against counterfeiting in connection
with the introduction of the euro” (COM(2001 771
final).

33

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

4. THE ENLARGEMENT OF THE PENAL JUDICIAL DIMENSION  

4.2. Strengthen cooperation and measures in criminal matters

Simplifying judicial
assistance
procedures

Follow-up of the
Commission
Communication
concerning the
creation of Eurojust

Establishment of
the European
judicial cooperation
unit

JAI/OLAF

Objective achieved

The Council has adopted Decision setting up
Provisional Judicial Cooperation Unit (OJ L 324 of
21.12.2000).

The provisional unit (Pro-Eurojust) started its work on
1 March 2001. For an evaluation, see the 2001 report
of Pro-Eurojust (Document 15545/01 du 20.12.01).

JAI/OLAF

Objective partly achieved

On 28 February 2002 The Council adopted a Decision
setting up Eurojust (OJ L 63 of 6.3.2002).

Preparations are under way to install Eurojust in its
provisional seat in the Hague.

Relations between Eurojust and OLAF as regards
operational matters are subject to a memorandum of
understanding.

Stepping up
cooperation in
criminal matters for
the criminal-law
protection of
financial interests

Vertical
cooperation with
the Member States
in the fight against
criminality
affecting financial
interests

OLAF

Action ongoing

An analysis of the technical and operational assistance
which the Office can offer to the judicial authorities is
underway, in the context of the service platform (see
item 2.1.).

34

Objectives

Actions

Lead Dept.

Implementation and follow-up

Comments

4. THE ENLARGEMENT OF THE PENAL JUDICIAL DIMENSION  

4.2. Strengthen cooperation and measures in criminal matters

Mutual recognition
of decisions in
criminal matters

JAI/OLAF

Deadline for action respected

Cooperation in
police matters
(Protection of
financial interests)

OLAF, JAI,
Europol

In November 2000, the Council and the Commission
adopted a Programme of measures to implement the
principle of mutual recognition of decisions in criminal
matters (OJ C 12 of 15.1.2001).

For the follow-up of the Programme, see the half-
yearly update of the scoreboard of progress achieved
for the creation of an “area of freedom, security and
justice" in the EU (COM(2001) 628 final of
30.10.2001).

Action ongoing

On 6.12.2001 the Council adopted a Decision
extending the mandate of Europol to serious forms of
international criminality listed in the annex of the
Europol convention (OJ C 362 of 18.12.2001).

Negotiations on a cooperation agreement between the
Commission and Europol have been completed. The
formal adoption procedures started in Europol and
within the Commission.

35

Title II: Measures taken by the Member States for the
implementation of Article 280 of the EC Treaty

For  the  second  time,  collaboration  with  the  Member  States,  at  non-operational  level,  is
reflected  in  the  Annual  Report  of  the  Commission  on  the  Protection  of  the  Communities’
Financial Interests.

In accordance with Article 280 of the EC Treaty, this second part of the report gives account
of the joint efforts of the Member States’ administrations in the year 2001 with a view to the
protection  of  the  Communities’  financial  interests.  It  has  been  drawn  up  on  the  basis  of  a
questionnaire  established  in  co-operation  with  the  Member  States.  The  Commission
recognises  that  the  evaluation  of  the  Member  States’  activities  is  still  far  from  a  genuine
comparative  analysis,  as  called  for  by  the  European  Parliament.  However,  the  Commission
largely  depends  on  the  information  that  it  actually  receives,  while  providing  interpretative
elements  necessary  for  a  good  comprehension  by  the  Member  States  of  their  regulatory
obligations.

A  reflection  could  be  carried  out  on  the  complementarity  of  this  work  with  that  on  sound
financial  management  which  is  carried  out  under  the  annual  discharge  procedure.  In  this
connection, the Commission submits a report to the Budgetary Authority on the basis of the
Member States’ answers to the observations of the Court of Auditors47.

This  second  part  of  the  report  opens  with  an  overview  of  legislative  developments  in  the
Member  States  aimed  at  implementing  Article  280  of  the  Treaty  that  have  taken  place  in
2001, followed by two sections devoted to the state of ratification and implementation of the
Convention  of  26  July  1995  on  the  Protection  of  the  European  Communities'  Financial
Interests and its protocols.48

Information  is  then  provided  on  the  mechanisms  in  place  for  internal  co-ordination  of  the
control and investigative authorities in each Member State, as well as for cooperation between
the  competent  authorities  of  the  different  Member  States  and  between  the  latter  and  the
Commission.

Information provided by Member States reveals that their organisation is generally consistent
with the common objective of the protection of the Communities’ financial interests, based on
the  principle  of  equivalence  laid  down  in  Article  280  of  the  EC  Treaty.  However,  a
fragmented approach, either by policy area, administrative entity or between Member States,
may reduce the effectiveness of the prevention of and fight against fraud. In this connection,
some Member States have pointed out that coordination could still be improved.

Finally,  as  in  the  previous  Report,  a  specific  section  adresses  recovery.  In  this  context,  the
Commission  strives  to  verify  that  a  good  collaboration  exists  between  the  judicial  and

47

48

Answers of the Member States to the comments of the Court of Auditors in its Annual Report and in its
Special Reports. This procedure is in place since the European Council of Dublin in December 1996. In
April  2002,  at  the  time  of  vote  on  the  2000  discharge,  the  European  Parliament  asked  the  Court  of
Auditors  to  evaluate  the  total  cost  of  the  internal  and  external  controls  of  Community  funds,  by
distinguishing those concerning the Community budget from those concerning national budgets.
Convention of 26 July 1995 on the protection of the European Communities' financial interests (OJ C
316  of  27.11.95,  p.  48)  and  its  additional  protocols  (OJ  C  313  of  23.10.1996,  p.  1;  OJ  C  221  of
19.7.1997, p. 11; OJ C 151 of 20.5.1997, p. 1).

36

                                                
administrative  authorities  in  the  Member  States  in  order  to  ensure  an  effective  recovery  of
outstanding debts.

The  Commission  is  fully  aware  that  a  genuine  comparative  analysis  of  the  Member  States’
activities would require, as stressed in previous reports, a closer harmonisation of the concepts
of controls and sanctions. In this connection, the Commission is engaged, in the framework of
the CoCoLaF, in an exercise aimed at a better definition of these concepts.

4. 

TEXTS CONTRIBUTING TO THE IMPLEMENTATION OF ARTICLE EC 280 - PRINCIPAL
LEGISLATIVE DEVELOPMENTS

The following table lists the main legislative developments aimed at implementing
Article 280 of the EC Treaty in 2001. Consequently, it is possible that that the table
does not mention those Member States which adopted measures of an administrative
nature in 2001, or which have witnessed an abundant legislative activity during the
preceding period.

4.1. Own resources: principal legislative developments

Member
State

Measure

EL

F

IRL

I

The  new  customs  code  (Act  2960/2001)  harmonises  national  legislation  with  Community
legislation, especially as regards breaches of customs legislation.

Article 28-1 of the Code of Criminal Procedure, which authorises certain customs officers to
conduct  judicial  investigations,  in  particular  as  regards  fraud  affecting  the  Communities’
financial  interests,  has  been  implemented  since  December  2001  (offences  defined  by  the
Customs Code, and more specifically traditional own resources and agricultural expenditure).
The  new  provision  will  facilitate  the  conduct  of  investigations  concerning  several  Member
States.
In  total,  73  officers  have  been  authorised  by  ministerial  decree  to  conduct  judicial
investigations.

The Customs and Excise (Mutual  Assistance)  Act  of  March  2001  gives  force  of law to  the
CIS Convention, the Customs Cooperation Convention and other related instruments.

Promulgation of a new Legislative Decree (No 68 of 19.3.2001), “Adaptation of the tasks of
Guardia di Finanza as laid down by section 4 of Act No 78 of 31.3.2000). This Decree was
promulgated  in  the  general  framework  of  the  reform  of  the  tasks  of  police  forces,  as  laid
down  by  Act  No  78  of  31.3.2000.  It  gives  the  definition  of  the  institutional  mission  of  the
Guardia di Finanza as economic and financial police protecting the budget of the state, of the
regions,  of  the  local  bodies  and  of  the  European  Union.  It  confirms  the  exclusive
investigation  powers  of  Guardia  di  Finanza  officers  to  prevent,  investigate  and  combat
infringements concerning resources and expenditure in the EU budget.

37

4.1. Own resources: principal legislative developments

Promulgation of a new Act (No 92 of 19.3.2001 amending standards as regards repression of
cigarette smuggling Under this Act:

–  smuggling is an offence punishable by imprisonment for between two and five years when

the quantity of tobacco smuggled is more than 10 kilos;

–  the following circumstances aggravate the penalty:

–  using  modified  means  of  transport  with  a  view  to  hindering  police  action  or  to  causing

danger;

–  using  legal  entities  or  financial  facilities  in  countries  which  have  not  ratified  the

Strasbourg Convention on money laundering;

–  the cooperation of tobacco producers has been envisaged in order to identify the source of

the merchandise;

–  the management of seized or confiscated goods has become easier and more economical;

a  new  offence  has  been  introduced  –  that  of  group  organisation  in  the  purpose  of  tobacco
smuggling, punishable by imprisonment for between three and eight years and falling within
the competence of the Departmental Anti-Mafia Offices.

A  law  has  been  adopted  by  the  Parliament’s  second  chamber,  concerning  control  on
Community funds. This law sets up free ministerial competencies: the right to be informed by
managing body, the right to give instructions to the managing body and the recovery of funds
from the managing body.

New  general  scheme  relating  to  tax  offences  and  a  new  tax  offence  structure:  distinction
between  common  tax  offences,  customs  offences,  tax  offences  and  offences  against  Social
Security.

Investigations  pertaining  to  one  or  other  of  the  above-mentioned  economic  and  financial
offences are within the jurisdiction of the Criminal Investigation Department wherever they
are committed on an organised basis and/or have an international or transnational dimension.

As  regards  checks  and  inspections,  the  DGAIEC  (Portuguese  customs)  has  adopted
implementing  provisions  for  local  customs,  following  the  reform  of  the  EC  Customs  Code
and implementing provisions.

With  regard  to  the  special  seal  for  manufactured  tobaccos,  a  code  has  been  adopted  which
enables the DGAIEC to trace its origin.

Act 875/2001, amending the criminal code, has updated the provisions on the confiscation of
assets.

The Swedish law criminalising smuggling was replaced on 1 January 2001 by Act 2000:1225.
Customs offences can be punished by two years in prison. For serious offences, the penalty
can extend to six years.

Sweden  has  long  had  a  customs  criminal  court  that  meets  the  requirements  of  Article  280.
The  new  Act  of  1  January  2001  (2000:1225)  has  strengthened  the  customs  prosecutor’s
powers.

38

NL

P

FIN

S

4.2. Agricultural expenditure: principal legislative developments

Member
State

Measure

B

EL

E

F

I

Royal Decree of 15 May 2001 relating to administrative fines: where the Royal Prosecutor,
three-months  after  receiving  the  official  report,  has  not  notified  the  administration  whether
penalties should be ordered or not, the administration decides whether an administrative fine
should be ordered or not.

The  newly  adopted  Act  2945/2001  contains  provisions  as  regards  the  fight  against  fraud
affecting the EAGGF Guarantee Section:
–  power  of  the  rural  development  payment  agency  (EPAA)  to  conduct  on-the-spot  checks

and cross-checks in the case of suspected irregularities;

–  possibility of suspending payments and of recovery;
–  forwarding evidence to the relevant disciplinary bodies and prosecution authorities in the

event of irregularities;

–  powers of the payment and inspection agency (OPEKEPE) as regards the prevention and

repression of all irregularities

–  possibility of imposing penalties on the basis of a decision by the Ministry of Agriculture;
–  legal advice provided to OPEKEPE by other bodies.

Act No 24/2001, amending the general Budgetary Act:

Designation  of  the  competent  body  and  definition  of  the  functions  to  be  exercised  by  this
specific service as provided by Regulation No 4045/89;

Designation  of  national  and  regional  services  empowered  to  carry  out  the  checks  and
inspections provided for by Regulation No 4045/89.

Article 28-1 of the Code of Criminal Procedure, which authorises certain customs officers to
conduct judicial enquiries, in particular as regards fraud affecting the Communities’ financial
interests, has been implemented since December 2001 (offences provided for by the Customs
Code, and more specifically traditional own resources and agricultural expenditure). See also
item 4.1. above).

A  draft  decree  has  been  prepared  with  regard  to  the  control  of  cow  milk  production  and
procedures for recovering the additional levy.

–  Legislative Decree No 223 of 14.5.2001 lays down new penalties concerning Community
aid to the production of olive oil and to table olive processing. The Department for Market
Policies of the Ministry for Agriculture and Forestry approved the draft legislative decree
concerning the penalty system based on Regulation No 4045/89.

39

4.2. Agricultural expenditure: principal legislative developments

Member
State

Measure

Legislative Decree No 68 of 19.3.2002:

–  gives  the  Guardia  di  Finanza  the  role  of  “economic  and  financial  police  force  for  the
protection  of  the  public  budget,  and  that  of  the  regions,  local  bodies  and  the  European
Union “;

–  empowers Guardia di Finanza officers to conduct searches, investigations, inspections and
banking enquiries in the field in question, while enjoying the same rights which it had as
regards VAT and direct taxation.

An  agriculture,  food  and  forestry  protection  (NAF)  control  unit  has  been  set  up  in  the
Agriculture Ministry.

Diseases  of  Animals  Act  of  March  2001:  provides  for  additional  powers  for  authorised
officers, power to regulate dealers and for increased sanctions

Adoption,  by  the  first  and  second  chambers  of  Parliament,  of  the  Dutch  Government
Accounts Act (Eighth Amendment) Act and of the EC Grants Monitoring Act (into force on
1.5.2002):

– 

– 

listing  powers  of  control  of  the  Court  of  Auditors  with  regard  to  the  use  of
Community grants (down to the final recipient);

establishing parallel powers for the Minister as regards the right to be informed by
the  management  body,  the  right  to  give  indications  to  the  management  body,  and
the right to recover funds from the management body

IRL

NL

P

New  general  rules  for  applying  the  rural  development  plan,  known  as  RURIS,  have  been
established for the period 2001 to 2006:

– 

– 

– 

– 

aid  is  paid  out  only  if  the  recipient  has  regularised  his  debt  position  with  paying
agencies;

paying agencies can offset claims on the recipient;

cancellation of the contract gives rise to an obligation to refund the aid granted and
suspension of eligibility;

debt certificates issued by the paying agencies have the value of enforceable
instruments.

FIN

S

General  measure:  Act  688/2001  on  State  aid  covers,  inter  alia,  the  recovery  and  control  of
public aid, including Community aid.

General  measure:  since  March  2001,  the  protection  of  Community  financial  interests  and
relations  with  OLAF  have  been  coordinated  by  an  Economic  Crimes  Bureau  and  a
Community fraud Council.

40

4.2. Agricultural expenditure: principal legislative developments

Member
State

UK

Measure

(England)  new  regulations  on  fishing  and  aquaculture  structures:  regulate  conditions  for
granting national and Community subsidies (FIFG) as well as control and recovery measures
(SI 2001 No. 117).

Equivalent  but  separate  provisions  have  been  adopted  in  Scotland,  Wales  and  Northern
Ireland.

4.3. Structural measures: principal legislative developments

Member
State

DK

EL

E

I

Measure

Decree No 132 of 1 March 2001 relating to responsibility and the division of powers for the
administration of European Social Fund aid deals with the following points:

Composition  and  tasks  of  the  monitoring  committees  for  Objective  3  and  EQUAL;  ESF
measures  under  Objective  2;  central  and  regional  project  approval  subcommittees;
organisation of the central and regional project administrations, responsibility and missions;
use of the web-based IT system; control and auditing, in particular the obligation to notify
irregularities; requirement that the project administration make at least one supervisory and
control visit to each project during the subsidy period.

Decree No 133 of 1 March 2001 relating to ESF aid: conditions of aid; control and follow-
up; use of the web-based IT system; access to justice; recoveries and penalties.

A bank guarantee is imposed on all private and independent aid recipients.

To enable aid for a project to be granted, auditors are required to certify that the project’s
recording procedures and systems are appropriate.

Act  2860/2000  has  set  up  new  management  and  control  bodies,  namely  the  Community
Support  Framework  Monitoring  Committee,  the  Operational  Programme  Monitoring
Committee,  the  central  CSF  Management  Agency,  the  management  agencies  for  the
operational programmes, the paying agency and the External Financial Control Committee
(EDEL).

Royal legislative decree No 1098/2001: develops the current legal framework in the field of
public procurement.

Act 24/2001 amending the Public Procurement Act:

–  Requires new securities as regards the solvency of tenderers;

–  Regulates  the  procedures  for  the  award  of  services  in  the  field  of  the  management  of

information systems.

Promulgation of a new Legislative Decree (No 68 of 19.3.2001, “Adaptation of the tasks of
Guardia di Finanza as laid down by section 4 of Act No 78 of 31.3.2000”).

41

4.3. Structural measures: principal legislative developments

NL

A

P

Adoption of the Dutch Government Accounts Act (Eighth Amendment) Act and of the EC
Grants Monitoring Act : see item 4.2. above.

A  convention  has  been  concluded  between  the  Bund  and  the  Länder  (this  convention
includes all Austrian bodies involved in and responsible for the management of the various
structural  interventions  and  projects  which  directly  or  indirectly  involve  protection  of  the
financial interests of the Community).

Pursuant  to  Regulations  Nos  1260/99,  438/2001  and  448/2001,  a  specific  national
legislative  framework  for  the  Community  Support  Framework  (CSF)  III  has  been
developed:

– 

– 

– 

a  Decree-law  governing  the  operation  of  the  national  control  system  (SNC),  of
CSF III.

under this Decree-law, the Inspectorate General of Finance (IGF) is the competent
authority to issue the statement and to coordinate notification of irregularities;

the  Instituto  de  Gestão  de  Fundos
a  regional  Decree-law  establishing 
Comunitários  (Institute  for  the  Management  of  Community  Funds)  in  the
Autonomous Region of Madeira.

FIN

General measure: see item 4.2.

The following Acts were passed:

– 

– 

– 

Act  1268/2000  amending  the  act  on  the  management  of  the  Structural  Funds,
which came into force on 1 January 2001: management and supervision provisions
relating to Community initiatives and the ESF;

Act 574/2001 amending the act on regional development: rules on implementation
of Community initiatives and recovery of structural and national funding;

Act  1113/2001  amending  the  act  on  employment:  guidelines  on  public
investments (ERDF).

New regulations:

– 

– 

government decrees (943/2001 and 1466/2001) amending the employment decree
(ERDF);

decree  by  the Ministry  of  Education  (933/2001):  powers of the  national  Council
for Education and the provincial offices with regard to the management, follow-up
and audit of projects financed by Interreg and the ESF.

42

4.3. Structural measures: principal legislative developments

S

Adaptation  of 
rules  concerning
administration of Structural Funds and specific rules within the field of EAGGF – Guidance
Section, FIFG and ESF in order to:

relevant  Swedish 

legislation  and 

implementing 

– 

– 

take action pursuant to the new Community legislation for 2000-2006;

clarify and strengthen the provisions relating to recovery.

Measures making it possible for the Interreg programmes to be managed as agreed with the
Commission and other Member States

5. 

COMPLEMENTARY  TEXTS  FOR  THE  PROTECTION  OF  COMMUNITY  FINANCIAL
INTERESTS

5.1.  What  is  the  state  of  ratification  by  the  Member  State  of  the  Convention  of  26
July  1995  on  the  protection  of  the  European  Communities’  financial  interests
and its protocol?

Progress with ratifications
notified to the Secretariat-General of the Council of the European Union at 21.06.2002

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

UK

Financial interests
Convention (26.7.1995)

1st Protocol
(27.9.1996)

ECJ Protocol
(29.11.1996)

12.03.2002

02.10.2000

24.11.1998

26.07.2000

20.01.2000

04.08.2000

03.06.2002

Legislation adopted, but
ratification not yet
notified

12.03.2002

02.10.2000

24.11.1998

26.07.2000

20.01.2000

04.08.2000

03.06.2002

Idem

12.03.2002

02.10.2000

03.07.2001

26.07.2000

20.01.2000

04.08.2000

03.06.2002

idem

17.05.2001

17.05.2001

17.05.2001

16.02.2001

21.5.1999

15.1.2001

18.12.1998

10.6.1999

11.10.1999

16.02.2001

21.5.1999

15.1.2001

18.12.1998

10.6.1999

11.10.1999

28.03.2002

21.5.1999

15.1.2001

18.12.1998

10.6.1999

11.10.1999

43

2nd Protocol
(19.6.1997)

12.03.2002

02.10.2000

Ratification process
under way

26.07.2000

20.01.2000

04.08.2000

03.06.2002

Ratification process
not yet initiated

Internal consultations
initiated

28.03.2002

Ratification not
foreseen before end
2002

15.1.2001

Ratification process
under way

12.03.2002

11.10.1999

5.2.  Where  appropriate,  has  the  Member  State  taken  steps  to  transpose  this
Convention  and  these  protocols?  (This  relates  to  measures  taken  after  the
adoption of the 2000 Annual Report in May 2001).

Member
State

DK

D

EL

IRL

I

L

The convention and the protocols were implemented in Danish Law in 2000.

A  law  has  been  drafted  to  ratify  the  second  protocol  of  19  June  1997  to  the  Convention.
Amendments to national law aiming to transposition depend on an implementing law that is
being  drafted  too.  It  is  envisaged  to  amend  article  261  of  the  criminal  code  (money
laundering, illegal asset concealing) and to extend the scope of art. 30 of the law concerning
infringements  in  order  to  have  the  power  to  impose  penalties  to  corporate  bodies  and
association of persons.

The  Convention  and  its  protocols  have  been  taken  into  account  in  the  new  customs  code
(Law 2960/2001)

Part  6  of  the  Criminal  Justice  (Theft  and  Fraud  Offences)  Act  of  19  December  2001
transposes  the  1995  Convention  and  its  protocols.  It  will  come  into  operation  with  effect
from 1 August 2002.

The contents of the protocol to the PIF convention signed the  19.6.97  and concerning  the
liability of legal persons, confiscation, money laundering and the co-operation between the
Member  States  and  the  Commission  for  the  purpose  of  protecting  the  European
Communities' financial interests and protecting personal data related thereto, have been in
large  part  transposed  in  Legislative  Decree  n°  231/01  concerning  the  liability  of  legal
persons  for  illegal  activities  consequent,  among  others  to  the  crimes  of  embezzlement,
misappropriation of funds or swindle detrimental to the State budget.

Moreover,  the  Minister  of  Labour  has  adopted  some  administrative  measures  affecting
checks on activities co-financed by ESF.

The  content  of  the  Convention  and  the  ratified  Protocols  was  transposed  into  Law  30  on
March 2001.

44

Member
State

A

The  obligation  with  regard  to  transposal  contained  in  these  four  EU  legal  instruments
(including the second protocol) has already been met in part by current provisions and, with
one  exception  (see  below),  by  the  amendment  to  the  Criminal  Law  Act  of  1998,  in
particular as a result of:

–  introduction of the offence “misuse of aid”;

–  extension of the provisions on the corruption of officials to include Community officials

and officials of other Member States;

–  expansion of the list of offences in the field of money laundering.

–  Certain changes to the Act on the repression of financial offences and the Act on export
refunds  effected  by  the  1998  Act  amending  taxation  also  contribute  to  the
transposal of the legal instruments referred to above.

The only measure which has not yet been transposed is the introduction of the responsibility
of  legal  persons  envisaged  in  the  second  protocol.  With  regard  to  the  transposal  of  this
obligation, in Article 18(2) the second protocol anticipates a five-year deadline for Austria
with effect from the adoption of the legal instrument.

P

The  Convention  and  respective  protocols  are  directly  applicable,  without  prejudice  to
adaptations to internal law.

In this context Act 108/2001 was published amending the Portuguese Criminal Code with
regard  to  the  offences  of  trading  of  favours,  passive  corruption  for  illicit  acts,  passive
corruption for lawful acts and, finally, the concept of official.

At the same time, on 26 November 2001, Resolution 163/2001 of the Council of Ministers
was  published,  which  adopts  a  number  of  measures  and  national  guidelines  and  basic
principles in the fight against fraud and tax avoidance: prevention, control, strengthening of
UCLEFA and measures against offences, strengthening external control and reinforced use
of information systems (national and Community projects).

Some legislative amendments required  by  the second  Protocol  were implemented  in  2001
(measure 369/2001 amending the criminal code): extension of the criminal liability of legal
persons to situations where the person or legal entity has taken part in the crime or allowed
the crime to be committed.

(Åland) The provincial government, gave its approval to the 1995 Convention in 2001.

Legislation transposing the provisions of the second Protocol (1997) into Swedish law came
into  force  on  1  January  2002.  Attempting,  preparing  or  conspiring  to  perpetrate  serious
laundering  or  serious  bribery  have  been  made  a  criminal  offence.  Provisions  relating  to
foreign  criminal  judgments  have  been  widened:  the  judgments  of  foreign  criminal  courts
relating to the measures covered by the Protocol can hinder pursuit of the same measure in
Sweden.

FIN

S

45

Member
State

UK

The  United  Kingdom  points  out  that  most  of  the  provisions  in  the  Convention  and  its
protocols already existed in UK law before the Convention and its Protocols were signed.
Part 1 of the Criminal Justice Act 1993, which entered into force on 1 June 1999, enabled
the UK to ratify the Convention. The jurisdiction required by the first indent of Article 4(1)
of the Convention (cases where fraud is committed within the territory of the Member State,
including where the benefit was obtained in its territory) was conferred by those provisions.

46

6. 

COORDINATION  OF  SERVICES  CHARGED  WITH  THE  PROTECTION  OF  FINANCIAL
INTERESTS WITHIN EACH MEMBER STATE

The Community financial control system in terms of both expenditure and income is
largely  based  on  the  primary  responsibility  of  the  Member  States,  which  manage
80% of funds. The controls provided for by sectoral regulations involve a wide range
of  actors  and  staff  at  the  various  levels  of  the  national  administration  (payment
agencies,  management  authorities,  central  and  decentralised  national  services,  local
authority services).

These  controls  constitute  the  system  for  the  protection  of  Community  financial
interests where Member States are required to ensure both effective action and action
that is equivalent to that which they undertake to defend their own interests.

This  is  why  a  good  coordination  between  the  different  protagonists  involved  in  all
levels of controls is of a strategic importance

The sectoral regulations require national authorities to carry out what are known as
regularity controls and controls that are more targeted on the fight against fraud. The
former consist of documentary checks, sometimes called “first level” checks, aiming
at  compliance  with  procedures  and  at  the  criteria  determined  by  regulation  for  the
granting of financing or of advantages (customs duty-free movements, for example).

Regularity  controls  also include  a posteriori checks (after payment of the  funds  for
example), the aim of which is to check that the work has really been done, that the
financed projects exist or that the control system is reliable.

In addition, certain controls are conducted on the basis of suspected fraud established
by different authorities, depending on the Member States: customs, police, financial
administration,  judicial  authorities  at  an  advanced  stage.  The  organisation  of  the
services depends on the Member States.

Following the request of the Council on the one hand and the report of the European
Court of Auditors on the structural Funds49 on the other, information is here provided
on  the  mechanisms  in  place  for  the  coordination  of  the  control  and  investigative
authorities carrying out all these controls in Member states.

The  information  is  presented  by  field  of  control:  traditional  own  resources,
agricultural expenditure and structural actions.

49

Special  Report  n°4/2001  on  the  audit  relating  to  EAGGF,  Guarantee  Section  -  implementation  of  the
Integrated Administration and Control System (IACS) accompanied by the Commission's responses.

47

                                                
6.1.

Own  resources:  coordination  and  cooperation  mechanisms,  possible  difficulties  at
legislative or regulatory level

Member
State

B

Anti-fraud controls and investigations are carried out within the same government department
(Customs and Excise department). It is also competent to prosecute customs infringements.

With regard to the exchange of information with the police, the situation is as follows:

–  agreed protocols are being negotiated with a view to formalising exchanges;

–  five tax authority officials have been made available to the Central Office for Combating

Crime (Federal Police), pursuant to the Royal decree of 22 December 2000.

For  passing  on  information  about  presumed  frauds  to  the  legal  authorities,  the  following
arrangements exist:

– 

– 

– 

seven  tax  officials  are  made  available  to  the  Public  Prosecutor  or  the  Judge
Advocate for Labour;

collection  of  tax  by  the  tax  departments  is  possible  at  the  judicial  investigation
stage, if the investigation uncovers indications of fraud (Act of 18 April 1999);

a  cooperation  agreement  has  been  concluded  between  the  Belgian  Department  of
Justice and Department of Finance.

DK

General  comments  concerning  the  coordination  between  the  services  and  the  impact  of  the
law on data protection:

With regard to the notification of cases of suspected fraud by the administrative authorities to
the judicial authorities, inspections are carried out in accordance with the Director of Public
Prosecutions’  communication  No  4/1998.  This  communication  also  sets  out  the  procedures
for informing the administrative authority of the outcome of the matter.

Administrative or legislative adaptations are under way to implement the Act of 31 May 2000
on the protection of personal data in control measures.

A committee for matters linked to economic crime and cybercrime (“Violations Committee”)
has  undertaken  to  revise,  under  the  direction  of  the  Ministry  of  Justice,  the  provisions  of
criminal law applicable to different forms of economic crime.

“The  Committee  on  Economic  Crime”  constitutes  an  inter-ministerial  forum,  under  the
direction of the customs and tax authorities, with a view to combating economic criminality
affecting  the  common  interest.  This  Committee  attaches  as  much  importance  to  economic
crime  affecting  the  Community’s  financial  interests  as  it  does  with  regard  to  national
resources and expenditure.

48

6.1.

D

EL

E

Own  resources:  coordination  and  cooperation  mechanisms,  possible  difficulties  at
legislative or regulatory level

In the field of traditional own resources, a procedure for the coordination of external/customs
controls  and  fiscal  control/  customs  surveillance  measures  with  regard  to  enterprises
established in several zones under the competence of a principal customs office, is regulated
by paragraphs 59 to 64 of administrative instruction DA-AO. Rules with regard to the content
and  volume  of  data  exchange  include  :  federal  and  Länder  data  protection  and  budgetary
laws,  Article  15  of  the  Customs  Code,  Article  30  of  tax  laws  (professional  secrecy)  and
criminal code.

The Greek authorities did not see any serious overlapping, since it is Customs that handles the
administrative  penalties  and  recovery,  even  where  the  complaint  is  lodged  by  another
enforcement agency (SDOE, the Police, the Harbour Guard).

The  official  tax  administration  authority  (AEAT)  has  established  three  coordination
mechanisms,  based  on  the  various  partial  Plans  which  implement  the  General  Tax  Control
Plan (2001):

– 

– 

– 

coordination of activities relating to taxpayers who are the subject of inspections;

improvements in the exchange of information;

specific  coordination  between  the  recovery  service  and  the  Customs  and  Excise
Duties Service.

The AEAT special quality Programme for 2001 provides for the following measures:

– 

– 

– 

measures  to  improve  interdepartmental  coordination  in  the  fight  against  fraud:
recovery
transmission  of 
organisations,  coordinated  verification  activities,  research  aimed  at  detailing  the
number and importance of preventive measures (legal and others) against fraud;

information  sheets  on 

transmitted 

recovery 

to 

cooperation between the Customs and Tax Service and other public services in the
fight against fraud (local corporations, autonomous communities and cities);

internal coordination: inter-territorial investigative activities.

F

The DGDDI (General Directorate of Customs and Indirect Taxes) carries out all checks and
investigations in the customs field; therefore, no coordination with other services is needed,
but only internal coordination.

The French Customs has a specific action to impose tax penalties; it can either report to the
judicial  authority  and  prosecute  offences  through  a  complaint  to  the  Public  Prosecutor  or
summon directly before a criminal court.

As  customs  officers  have  been  recently  empowered  to  conduct  criminal  investigations,
cooperation with judicial authorities in the financial area will be enhanced.

Moreover, in accordance with the national customs code, judicial authorities must inform the
customs of any fact that can possibly be considered as a customs offence.

IRL

Comprehensive systems are in place for carrying out traditional checks, fraud investigations
and  horizontal  and  multidisciplinary  coordination  activities:  Automated  Entry  Processing
System  (AEP),  Customs  Audit  Teams,  the  Investigation  Bureau,  Customs  and  Excise
Enforcement and Anti-Evasion Teams and the Customs National Freight Intelligence Unit.

49

6.1.

Own  resources:  coordination  and  cooperation  mechanisms,  possible  difficulties  at
legislative or regulatory level

I

NL

A  restructuring  operation of  the  Office  of  Revenue  Commissioners,  which  incorporates  the
Irish  Customs  Service,  includes  the  formation  of  a  Prosecutions  Division,  which  is  being
tasked with coordinating criminal prosecutions across all tax heads, including customs fraud
cases.

Coordination  between  the  services  concerned  (the  Customs  Agency  and  the  Guardia  di
Finanza) is ensured at national level by legislative provisions and at local level by operational
instructions drawn up by the head of Customs and the provincial Commander of the Guardia
di Finanza.

Generally, whenever a monitoring agency notes an irregularity, it sends a copy of the official
report both to the authorising officer for the recovery of the improperly collected amounts and
the application of administrative penalties, and to the prosecutor if a crime is suspected.

In  most cases, the administration will have  to  await  the  conclusion  of criminal  proceedings
before starting a civil action for recovery. The legal basis for actions for recovery is either a
court  order (for  criminal  infringements),  or  an  administrative  order  imposing  sanctions  and
closing down proceedings.

The Customs Information Centre (DIC) organises an operational coordinating meeting once a
month,  attended  by  all  the  services  involved  in  control  and,  if  necessary,  in  investigations
relating  to  traditional  own  resources  –  the  customs  service,  the  tax  information  and
investigation  service  and  economic  control  services  (FIOD-ECD)  and  the  Agricultural
Inspectorate (AID).

These meetings are used to discuss irregularities and to determine the powers of the various
services concerned.

Regular consultations also take place between the Ministry of Finance and the Ministry  for
Agriculture (LNV). A specific prosecutor has been appointed for the national coordination of
criminal investigations and the regulatory aspects of criminal proceedings. Discussions take
place regularly with the various services involved in criminal proceedings.

The  Director-General  for  Taxes  and  the  College  of  Public  Prosecutors  have  agreed  on
guidelines  on  the  notification,  transaction  and  pursuit  of  tax  and  customs  offences  (“ATV”
guidelines). Using specific indicators, the customs authorities hold regular discussions on the
treatment  of  suspected  criminal  acts  with,  on  the  one  hand,  the  tax  information  and
investigation service and the economic control services (FIOD-ECD) and, on the other hand,
the public prosecutor’s department. This arrangement is evaluated annually.

No obstacles have been identified with regard to coordination between the services involved
in  the  control  of  traditional  own  resources.  The  guidelines  of  the  tax  service  (VIV)  make
adequate  provision  for  the  exchange  of  information,  both  in  the  control  phase  and  in  the
investigatory phase. However, when criminal investigations are involved, it is the prosecutor
dealing with the case who decides on the way in which information will be revealed.

A

The  Customs  administration  is  using  a  standardised  electronic  form  for  the  notification  of
irregularities.

Established  irregularities  also  are  the  subject  of  risk  analyses,  both  under  Regulation  No
386/90 and under Regulation No 4045/89.

50

6.1.

P

Own  resources:  coordination  and  cooperation  mechanisms,  possible  difficulties  at
legislative or regulatory level

The decree establishing the tax general authority (AGT) provides for an internal supervisory
authority  as  well  as  a  common  structure  for  tax  administration,  the  purpose  of  which  is  to
carry out administrative inspection and control measures with a view to ensuring control of
compliance with set aims and the adoption of appropriate corrective measures.

Moreover the customs (DGAIEC) establish, recover and entry in the accounts import duties,
the  management  of  the  Community  own  resources  audit  system  being  the  responsibility  of
this Directorate-General, more precisely the directorate of the department of national income
and Community own resources.

Suspected  fraud  in  the  three  fields  in  question  (own  resources,  EAGGF  Guarantee  Section
and  Structural  and  Cohesion  Funds)  are  communicated  by  the  control  body  to  the  public
prosecutor.

Consequently,  they  are  brought  to  the  attention,  together  with  the  despatch  of  the  control
report,  of  the  financial  interlocutor/payment  authority/paying  agency,  for  the  purposes  of
supporting the process not only in criminal but also in administrative terms to recover aid, a
process which continues regardless of whether the criminal procedure is concluded or not.

The  judicial  authorities  and  the  administrative  authorities  are  required  to  keep  each  other
informed of existing procedures, thus guaranteeing good collaboration between them.

In relation to these offences the judicial authorities and foreign police bodies can travel (after
obtaining the authorisation of the Minister for Justice) throughout the national territory, with
a  view  to  taking  part  in  criminal  investigations  and  setting  up  teams  responsible  for  joint
criminal investigations.

FIN

General measure:

The  anti-fraud  programme  on  white-collar  crime  was  continued  in  2001.  The  Government
made a decision in principle of starting a new programme for 2002-2005.

The Ministry of Finance started a project for the development of the control administrations’
work (VIRKE) in 2001.

Customs:

The  Customs  administration  has  many  different  kinds  of  information  exchanges  systems  in
use. It ran a research project on administrative and judicial cooperation on customs crime.

S

There is an agreement between the Customs Board and the Public Prosecutor containing rules
on the handling of customs surcharge issues in a public prosecution context (Acts 2000:1225
and 2000:1281).

In  addition,  the  Customs  Board  takes  part  in  regional  (SABEM)  and  national  coordination
groups  (Economic  Council)  together  with  representatives  from,  amongst  others,  the  police,
tax  authorities,  the  Enforcement  Authority,  the  Economic  Crimes  Bureau,  the  Patent  and
Registration Office and the Social Insurance Office.

The Customs Board also cooperates with the National Bank and has privileged access to the
register of suspected offences of the Police.

51

6.1.

Own  resources:  coordination  and  cooperation  mechanisms,  possible  difficulties  at
legislative or regulatory level

General measure: Since  March 2001, the  protection  of the  Communities’ financial interests
and relations with OLAF are coordinated by the Economic Crimes Bureau and by a Council
on EU Fraud (see point 4.1).

UK

A  single  point  of  contact  within  the  customs  service  manages  communications  between
customs  assurance  staff  and  investigators.  This  point  of  contact  also  coordinates
communications with external agencies.

Regular  meetings  are  held  between  customs  investigators  and  the  rural  payment  agency
(RPA). Discussions on revised administrative agreement should be finalised in 2002.

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

Member
State

B

In the field of operational programmes for vegetables and fruit, the Belgian Intervention and
Refunds  Bureau  (BIRB)  has  signed  cooperation  protocols  with  Customs  and  the  Walloon
region.

To guarantee the continuity of management and supervision, given the gradual regionalisation
of  the  implementation  of  the  common  agricultural  policy,  the  disbursing  agency  meets
regularly with the supervising authorities.

In the field of agricultural expenditure in general, several coordinating bodies have been set
up: a multidisciplinary unit to combat fraud in the meat sector (MVC), an interdepartmental
prevention  unit  (RPI),  an  interdepartmental  subcommittee  overseeing  coordination  of  fraud
prevention in the economic sectors and enforcement of Regulation (EC) 595/91.

A  list  of  the  debtors  is  forwarded  monthly  to  Customs  by  the  Belgian  Intervention  and
Refunds Bureau (BIRB), pursuant to Regulations (EC) Nos 3665/87 and 800/1999.

Adaptation is under way to the Data Protection Act (8 December 1992).

Coordination  mechanisms  between  the  Customs  department  and  front-line  supervising
services:

– 

– 

the  coordinating  unit  of  the  central  Customs  and  Excise  department  is  informed
quarterly by the front-line supervising services and the disbursing agencies of any
infringements  or  irregularity  noted  and  communicated  to  these  bodies,  including
infringements  and/or  irregularity  involving  an  amount  less  than  €4 000.  These
communications  make  it  possible  for  the  Customs  department  to  conduct  a  risk
analysis annually under Regulation (EC) 4045/89;

conversely, the coordinating unit informs the front-line supervising services and the
disbursing  agencies  of  cases  of  infringement  and/or  irregularity  noted  a  posteriori
which can have an impact on front-line supervision.

52

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

Cases  of  presumed  fraud  or  irregularity  are  also  discussed  within  the  following  inter-
ministerial and interdepartmental coordinating  bodies: the interdepartmental  prevention  unit
(CIP), the inter-ministerial economic committee (CEI) and the interdepartmental coordinating
committee  for  combating  fraud  in  the  economic  sectors,  pursuant  to  Regulation  (EC)  No
595/91 (CICF).

DK

General  comments  concerning  coordination  between  services  and  the  impact  of  the  Data
Protection Act etc. see item 6.1 above.

The Directorate for Food, Fisheries and Agri-Business (the “paying agency”) has concluded
agreements with the authorities to which it delegated control missions. These agreements lay
down the general guidelines on the tasks of the authorities, in conformity, in particular, with
the requirements of Regulation (EC) 1663/95. These agreements are reassessed each year.

Regular  meetings  between  the  departments  concerned  ensure  the  quality  of  cooperation  as
regards control and any adjustments that may be necessary.

D

In the field of EAGGF Guarantee, the supervising authorities are governed by paragraph 12
of working instruction DA-AWiMO and by item 5.2 of the control guide.

For  the  implementation  of  controls  laid  down  by  Regulation  (EEC)  No  4045/89,  special
instructions were given, that:

– 

– 

– 

govern in detail the exchange of information between the  supervising  authority  of
the customs administration and other services/administrations

form  part  of  the  software  of  “Profit  “control,  which  has  been  very  broadly  used
since the beginning of 2000 for post-clearance verifications of export refunds within
the control branch of the customs administration;

govern  the  dissemination of  post clearance  verification  reports  as  well  as  of  other
information.  Thus,  in  addition  to  the  competent  administrative  authorities,  the
payment  authority  (also  in  the  other  Member  States)  the  ZKA  (bureau  of
investigation  on  customs  infringements)  or  the  risk  analysis  central  service  also
obtain a copy of the reports.

In the EU payment authority (head customs office, Hamburg-Jonas ), the coordination of the
fight  against  fraud  gives  rise  to  the  processing  of  requests  and  files  following  established
rules and its activities are subject to the permanent control of the internal audit service and of
the  certification  organisation.  (control  on  legality  of  the  payments  and  on  compliance  with
rules concerning recovery and penalties).

The  payment  authority  and  the  risk  analysis  central  service  of  the  customs  administration
(ZORA) also communicate information in the form of risk profiles to the services responsible
for  checks  and  investigations.  The  latter  are  required  to  communicate  the  results  of  their
work, in permanent contact and coordination with the payment authority (recovery) and with
ZORA (preventive anti-fraud actions ).

Control and investigation authorities and ZORA have access to the data of the AIDA central
computer system of the payment authority.

53

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

There is no direct exchange of data between the payment authority/ZORA and the judiciary
and police authorities. Information and files are nevertheless communicated according to the
rules in force for criminal procedures.

Within  the  framework  of  its  coordination  function,  the  federal  Ministry  for  Consumer
Protection,  Food  and  Agriculture  organises  regular  meetings  with  the  authorities  of  the
Länder in order to ensure that the transposal of European law by the Länder and, where they
are concerned, federal institutions, is as uniform as possible.

There has been intensive coordination to make the electronic database of the HIT system fully
operational  and  ensure  the  implementation  of  the  system.  Administrative  agreements  have
been concluded between payment/certification authorities and internal audit services.

Adaptations  needed  at  legislative  or  regulatory  level  for  implementing  the  laws  on  data
protection  and  budgetary  laws  both  at  federal  and  Länder  level,  Article  15  of  the  Customs
Code, Article 30 of tax laws (professional secrecy) and criminal code.

EL

Cooperation in the field of exports between, on the one hand, the Ministry of Agriculture’s
Audit Directorate of EAGGF-Guarantee expenditure and, on the other hand, the Ministry of
Finance’s customs departments is considered satisfactory. Cooperation with the new customs
inspection service is expected to be even closer.

Two new administrative units have been set up, in order to coordinate the new administrative
departments of the Ministry for Agriculture referred at in point 4.2:

– 

– 

A department whose task is to ensure lawful management of the program, through
effective  coordination  between  the  departments  that  manage  the  program  and  the
paying agency (Ministerial common decision 399570/2001);

A  department  whose  task  is  to  coordinate  the  EAGGF  Guarantee  Section  paying
agencies (Ministerial decision 422182/2001).

These new administrative units and the new administrative departments work closely together
with the Direction for planning and agricultural structures and  with  General  Directorate for
fishing, to implement programs and structural actions.

General  measure:  The  General  Intervention  Board  of  the  State  Administration  (IGAE)
continues to develop its national database (TESEO) to check and monitor public grants and
aid,  by  introducing  changes  as  regards  the  exchange  of  information  with  the  management
bodies (Resolution of 7 February 2001).

Act 24/2001, amending the General Budget Act:

– 

– 

assigns the General Intervention Board of the State Administration (IGAE), via the
National Audit Office, as the responsible service for exercising the missions of the
specific service as mentioned in Article 11 of  Regulation 4045/89, and  defines its
functions;

designates the bodies responsible for the controls foreseen in that Regulation.

Fruit and vegetable sector: on 5 October 2001, an agreement was signed, defining the powers
and scope of action of the respective Departmental Directorates for Agriculture and Forestry
the  Inter-professional  Office  for  Fruit,  Vegetables  and  Horticulture
(DDAF)  and 

54

E

F

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

(ONIFLHOR).

France  has  developed  remote  sensing  inspections,  which  increased  from  23%  in  1998  to
72.5% in 2001. Also, the partial use of Computer-Assisted Photo-Interpretation (PIAO) has
progressively increased (30% of all diagnostics effected in 2001).

In  addition,  100  inspection  staff  were  recruited  by  the  payment  agency  between  1999  and
2001. The improvement of training and monitoring of temporary agents and the provision of
improved  tools  to  these  agents  (control  manual,  increasing  numbers  of  differential  global
positioning systems (GPS), planimeters etc.) has continued.

As regards the control of beef premiums, the French authorities have put in place joint checks
and  inspections  by  the  services  responsible  for  checks  and  identifications,  and  those
responsible for premium controls in 2001, as recommended by the Court of Auditors.

Individualised cells for the coordination of checks and inspections have been established in
an important number of Departmental Directorates for Agriculture and Forestry (DDAF).

Rural development: since 1 January 2001, there has been a single payment agency. A team of
inspection  staff  has  been  appointed  to  work  for  this  service,  which  operates  in  full  liaison
with  the  State’s  decentralised  departments.  Furthermore,  a  new  computer  application  has
been devised to fulfil the following objectives:

– 

– 

– 

implement cross inspections in the framework of administrative controls before the
payment of aid;

establish on-the-spot control plans;

present the results of on-the-spot control plans, as well as follow-up measures taken
further to these controls.

All these new elements aim to improve the detection of irregularities.

Internal audit: improvement of the quality and continuity of internal audit:

– 

– 

– 

restructuring of all internal audit activities performed by the Permanent Committee
for  the  Coordination  of  Inspections  (COPERCI)  in  the  framework  of  Community
aid procedures into a single audit service, driven by an Audit Committee.

audit  manuals  for  the  38  auditors,  compulsory  audit  training  and  centralised
professional documentation;

conclusion of agreements with the payment agencies’ internal audit services and the
General directorate for Public Accounts.

55

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

Coordination in the field of export refunds:

–  according to Regulation 800/1999, specialised firms (SCS) may deliver proofs of arrival
of goods exported from the European Union to third countries, in order to allow payment
agencies to disburse  the  refunds requested.  In  order to  examine  requests for  approval  of
candidate  firms  in  France,  an  inter-ministerial  approval  committee  has  been  created  by
Ministerial decree of 20 December 1996. This committee examines SCS’ compliance with
their conditions for approval, and verifies proofs of arrival;

–  EAGGF-related irregularities can constitute a breach of the Customs Code, and are subject
to prosecution by the customs authorities, which have power to apply  specific  penalties.
The  French  customs  service  can  refer  a  case  to  the  judicial  authorities  and  prosecute
established offences, either by filing a complaint with the Prosecutor of the Republic or by
direct prosecution in a criminal court. The recent authorisation given to customs officials
as regards the conduct of judicial enquiries (see point 4.1. above) should help to reinforce
cooperation with the judicial authorities. In addition, the national customs code obliges the
judicial  authorities  to  inform  customs  of  all  acts  which  may  constitute  a  breach  of  the
Customs Code;

Since  1  January  2001,  the  customs  services  have  been  exchanging  information  concerning
irregularities  of  a  magnitude  less  than  €4  000  on  a  quarterly  basis  with  the  agencies
responsible for export refunds. This procedure helps to improve mutual information between
inspection services and services responsible for the payment of refunds.

56

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

Coordination and information exchange measures as regards ex posteriori controls established
by the Inter-ministerial Committee for the Coordination of Controls (CICC):

– 

– 

– 

– 

– 

– 

– 

integration,  into  the  risk  analysis  conducted  in  application  of  Regulation  No
4045/89, of a specific coefficient for each aid measure, based on the opinion of the
Committee for the Certification of Accounts of the Payment Agencies as regards the
value of conducting a posteriori controls;

sharing of control methodologies elaborated by the ACOFA Inspection service with
other services effecting checks and inspections under Regulation No 4045/89;

implementation of exchanges between the ACOFA Inspection service and customs
as part of the training given to “4045 control agents”;

specific  procedure  aimed  at  preventing  the  implementation  of  Regulation  4045/89
controls in cases where controls concerning the same beneficiary, the same period
and using the same investigation methods have already been effected;

systematic  information  of  the  CICC  about  the  results  of  anti-fraud  investigations
conducted by customs in the case of irregularities exceeding €4 000;

systematic  information  of  paying  agencies  by  inspection  services  whenever
prosecutable offences are reported to the authorities;

systematic information of inspection services about all irregularities brought to the
attention of the CICC.

All administrative services in charge of the management and/or control of EAGGF Guarantee
Section  support  may  apply  for  access  to  the  database  of  checks  and  inspections  conducted
under Regulations Nos 4045/89 and 595/91, which is managed by the CICC Secretariat.

IRL

In the Ministry of Agriculture, Food and Rural Development (DAFRD), a complex system of
consultation  and  information  exchange  has  been  put  in  place  between  inspectors  and
authorising divisions, between divisions with common interests (for example in relation to the
integrated  administration  and  control  system),  between  policy  and  implementing  divisions
and with support divisions.

As regards export refunds, well-established procedures exist for cooperating with the customs
authorities.  Reports  concerning  beneficiaries  of  aid  under  Regulation  No  4045/89  are
transmitted  by  customs  to  the  Ministry  of  Agriculture’s  Finance  Division.  Information  is
freely  exchanged  between  responsible  Departments,  including  police  or  the  judiciary  as
required, even though each service maintains its own database.

In the field of area aid and livestock premiums, the management and control authorities report
to the same Director.

As regards milk quota, regular meetings take place between the different services involved.
The Milk Quota Division uses the facility of shared database, allowing cross-checks with area
data, bovine identification systems and herd number systems.

With regard to production refunds for sugar used in the chemical industry, control tasks are
shared between the Administrative Division and Inspectorate.

57

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

The access to the information held by different Government Agencies takes due consideration
of the Data Protection Act limits.

Appeals  in courts against  the  penalties  imposed  under  Export  Regulations  are  frequent  and
make recovery difficult.

I

Coordination between the services concerned (the Customs Agency, the Guardia di Finanza
and  the  Ministry  for  Agricultural  and  Forest  Policies)  is  safeguarded  at  national  level  by
legislative provisions and at local level by operational instructions drawn up by the head of
Customs,  the  provincial  Commander  of  the  Guardia  di  Finanza  and  the  Ministry  for
Agricultural and Forest Policies.

The service set up by interdepartmental decree 1.4.1996 under Article 11 of Regulation No
4045/89 to coordinate checks and inspections operates in the Ministry for Agriculture.

Generally, whenever a monitoring agency notes an irregularity, it sends a copy of the official
report both to the authorising officer for the recovery of the improperly collected amounts and
the  application  of  administrative  penalties  and  to  the  prosecutor,  if  a  criminal  offence  is
suspected

NL

Consultations  regularly  take  place  between  the  Agricultural  Inspectorate  (AID)  and  the
paying agencies (implementation and rate of controls, methods of mutual information).

The implementation and control of measures financed by the EAGGF Guarantee Section are
also  the  subject  of  periodic  consultations  between  AID  and  the  coordination  office  of  the
directorate of international affairs of the Ministry for Agriculture (LNV).

Where appropriate, ad hoc consultations take place between AID and the Public Prosecutor
on specific cases of suspected fraud.

In accordance with Article 11 of Regulation (EC) 4045/89, a control coordination unit (CCU)
has been set up within the general inspectorate of the Ministry for Agriculture (LNV), which
is responsible for the coordination of ex post accounting controls of expenditure financed by
the EAGGF Guarantee Section.

The  coordination  activities  of  the  CCU  cover  the  various  aspects  of  the  line  of  control:
programming, control standards, management of controls, internal reporting, surveillance of
the quality of controls, training, coordination of contacts with the OLAF within the AID.

The methods of coordination between the various actors involved are specified by procedural
handbooks.

58

6.2

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

Interaction takes place between the programming and implementation of accounting controls
by  the  control  coordination  unit  (CCU)  of  the  general  inspectorate  of  the  Ministry  for
Agriculture  (LNV)  under  Regulation  (EC)  No  4045/89  and  physical  controls  pursuant  to
Regulation (EC) No 386/90.

The  paying  agencies,  the  customs  information  centre  (DIC)  and  the  customs  laboratory
provide in particular information to the CCU concerning, respectively:

– 

– 

– 

payment of refunds made;

irregularities noted during physical controls;

samples taken at the time of controls and the results of analyses.

In  general,  before  carrying  out  ex  post  documentary  checks,  CCU  officials  contact  the
customs post responsible for processing the export declarations in question.

No coordination exists between Regulations (CE) Nos 3508/92 and 4045/89, since regulation
4045/89  expressly  excludes  the  integrated  administration  and  control  system  (IACS)  from
application of the regulation. Controls carried out under the Regulations (EC) Nos 386/90 and
3508/92 are not coordinated either, since there are no links between these controls.

The exchange of information between the general inspectorate of the Ministry for Agriculture
(AID)  and  customs  is  governed  by  an  information  protocol.  Notification  to  the  judicial
authorities  of  facts  likely  to  be  the  subject  of  criminal  proceedings  is  governed  by  the
criminal law.

No  obstacle  was  noted  with  regard  to  coordination  between  the  various  services  in  the
agricultural field.

A

The  paying  agencies,  Zollamt  Salzburg  Erstattung  and  Agrarmarkt  Austria  are  informed  of
the control programme under Regulation No 4045/89 and receive the audit reports from the
control  bodies,  which  inform  the  agencies  in  particular  of  all  complaints  by  means  of  a
standardised  electronic  or  paper  form.  Important  files  are  the  subject  of  coordinating
meetings.

With regard to the implementation of the control referred to in Regulation (EC) No 4045/89,
an  inter-ministerial  Working  Party  has  been  set  up,  within  the  framework  of  the  special
department  at  the  Ministry  of  Finance  (BMF),  between  the  BMF  on  the  one  hand  and  the
Ministry  of  Agriculture  (BMLFUW)  on  the  other  hand  which  ensures  inter  alia  the
coordination of controls. This is an informal Working Party which must be legalised (law or
administrative convention).

To this end, meetings take place on a regular basis with a view to exchanging information and
data. This Working Party is also consulted by the three paying agencies. If necessary, contact
is also made with the police and the judicial service.

Any irregularities noted are also the subject of risk analyses, both under regulation No 386/90
and under Regulation No 4045/89.

59

6.2

P

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

See also item 6.1 Regulation 386/90:  administrative  checks  and  inspections  provided for  in
Article  4  are  carried  out  in  accordance  with  the  implementing  provisions  in  force,  in  two
separate stages: the first concerns checks on documents sent by the customs authorities or by
the  economic  agents,  while  introducing  into  the  computer  system  information  relating  to
various documents received. In the second phase, an administrative control is carried out of
the  various  documents  which  supplement  the  already  completed  procedures  by  means  of  a
“checklist”.

Controls  provided  for  in  regulation  3508/92:  the  rules  of  procedure  in  force  for  each  aid
scheme  covered  by  this  regulation  define  the  administrative  controls  that  the  services
responsible for administration of the measures have to carry out.

With regard to on-the-spot checks, these same rules give the supervisory authority the powers
to  plan  and  coordinate,  for  each  year,  the  aims  of  control  and  cooperation  with  the  service
responsible  for  administering  the  measures  and  with  the  representatives  of  the  permanent
Commission  of  the  system  of  unified  control  (SUC).  The  selection  for  control  purposes  is
based  on  risk  analysis,  taking  account  of  the  results  of  control  operations  undertaken
previously and avoiding duplication or absence of control.

The competent authorities have access, either directly or indirectly, to the information on the
databases provided for in Regulation No 3508/92

Regulation  No  4045/89:  a  Decree-Act  defines  the  powers  of  the  national  organisations  as
regards the implementation, support and coordination of controls.

The control programme is drawn up according to the criteria defined in this regulation, in an
agreement between all the parties concerned, at specially convened meetings and controls are
allotted according to the function and powers of each party. At the present time, controls are
supervised  by  the  National  Agricultural  Intervention  and  Guarantee  Institute  (INGA),  the
Institute of Wine and the Vine (IVV), the National Support Institute for Farming and Fishing
(IFADAP),  the  Directorate-General  for  Fisheries  and  Aquaculture  (DGPA)  and  the
Directorate-General  for  Customs  and  Excise  Duties  on  Consumption  (DGAIEC).  The
Directorate-General  for  Audits  (IGA)  and  the  IGF  itself  are  given  an  additional  role  in  the
implementation of these controls, the IGF having the additional task of coordinating control
as well as the other specific service functions.

Moreover,  information  has  been  supplied  to  inspectors  in  terms  not  only  of  the  results  of
controls but also of the risks associated with each recipient and other relevant information for
the purposes of control.

Coordinating meetings, either extended to all those with responsibility for control, or bilateral
to deal with specific issues, are organised between the control organisations and the specific
services.

There also is a database installed and maintained at the IGF to support controls, but its  not
common to the other ministries.

See point 6.1. with regard to the treatment of cases of suspected fraud in the three fields in
question  (own  resources,  EAGGF  Guarantee  Section  and  Structural  Funds  and  Cohesion
Funds)

FIN

General measures: see point 6.1. The Ministry of Agriculture and Forestry and the National
Board of Customs have close control cooperation.

60

6.2

S

UK

Agricultural  expenditure:  coordination  and  cooperation  mechanisms,  possible
difficulties at legislative or regulatory level

The  exchange  of  information,  especially  between  the  tax  authorities  and  the  Agricultural
Board, takes due consideration of the provisions with regard to data protection.

General measure: Since  March 2001, the  protection  of the  Communities’ financial interests
and relations with OLAF have been coordinated by the Economic Crimes Bureau as well as
by  a  Council  on  EU  Fraud  (see  point  4.1.).  These  two  bodies  are  currently  examining  the
legal framework for exchange of information.

The projects assistance unit within the Swedish Council for Agriculture (SJV) meets with the
relevant authorities (town councils, other fund-managing authorities) to discuss the rules on
reporting.

The Counter Fraud and Compliance Unit (CFCU) of the UK Rural Payments Agency (RPA)
conducts  investigations  into  cases  of  suspected  fraud  affecting  the  EAGGF  Guarantee
Section.  It  meets  regularly  with  the  Department  for  Environment,  Food  and  Rural  Affairs
(DEFRA)  and  with  HM  Customs  and  Excise,  in  order  to  ensure  good  cooperation  under
Regulation (EC) 595/91.

Assistance  and  cooperation  between  the  rural  payment  agency  (RPA)  and  the  other
authorities  are  deemed  to  be  satisfactory.  Although  there  are  no  formal  administrative
agreements  on  the  matter  (except  with  HM  Customs  &  Excise),  valuable  exchanges  of
intelligence have taken place.

The  Rural  Payments  Agency  (RPA)  is  the  only  payments  agency  in  the  United  Kingdom
which administers export refunds under Regulation (EC) 386/90.

Under  Regulation  (EC)  3508/92 the  Rural  Payments  Agency  (RPA)  exchanges  information
annually  with  the  agricultural  regional  offices  for  the  devolved  countries  of  the  United
Kingdom  on  farmers  with  land  in  more  than  one  country  of  the  United  Kingdom.  This
exchange of information aims to prevent the duplication of direct aid and forms the basis for
updating  the  corresponding  databases,  as  well  as  for  the  implementation  of  on-the-spot
checks.

The Rural Payments agency is  responsible  for  the  transmission of information on  behalf  of
the  UK  payment  agencies  on  the  operation  of  the  Integrated  Administration  and  Control
System (IACS).

The Forestry Commission and the regional agriculture offices exchange information in order
to be able to comply with the obligations of the regulation on rural development. Protocols
are reviewed and reinforced regularly.

(Scotland)  As  a  result  of  the  abolition  of  the  Intervention  Board  for  Agricultural  Products
(IBAP), an Agency Agreement granted the functions of this body to the UK Rural Payments
Agency (RPA)

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

Member
State

61

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

B

DK

(Walloon region)Two coordination mechanisms should be mentioned:
– 

an  OLAF  inter-administrative  working  party,  consisting  of  a  representative  from
each  operational  government  department,  the  budget  department  and  the  tax
inspectorate,  was  set  up  in  1996.  Its  role  is  to  submit  irregularity  cases  and
developments  in  cases  already  reported  to  OLAF  pursuant  to  Regulation  (EC)
2064/97 to the competent members of the government;

– 

an  Audit  Committee,  set  up  in  1998,  audits  the  management  and  supervision
systems of programmes part-financed by the Structural Funds. It is to this body that
the tax inspectorate reports on its mission.

The units responsible for checks and inspections on structural measures cooperate with other
public  authorities  with  a  view  to  coordinating  controls  of  the  resources  of  a  number  of
Structural Funds granted to the same recipient. In certain cases, the control measures are also
coordinated with the customs and excise directorate.

The checks and inspections units also participate in the inter-ministerial committees as well
as  in  working  parties  within  the  framework  of  the  fight  against  fraud  cf.  item  6.1  above.
Besides  the  units  are  represented  in  the  Committee  on  the  coordination  of  the  financial
control of the Structural Funds’ appropriations.

D

EAGGF

Data  on  aid  are  compared  by  computer  between  the  various  Länder  and  between  the
administrations  of  agriculture,  forestry,  environment,  customs  and  veterinary  activities.
Moreover,  service  meetings  regularly  took  place,  as  well  as  information  and  improvement
actions.

ERDF

Thanks  to  the  establishment  of  a  management  authority  for  all  Structural  Funds,  the
conditions have been set up for the coordination of all the Funds for the period 2000-2006.
Länder  have  uniform  data  banks,  which  serve  as  a  base  to  the  coordination  of  checks  and
investigations. The independent services are informed of the results of controls carried out by
the administration. Numerous seminars are organised in order for the  services concerned  to
exchange information concerning their checks and investigations.

ESF

The  Federal  Ministry  of  Labour  and  of  Social  Affairs  keeps  ESF  managers  at  federal  and
Länder  level  regularly  informed  of  the  bases  and  innovations  connected  with  the
interpretation  and  the  application  of  Community  legislation.  Thanks  to  this  coordination
covering all Funds, experience sharing in the field of controls is guaranteed.

Adaptations  considered  at  legislative  or  regulatory  level:  laws  on  data  protection  and
budgetary laws both at federal and Länder level, law on subsidies and criminal code.

62

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

EL

Coordination  of  Community  and  national  checks  on  programmes,  final  beneficiaries  and
measures which are financed in full or in part by the European Union is the responsibility of
EDEL  (the  Financial  Control  Committee),  in  accordance  with  Act  No  2860/2000  (Article
17.4(d)) and Decision No 2/4245/004 of 24 January 2001 by the Minister of Finance defining
the powers and governing the affairs of the Financial Control Committee.

This  coordination  is  to  be  conducted  in  conjunction  with  the  European  Commission,  the
European  Court  of  Auditors,  the  Central  Administrative  Agency,  the  Payment  Agency  and
the  Management  Bodies  handling  the  operational  programmes  under  the  3rd  Community
Support Framework.

As  regards  the  exchange  of  information  in  this  area,  all  the  parties  involved  in  the  checks
(first-level,  second-level  and  third-level)  have  access  to  the  Integrated  Information  System
(IIS) and are required to enter their inspection findings. As a result, both the inspection bodies
and the other agencies involved can immediately get hold of information from the IIS.

E

General Measure: see point 6.1.

The  General  Intervention  Board  of  the  State  Administration  (IGAE)  has  pursued  its
coordination  activities. These  coordination  efforts  have  allowed  it  to  elaborate  a Manual  of
procedures  concerning  the  declaration  of  expenditure  linked  to  each  form  of  intervention
(Article 8 of Regulation 2064/97), aimed at allowing the closure of the programming period
1994-1999 on the basis of homogenous criteria.

F

The  Inter-ministerial  Committee  for  the  Coordination  of  Controls  (CICC)  has  been
designated to coordinate different administrative departments’ activities. The State Council is
currently examining a draft decree instituting the CICC.

ESF:  On  11  May  1999,  the  Ministry  of  Employment  and  Solidarity  issued  a  circular
concerning  checks  and  inspections  on  actions  co-financed  under  Regulation  2064/97.
Furthermore,  the  general  inspection  services  of  those  Ministries  having  obtained  ESF
appropriations have been asked to conduct in-depth checks and inspections under Article 3 of
Regulation 2064/97.

As regards ex ante controls, a standard form has been sent to the ESF management services,
together  with  the  recommendations  made  by  the  Inter-ministerial  Committee  for  the
Coordination  of  Controls  (CICC).  In  addition,  the  Ministry  of  Employment  and  Solidarity
organises training sessions on this theme.

IRL

EAGGF-Guidance: Close liaison is maintained between the Department of Agriculture, Food
and  Rural  Development’s  administrative  staff  and  inspectorate  (regular  meetings,  seminars,
participation in investigations). Well-established procedures exist for working with the Garda
(police) and the Department of Justice.

FIFG: an annual meeting is held with all agencies reporting to the Department of the Marine
and  Natural  Resources  (DMNR)  with  which  there  is  a  Bilateral  Audit  Agreement.  The
purpose of  this  meeting  is  to  coordinate  the  systems  audits  to  be  conducted  each  year. The
Internal  Audit  Unit  has  organised  a  number  of  workshops  on  the  role  of  risk  assessment
methodology in the control of expenditure.

ESF:  An  ESF  Financial  Control  Steering  Committee  has  been  established,  inter  alia,  to
coordinate the work of the various bodies involved in financial control activities carried out
within the Department of Enterprise, Trade and Employment (DETE).

63

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

I

NL

ERDF  and  Cohesion  Fund:  managing  authorities  are  required  to  report  quarterly  to  the
Department of Finance any cases of fraud or irregularity detected in the previous quarter, and
to  undertake  any  necessary  follow-up  action  in  accordance  with  Regulations  1681/94  and
1831/94.

The ERDF and Cohesion Fund Financial Control Unit regularly advises the payment agency
for the ERDF (Department of Finance) of any cases of fraud or irregularity uncovered in their
audits of programmes.

The Guardia di Finanza has drawn up protocols with the Regions, and the agricultural policy
unit  of  the  Carabinieri  exchanges  information  regularly  with  the  other  bodies  appointed  to
control on the correct application of Community legislation.

In general, whenever a control agency records an irregularity, it sends a copy of the official
report to the authorising officer for recovery of the improperly collected amounts and for the
application of administrative sanctions, and a copy to the judicial authority.

With regard to Objectives 1 and 2, in particular, the Ministry for Economic Affairs (EZ), the
Ministry for Agriculture (LNV) and the Ministry for Home Affairs (BZK) have established
close cooperation: regular meetings and the coordination of administrative notes.

Consultations have also taken place between the above-mentioned ministries and the Ministry
of Finance, the Ministry for Housing, Spatial Planning and the Environment (VROM) and the
Ministry for Social Affairs and Employment (SZW).

Within  the  framework  of  Objective  3,  close  cooperation  exists  between  the  Ministry  for
Social  Affairs  and  Employment  (SZW),  the  Ministry  for  Education,  Culture  and  Science
(OCW), the Ministry for Home Affairs (BZK) and the Ministry of Finance.

There are periodic consultations with representatives of local authorities.

Coordination of services with regard to checks and inspections on ESF expenditure:

– 

– 

– 

– 

The department for internal controls of the Social Affairs and Employment agency
(SZW) is responsible for primary controls of the implementation of projects as well
as of final statements. In terms of its functions, this department is separate from the
other departments of the SZW agency.
When special investigations are necessary, the director of the SZW agency entrusts
the  task  to  an  external  accounting  firm.  This  firm  works  under  the  aegis  of  the
department for internal controls.
Secondary  controls  (audits  of  financial  and  material  management  by  the  SZW
agency,  control  of  the  activities  of  the  internal  control  department,  control  of  the
application of control protocols) are the responsibility of the accounting service of
the Ministry of Social Affairs and Employment (AD).

The Economic and Financial Affairs directorate also checks that use of ESF funds is
effective and within the law.

As  regards  information,  the  Social  Affairs  and  Employment  agency  (SZW)  and  the  SZW
Ministry consult each other regularly on the results of monitoring and control activities under
the ESF. The SZW agency also draws up a monthly qualitative/financial statement.

64

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

When the agency  for  Social  Affairs  and  Employment  (SZW),  the  SZW  Ministry  or  a  third
party notify cases of suspected fraud and irregularity in the context of ESF expenditure, the
SZW Ministry has to see that appropriate action is taken. In similar circumstances the SZW
agency  decides  if  it  is  necessary  to call  on  the  labour  inspectorate.  If  necessary,  the  labour
inspectorate  can  initiate  criminal  investigations  or  take  part  in  the  preparation  and
implementation of such investigations.

The ministry is also responsible for the periodic notification of cases of suspected fraud and
irregularity in the context of the ESF in the Commission (OLAF).

The  labour  and  revenue  inspectorate  (SIWI)  of  the  Ministry  for  Social  Affairs  and
Employment (SZW) notifies any cases of irregularity to the SZW agency.

No  aspect  of  current  regulations  or  in  the  management  and  control  structure  obstructs  the
periodic exchange of information within the ESF framework.

With  regard  to  the  Interreg  programme,  ex-ante  controls  are  carried  out  by  the  programme
secretariats on the basis of intermediate and final reports. If necessary, controls are carried out
by the Ministry for Housing, Spatial Planning and the Environment (VROM).

The  accounting  department  of  the  Ministry  for  Housing,  Spatial  Planning  and  the
Environment (VROM) carries out two types of control in the context of Interreg:

–  “5%”  controls  under  the  terms  of  Regulation  (EC)  2064/97,  in  collaboration  with  the
national  planning  service  (RPD)  and  the  services  involved  in  the  implementation  of  the
programme.

–  ex post controls in the context of drawing up the accounting statement pursuant to Article

8 of Regulation (EC) 2064/97.

No anti-fraud control in the strict sense of the term was carried out in 2001 with regard to the
Interreg programme.

Interreg: in general, coordination exists between the parties concerned within the Ministry for
Housing, Spatial Planning and the Environment (VROM) and the programme secretariats. No
obstacle  has  been  notified  in  this  respect.  The  same  is  true  of  cooperation  with  the  other
ministries.

No obstacle has been noted with regard to URBAN programmes under the ERDF. The rules
of  procedure  were  defined  in  a  protocol  of  irregularities  concluded  between  the  towns
concerned and the Ministry for Home Affairs (BZK).

A

An  administrative  authority  has  been  set  up  for  each  intervention,  whose  duties  are  to
coordinate  the  various  measures  and  the  intermediate  authorities  as  well  as  to  ensure
coordination between the funds involved in the various interventions.

With a view to ensuring the exchange of information and coordination between the various
administrative  authorities  under  the  various  interventions,  there  is  an  “administrative
authority  Working  Party”.  In  addition  to  experience  sharing,  this  working  party  also
coordinates the agendas supervising several funds or interventions

In  the  area  of  control  of  financial  transactions,  the  Chancellor’s  Office  is  responsible  for
coordination between several funds.

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6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

Coordination  is  facilitated  by  a  databases  placed  at  the  disposal  of  the  administrative
authorities with regard to all operations in the context of the various interventions.

Measures provided for by Austrian law concerning data  protection  have  to  be  implemented
and respected.

In particular,  when  a  case  of  suspected fraud  has  not  yet  been  confirmed  by  the  competent
court, the persons or firms associated with notification of the fraud must, as far as possible, be
afforded special protection. In this context, the national authorities must be able to make the
files they transmit anonymous. Account should be taken of possible libel action which could
ensue if an unconfirmed suspicion is made public.

P

See  also  item  6.1.  In  view  of  the  responsibilities  resulting  from  Regulation  438/2001,  the
General  Inspectorate  for  Finance  (IGF)  was  given  the  responsibility  for  the  overall
coordination of controls, as was already the case during previous programming periods.

The  model  developed  for  the  national  system  of  control  (SNC)  of  Community  Support
Framework  III  is  essentially  structured  on  three  levels  where  the  following  authorities
intervene:

– 

– 

– 

the  control  units  of  the  management  authorities  for  each  operational  intervention
(this  function  is  separated  from  the  other  tasks  associated  with  management  and
payments (1st level);

the authorities designated for the second level of control for each fund;

the  Inspectorate-General  of  Finance  (IGF)  which,  as  a  high  level  control  body,
ensures overall coordination of the national control system, without prejudice to its
other  functions,  namely  the  evaluation  of  existing  systems  of  management  and
control at the various levels of operational interventions, the notification of detected
irregularities, the annual transmission of follow-up action pursuant to Articles 10 to
12 of Regulation 438/2001 and the issue of statements.

The operation of the national control system is governed by internal regulations and manifests
itself  in  regular  meetings,  convened  by  the  IGF,  which  involve  representatives  of  the
coordinating authorities for second level control and the payment authorities.

A database has been created for the management of information on controls which, although
installed  at  the  Inspectorate-General  of  Finance  (IGF),  will  be  supplied  directly  by  the
transfer of files from other bodies.

See point 6.1. with regard to the treatment of suspected fraud in the three fields in question
(own resources, EAGGF Guarantee Section and Structural Funds and Cohesion Funds).

FIN

General measure: see point 6.1

Ministries responsible for the Structural Funds:

There are legal provisions concerning the executive assistance that the police can provide to
the other authorities.

In addition, the authorities responsible for the Structural Funds have close cooperation with
other authorities in order to prevent irregularities and to start investigations when needed.

66

6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

(Åland)  With  regard  to  the  Interreg  II  A  archipelago  and  the  Interreg  III  A  islands,  an
arrangement  has  been  concluded  between  the  parties  concerned  as  regards  recovery.  A
memorandum is currently being prepared for the Interreg III A islands.

S

The different payment authorities and the Economic Crimes Bureau exchange information in
the framework of reporting to OLAF.

The Swedish Business Development Agency (NUTEK), is responsible for the coordination of
the Structural Funds in Sweden, for the programme period 1994-99. For the new programme
period  NUTEK  has  an  advisory  role  to  liaises  with  the  various  administrative  bodies
concerned  (the  Agricultural  Board  Council,  Council  for  the  Labour  Market  Board,  Council
for Fisheries, the National Board of Fisheries and the authorities responsible for Interreg). It
also  cooperates  with  the  disbursement  paying  and  management  authorities  (seminars,
exchanges of information), as well as with the internal audit office for Structural Funds, the
secretariat  of  the  supervisory  steering  committee,  the  economic  crimes  bureau,  and  the
Swedish National Financial Management Authority control bureau. For instance, the different
payment  authorities  and  the  Economic  Crimes  Bureau  exchange  information  in  the
framework of reporting to OLAF.

With regard to ESF (Objective 3 and Equal), close cooperation exists between the competent
authorities, the Council for the Labour Market (AMS) and the Swedish ESF Council (regular
meetings, working paper on distribution of powers(cid:1)).

The authorities involved in the management of the Structural Funds have strengthened their
cooperation and intensified their training initiatives.

The paying authority (AMS financial services) and the ESF Council are responsible for the
communication of irregularities to the Labour Market Board, which transmits them to OLAF.
Follow-up  is  ensured  by  the  Labour  Market  Board,  the  ESF  Council  and,  if  necessary,  the
Financial Crime Authority.

The national authorities’ requests for clarification from other authorities concerning persons
having earlier applied for or received public aid, and vice versa, have to take account of the
Data Protection Act.

General measure: See point 6.2

UK

The Department of Trade and Industry (DTI) continues to assist the other Departments and
the authorities in their reporting activities, in order to maintain the necessary consistency

The Department for Work and Pensions (DWP): Government Offices (GOs) manage various
Structural Funds, which makes it possible to coordinate controls carried out under the various
programmes.

Close  coordination  also  exists  between  the  different  central  departments  involved  in  the
management  of  funds  (Department  for  Work  and  Pensions,  or  DWP,  Department  for
Transport, Local Government and the Regions, or DTLR, and the Department of Trade and
Industry, or DTI).

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6.3. Structural  measures:  coordination  and  cooperation  mechanisms,  possible  difficulties  at

legislative or regulatory level

The  Department  for Work  and  Pensions (DWP): the follow-up  and  inspection  teams  of  the
Government  Offices  (GOs)  carry  out  controls  under  Article  3  of  Regulation  (EC)  2064/97
and Article 10 of Regulation (EC) 438/2001. Two types of follow-up may be given:

– 

– 

the results of “5%” controls are forwarded to the central European secretariat within
each  Government  Office  (where  they  can  be  compared  with  other  structural
programmes), as well as to the central seat of the ministry;

cases of suspected fraud are forwarded to an independent unit within the ministry,
the  special  investigation  unit  (SIU),  which  can  conduct  its  own  investigations,  if
necessary in conjunction with OLAF. If more rigorous investigations are necessary,
the unit forwards its files to the police. The results of these police investigations or
of the criminal proceedings, as the case may be, are retransmitted to the central seat
of the ministry and to the Government Office concerned.

(Scotland)  The  Scottish  authorities  have  introduced  a  new  integrated  database  for  the
management of ERDF and ESF funds, intended to be accessible on line to all parties involved
in the management of these funds in Scotland.

(Scotland) The  managers  of  programmes  at  strategic  and operational level  have  established
coordination by means of formal communications.

(Scotland)  The  management  and  payment  authorities  responsible  for  FIFG  and  EAGGF
Guidance  Section  maintain  contacts  with  organisations  responsible  for  other  European  and
national funds.

(Scotland)  The  Scottish  authorities  apply  a  contingency  plan  for  the  fight  against  fraud
against the ERDF and ESF. It contains details of contact points, the procedures for identifying
and  reporting  cases  of  suspected  fraud  and  communication  links  with  the  prosecuting
authorities.

In  the  area  of  the  FIFG  and  EAGGF  Guarantee  Section,  the  management  and  payment
authorities also follow standard procedures to deal with cases of (suspected) fraud.

(Northern  Ireland)  With  regard  to  projects  financed  by  the  European  Special  Support
Programme  for  Peace  and  Reconciliation  (EUSPPR),  a  database  holds  the  details  of  all
organisations involved. Cross  checks  make  it  possible  to  see  whether the same  projects  are
financed by other Structural Funds.

When visiting projects, officials stamp the supporting documentation to show by which fund
the project in question is subsidised.

Internal audit departments also visit projects on the basis of a risk analysis. They also check
whether officials have carried out their controls in accordance with government or European
guidelines. The internal audit departments are coordinated through the “Euronet” network.

(Northern  Ireland)  No  obstacle  has  been  notified  with  regard  to  cooperation  between  the
various departments involved in controls and investigations.

68

7. 

COMMENTS  ON  COOPERATION  BETWEEN  THE  COMPETENT  AUTHORITIES  OF  THE
MEMBER STATES (ARTICLE 280(3), OF THE EC TREATY)

The analysis of the Member States’ replies has revealed that the necessary regulatory
mechanisms  have  been  put  in  place  and  that  Member  States  are  generally  satisfied
with the co-operation between their competent authorities and with the Commission
and OLAF; some of them, however, feel that their co-operation could benefit from an
improvement  of  the  technical  means  at  their  disposal.  This  issue  is  currently  being
studied by the competent services of OLAF and the Commission.

8. 

RECOVERY

The previous Report specifically addressed the issue of recovery. In this context, it is
up  to  the  Commission  to  verify  whether  a  good  collaboration  exists  between  the
judicial  and  administrative  authorities,  in  order  to  establish  whether  the  Member
States  have  taken  all  necessary  measures  to  ensure  an  effective  recovery  of
outstanding debts.

Most  Member  States  mentioned  good  collaboration  between  the  above-mentioned
authorities. On the other hand, in some Member States, deficiencies have been noted.

69

8.1.

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

Member
State

Measure

B

The prosecuting authorities generally communicate the date of referral of a case before the
Court so that the administration can join civil proceedings and apply administrative fines.

As  soon  as  the  Belgian  Intervention  and  Refunds  Bureau  (BIRB)  is  informed  of  an
investigation into any irregularity, it introduces a complaint in accordance with the Code of
Criminal  Procedure.  The  disbursing  agency  is  kept  informed  of  the  development  of  the
proceedings.

The  regional  director  of  Customs  and  Excise  is  responsible  for  civil  and  criminal
proceedings  within  the  context  of  his  powers.  For  other  cases,  the  question  falls  mainly
within the competence of the justice department.

Officials of the prosecution service attached to courts are duty bound to communicate any
indications  of  fraud  with  regard  to  direct  or  indirect  taxes  (including  own  traditional
resources) to the Ministry of Finance.

DK

Cases of suspected fraud are handled in accordance with Notice No 4/1998 of the Director
of  Public  Prosecutions.  This  communication  also  established  the  rules  for  informing  the
administrative authorities of the outcome of investigations.

The  administrative  authorities  are  always  kept  informed  of  the  outcome  of  criminal
proceedings by the judicial authorities.

Recovery of a wrongly paid amount does not in itself give rise to criminal proceedings.

The  normal  procedure  is  to  bring  a  civil  action  to  recover  the  amounts.  When  a  writ  has
been obtained recording the amounts to be recovered, the matter may be referred back to the
court for attachment.

70

8.1.

D

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

In  theory,  judicial  authorities  are  not  required  to  inform  the  administration  of  the  end  of
criminal proceedings concerning the recovery of the amounts embezzled and unduly paid.
But rules on information are provided for by the Code of Criminal Procedure and the Tax
Code:

– 

– 

– 

– 

The injured party having filed a complaint has to be informed  of a  writ  of  nolle
prosequi of the Prosecutor’s office (Code of Criminal Procedure);

if  assets  belonging  to  the  offender  are  seized  to  ensure  the  recovery  the  injured
party  has  to  be  informed  (Code  of  Criminal  Procedure).  This  provision  has  is
based a provision of the Civil Code whereby the seizure and final liquidation  of
assets cannot be ordered unless the injured person is entitled to assert his claim to
compensation against the author of the offence. In such a case, the State intervenes
actively in that it can seize the alleged fruits of the offence and place them at the
disposal of the injured person, who can thus exercise his claim to compensation. A
corresponding enforcement order and the authorisation of the judge are necessary.

information  drawn  of  the  public  authorities’  procedural  documents  for  the
establishment,  implementation  or  rejection  of  the  claim  is  admissible  in  the
context of the offence (Code of Criminal Procedure). A corresponding request for
information  must  nevertheless  be  submitted.  The  same  applies  to  the  injured
party’s right of inspection;

the criminal court communicates to the financial administration the judgment and
other  orders  ending  the  procedure  when  it  does  not  take  part  itself  in  the
proceedings (tax code).

The  new  customs  code  represents  an  improvement,  in  that  it  allows  a  clearer  separation
between the administrative recovery procedure and the criminal procedure.

Administrative authorities have the possibility of bringing the civil proceedings provided for
by  Article  2  of  the  Code  of  Criminal  Procedure.  The  circular  of  5  December  2001
mentioned at point 4.3. above underlined the need to inform payment agencies whenever a
case is likely  to jeopardise  funds,  so  that  they  can  decide  whether  to  bring  a  civil  action.
Such an action will in particular enable the payment agency to have access to the judicial
file and to take the necessary precautionary measures for the recovery of the funds.

The above-mentioned circular also emphasises the need to inform the customs authorities so
that they can proceed to the recovery of duties and taxes. The Customs Code requires the
judicial authorities to bring all indications of breaches of the Customs Code to the attention
of the customs authorities, regardless of the type of proceedings engaged.

The assignment of a magistrate to the General Director for customs and indirect taxation as
of  2001,  aimed  at  ensuring  the  administrative  management  of  those  customs  agents  who
conduct  judicial  enquiries,  facilitates  the  liaison  between  the  judicial  and  administrative
authorities.

As regards structural actions, a circular by the Department of Employment and Solidarity of
11 May 1999 specifies the procedure to follow in case of recovery of unduly paid funds.

EL

F

71

8.1.

IRL

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

As regards traditional own resources, criminal proceedings are undertaken by the Director
of Public Prosecutions on the basis of the evidence provided by the Office of the Revenue
Commissioners  (of  which  the  Irish  Customs  Service  is  a  part).  The  latter  functions  as
investigating authority. Accordingly, the completion of such proceedings is always known
to the authorities responsible for recovery.

In the field of agricultural expenditure, officials of the Department of Agriculture, Food and
Rural Development (DAFRD) are closely involved in criminal proceedings, either through
having referred the file to the Director of Public Prosecutions (DPP) in the first instance or
as a witness for the State. In significant cases Department staff will liaise closely with the
office of the DPP and be briefed regularly on the progress of the case.

As regards the ERDF and the Cohesion Fund, there are no specific legal or administrative
provisions for the judicial authorities to report to the administrative authorities completion
of  criminal  proceedings.  Records  are  maintained  by  the  Department  of  Finance,  as  the
paying  authority,  of  all  outstanding  irregularities  reported  in  accordance  with  Regulations
1681/94 and 1831/94, and are periodically reviewed to establish the latest positions.

Generally,  whenever  public  servants  are  involved  in  offences,  the  office  of  the  public
prosecutor is obliged to inform the prosecutor of the Audit Office for determination of the
loss to the public Treasury.

As regards traditional own resources, no legislative mechanism is in place for the judicial
authorities  to  inform  the  administration  of  the  outcome  of  criminal  proceedings  for  the
purposes of recovery, owing to the fact that the existence of criminal proceedings does not
prevent the customs authority from effecting the recovery, even forced, of the customs debt.

In  addition,  criminal  proceedings  are  followed  by  the  office  of  the  receiver  of  customs,
which remains in contact with the judicial authority until the lawsuit comes to an end.

The judge gives his rulings both at civil and  criminal  levels.  If  no  criminal  proceeding  is
deemed necessary, a civil action for the payment of duties is brought before a civil Court.
Once  the  judgement  has  been  finalised  and  is  res  iudicata  the  administration  has  an
enforceable judgement. On that basis, it can recover the debt established by the Court.

I

L

72

8.1.

NL

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

Own resources

Two paths can be followed when irregularities have been noted: the criminal route or the tax
route. In both cases, the unpaid duty is levied and collected. Whenever levying or collection
could hold up the criminal proceedings, priority will be given to the criminal investigation.

Criminal proceedings are opened by the tax information  and investigation  service and the
economic  inspection  services  (FIOD-ECD)  in  an  automated  system  (integrated  system  of
information on fraud, or GEFIS).

When a criminal investigation is over, the customs authority concerned is informed of the
conclusions  of  the  investigation,  which  will  make  it  possible  to  levy  and/or  recover  the
unpaid duties.

In  addition,  regular  consultations  take  place  between  the  investigating  (FIOD-ECD),  the
authority responsible for the proceedings (the law officer involved) and the administrative
authority (liaison official of the customs district concerned) on the development of criminal
investigations.

Structural measures

For  recovery  of  irregularities  under  objective  2  (Urban),  cities  will  be  held  responsible
directly  when  financial  correction  for  NL  is  applied.  In  the  area  of  ESF  actions,  the
applicable  regulation  stipulates  that  subsidies  can  be  reduced  to  zero.  In  addition,  regular
consultations take place between the Social Affairs and Employment agency (SZW) and the
office  of  the  public  prosecutor  (department  in  the  case  of  EU  fraud)  in  order  for  the
necessary actions to be initiated.

A

Traditional own resources

The  paying  agency’s  book  of  debtors,  to  which  the  principal  Salzburg  customs  office
(paying  agency)  also  has  access,  has  records  of  all  recoveries  of  undue  payments,  all
measures adopted by the paying agency with a  view  to  collecting  outstanding  amounts  as
well as debtor payment.

The administrative authorities are party to criminal proceedings set in motion by the judicial
authorities  in  their  capacity  as  joint  interested  party,  and  are  consequently  immediately
informed of criminal decisions.

Agricultural expenditure

The administration is informed by the Ministry of Justice if (a) a criminal proceedings or a
preliminary  investigation  are  initiated  or  (b)  if  the  accusation  is  withdrawn  due  to  the
absence of a punishable offence. The administration is informed of the outcome of criminal
proceedings, although often after a considerable delay (forwarding the judgment).

73

8.1.

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

Structural measures

Administrative bodies (including the implementing bodies) are responsible for the initiation
of  criminal  proceedings  (in  the  event  of  suspected  fraud,  for  example)  –for  example  by
referral  to  the  office  of  the  public  prosecutor.  The  administrative  authority  is,  in  such
proceedings, at the very least a witness, even if it is not also a party to the proceedings. In
any event, it is informed of the follow-up and outcome of all proceedings.

The  management  authority  within  the  meaning  of  Regulation  (EC)  No  1260/1999  is
informed of pending proceedings and of their outcome by means of quarterly notifications
published by the responsible authorities. The same is true for the central authorities which
manage  the  funds  and  of  the  ministries  responsible  for  controls  which  are,  once  again,
responsible for the publication of the quarterly notifications to be sent to the OLAF

P

Persons who have incurred losses are informed of their right to join an application for civil
compensation to criminal proceedings.

Moreover, the possibility of the bodies responsible for recovery being party to the criminal
proceedings makes it easier to monitor the proceedings.

As  a  general  rule,  the  administrative  procedure  for  recovery  of  aid  follows  its  course
whether  or  not  the  criminal  proceedings  succeed.  After  judgment  and  notification  by  the
judicial  authorities  to  the  authorities  responsible  for  recovery,  the  writ  is  served  on  the
economic operator with a view to recovering the unduly paid amounts. In the event of non-
payment,  a  debt  certificate  (has  the  value  of  an  enforceable  instrument)  is  issued  with  a
view  to  forced  recovery,  a  procedure  which  involves  tax  enforcement  in  certain  bodies
responsible for the recovery of aid.

Parallel  to  the  criminal  conviction,  the  court  orders  the  total  refund  of  the  amounts
unlawfully obtained or diverted, and publication of the judgment.

74

8.1.

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

FIN

Traditional own resources

There  are  no  specific  legal  procedures  for  the  recovery  of  amounts  improperly  paid  or
avoided. A set-off can be ordered by the court only in the event of non-payment of a duty
claimed by the administrative authorities.

Agricultural expenditure

The  management  authorities  are  notified  by  the  legal  authorities  of  the  completion  of
criminal proceedings. Recovery of EAGGF Guarantee expenses continues irrespective of a
possible appeal, unless an explicit decision is made to stop recovery following a petition by
the  applicant.  If  applicable,  the  unit  for  legal  and  budgetary  affairs  of  the  Ministry  for
Agriculture and Forestry protects the Community’s financial interests before the courts and
submits evidence as an applicant.

Structural measures

The management authority takes an administrative decision regarding recovery. If recovery
is not carried out, a request for compensation can be made to the court against the recipient.

When  recovery  is  linked  with  criminal  proceedings,  the  authority  that  has  introduced  the
complaint  acts  as  an  applicant.  The  authority  is  informed  of  the  final  outcome  of  the
criminal proceedings and can initiate an action for recovery on this basis.

(Åland)  The  provincial  government  (the  management  authority)  informs  the  office  of  the
provincial  commissioner  of  police  of  the  amounts  improperly  paid  and  not  recovered.  A
court  judgment  is  not  required  for  the  recovery  of  FIFG  resources.  The  commissioner  of
police informs the provincial government regarding the initiation and progress of the action
for recovery. Both authorities work closely together.

S

Sweden  does  not  use  criminal  procedures  for  recovery.  The  management  authorities  are
responsible for recovery. If necessary, the authority can refer the case to the public service
for the enforcement of debts in order to recover the amount through civil proceedings.

Criminal proceedings relate to the infringement as such, the sanction to be imposed and – in
the field of customs duties – the confiscation of goods. The administrative authority takes
the initiative in such a proceedings. At the end of criminal proceedings, a copy of the final
judgment  is  passed to the  public service  for  the  enforcement  of  debts.  The  administrative
authority is also informed.

In  the  field  of  the  own  traditional  resources,  it  is  Customs  who  decide  on  the  possible
administrative fines to be applied. An application can be made to the administrative court.

75

8.1.

UK

Legislative  mechanisms  and  administrative  provisions  for  the  judicial  authorities  to
communicate the outcome of criminal proceedings to the administration, for the purposes
of recovery

Own resources

HM Customs and Excise acts as prosecution authority. Procedures are in place to monitor
the development and outcome of cases.

The  judicial  authorities  are  not  responsible  for  communicating  the  end  of  criminal
proceedings to administrative authorities. Customs monitors all criminal cases falling within
its  jurisdiction  and  advises  the  appropriate  unit  within  Customs  when  recovery  action
should be instigated.

A demand for duty is issued at the earliest opportunity once the amount has been quantified,
and on condition that it does not compromise a criminal investigation.

The amounts concerned can be recovered whether or not the criminal investigation has been
successful.

Agricultural expenditure

(Scotland) The Scottish authorities closely monitor cases of suspected fraud with criminal
implications in the agricultural field for the purposes of recovery.

The  Counter  Fraud  and  Compliance  Unit  (CFCU)  of  Britain’s  Rural  Payments  Agency
(RPA) cooperates closely with the various regional and national  authorities  (including  the
customs authority, for which there is a designated liaison officer tasked with ensuring good
communication  with  HM  Customs  and  Excise  on  cases  which  they  are  investigating  on
behalf of the RPA) which can institute criminal proceedings. It is rare that the CFCU is not
aware of the outcome of criminal proceedings.

(Northern  Ireland)  the  judicial  authorities  do  not  formally  notify  the  outcome  of  criminal
proceedings  to  the  Department  of  Agriculture  and  Rural  Development  (DARD).  The
investigating  officer  (IO)  will  however  inform  the  Grants  and  Subsidies  Division  of  the
Department, which is responsible for recovery, of the outcome of criminal proceedings.

Structural measures

The Department for Transport, Local Government and the Regions (DTLR) states that, as a
general rule, the administrative authority takes the initiative to obtain information on behalf
of the judicial authorities on the state of criminal proceedings.

The Department for Work and Pensions (DWP) encourages Government Offices (GOs) to
follow  the  development  of  criminal  proceedings  concerning  cases  affecting  the  ESF  and
falling  under  their  responsibility.  The  recovery  of  the  funds  however  is  initiated
automatically, and does not depend entirely on the outcome of the criminal proceedings.

(Northern Ireland) The Departmental Solicitor’s Office (DSO) informs the ministries of the
date  and  outcome  of  cases  brought  before  the  courts,  so  that  they  can  take  action  with  a
view  to  recovery.  The  ministries  also  maintain  close  contacts  with  the  Police  Service  of
Northern Ireland (PSNI ).

76

8.2.

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Member
State

Measure

B

Keeping a “debtors” file and estimating the chances of recovery, as well as the time limits
imposed  by  the  European  authorities  (4  to  8  years)  regarding  actions  for  recovery,  are
instruments likely to guarantee an effective follow-up as regards protection of Community
financial interests.

(Walloon  region)  Directly  an  improper  payment  is  detected,  the  operational  government
department asks the Collector of Taxes of the Ministry for the Walloon Region to proceed
with the recovery of the amounts concerned.

DK

Own resources

With  a  change  in customs  law  (Act  No  947  of  20  December  1999,  in  force  by  1  January
2000) the conditions for customs credits were tightened and the possibility of not allowing
customs credits was made possible if a risk of fraud is at hand.

Agricultural expenditure

The organisation of the recovery  system  was  changed  radically  in 2000 and  the  work  has
continued in 2001 with the goal of improving the recovery.

Structural measures

As regards the ESF, the legal basis for recovery was improved with a new law and a new
regulation  on  administration  of  subsidies  from  the  ESF  (Act  No  254  of  12  April  2000,
Regulation No 133 of 1 March 2001). The result has been important changes in the way of
monitoring the projects and assuring recovery.

D

Having extensively employed magistrates, judges, police officers, auxiliaries and bailiffs, as
well as members of the fiscal and customs police force, Länder made sure, also under pilot
projects,  that  recovery  and  seizures  have  been  much  more  enforced  than  during  previous
years.  Improvements  are  not  limited  to  the  field  of  the  financial  interests  of  the
Communities.

Customs administration

In  2001,  a  “central  service  for  the  acceleration  of  the  recovery  procedure”  and  the
corresponding rules were introduced at the level of the payment authority of the  principal
customs  office  at  Hamburg-Jonas.  In  order  to  prevent  the  omissions  at  the  time  of  the
collection,  an  audit  procedure  is  thus  implemented  within  the  services  charged  take
decisions in the fields concerned. Moreover, claims are the subject of a periodical legal and
economic evaluation in order to better assess the risk of total loss.

Data exchange between the payment authorities competent for the control of the entry of the
traditional own resources and the recovery services takes place already by DP media. An IT
procedure for data transmission between the supervising authorities (services charged with
the follow-up of criminal cases and with the application of the penalties in the main customs
offices) and the customs revenue offices is under conception (procedure IT STRAF).

77

8.2.

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Structural measures

EL

E

The management or the payment authority referred to in Article 8 of Regulation (EC) No
438/2001 has to keep an account of recoverable amounts concerning payments carried pour
and co-financed by EU, to ensure that amounts are recovered without unjustified delay. By
the introduction of computerised accounts and of institutional and staff adaptation measures,
in particular in the field of the post-clearance verifications, Länder endeavoured to improve
the recovery of undue expenditure.

Responsibility for monitoring and improving the recovery procedure has been attributed to
newly created Directorate 52 (Analysis and Evaluation) within the General State Accounts
Office.

Own resources

The General Tax Control Plan (2001) of the official agency of the tax authorities (AEAT)
envisages coordination measures between,  on  the  one hand, the recovery  services  and, on
the other hand, the customs and excise authority.

The Special Programme of Quality for 2001, established  by  the  official  agency  of  the  tax
authorities (AEAT), provides for numerous actions aiming to improve recovery, such as the
strengthening  of  collaboration  between  the  recovery  services  and  the  inspection  and
investigation services of the AEAT.

F

Agricultural expenditure

Coordination bodies, made up of representatives of authorising and accounting departments
and with which inspection services are associated, were put in place in 2001 in the majority
of  payment  agencies.  These  bodies  ensure  the  correct  application  of  Community  and
national  orientations  as  regards  the  management  of  unduly  paid  funds  (creation  of  a  pre-
debtor  record,  monitoring  of  the  delay  between  the  establishment  of  an  anomaly  at  the
occasion  of  an  on-the-spot  check  and  the  recovery  of  the  corresponding  undue  payment).
Such an approach helps to improve the monitoring of recovery and to inform inspectors of
the follow-up of their findings.

Structural actions

The Ministry of Employment and Solidarity ensures the regular monitoring of recoveries on
the  basis  of  inspection  reports  issued  by  the  regional  inspection  services.  The  Ministry
keeps a general table allowing  the follow-up  of  each  inspection to  be  monitored  from  the
date  of  the  on-the-spot  check  until  actual  recovery.  Furthermore,  regional  inspection
services are informed by the Treasury of the completion of recovery actions (transmission
of receipt declarations).

78

8.2.

IRL

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Traditional own resources

Please see item 6.1. above. All the areas referred to above are closely linked.

Agricultural expenditure

The new SAP Accounts System has improved the monitoring of debtors and recovery, by
allowing the netting of debts against payments across aid schemes. Furthermore, a new debt
collection unit has been set up within the Agricultural Structures in the framework of agri-
environmental  and  early  retirement  schemes.  As  regards  early  retirement  aid,  several
measures have been adopted in order to avoid a build up of debt in relation to concurrent
payment  of  national  retirement  pensions.  A  litigation  unit  has  been  established  within  the
Beef  Exports  Refunds  Division  to  manage  the  recovery  of  EU  monies  through  the  courts
and  legal  proceedings  relating  to  the  Paying  Agency’s  activities  to  protect  EU  funds.
Professional and administrative staff have been assigned to the division.

Structural actions

The existing measures for recovery of irregular expenditure are considered to be adequate.

I

In general, whenever a control agency notes an irregularity, it sends one copy of the official
report to  the  authorising  officer for  recovery  of  the  improperly  collected  amounts  and  for
the application of administrative sanctions, and one copy to the judicial authority.

Traditional own resources

The customs agency has asked the internal audit offices to intensify controls on the forced
recovery  of  the  customs  debt  and  has  laid  down  guidelines  regarding  the  examination  of
requests for the customs debt to be written off.

NL

Traditional own resources

The 1990 law on recovery also applies to traditional own resources. The operation of this
law is deemed to be satisfactory by the Netherlands authorities.

Structural measures

In order to secure the recovery of undue expenditure under the ESF, the Netherlands has set
up the “ Netherlands ESF recovery procedure” (November 2000). This procedure envisages
the following stages:

– 

– 

– 

– 

administrative decision;

42 days later: first reminder;

2 weeks later: second reminder;

2 weeks later: transmission of file to the Social Affairs and Employment (SZW)
agency

Under  the  Interreg  programme,  the  Ministry  for  Housing,  Spatial  Planning  and  the
Environment (VROM) will initiate, if necessary, the necessary recovery measures.

79

8.2.

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Agricultural expenditure

When the control authorities of the paying agencies or the external services, in particular the
accounting service (AID) or the customs, note irregularities, they inform the department of
the paying agency responsible for recovery.

The  paying  agency  is  also  informed  when  AID  or  the  tax  information  and  investigation
service and economic control services (FIOD-ECD) have drawn up an official report. If a
current  criminal  investigation  is  opposed  to  the  establishment  of  a  full  control  report,  the
law officer decides what information it is advisable to give the paying agency, and when.

A

Own resources

In  theory  the  authorities  responsible  for  controls  and  investigations  and  the  authorities
responsible for recovery are brought together in a single office and supervised by a common
directorate.

If, in exceptional circumstances, there is more than one address, steps are taken  to ensure
that documents are transmitted immediately.

Agricultural expenditure:

The total amount recovered by the paying agency AMA was €5 million in  2001  (0.5% of
annual payments). A total of 90% of recoveries was brought in by compensation within a
few months.

Structural measures

The Austrian authorities recall the general obligations of recipients of financing under the
Structural  Funds  set  out  in  the  Convention.  Complaints  are  basically  the  responsibility  of
the various implementing bodies, and there is no authority  with  specific responsibility  for
recovery.

The federal implementing bodies are  able to involve  the financial  prosecutor,  who  can  be
called upon in any recovery proceedings.

P

Agricultural expenditure

At the National Agricultural Intervention and Guarantee Institute (INGA), the principal aid-
paying  agency  of  the  EAGGF  Guarantee  Section,  the  Recovery,  Frauds  and  Irregularities
service has organised training on the new version of the regulation on recovering aid, for the
other services concerned. Monthly meetings are organised with the services that administer
the measures, and they are asked to provide information on the outcome of control reports.

Structural measures

In the case of the ESF, procedures have been adopted relating to the compensation, under
the Social Security budget, of ESF amounts unduly paid to recipient authorities.

Moreover, the increasing use of the credit compensation model has permitted increasingly
frequent and increasingly rapid recovery.

80

8.2.

FIN

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Traditional own resources

Various  measures  improving  recovery  have  been  adopted  during  the  last  fifteen  years
(security  of  the  amounts  to  be  paid  at  an  advanced  stage,  cooperation  with  the  judicial
authorities,  general  measures  against  the  “grey”  economy  and  the  tracing  of  criminal
profits(cid:1)). In the case of post-settlement recovery, there are not necessarily any security and
measures for recovery must be started. The customs authorities are informed when the tax
authorities have initiated measures for recovery.

Agricultural expenditure

Several measures have been adopted to reinforce the effectiveness of recovery:

– communication by the supervisory authorities to the recovery authorities of risks of fraud
detected at the time of supervision;

– the  passing  of  information  by  the  recovery  authorities  to  the  supervisory  authorities
regarding the outcome of recovery proceedings;

– risk analysis for ex post controls pursuant to Regulation (EC) 4045/89;

– use of T5 control form (export refunds);

– a centralised system of following  up  commitments  to pay,  based  on  the  Commission’s
guidelines.

Structural measures

The following measures have been taken:

– definition  of  the  competencies  of  the  various  departments  within  the  Ministry  of  the
Interior involved in the management of funds (pursuant to Regulation (EC) 438/2001);

– changes to the law to clarify the principles as regards recovery;

– procedure providing for the dispatch  of  follow-up  reports  by  supervisory  authorities  to
recovery authorities (centres for employment and economic  development),  and  to  the  unit
for  rural  and  structural  policy.  The  latter  unit  checks  whether  the  management  authority
responsible for recovery has taken the necessary steps on the basis of the follow-up report;

– changes to the law on State aid (measure 688/2001): measures contrary  to  Community
legislation can henceforth give rise to proceedings for recovery;

– amendment of the measure on regional development (measure 574/2001): establishes the
Ministry of the Interior’s right to recover funds from regional councils.

(Åland)  The  provincial  government  could  improve  legislation  on  recovery  in  order  to
extend the applicability of the measures relating to recovery to all forms of aid part-financed
by the Structural Funds.

S

The  procedures  for  recovery  are  the  same  with  regard  to  Community  resources  and
expenditure  as  for  the  recovery  of  national  debts;  this  is  why  no  specific  measures  have
been taken for recovery of EU monies. All authorities managing EU funds have produced
manuals on procedures to follow in the case of recovery.

81

8.2.

UK

Measures to improve the recovery of resources and of undue expenditure –links between
the control and investigation authorities and those charged with recovery

Own resources

Procedures for the identification, notification and administration of outstanding amounts are
regularly reviewed to ensure their effectiveness.

Agricultural expenditure

(Scotland)  With  regard  to  EAGGF  expenditure,  the  recovery  unit  within  the  Scottish
Executive Environment and Rural Affairs Department (SEERAD) has been expanded since
its  creation  in  May  2000.  The  amounts  to  be  recovered  are  identified  during  on-the-spot
checks and are recorded in the integrated administration and control system (IACS).

With  regard  to  the  inspection  arrangements  of  the  Forestry  Commission,  these  are  being
improved constantly.

(Northern  Ireland)  The  Department  of  Agriculture  and  Rural  Development  (DARD)  has
introduced  a  number  of  procedural  improvements  as  well  as  reinforced  management
controls.

Structural measures

of 

The  Department  for  Transport,  Local  Government  and  the  Regions  (DTLR)  has  issued  a
procedures.
number 
Government Offices (GO) are obliged to consider and record  all possibilities  of recovery,
and  only  to  send  a  report  of  irrecoverability  to  the  DTLR  if  all  possibilities  have  been
exhausted.

notes  which 

guidance 

recovery 

cover 

also 

The “EURONET” group permits a vital exchange of information between the internal audit
units and the ministries responsible for the Structural Funds.

8.3.

Daily liaison between the control authorities and those responsible for recovery

Member
State

Measure

B

The  supervisory  authorities  coordinate  their  activities  by  various  means  (in  writing,  by  e-
mail and through meetings).

Named  contacts  have  been  designated  within  each  disbursing  agency  in  order  to  simplify
contact:  a  single  contact  point  within  the  Belgian  Interventions  and  Refunds  Bureau
(BIRB);  a  contact  point  for  each  section  at  the  Ministry  for  the  Middle  Classes  and
Agriculture.

(Region of Brussels – Capital) Whenever recovery needs to be effected, the Region bases
itself on the relevant texts: after having exhausted all means of redress within the Financial
and  Budgetary  Administration  of  the  Region,  the  regional  centralising  accountant  applies
Articles 94 and 95 of the Royal Decree of 17 July 1991 concerning the coordination of the
State  accountancy  laws.  Recovery  is  then  effected  by  the  Administration for  Value-added
Tax, Registration and State Property, which is attached to the federal Ministry of Finance.

82

8.3.

DK

D

Daily liaison between the control authorities and those responsible for recovery

Own resources

The  customs  and  excise  authorities  carry  out  all  work  in  relation  to  both  control  and
recovery, so that they act as a single authority in this matter.

Agricultural expenditure

When proceedings for recovery are initiated (see item 8.2 above), the control authorities are
no  longer involved,  and  the  operational  services  of  the  paying  agency  are  responsible  for
contacts with the control authorities. The operational offices keep a permanent check on the
conformity  of  controls  with  the  adopted  control  programmes,  in  particular  at  frequent
meetings with the control authorities.

Structural Funds

The control unit and the payment and management unit keep each other informed.

The authorities responsible for checks and recovery are usually under the responsibility of
the competent authorities at local level but they  are  organised separately.  That  is  why  the
regular  procedures  do  not  require  any  direct  link  between  the  authorities  responsible  for
checks  and  for  recovery  collection.  The  mutual  and  regular  exchange  of  information  is
automatic and targeted at needs.

EL

Traditional own resources

E

F

Inspection  departments  are  required  to  refer  all  cases  to  the  customs  offices  to  start  the
recovery procedure. The Customs Department has the sole responsibility for recovery.

Structural actions

Directorate 52 (Analysis and Evaluation) of the General State Accounts Office is working
on amending the Joint Ministerial Decision on recovery, so as to bring it line with the new
legislation  with  regard  to  the  structural  funds,  in  particular  the  3rd  CSF.  This  activity
involves  close  cooperation  with  the  General  State  Accounts  Office’s  Directorate  41
(financial  relations  with  the  EU),  the  Central  Management  Agency  and  the  Payment
Agency.

See answers to items 4, 6.2 and 8.2. above

A “monitoring of follow-up” procedure exists in the framework of quarterly meetings of the
EAGGF  Inter-ministerial  Committee  for  the  Coordination  of  Controls  (CICC)  as  far  as
controls under Regulations Nos 4045/89 and, since 2000, 595/91 are concerned.

All  files  for  which  a  recovery  action  has  been  decided  on,  either  following  checks  and
inspections under Regulation No 4045/89 or following a different type of control and for an
amount exceeding €4 000, is systematically reviewed on the occasion of quarterly meetings.
During  these  meetings,  payment  agencies  are  invited  to  inform  the  CCIC  of  the  state  of
progress of the recovery of unduly paid sums.

This monitoring procedure is materialised by regularly updated tables containing, for each
file,  the  aid  amount  to  be  recovered,  information  about  the  initiation  of  the  recovery
procedure  by  the  payment  agency  as  well  as,  for  cases  exceeding  €4  000,  information
concerning the state of the file in the light of Regulation No 595/91. The control services,
which participate together with the payment agencies in the quarterly meetings of the CICC,

83

8.3.

Daily liaison between the control authorities and those responsible for recovery

receive  copies  of  these  tables  and  are  therefore  regularly  informed  of  the  current  state  of
affairs.

IRL

Traditional own resources

The  control  and  recovery  services  both  form  part  of  the  Irish  customs  service  (ICS)  and
close contacts are maintained.

Agricultural expenditure

Close  and  regular  links  exist  between  the  “inspection  department”  and  the  “recovery
department”,  both  at  a  formal  and  at  an  informal  level.  Irregularities  are  systematically
reported to the administrative staff, who arrange for the recovery, if necessary, of amounts
unduly paid.

I

L

NL

A

Structural actions

Please see the replies to point 8.1 above.

In the area of traditional own resources, Customs offices follow up the enforced recovery of
Customs duties carried out by the bodies competent for the recovery, through the analysis of
write-off  applications,  as  provided  for  by  article  19  of  Legislative  Decree  No112/99.  The
Customs  office  that  initiated  the  recovery  proceedings  is  also  competent  to  verify  if  the
competent body has complied with the regulation in force to recover the customs debt. The
Customs  Agency  has  given  the  necessary  instructions  by  circular  letter  No270/D  of
8.11.1996.

When the activities of the control  bodies reveal  irregularities,  they  inform  the  authorising
officer for the purposes of recovery. If irregularities amount to offences, the bodies inform
the judicial authorities, and the authorising officer monitors the procedure with the judicial
authority.

The Customs and excises Departments are responsible for both checks and recovery.

Traditional own resources: daily contacts between control and recovery services within the
customs services. Communication lines are short.

Traditional own resources

It  is  generally  the  control  authorities  which  also  calculate  the  amount  to  be  recovered  a
posteriori and which forward the relevant documents directly to the services charged with
recovery.

In this context, every effort is made to reduce the delay to a minimum.

Agricultural expenditure

See comments under 8.1. and 8.2.

Structural measures

There is no special service dealing with recovery of aid granted by the Structural Funds (the
one exception, however, being the financial prosecutor who intervenes, if necessary, within
the framework of legal proceedings).

84

8.3.

Daily liaison between the control authorities and those responsible for recovery

P

The control bodies monitor recommendations and proposals formulated in the reports,  the
authorities responsible for recovery being obliged to provide information on the recovery of
amounts due to notified irregularities. Within the bodies themselves, there are procedures to
guarantee  good  liaison  between  the  administration  and  control  services  and  the  recovery
services.

Own resources

The DGAIEC (customs) maintains a file for monitoring cases of fraud and irregularities.

Structural Funds

The paying agencies are preparing to adopt procedures necessary for the recovery of unduly
paid sums.

FIN

Own resources

The unit for the management of credits at the National Customs Council receives proposals
for post-settlement recovery by e-mail from the customs districts. If necessary, the recovery
authorities contact the legal or fiscal authorities (see item 8.1. above).

Agricultural expenditure

There are regular contacts between the supervisory authorities and the recovery authorities
in the Ministry for Agriculture and Forestry;

Structural measures

Procedures have been set up to allow the follow-up of the measures taken in concrete cases
by  the  supervisory  authorities  on  the  one  hand,  and  the  recovery  authorities  on  the  other
(meetings, common databases(cid:1)). Coordination is facilitated by the fact that the supervisory
and the recovery authorities for each Structural Fund are within the same Ministry.

(Åland) In practice contacts are limited since requests for recovery are relatively rare with
regard to  projects  part-financed  by  the  Structural  Funds.  In  general,  requests  for  recovery
are honoured without it being necessary to apply to the police.

S

All  management  authorities  have  concluded  contracts  with  a  debt  collection  company.  In
the  event  of  non-payment  of  the  sum  owed  after  this  company’s  intervention,  the  case  is
passed to the public service for the enforcement of debts.

UK

Own resources

Regular  and  effective  channels  of  communication  have  been  established  within  HM
Customs  and  Excise,  permitting  the  notification  of  debts  to  the  teams  responsible  for
recovery, and making it possible for the latter to inform the inspection teams of the results
of their activities.

85

8.3.

Daily liaison between the control authorities and those responsible for recovery

Agricultural expenditure

The  Rural  Payments  Agency  (RPA)  has  both  investigation  departments  and  departments
responsible for recovery.

Within the Forestry Commission, the same people deal with controls and recovery (in the
latter case, they are assisted by the financial sections).

(Scotland) In the area of agricultural expenditure, the results of inspections are incorporated
into the integrated administration and control system (IACS), which identifies the amounts
to be recovered and transmits them to the sections responsible for recovery.

(Northern Ireland) Within the Department of Agriculture and Rural Development (DARD),
the  subsidies  and  grants  inspection  division  (SGID)  and  the  subsidies  payments  division
(SPD), which is responsible for recovery, come under the same management unit. Regular
meetings  and  detailed  instructions  guarantee  strict  application  of  the  rules  in  force.  In
addition, the Department of Agriculture and Rural Development (DARD) uses a centralised
and  completely  integrated  computer  system  for  all  aspects  of  direct  agricultural  aid
management,  including  calculation  and  the  application  of  sanctions,  the  authorisation  of
payments and the recording and processing of expenditure to be recovered.

Structural measures:

Both  controls  and  recovery  are  the  responsibility  of  the  Department  for  Transport,  Local
Government  and  the  Regions  (DTLR).  Day-to-day  work  however  is  carried  out  by  the
Government Offices (GO), on the Department’s behalf.

With  regard  to  ESF  expenditure, the  Government  Offices  (GOs)  are  obliged  to  report  the
recovery of undue expenditure to the Department for Work and Pensions (DWP).

With regard to the FIFG, the authorities responsible for controls and those responsible for
recovery are located in the same ministry.

(Northern  Ireland)  Internal  audit  reports  containing  data  on  irregularities  are  sent  to  the
accounting officers (AO) of the implementing ministries responsible for recovery. The same
is true for reports drawn up by the investigators (IAUs).

86

Title III: STATISTICS AND ANALYSES

INTRODUCTION

For  the  protection  of  its  financial  interests,  Community  legislation  lays  down
notification  requirements  as  regards  Community  fields  of  activity  (Own  Resources
and  Expenditure).  Based  on  the  sectoral  legislation,  Member  States  are  obliged  to
communicate to the Commission all cases of irregularity50 which exceed € 4 000 (€
10 000 for own resources).

Member  States  also  notify  further  stages  in  the  examination  of  those  irregularities
such as administrative decisions or the transmission of the file to judicial authorities.

The distinction between fraud and other irregularities is that fraud is a criminal act51,
which is ultimately determined at the outcome of the judicial process. Any attempt to
distinguish,  for  reporting  purposes,  between  fraud  and  other  types  of  irregularity
therefore  requires  Member  State  authorities  to  estimate  in  advance  whether  each
irregularity is likely to constitute fraud.

Reported Communications Reg. 595/91 for 2001 in digital format:

Qualifications of Irregularities *

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Reported as Fraud acc. to
the Convention (IRQ3)

Reported as Irregularities
acc. to reg. 2988/95 (IRQ2)

Reported as Errors (IRQ1)

Qualification not reported

B

DK

F

IRL

I

NL

A

FIN

S

UK

In  general,  the  Member  States  accept  that  this  approach  is  desirable  for  statistical
purposes.  In  practice,  however,  the  notification  of  cases  of  fraud  and  irregularity
varies  widely  between  Member  States52.  Some  are  more  prepared  to  reach  a
judgement  at  an  early  stage  in  the  procedure:  others  are  more  cautious.  In  some
Member  States  judicial  authorities  conduct  all  the  investigations,  in  others,
administrative  authorities  do  the  initial  investigation.  The  consequence  is  that  the

50

51

52*

Article 1(2), Regulation (EC, EURATOM) N° 2988/95 of the Council of 18 December 1995 (OJ L312
of 23.12.1995).
The  common  definition  of  fraud  is  found  under  Article  1  of  the  Convention  on  the  Protection  of  the
Communities’ Financial Interests of 26 July 1995 (OJ C N°316 of 27.11.1995).
The chart shown above was produced on the basis of those communications that have been reported in
digital format via the AFIS network, since the analysed field “Qualification of the Irregularity” is only
available in that format. Consequently, only those Member States appear in the table that have used the
AFIS-network to report their irregularities.

87

                                                
figures  submitted  by  Member  States  in  the  past  have  not  been  prepared  in  a
consistent way across the EU as a whole.

The  Commission  has  set  up  a  working  group  to  provide  Member  States  with
guidelines  by  which  irregularities,  including  suspected  fraud,  can  be  notified  in  a
more consistent way. Improvements have been agreed on the practical modalities of
communication.  However,  the  consensus  has  not  yet  been  achieved  on  how  and
when to  determine  for  reporting  purposes  that  a  particular  irregularity  may  involve
fraud.  The  main  difficulty  is  the  reluctance  of  some  Member  States  to  make
predictions,  even  for  statistical  purposes,  before  the  completion  of  criminal
proceedings. The Commission is determined to resolve this problem, and discussions
are continuing.

A further difficulty in the preparation of the present Report is that the Member States
are  in  the  process  of  moving  from  the  communication  of  irregularities  on  paper  to
electronic communication. In the agricultural sector in particular, a very high number
of communications were presented in paper form rather than, as anticipated, via the
new  electronic  format.  This  has  made 
the
communications and to establish their reliability. This  situation  will  improve  in  the
future as the migration to electronic format is completed.

it  difficult  rapidly 

to  analyse 

Traditional Own Resources

In  the  context  of  the  new  approach  to  the  information  to  the  Budgetary  Authority,
from  the  year  2000  onwards,  the  Commission  merged  the  report  established  by
OLAF under Article 280 of the Treaty and the report established under Article 17(3)
of Regulation N°1150/00 by the Directorate general Budget.

For  the  year  2001,  the  Commission  notes  with  satisfaction  that  all  Member  States
endeavoured to communicate the necessary information in the given timeframe.

Besides,  the  Commission  adopted  Decision  C(2002)  416  final  of  13.03.200253  in
order to further simplify the modalities of notification of underlying information.

Expenditure

In  order  to  ensure  fast  and  reliable  communication  the  Commission  has  created
special  irregularity  modules  under  Regulation  (EC)  No  595/91  as  well  as  under
Regulation (EC) No 1681/94 and Regulation 1831/94 so the notifications can be sent
in safe electronic form using the AFIS network. These notifications are to be stored
in such a way as to be accessible and put to maximum use by both the Member States
as well as other Commission services.

During  the  first  half  of  2001  all  Member  States  received  training  to  use  the  new
system,  as  well  as  a  module  for  use  for  communicating  irregularities  under
Regulation  595/91.  As  a  result  of  this  all  Member  States  should  have  been  able  to
send  messages  in  digital  form  since  the  third  quarter  of  2001.  However  some
Member States have  found this migration of communications  to electronic  delivery

53

Amending  Decision  97/245/CE,  Euratom  of  20  March  1997  defining  the  modalities  for  the
communication  by  the  Member  States  of  certain  information  addressed  to  the  Commission  in  the
context of the system of the Communities’ own resources.

88

                                                
problematic and by simply comparing Regulation 595/91 irregularity messages it is
clear that there are some deficiencies in the figures.

At a series of meetings in Brussels in April 2002, Member States were encouraged to
report any technical difficulties they had experienced in using the 595 module and to
validate the 2001 figures electronically. Member States were all invited to verify the
statistics  and  to  comment  on  them.  Those  responses  which  were  received  on  time
have been taken into account. Due to the fact that some replies had not been received
by the agreed deadline (18/04/2002), and the fact that some 2/3 of the messages were
received  in  paper  format,  an  in-depth  analysis  was  not  possible  and  these  results
should  be  treated  as  preliminary  findings.  However,  an  additional  effort  has  been
made  to  incorporate  all  the  information  received  after  the  deadline  and  thus  all
statistics  presented  in  this  part  of  the  report  are  based  on  figures  on  the  situation
15/05/2002.  This  applies  to  communications  under  Regulation  595/91  as  well  as
1681/94 and 1831/94.

9. 

THE SITUATION IN 2001

Examination of all communications received in 2001 reveals that the total number of
irregularity messages communicated has decreased in all sectors in comparison to the
year 2000. This is the case particularly in Own Resources and in Agriculture, much
less  so  in  the  Structural  Funds.  As  regards  the  amounts,  the  same  decrease  can  be
observed. However, whilst the budgetary implications of irregularities affecting Own
resources (from €527 million to €256 million) and the EAGGF Guarantee area (from
€ 474 million to € 141 million) have fallen, th e budgetary implications affecting the
Structural Funds have increased (from € 114 million to € 201 million). In the latter
case, this may reflect stronger efforts in detecting fraud and other irregularities and
cases involving greater amounts.

9.1. 

Traditional Own Resources

The Member States’ Activity Reports (Article 17(3) of Regulation N° 1150/00)

Under Article 17(3) of Regulation N° 1150/00, the Member States communicate the
annual  data  regarding  the  activity  of  the  customs  administrations  (declarations
accepted ;  declarations  submitted  to  ex  post  control ;  staff  numbers).  These  data
make it possible to define the trends of customs activity in the European Union.

As compared to 2000, activity in the year 2001 reflects a clear rise in the number of
accepted  declarations54  (+20,30%),  especially  in  Germany,  Italy  and  the  United
Kingdom.  Given  the  economic  conditions,  this  rise  is  surprising.  The  number  of
controlled  declarations55,  on  the  other  hand,  rises  by  almost  50%.  However,  the
overall rate of control rose by 1,70% only as  compared to 2000, the rate of control
increasing significantly in Belgium , Germany, Greece and Portugal.

In spite of this, the impact of this overall increase must be analysed with due caution,
for a number of reasons :

54

55

The number of declarations accepted in 2001 is 108.375.105 as against 88.625.612 in 2000.
The number of declarations controlled in the context of audit cannot be quantified by nature; therefor
the rate of control cannot take them into account.

89

                                                
– 

– 

it  seems  that  some  Member  States  always  communicate  the  total  number  of
accepted  declarations,  regardless  of  the  nature  of  duties  concerned  (own
resources  or  national  taxes),  and  do  not  necessarily  specify  the  split  between
types of declarations;

from  one  year  to  the  next,  some  Member  States  have  important  variations  in
the number of controlled declarations : this is the case for Greece with 246 804
declarations controlled in 2001 as against 17 517 only in 2000.

The Commission draws again the attention of the Member States on the necessity of
providing  consistent  statistics  which  can  be  used  for  a  detailed  analysis  of  each
Member  State’s  activity  and  a  more  objective  comparison  of  the  activity  of  the
Fifteen. On the other hand, the Member States will be invited to justify the objective
nature of some data in the context of the Advisory Committee on Own Resources.

Overall, the number of staff in the customs services is relatively stable. However, in
some Member States, such as Greece, Germany, Austria and the United Kingdom in
particular,  this  number  diminished  as  compared  with  2000.  These  Member  States
will be requested to explain this decrease. Besides, the overall staff level for ex post
control remains stable.

An  Analysis  of  the  data  transmitted  by  the  Member  States  under  Article  6(5)  of
Regulation N° 1150/00 (see Annex 1).

As provided by Article 6(5) of Regulation N° 1150/00, the Member States inform the
Commission  of  cases  of  fraud  and  irregularity,  whose  amount  is  higher  than  €
10 000.  This  information  makes  it  possible  to  describe  trends  in  the  fight  against
fraud and their financial impact.

90

The Member States’ Communications of fraud and other irregularities - 1997/2001

(as on 26.04.2002)
(Article 6(5) Regulation N° 1150/00)

Member States

1997

1998

1999

2000

2001

Cases 2000-
2001

Amounts
2000-2001

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK

260
83
397
15
81
232
54
302
4
466
81
16
36
46
481

345
133
335
12
73
216
63
173
7
305
163
18
42
98
499

294
102
496
14
119
267
40
288
8
205
87
14
36
66
534

306
108
488
0
116
246
37
226
2
264
89
19
36
17
496

293
67
351
10
134
215
35
197
0
205
98
11
20
18
192

TOTAL CASES

2.554

2.482

2.570

2.450

1.846

- 4 %
- 38 %
- 28 %
+ 100 %
+ 16 %
- 13 %
- 5 %
- 13 %
- 100 %
- 22 %
+ 10 %
- 42 %
- 44 %
+ 6 %
- 61 %

- 25 %

38%
-48%
-63%
+ 100 %
365%
-41%
-20%
140%
-100%
-65%
118%
30%
96%
122%
-91%

-51%

Overall,  for  the  period  1989-2001  (updated  on  26.04.2002)56,  the  Commission
received 20 452 communications (initial communications and updates). For the year
2001 alone, 1 846 communications were transmitted by the Member States. The table
above shows the evolution of the communications of cases of fraud and irregularity
from 1997 to 2001.

Two  tendencies  emerge:  in  raw  data,  the  number  of  cases  of  fraud  and  irregularity
since  1997  continues  to  dwindle ;  so  does  the  number  of  cases  of  fraud  and
irregularity  in  2001,  which  diminishes  by  25%  on  the  average  as  compared  with
2000, with 1 846 communications in 2001 as against 2 124 in 2000.

The  fall  is  particularly  significant  in  the  United  Kingdom  (-61%),  a  situation
resulting  essentially  from  the  settlement  of  one  particular  file;  the  fall  is  equally
important in Finland (-44%),  Germany  (-28%), the Netherlands  (-22%), Portugal (-
42%) and Denmark (-38% in cases). The new direction of certain customs controls to
other areas of activity (for example, the fight against terrorism) could partly explain
this tendency.

However, the Member States are obliged to monitor the Communities’ resources as
carefully as they do monitor national resources. Reorienting controls cannot be done
at the expense of the Union’s own resources. The Member States will be requested to
explain the reasons for this trend, in the Advisory Committee for Own Resources.

56

The  table  above  was  established  on  the  basis  of  data  provided  by  the  Member  States.  The  notion  of
fraud is not interpreted in a uniform manner by the Member States. This is due partly to the fact that the
Convention  on  the  Protection  of  financial  interests  which  gives  a  definition  of  the  notion  has  not  yet
been ratified by all national Parliaments. For some Member States, an infringement to Community law
cannot be described as fraud as long as a Court has not adopted a final ruling. In some others, on the
other hand, operational services qualify this type of infringement themselves during the investigations.
The  Commission  therefore  recommends  that  only  the  overall  figures  including  both  the  concepts  of
fraud and irregularities be used for the sake of analysis.

91

                                                
The overall fall of established amounts (see Annex 7) is proportionately steeper than
the fall in number of cases. The established amount falls back to the levels noted in
1998 and 1999. The fall in 2001 is very important (-51%) as compared to 2000 – a
year  in  which  the  established  amount  had  doubled  as  compared  to  1998  and  1999.
Such a variation derives naturally from the decreasing number of cases and also from
the smaller impact of the file Milk Products of New-Zealand57, which accounts for no
more than 0.50% of established amounts in 2001 as against 55.66% in 2000, as well
as of cigarettes.

An  important  increase  of  the  established  amount  was  noted  mainly  in  Spain
(+365%), Italy (+140%, due to cases related to banana imports), in Austria (+118%),
in  Sweden  (+122%)  and  in  Finland  (+96%).  This  amount  on  the  other  hand  falls
substantially in Germany,  the  Netherlands,  France  and  the  United  Kingdom.  Given
these elements, the Member States are invited by the Commission to state the reasons
for this deficit.

The recovered amount in 2001 (€40 342 543, see Annex 7) decreased as compared to
2000 (€86 101 574). However, the overall average rate of recovery is comparatively
stable  (15.7%  in  2001  as  against  16.3%  in  2000).  This  rate  rose  significantly  in
Denmark,  in  Germany,  in  France,  in  the  Netherlands  and  in  Finland.  But  it  falls
substantially  in  Greece,  in  Ireland,  in  Sweden,  in  the  United  Kingdom  and  in
Portugal.  The  rate  of  recovery  varies  widely  from  one  Member  State  to  another,
given  in  particular  national  procedures  of  recovery :  therefore,  it  is  not  possible  to
appreciate the Member States’diligence.

The  Commission  is  glad  to  underline  the  efforts  made  by  the  Member  States  as
regards deadlines as well as the quality of information transmitted for the year 2001.
The data collected from the Member States constitute a prime basis for risk analysis
and defining the targets of the Commission controls.

The  overall  balance  2001  confirms  the  general  trends  observed  during  previous
years.  Certain conclusions,  however,  require  explanations  from  the  Member  States.
The  Commission  wonders  about  the  clear  increase  in  the  number  of  declarations
when  compared  to  the  simultaneous  fall  in  the  number  of  cases  of  fraud  and
irregularities  communicated.  These  questions  will  be  open  to  debate  in  the  next
meeting of the Advisory Committee on Traditional Own Resources, on the basis of a
more elaborate working document.

9.2. 

Agricultural expenditure (EAGGF Guarantee)

The  year  2001  was  a  so  called  transitional  year  in  which,  for  the  first  time,  the
communications  of  frauds  and  irregularities  under  Regulation  (EEC)  N°  595/91
should have been forwarded to OLAF in electronic  or digital format  rather  than on
paper.  Unfortunately,  the  implementation  of  the  new  electronic  system  was  a
problem for some Member States which is why only a relatively small percentage of
the  communications  received  in  2001  were  in  digital  format.  The  chart  below
illustrates how the communications were sent.

Irregularities communicated by the Member States

57

See the Special Report of the Court of Auditors N° 4/98 (OJ N° C 127 of 24.04.1998 and OJ N° C 191
of 18.06.1998).

92

                                                
digital
37%

paper
63%

There  is  no  certainty  that  the  total  number  of  communications  received,  both
electronically  and  on  paper,  represent  the  total  number  of  frauds  and  irregularities
detected by Member States. The reason for this doubt is the fact that, in comparison
to  the  year  2000,  the  number  of  frauds  and  other  irregularities  detected  by  the
Member States in 2001 and their budgetary impact, decreased. The trend over recent
years however, has been a steady and significant increase in the number of cases. In
2001 the number of cases decreased by almost 552 cases, situation as communicated
on 15 May. The next chart provides an overview of the number of cases over the last
five years.

Cases communicated by the Member States

3000

2500

2000

1500

1000

500

0

1997

1998

1999

2000

2001

It is, of course, difficult to give an explanation for this decrease. It is unlikely that the
number  of  cases  of  fraud  and  irregularities  has  fallen  so  sharply.  One  of  the
explanations  might  be  that  the  transition  from  paper  format  to  digital  format  has
resulted in not all irregularities being reported.

Not only the number of cases decreased but also the amount of money the fraud and
irregularities  entailed.  In  the  year  2000  the  amount  affected  was  almost  €  475
million.  In  the  year  2001  it  was  approximately  €  141  million  .  As  a  percentage  of

93

total EAGGF expenditure this means a decrease from 1.18% to 0.34%. In annex 3 an
overview is given over the number of cases, the amounts involved and the % of the
EAGGF expenditure affected over the last five years.

9.3. 

The field of structural measures

In  the  field  of  expenditure  on  structural  measures,  the  trend  highlighted  in  the  last
annual report can be confirmed. In comparison to the year 2000, the number of cases
decreased slightly, but the increase in terms of the budgetary impact continued. This
could be the result of an improvement in the inspection system of the Member States,
not only in terms of number of irregularities  detected but  also with regards  to their
seriousness (for chart and figures see annexes 4 and 5).

Also this year, the majority of cases communicated by the Member States concerned
the Structural Funds (EAGGF Guidance Section, ESF, ERDF, FIFG). With regard to
the  Cohesion  Fund  (which  amounts  to  approximately  €3  billion  a  year),  out  of  the
four beneficiary Member States (EL, E, Irl, P), only Greece communicated 4 cases of
fraud/irregularity (involving about € 2.429  million). From the total number of cases
communicated, it was once again the Social Fund which was most affected in 2001
(694  cases  reported),  whilst  in  monetary  terms  it  was  the  Regional  Fund  which
registered the highest level of fraud/irregularities (more than €102 million).

The analysis of patterns across Member States in the previous year was confirmed in
2001.  The  highest  number  of  cases  was  communicated  by  the  Netherlands  and
France, mostly and, in the former case only, those affecting the Social Fund. In terms
of  amounts,  Ireland  once  again  differed  from  the  other  Member  States  with  a  very
limited number (smaller than the previous  year) of  cases  involving  very  significant
amounts of ERDF funding, a total of 41 cases amounting to more than € 31 million.

9.4. 

Cases under investigation by OLAF

As a general rule, OLAF opens an investigation because fraud is suspected, with the
sole  exception  of  direct  expenditure,  where  OLAF  deals  with  all  irregularities  and
has  a  key  responsibility  for  conducting  investigations.  The  national  judicial  bodies
carry  out  the  investigation  to  determine  the  definitive  nature  of  the  behaviour.
Amounts  are  established  once  the  investigation  by  OLAF  is  finished,  and  sent  to
follow-up.  The  impact  of  cases  closed,  however,  is  a  provisional  estimate,  to  be
confirmed by the competent national bodies which must issue the recovery order to
the persons concerned (except in the case of direct expenditure).

OLAF  dealt  in  2001  with  381  new  cases  most  of  which  fall,  according  to  the
provisional assessment of the Office, into the criminal category58. The total number,
as shown in the first table, reflects a level of antifraud activity higher than it was in
2000 (328 cases opened). Cases are broken down by Community policy. A detailed
account of investigations is given in the Activity report of the Office, under Article
12 of (EC) Regulation N°1073/9959.

58

59

It  is  possible  that  some  of  these  cases  have  also  been  included  by  Member  States  in  their
communications.
(EC) Regulation N°1073/99 of the European Parliament and the Council concerning the investigations
of the European Office for the Fight against Fraud (OJ L 136 of 31.05.1999).

94

                                                
Budget area

New cases in 2001

Traditional Own Resources
EAGGF TOTAL

- Agricultural trade/Export
subsidies

- Subsidy and Direct Aid

Structural Actions
Direct expenditure

Internal policies (Expenditure)
External policies)

Internal cases
Overall Total

74
105
70

35
66

37
66
33
381

95

The second table presents the data regarding cases that were closed in 2001 and their
budgetary impact. No quantification is done of the impact of ongoing cases in order
to  avoid  disseminating  figures  which  may  be  subject  to  considerable  variations
following the conclusion of the investigation. Therefore, the figures displayed below
and  in  annex  6  do  not  give  a  complete  picture  of  the  overall  fight  against  fraud
affecting  the  Communities’  budget,  or  of  the  consequences  for  national  budgets  or
for the budget of separate institutions.

Budget area

Number of
cases
closed

Estimated
Amount in €

% sectoral
budget60

Traditional Own Resources
EAGGF TOTAL

–  Agricultural  trade/Export
subsidies
– Subsidy & Aid

Structural Actions
Direct expenditure

Internal policies (Expenditure)

External policies

Internal cases

Overall Total

98
364
281

83
66

52
70
13
663

276 154 658
198 500 000
190 000 000

8 500 000
47 530 187

13 901 214
7 768 308
20 878 599
564 732 966

0,02
0,47

0,12

0,21
0,16

In traditional own resources (customs duties and antidumping duties), 74 new cases
were opened in 2001. The number of cases closed was 98, with an estimated impact
of €276,15 million.

In agriculture, 105 new cases were opened in 2001 (70 for Agriculture trade and 35
for  agricultural  subsidies  and  direct  aid)  and  enquiries  in  these  matters  were  still
ongoing  at  the  end  of  the  reporting  period.  364  cases  were  officially  closed,
representing a financial impact of €198,5 million :  half of these were referred to the
Member States for follow-up action, as it was decided that they were best placed to
check  the  matters  in  question ;  another  significant  proportion,  after  a  rigorous
assessment,  were  deemed  not  worth  opening  as  a  formal  investigation.  In  2001
OLAF  also continued its work  on those cases  which  were  opened  before  2001  and
were still ongoing when this report was done, for example, the multi Member State
case  of  the  importation  of  bananas  covered  by  false  licences  (estimated  financial
impact  €  155m),  the  Spanish  flax  affair   (financial  impact,  €  100m  –  now  going
through the Commission Clearance of Accounts procedure) and various milk quota
cases in different Member States (financial impact running to at least € 10m).

In  the  structural  funds,  66  new  investigations  were  opened,  out  of  which  84%
concerned  the  ERDF  and  ESF.  Priority  was  given  to  cases  with  a  transnational

60

Percentage  of  the  2001  Commitment  appropriations  of  the  EC  Budget  relevant  for  each  Budget  area,
Execution as at 17.04.2002.

96

                                                
dimension  and  a  significant  financial  and  judicial  output.  In  the  same  period,  66
cases  were  closed61,  90%  of  which  concerned  the  ERDF.  Most  cases  of  suspected
fraud  involved  false  billing,  false  declarations  of  expense.  Specific  problems  were
detected  in  public  tendering.  OLAF  increased  efforts  to  ensure  close  cooperation
with its natural partners, that is the national (administrative and judicial) authorities
and the Commission departments concerned.

In  direct  expenditure,  the  distinction  is  made  between  internal  policies  such  as
Education or Research, External aid and finally corruption cases. In this field, which
is managed mainly by the Commission, OLAF opened, in 2001, 136 new cases and
closed  135  cases.  Half  of  these  new  cases  involved  external  aid  (PHARE,  TACIS,
Development  assistance  programmes,  etc).  ¼  of  new  cases  involved  an  anti-
corruption dimension, thus demonstrating the importance which the Commission and
OLAF attach to scrutiny in this sensitive area.

OLAF also closed some 135 cases with an estimated overall budgetary impact of €
42.5 million (see Annex  6). Again,  external  policies  account for more than 50% of
the total. However, the greater amount has to do with internal policies, and internal
(anticorruption cases) cases.

61

This does not include cases dismissed because, after a rigorous review, no financial or other interests of
the European Union were found jeopardised or because the sources were not reliable.

97

                                                
10. 

SPECIFIC ANALYSIS

10.1.  The field of traditional own resources

As regards the breakdown of frauds and irregularities by customs arrangements, the
2001  figures  confirm  the  impact  of  fraud  on  free  circulation  (73.40%  of  cases  and
82.30%  of  established  amounts).  However,  as  far  as  the  number  of  cases  is
concerned, fraud now affects the transit regime and outward processing.

The detailed breakdown of the established frauds and irregularities by type of fraud
in  free  circulation  leads  to  the  observation  that  cases  mentioned  under  Other
Irregularities  is  in  increasing  proportion –  49.10%  of  the  cases  for  73.60%  of  the
established  amount.  The  imprecise  nature  of  the  information,  which  was  already
highlighted  in  the  previous  years,  distorts  analysis.  With  this  reservation,  fraud  in
free circulation is high on the incorrect description of goods (28.80% of the cases for
15.10% of the amount).

The analysis of the data communicated can also reveal the impact of fraud by type of
goods.  In  2001,  the  impact  was  very  strong  on  cigarettes  and  rice,  as  regards  the
number  of  cases.  In  established  amounts,  the  impact  of  fraud  is  particularly
significant on bananas. As far as the breakdown of cases of fraud and irregularities
by  origin  is  concerned,  the  2001  figures  confirm  the  tendency  observed  in  the
previous  years :  the  impact  is  very  strong  on  goods  originating  from  the  USA  and
China.

10.2.  Agricultural expenditure (EAGGF Guarantee)

It  is  difficult  to  make  an  in-depth  analysis  until  we  are  certain  that  all  the  cases,
which  occurred  during  2001  have  been  communicated.  It  would  therefore  be
premature to draw too many conclusions but certain facts can already be established.

The first conclusion is that the cases communicated are spread over all the possible
types of fraud and irregularities.  In the  following  chart an overview  is given  of  the
different types and their percentage.

Types of irregularities

OTHERS
33%

FALSIFIED DECLARATION
3%

PRODUCT NOT 
ELIGIBLE FOR AID
3%

ABSENCE OF DECLARATION 
OR LATE RETURN
5%

FALSE OR FALSIFIED 
REQUEST FOR AID
17%

INACCURATE PRODUCTION 
DECLARATION
11%

INEXACT ORIGIN
9%

ACTION NOT CARRIED OUT 
IN ACCORDANCE WITH 
RULES
7%

IRREGULAR TERMINATION, 
SALE OR REDUCTION
6%

MISDESCRIPTION 
OF THE HOLDING
6%

98

It is also clear that, as in the year 2000, the highest numbers of communications are
from Germany, Spain and France (see annex 2). Italy comes fifth this year with 163
cases. In monetary terms Italy is the Member State that reports  the  highest  level of
fraud  and  irregularities,  i.e.  more  than  €  45  million,  followed  by  Spain  with  a
reported amount of more than € 30 million. It aly takes account for almost one third
of the amount of irregularities.

10.3.  The field of structural measures

The following tables report some figures concerning the irregularities communicated.

Most frequently appearing types of irregularities

Codes

Type of irregularity

Frequency

999 other irregularities
325 not eligible expenditure
210 missing or incomplete supporting documents
612 failure to respect other regulations/contract conditions
102 incorrect accounts
831 overfinancing
811 action not completed
812 action not carried out in accordance with rules
211 incorrect supporting documents

The rest of the codes

339
316
170
107
79
73
67
58
43
383

Indicative 
Implicated 
Amount
74 405 978
34 071 194
10 126 475
13 289 780
16 091 043
3 994 668
8 991 222
1 573 023
9 702 371
93 293 138

Indicative 
Average 
amount

219 487
107 820
59 567
124 204
203 684
54 721
134 197
27 121
225 637
243 585

The  first  one  shows  the  types  of  irregularity  which  appeared  most  frequently,
together with an indicative implicated amount and the indicative average amount:

It  must  be  noted  that  due  to  the  reporting  method  a  single  case  may  contain  more
than one type of irregularity. As the objective of this table is to show the frequencies
of the different types of irregularity their count slightly distorts the real total results.62

The exact total amounts are those reported in annexes 4 and 5.

These figures are represented graphically below.

62

Therefore  the  ‘total’  row  has  been  omitted.  The  same  considerations  must  be  kept  in  mind  for  the
“indicative implicated amount” and for the “indicative average amount” columns. The values showed in
those two columns are only “virtual”.

99

                                                
Not eligible 
expenditure
(325)
19%

The rest of the 
codes
23%

Incorrect 
supporting 
documents
(211)
3%

Action not carried 
out in accordance 
with rules
(812)
4%

Action not 
completed
(811)
4%

Overfinancing
(831)
4%

Incorrect 
accounts
(102)
5%

Other 
irregularities
(999)
21%

Missing or 
incomplete 
supporting 
documents
(210)
10%

Failure to respect
other regulations/
contract 
conditions
(612)
7%

The  next  table63  and  chart  focus  on  the  most  “risky”  irregularities  in  respect  of
overall amount. By comparing it with the previous one, the type of irregularity that
appears most often and poses greatest risk to the EU’s financial interests is the “not
eligible expenditure” category:

Most Risky irregularities compared with indicative implicated amounts

C o d e s

T y p e  o f  ir r e g u la r it y

In d ic a t iv e  im p lic a te d  
a m o u n t s

F r e q u e n c y

9 9 9 o th e r   irr e g u la r it ie s
3 2 5 n o t  e lig ib le  e x p e n d itu r e
2 0 7 in s u f f ic ie n t  c e r tif ic a t e s
1 0 2 in c o rr e c t  a c c o u n ts
2 1 3 f a ls if ie d  s u p p o r tin g   d o c u m e n t s
8 1 0 a c tio n  n o n  im p le m e n t e d
f a ilu re   to  r e s p e c t  o t h e r  
6 1 2
r e g u la tio n s /c o n t ra c t  c o n d itio n s
2 9 9 o th e r   c a s e s   o f  ir r e g u la r  d o c u m e n t s
2 1 1 in c o rr e c t  s u p p o rt in g   d o c u m e n t s

T h e  r e s t  o f  th e  c o d e s

7 4  4 0 5   9 7 8
3 4  0 7 1   1 9 4
1 9  4 3 2   4 6 7
1 6  0 9 1   0 4 3
1 5  4 6 6   5 6 3
1 4  0 9 0   8 7 8

1 3  2 8 9   7 8 0
1 1  1 2 4   2 5 0
9  8 4 7   8 9 6
5 7  7 1 8   8 4 3

3 3 9
3 1 6
2 8
7 9
4 0
3 1

1 0 7
2 5
4 3
6 2 7

In d ic a tiv e  
a v e r a g e  
a m o u n t
2 1 9   4 8 7
1 0 7   8 2 0
6 9 4   0 1 7
2 0 3   6 8 4
3 8 6   6 6 4
4 5 4   5 4 4

1 2 4   2 0 4
4 4 4   9 7 0
2 2 9   0 2 1
9 2   0 5 6

63

Please note that the same considerations expressed for the previous table are valid also for the present
table.  See  also  the  previous  footnote.  A  total  sum  of  the  « Implicated  amounts »  column  would  not
correspond to the amounts reported in annexes 4 and 5.

100

                                                
Incorrect accounts
(102)
6%

Falsified supporting 
documents
(213)
6%

Insufficient 
certificates
(207)
7%

Action non 
implemented
(810)
5%

Failure to respect other 
regulations/
contract conditions
(612)
5%

Other cases of irregular 
documents
(299)
4%

Incorrect 
supporting 
documents
(211)
4%

The rest of the codes
22%

Not eligible 
expenditure
(325)
13%

Other irregularities
(999)
28%

The last table presents the  same  aspects  highlighted above, but from an  “indicative
average amount” point of view64.

Codes

Type of irregularity

Indicative 
average 
amount

Frequency

207 insufficient certificates
103 falsified accounts
810 action non implemented
299 other cases of irregular documents
614 infringement of rules concerned with public procurement
213 falsified supporting documents
402 non existing operator
211 incorrect supporting documents
999 other irregularities
The rest of the codes

694 017
532 682
454 544
444 970
432 567
386 664
356 569
225 637
219 487
90 419

28
10
31
25
11
40
6
43
339
1102

Indicative 
implicated 
amounts
19 432 467
5 326 816
14 090 878
11 124 250
4 758 241
15 466 563
2 139 411
9 702 371
74 405 978
99 642 140

Falsified 
supporting 
documents
(213)
10%

Non existing operator
(402)
9%

Incorrect supporting 
documents
(211)
6%

The rest of the codes
2%

Other irregularities
(999)
6%

Infringement of rules 
concerned with public 
procurement
(614)
11%

Action non 
implemented
(810)
12%

Other cases of 
irregular documents
(299)
12%

Insufficient 
certificates
(207)
18%

Falsified 
accounts
(103)
14%

64

Same considerations as previous note.

101

                                                
Examination of the three tables shows a great impact on the overall evaluation by the
«999 – other irregularities» code. Under this code the irregularities that do not fit any
other possible description provided for by the communication system are reported.

However, their weight on the total seems excessive. The availability of more precise
information  in  this  field  would  certainly  aid  interpretations  of  the  statistics
concerned.

In  respect  of  detection  methods  the  following  table  is  a  complete  list  for  the  year
2001,  accompanied  by  the  total  amount  detected  per  method  and  its  relative
average65:

Detection Methods

Code

Detection Method

Frequency

Indicative
Amounts

Indicative
Average
Amount

101 National administrative or financial control
104 National fiscal control
107 judiciary inquire
111 Associated control
162 Associated control
170 Community control
199 Other controls
202 Control of products
206 Control of documents
207 Control of accounts
209 Control on the premises of the company
220 Physical check of goods

On the spot control of achievements of
project or action

230
301 Spontaneous confession
302 Whistle blower
303 Complaint
307 Routine
316 Information published on the media
320 Ex post control
330 Ex ante control
999 Other facts
blank

163
64
61
18
2
6
12
1
128
52
494
1

77
12
7
7
6
5
15
1
212
22

48 388 087
17 359 742
50 724 814
2 517 015
53 547
17 208 220
1 567 931
107 699
39 402 423
5 114 900
46 870 125
58 003

30 402 323
264 187
24 056 053
215 980
823 740
284 464
336 702
136 530
12 922 531
553 678

296 859
271 246
831 554
139 834
26 773
2 868 037
130 661
107 699
307 831
98 363
94 879
58 003

394 835
22 016
3 436 579
30 854
137 290
56 893
22 447
136 530
60 955
25 167

“Whistle blowing” as a detection method resulted in seven cases in four countries (F,
I, D, EL). In general, its average indicative amount would have been the lowest in the
table shown above. However, because of a single case in Italy, involving more than €
23 million, whistle blowing has the highest amount.

65

Please note that as with the types of irregularity, more than one detection method could be related to a
single case. All occurrences regarding detection methods have been taken into account. Therefore, also
in this case the « Implicated amounts » column does not correspond to the amounts reported in annexes
4 and 5.

102

                                                
11. 

FINANCIAL FOLLOW-UP

11.1.  Traditional own resources

Decision  2000/597/EC,  EURATOM66  on  Own  Resources,  and  more  particularly
Article 8, delegates to the Member States the collection of traditional own resources
(see Annex 7). The Commission monitors the way in which the Member States carry
out  their  mission  in  order  to  ensure  the  recovery  of  these  resources  in  compliance
with Community provisions in the customs and financial domain67. To this end, the
Commission  set  up  a  strategy  for  an  overall  monitoring68  which  permits  an
evaluation of the Member States’actions and the adoption of remedial measures.

There  are  three  main  principles  in  this  strategy :  a  sample  survey  of  the  ongoing
processing  of  cases,  the  write-off  procedure  for  amounts  of  own  resources  above
10 000  euro  that  are  considered  irrecoverable  and  implementing  the  principle  of
financial responsibility for certain errors made by national administrations.

Sample survey 

From the  year 2000, the integration of  information collected under Article  17(3) of
Regulation  N°1150/2000  in  the  report  on  the  Protection  of  financial  interests
dispensed  from  the  « A  Sample »  report  as  such,  in  as  much  as  the  underlying
information is of the same nature. However, the various aspects of customs activity
are  presented  and  discussed  in  the  Advisory  Committee  of  Own  Resources  on  the
basis of a more technical working document for the Member States.

Moreover, given the recent developments in the jurisprudence of the Court of Justice,
as  the  relevant  information  was  collected  from  the  Member  States  within  a
reasonable time-scale, the Commission decided to constitute a new B Sample to be
presented  as  the  B  2002  report69  and  published  in  2003.  The  monitoring  done
« Outside Sampling » - composed of cases which did not meet the conditions of the
B  Sample  but  could  still  be  of  interest  for  the  monitoring  of  recovery  –  will  be
extended so as to analyse twenty cases or so.

The Write-off Procedure

The  Member  States  take  the  necessary  measures  to  make  available  traditional  own
resources, to the exception of cases where recovery proves impossible for reasons not
attributable to the Member State concerned. Write-off cases (amount > € 10 000) are
communicated to the Commission for reviewing. If the Member State demonstrated
all diligence in order to recover the amount due, in compliance with Community and

66

67

68

69

Decision 2000/597/EC, Euratom of the Council of 29.09.2000 (OJ L 253 of 07.10.2000), entered into
force  on  01.03.2002.  An  amendment  of  Regulation  N°  1150/2000  is  being  drafted  so  as  to  take  into
account the provisions deriving from the decision.
Community  Customs  Code  (EEC)  Regulation  N°2913/92  of  the  Council  of  12.10.1992  (OJ  L302  of
19.10.1992),  Decision  2000/597/EC,  Euratom  and  (EC,  EURATOM)  Regulation  N°  1150/00  of  the
Council of 22.05.2000 (OJ L130 of 31.05.2000).
For a detailed account of this strategy, see the 2000 Report on the Protection of Financial Interests and
the Fight against Fraud.
This  report  will  come  after  Report  B94,  published  on  9  June  1997  (COM(97)259  final)  and  B98,
published on 29 April 1999 (COM(1999)160 final).

103

                                                
national law, the exemption can be accepted. If not, it is held financially responsible,
under  Article  8  of  Decision  2000/597  and  Articles  2  and  17  of  Regulation  N°
1150/00.

Examining the diligence of the Member States constitutes a very efficient action for
convincing national administrations to take recovery more seriously, as they are held
financially  liable  in  cases  of  non-recovery.  Moreover,  the  analysis  of  cases  under
Article  17(2)  of  Regulation  N°1150/2000  is  an  opportunity  for  the  Commission  to
make certain observations on the establishment of own resources, the way in which
the  separate  account  is  kept  and  on  the  compliance  of  national  provisions  with
Community law.

In  order  to  have  a  more  precise  and  objective  vision  of  the  conditions  of  non-
recovery,  the  Commission  amended  Annex  6  of  the  Decision  of  20  March  199770.
The amendment was adopted by the College on 13 March 2002 (C(2002) 416 final).

During the year 2001, 12 requests for write-off totalling an amount of €  2 434 780.85
were  addressed  by  six  Member  States  (S,  NL,  UK,  P,  F,  E)  under  Article  17(2)  of
Regulation  N°  1150/2000.  Yet  109  cases  in  total  were  reviewed  during  the  year
2001, as follows: 

Commission Position

Number of cases

% cases

Exemption granted

 48.50

Supplementary 

info

Inappropriate

Refusal

Total

8

32

 20.50

109

44.50

7.35

29.35

18.80

100 %

Amount in €

7 875 024.78

3 655 873.63

3 578 622 50

5 659 535 01

20 769 055.92

% amount

37.90

17.60

17.25

27.25

100 %

The financial responsibility of the Member States for administrative errors

On the basis of Article 8 of EC Euratom Decision 2000/597/EC, the Member States
have to ensure the collection of traditional own resources under the best conditions
(see Annex 7) : with this remunerated responsibility (25% of resources collected) and
in  order  to  achieve  sound  and  efficient  management  of  public  funds,  any  lack  of
diligence on the part of the Member States which results in a loss of resources gives
rise to financial responsibility. According to this approach, the Commission holds the
administrations financially responsible for their own errors71.

The year 2001 was mainly marked by the growing sensitivity of some Member States
to  the  principle  of  financial  responsibility  for  administrative  errors.  Therefore,  the
United Kingdom, Austria  and  Italy have  made  available  to  the  Community  budget,
the  amounts  of  own  resources  not  recoverable  due  to  errors  committed  by  the
responsible  national  administrations.  France  acted  in  the  same  way  early  in  2002.

70

71

Commission  Decision  97/245/EC,  Euratom  of  20  March  1997  defining 
the  modalities  of
communication by  the Member States of certain information to the Commission in the  context  of  the
system of the Communities’ own resources.
For example, in case an amount is time-barred under art. 221 (3) of the Customs Code, whereas all the
necessary  particulars  for  entering  the  amount  in  the  accounts  where  known,  or  in  case  of  an
administrative error which could not be detected by the debtor (art. 220 (2)b of the Code).

104

                                                
The  total  amount  of  the  sums  paid  in  this  way  by  these  four  Member  States  was
€7 388 990.12.

This example should lead some Member States whose share is in fact compensated
by  means  of  the  fourth  resource,  to  consider  their  position  with  regard  to  the
principle of financial responsibility resulting from errors by their administrations.

In total, 30 files were opened in 2001 ; 48 reminder letters were sent. At the end of
2001,  the  total  number  of  files  was  91  involving  a  cumulative  amount  without
interest of € 50 933 636 72.

Initiative  for  better  protection  of  the  Union’s  financial  interests :  financial
responsibility, external aspect73, enhanced administrative co-operation

Moreover,  the  Commission  is  developing  the  principle  of  external  financial
responsibility for the purposes of neutralising the negative effects on the Community
budget resulting from errors committed by the national authorities in application of
preferential  arrangements.  A  clause  on  financial  responsibility  is  found  in  the
directives  for  negotiation  of  the  free  trade  agreement  between  the  Community  and
the Arab Gulf countries and the draft directives for negotiation with Albania and the
ACP countries.

A  similar  principle  has  been  implemented74  in  this  domain  regarding  enhanced
administrative  co-operation:  it  consists  of  a  safeguard  antifraud  mechanism  which
foresees  the  possibility  of  suspending  preferential  agreements  or  autonomous
measures  in  cases  of  fraud  or  systematic  lack  of  administrative  co-operation.  This
provision is part of all directives mentioned  above and is to be included in all new
preferential agreements.

11.2.  EAGGF Guarantee Expenditure

The total number of open cases is over 10 300. The amount still to be recovered is
more  than  €  2.2  billion  (€  2  203  659  000,  see  Annex  8).  In  the  following  chart  an
overview of the total number of open cases is given.

72

73

74

Item 13 of the European Parliament resolution on the situation concerning the European Union’s own
resources  in  2001  (2001/2019(INI))  welcomed  the  action  of  the  Commission  regarding  the  actions
started in the area of financial responsibility for administrative errors due to Member States.
The Commission is developping theexternal aspect of the principle of financial responsibility, aimsing
to make partnersresponsible partners in international trade agreements which the Union has concluded
or will conclude with non-member countries. The consequences of the Turkish TV decision -given on
10.05.2001 by the Court of First Instance of the European Communities- led to a communication to the
Commission  adopted  on  17.07.2001  which  provides  expressly,  amongst  other  things,  for  the
implementation of this principle.
A provision on enhanced administrative co-operation was already inserted in the EU-Chile Association
Agreement reached in May 2002.

105

                                                
Total of open cases

3500

3000

2500

2000

1500

1000

500

0

B

Dk

D 

E L

E 

F

Irl

I 

L

N L

A

P

FIN

S

UK

From the new cases in the year 2001, which total more than €140 million, just over
€122  million  is  still  to  be  recovered.  In  the  ne xt  chart  an  overview  is  given  of  the
cases in the year 2001 and the state of recovery.

Percentage of recovery per Member State cases 2001.

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

B

DK

D 

EL

E 

F

IRL

I 

L

NL

A

P

FIN

S

UK

Amounts before payment Amounts recovered Amounts still to be recovered

11.3. 

Structural Funds

In  the  area  of  structural  funds,  the  recovery  situation  (see  Annex  9)  as  regards  the
data for the year 2001 is as follows:

– 
– 
– 

22 % of the amounts concerned by irregularities were recovered,
14 % out of which is outstanding at national level and
64 % is the amount yet to be recovered.

106

In the area of structural funds, that is actions co-financed in the framework of multi-
annual programs, the crucial phase as regards financial follow-up is the closing of the
intervention in question. As regards the programming period 1994-1999, the closing
of programs has just begun. A great part of cases, which were communicated under
Article  3  of  Regulation  (EC)  N°1681/94  must  normally  be  discharged,  with  the
exception of actions suspended for judicial reasons. The outcome of this exercise will
appear in the course of reporting on the 2002 exercise.

From  now  on,  the  new  (EC)  Regulation  448/2001  makes  it  an  obligation  for  the
Member  States  to  notify  the  Commission  once  a  year  the  balance  of  outstanding
recoveries. This will facilitate the financial follow-up in the future and the attribution
to the Member States of amounts lost due to their negligence.

11.4.  Direct Expenditure (including external aid)

The direct  expenditure sector of the budget  is managed  mainly by the  Commission
and OLAF has special responsibility in this area. In cases of direct expenditure fraud
and  irregularity  investigated  by  OLAF  where  it  is  not  considered  appropriate  to
launch  criminal  proceedings,  the  Office  ensures  that  important  elements  arising
either during the course of  investigations or from  the  final  investigation reports  are
communicated  to  the  authorising  DG  for  the  expenditure  in  question  so  that
appropriate safeguard measures  and/or recovery  action may be  initiated  in  a  timely
manner. OLAF also supports the authorising DG throughout the financial follow-up
and recovery process with the provision of advice and additional explanations etc. as
necessary.

Where, however, OLAF’s investigations lead it to believe that further criminal action
should  be  taken  in  a  case  or  where  criminal  proceedings  are  already  in  progress,
OLAF ensures that the necessary steps are taken for the Commission to bring  such
action (or equivalent measures under the law of the country concerned) with a view
to securing the recovery of unduly paid funds.

In  this  area,  23  direct  expenditure  fraud/irregularity  cases  were  referred  to  the
Follow-up unit during the reporting period. Most cases are still ongoing because of
protracted legal (including bankruptcy) proceedings, some of a criminal nature. The
total of actual financial recoveries in the reporting period amounted to € 456 629.12.
Many of the fraud/irregularity cases in question involved unauthorised expenditure,
false  or  inflated  claims  for  payment  of  expenses,  or  the  non-delivery/fictitious
delivery of contracted projects, goods or services.

107

ANNEXES

ANNEX 1

TRADITIONAL OWN RESOURCES
Number of cases of fraud and irregularity communicated by the Member States75 to the Commission

Evolution of the communications over the period 1998- 2001

(updated 28.04.2002)

Member States

1998
Cases

1998
Amounts €

1999
Cases

1999
Amounts €

2000
Cases

2000
Amounts €

2001
Cases

2001
Amounts €

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
UK

345
133
335
12
73
216
63
173
7
305
163
18
42
98
499

10 937 861
14 579 458
25 969 777
302 256
3 241 814
14 408 160
1 957 191
19 575 815
1 790 387
9 014 326
7 857 517
1 315 011
1 673 759
8 625 341
98 580 201

294
102
496
14
119
267
40
288
8
205
87
14
36
66
534

14 106 286
8 423 483
33 134 340
437 308
8 315 714
17 497 607
6 513 598
16 485 347
738 581
8 925 914
4 569 400
546 348
5 104 165
5 096 843
104 233 167

306
108
488
0
116
246
37
226
2
264
89
19
36
17
496

8 608 667
9 737 390
54 489 168
0
10 102 104
28 529 445
1 763 687
39 941 191
35 620
13 440 108
6 577 552
1 180 000
1 598 820
1 139 647
349 613 872

293
67
351
10
134
215
35
197
0
205
98
11
20
18
192

11 890 555
5 023 409
20 279 207
44 411
46 973 494
16 915 767
1 404 382
95 758 585
0
4 758 162
14 359 390
1 534 849
3 140 752
2 524 769
31 709 277

TOTAL CASES

2 482

219 828 874

2 570

234 128 101

2 450

526 757 271

1 846

256 317 009

75

The communication by the Member States of cases of fraud and irregularity with an amount above €10.000 is a Community obligatio n  set out in  Article 6(5) of
Regulation N° 1150/00 of 22.05.2000.

108

                                                
ANNEX 2

EAGGF GUARANTEE

update 15/05/2002

IRREGULARITIES COMMUNICATED BY THE MEMBER STATES UNDER
REGULATION N° 595/91

2001

(Amounts in € 1 000)

Member States

Number of cases

Amounts

% of EAGGF
expenditure

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

U K

TOTAL

67

60

451

25

492

412

88

163

2

45

131

143

53

31

5 717

1 109

7 438

13 403

30 191

10 896

1 161

45 377

29

6 442

1 864

2 153

910

704

252

2415

13 290

140 685

0.61

0.10

0.13

0.51

0.47

0.12

0.07

0.83

0.10

0.58

0.18

0.25

0.11

0.09

0.34

0.34

109

ANNEX 3

EAGGF GUARANTEE

update 15/05/2002

IRREGULARITIES* COMMUNICATED BY THE MEMBER STATES
REGULATION N° 595/91

1997 - 2001

(Amounts in € 1 000)

YEAR CASES

AMOUNT

% OF
SECTORAL
BUDGET

EAGGF-
EXPENDITURE

2001

2000

1999

1998

1997

2415

2967

2697

2412

2058

140 685

474 562

232 154

284 841

164 884

0.34

1.17

0.59

0.73

0.41

41 866 940

40 437 400

39 540 800

39 132 500

40 423 000

s
e
s
a
c
f
o
°
N

3 ,5 0 0

3 ,0 0 0

2 ,5 0 0

2 ,0 0 0

1 ,5 0 0

1 ,0 0 0

5 0 0

0

E A G G F  G u a r a n t e e

1 9 9 7

1 9 9 8

1 9 9 9
y e a r

%  O F B U D G ET

C A S ES

2 0 0 0

2 0 0 1

1 .4 0

1 .2 0

1 .0 0

0 .8 0

0 .6 0

0 .4 0

0 .2 0

0 .0 0

B
u
d
g
e
t
a
r
y

i

m
p
a
c
t

The concept "irregularity" includes fraud. The qualification as fraud, meaning

*
criminal behaviour, can only be made following a penal procedure.

110

 
 
 
ANNEX 4

update 15/05/2002

STRUCTURAL ACTIONS

IRREGULARITIES COMMUNICATED BY THE MEMBER STATES UNDER
REGULATIONS N° 1681/94 AND 1831/94

2001

(Amounts in € 1 000)

Member State

Number of cases

Amounts

involved

B

DK

D*

EL**

E

F

IRL

I

L

NL

A

P

FIN

S

U K

Total

0

13

164

80

80

205

55

91

0

323

20

55

38

15

55

1.194

0

463

12 535

6 108

6 256

12 114

48 642

58 792

0

14 207

617

9 335

1 038

246

31 199

201 552

* Fourth quarter communications not yet received

** Including 4 communications concerning the Cohesion Fund

111

ANNEX 5

update 15/05/2002

STRUCTURAL ACTIONS

IRREGULARITIES* COMMUNICATED BY THE MEMBER STATES UNDER
REGULATIONS 1681/94 AND1831/94

1997-2001

(Amounts in € 1 000)

Year

Number of
cases

Amounts % of Budget

Total sectoral
budget

2001

2000

1999

1998

1997

1 194

1 217

698

407

309

201 549

114 227

120 633

42 838

57 070

0.68%

0.45%

0.39%

0.15%

0.22%

29 829 680

25 556 000

30 654 450

28 365 990

26 304 900

*The concept of "irregularity" includes "fraud". The classification of fraud, meaning criminal
behavior, 
criminal
procedure.

following 

made 

only 

can 

be 

a 

s
e
s
a
c
f
o
°
N

1 400

1 200

1 000

0 800

0 600

0 400

0 200

0 000

STRUCTURAL ACTIONS

0,80%

0,70%

0,60%

0,50%

0,40%

0,30%

0,20%

0,10%

t
c
a
p
m

i

t
e
g
d
u
B

1997

1998

1999

year

2000

2001

part of budget

number of cases

112

 
 
 
ANNEX 6

DIRECT EXPENDITURE

update 15/05/2002

SUSPECTED FRAUD AND OTHER IRREGULARITIES INVESTIGATED BY
OLAF76

(Amounts in € 1 000)

Amount 
of case

Amount

% of 
Budget

135
148
107
24
41

 42 548
 170 374
 73 300
 11 000
 18 000

0,35%
1,33%
0,87%
0,09%
0,17%

Total 
sectoral 
Budget

12 299 409
12 788 618
8 425 287
11 750 900
10 681 600

Year

2001
2000
1999
1998
1997

s
e
s
a
C

f
o
r
e
b
m
u
N

200

100

0

1997

1998

1999
Year

2000

2001

% of Budget

Number of Cases

1,5%

1,0%

0,5%

0,0%

t
e
g
d
u
B

f
o
%

76

The figure concerning 2001 does not include all cases investigated, but only  those that  were
closed in that period

113

 
 
 
 
                                                
ANNEX 7

TRADITIONAL OWN RESOURCES (update 26/04/2002)

SITUATION OF RECOVERY IN CASES COMMUNICATED UNDER

REGULATION N°1150/2000

(Amounts in €)

Number of
cases
communicated
in 2001

(2)

Member
States

(1)

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

293

67

351

10

134

215

35

197

0

205

98

11

20

18

Established
Amounts

Percentage of
establishments
as compared to
the EUR-15 total

Average Amount
per case

Recovered Amounts
out of the amounts
communicated in 2001

% recovery

EUR-15 total

(3)

11 890 555

5 023 409

20 279 207

44 411

46 973 494

16 915 767

1 404 382

95 758 585

0

4 758 162

14 359 390

1 534 849

3 140 752

2 524 769

(4)

4.6 %

2.0 %

7.9 %

0.0 %

18.3 %

6.6 %

0.5 %

37.4 %

0.0 %

1.9 %

5.6 %

0.6 %

1.2 %

1.0 %

(5) = (3) / (2)

(6)

40 582

74 976

57 776

4 441

350 548

78 678

40 125

486 084

0

23 211

146 524

139 532

157 038

140 265

2 068 940

4 905 480

7 744 518

44 411

4 238 717

5 171695

721 505

620 584

0

3 530 285

1 062 752

450 033

2 978 415

1 195 601

(7)

5.1 %

12.2 %

19.2 %

0.1 %

10.5 %

12.8 %

1.8 %

1.5 %

0.0 %

8.8 %

2.6 %

1.1 %

7.4 %

3.0 %

Crude Rate of
recovery

77

(8) = (6) / (3)

17.4 %

97.7 %

38.2 %

100.0 %

9.0 %

30.6 %

51.4 %

0.6 %

-

74.2 %

7.4 %

29.3 %

94.8 %

47.4 %

77

The crude rate of recovery is not a significant element as it varies according both to the national procedures of recovery and the administrative and judicial procedures.

114

                                                
UK

192

31 709 277

12.4 %

165 152

5 609 607

13.9 %

17.7 %

EUR-15

1 846

256 317 009

100.0 %

138 850

40 342 543

100.0 %

15.7 %

115

ANNEX 8

update 15/05/2002

EAGGF GUARANTEE

SITUATION OF RECOVERY IN CASES COMMUNICATED UNDER
REGULATION N° 595/91

(Amounts in € 1.000)

Member

To be recovered

To be recovered

In Justice *

Amounts **

States

cases
communicated

"irrecoverable"

B
DK
D
EL
E
F
IRL
I
L
NL
A
P
FIN
S
U K

< 2001

2001

60 813

7 312

228 671

36 200

153 853

59 835

4 750

2 370

408

6 604

9 648

28 644

8 783

755

17 580

0

22 582

12 985

15 108

30 704

3 351

1 392 677

41 661

401 942

7

44 771

3 466

32 379

9

233

56 209

29

6 165

1 570

2 064

88

480

0

8 673

0

19 477

0

0

13 206

19 558

TOTAL

2 081 185

122 474

551 960

2 801

7 055

11 763

5 538

38 403

1 813

201

14 939

0

719

389

40

0

0

3 440

87 101

* In justice: awaiting outcome of judicial proceedings in national courts

** Amounts irrecoverable: awaiting formal decision in Clearance of Account procedure

116

ANNEX 9

update 15/05/2002

STRUCTURAL ACTIONS

SITUATION OF THE RECOVERY IN THE CASES COMMUNICATED UNDER
REGULATIONS N° 1681/94 AND 1831/94

(Amounts in 1.000 €)

Member State

Total to be recovered
<2001

Total to be
recovered2001

B

DK

D

EL

E

F

IRL

I

L

NL

A

P

FIN

S

U K

Total

845

391

55 516

12 346

65 550

14 700

5 587

88 836

0

1 112

0

20 023

737

823

0

139

10 863

5 695

4 875

4 288

525

45 473

0

1 256

102

3 067

448

48

57 494

25 659

323 961

102 438

N.B. In as much as these amounts are actually recovered, they can be reallocated to
finance other projects in a program which is still open.

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