Report from the Commission Protection of the european Communities’ financial interests and the fight against fraud - Annual report 2003 {SEC(2004)1058} {SEC(2004)1059} .
Date: 2004-08-30
Institutions: European Commission
Subjects: Community budget, activity report, fraud, fraud against the EU

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.12.2004 
COM(2004) 573 final/2 

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CORRIGENDUM 
Annule et remplace le document 
COM(2004)573 final du 30.8.2004 
Ceci concerne les versions EN/FR et DE. 

REPORT FROM THE COMMISSION 

PROTECTION OF THE EUROPEAN COMMUNITIES’ FINANCIAL 
INTERESTS AND THE FIGHT AGAINST FRAUD 

- ANNUAL REPORT 2003 - 

{SEC(2004)1058} 
{SEC(2004)1059} 

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TABLE OF CONTENTS 

Introduction ................................................................................................................................ 4 

Title I – The Communities' Activities for the protection of the European Communities' 

Financial Interests and the Fight Against Fraud: Major Developments in 2003 ......... 5 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

The development of An Overall Consistent Antifraud Policy ..................................... 5 

Overall Evaluation of the Measures adopted by the Community in the area of 
structural funds:............................................................................................................ 5 

Task Force on recovery work in the field of the EAGGF Guarantee Section ............. 7 

A Prevention Policy: A more visible Procedure for Fraud proofing Legislation ........ 7 

Cooperation with the Member States and Third countries........................................... 8 

Analysis of intelligence in the framework of mutual assistance.................................. 8 

Cooperation against certain forms of crime prejudicial to the interests of 
the Communities: protection of the European currency ............................................ 10 

Programme for the promotion of actions in the field of the protection of the 
Communities’ financial interests: Hercules ............................................................... 11 

An inter-institutional Approach to preventing and fighting against fraud and 
corruption ................................................................................................................... 12 

Deepening of the Antifraud Reform .......................................................................... 12 

Progress in the implementation of the Reform within the Commission .................... 14 

Strengthening of the criminal law protection of the communities’ 
financial interests ....................................................................................................... 15 

Towards concrete proposals on the creation of a European Prosecutor..................... 15 

Cooperation with Eurojust and Europol..................................................................... 17 

Title II – Implementation of Article 280 by the Member States in 2003 – Measures 

taken to protect the Community's financial interests ................................................. 18 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

6. 

Texts contributing to the implementation of Article 280 of the EC Treaty - 
principal legislative, regulatory and administrative developments............................ 19 

Horizontal developments ........................................................................................... 19 

Own resources............................................................................................................ 20 

Agricultural expenditure ............................................................................................ 21 

Structural measures .................................................................................................... 21 

Organisation of departments for the protection of the Communities' financial 
interests in the field of structural actions ................................................................... 22 

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6.1. 

6.2. 

6.3. 

6.4. 

6.5. 

7. 

8. 

European Regional Development Fund (ERDF) ....................................................... 23 

European Social Fund (ESF)...................................................................................... 25 

European Agricultural Guidance and Guarantee Fund (EAGGF) - 
Guidance section ........................................................................................................ 27 

Financial Instrument for Fisheries Guidance (FIFG)................................................. 29 

Cohesion Fund ........................................................................................................... 31 

Coordination between departments within the Member States.................................. 33 

Recovery by joining a civil action to criminal proceedings under 
Member States' legislation ......................................................................................... 35 

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INTRODUCTION 

The  Treaty  establishing  the  European  Community  calls  on  the  Commission  in  cooperation 
with the Member States, to transmit each year to the European Parliament and the Council a 
report  on  the  measures  taken  to  implement  Article  280  concerning  the  protection  of  the 
Communities’ financial interests. In accordance with the principle of shared responsibility in 
this  field,  the  2003  report  presents  successively  the  activities  of  the  Community  during  the 
year and the measures taken by the Member States.  

The  priorities  of  the  Community  to  protect  its  financial  interests  and  to  fight  against  fraud 
were  established  by  the  Overall  Strategic  Approach  of  28  June  20001  for  the  period  2000-
2005 and implemented by the 2001-2003 Action Plan2. The first part of the report highlights 
some significant Community activities in 2003, without mentioning all of the tasks achieved 
to  implement  the  2001-2003  Action  Plan  and  to  follow  up  the  Resolutions  of  the  European 
Parliament3 and the Annual Report of the Court of Auditors for the financial year 20024.  

The  second  part  of  the  report  presents  a  summary  of  the  measures  taken  in  2003  by  the 
Member States to implement the EC treaty. Two aspects were favoured in 2003: the structural 
measures and recovery in the field of direct expenditure.  

The  report  is  accompanied  by  two  staff  working  documents5:  on  the  one  hand,  the 
implementation of the 2001-2003 Action Plan and an inventory of the measures taken by the 
Member States, on the other hand the relevant statistical information.  

1 

2 

3 

4 
5 

Commission Communication on "the Protection of the Financial Interests of the Communities and the 
Fight against fraud – For an overall Strategic approach", (Doc. COM(2000) 358 final). 
See  the  Action  Plan  2001-2003  on  the  protection  of  financial  interests  (COM(2001)  254  final  of 
15.5.2001) for the implementation of the Overall Strategy 2001-2005. 
Resolution of 27 March 2003 on the Green Paper of the Commission concerning the Penal Protection of 
the Communities’ financial interests and the creation of a European Public Prosecutor and Resolution of 
13  March  2003  on  the  Protection  of  the  financial  interests  of  the  Communities  and  the  fight  against 
fraud – 2001 Annual Report. 
OJ C 286, 28.11.2003. 
Commission Staff Working Documents (SEC(2004)1058) "Implementation of Article 280 of the Treaty 
by  the  Member  States  and  the  Community  in 2003-  Follow  up  to  the  Action  Plan  2001-2003  and 
measures  taken  by  the  Member  States"  and  (SEC(2004)1059)  "Statistical  Evaluation  of Irregularities: 
Agricultural, Structural & Cohesion funds and Own resources- Year 2003". 

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TITLE I – THE COMMUNITIES' ACTIVITIES FOR THE PROTECTION OF THE EUROPEAN 
COMMUNITIES'  FINANCIAL  INTERESTS  AND  THE  FIGHT  AGAINST  FRAUD: 
MAJOR DEVELOPMENTS IN 2003  

The Commission established its political and general objectives in its overall strategic 
Approach adopted on 28 June 20006 for the 2001-2005 period. The implementation of 
this overall strategy by the Commission, including by the European Anti-Fraud Office 
in  its  non  operational  functions,  is  given  concrete  expression  in  the  2001-2003 
Action Plan7.  

Major  developments  achieved  in  2003  by  the  Commission,  are  highlighted  in  this 
annual  report.  They  are  in  line  with  the  four  main  themes  of  the  Overall  Strategic 
Approach. The report refers to certain horizontal topics such as the results of the audits 
in the Structural Funds. It also refers to the Commission Report evaluating the activities 
of OLAF8 and the commitments made before the European Parliament on 18 November 
2003.  A  summary  is  made  of  progress  in  the  criminal  law  protection  of  the  financial 
interests  of  the  Communities,  in  particular  with  regard  to  the  European  prosecutor 
project and relations between the Commission and the judicial and police cooperation 
bodies.  

1. 

THE DEVELOPMENT OF AN OVERALL CONSISTENT ANTIFRAUD POLICY  

1.1. 

Overall  Evaluation  of  the  Measures  adopted  by  the  Community  in  the 
area of structural funds:  

Regulation  (EC)  n°  1681/949  of  11  July  1994  provides  a  framework  for  the 
communication and the follow up of the irregularities detected. In accordance 
with  Article  2  (1),  Member  States  communicate  to  the  Commission  the 
provisions  which  they  have  taken  with  a  view  to  ensuring  the  regularity  of 
operations financed by the Community, the prevention of irregularities and the 
recovery  of  the  lost  funds,  and  the  description  of  the  management  control 
systems in force.  

In  2001,  the  European  Court  of  Auditors  published  its  special  report10 
concerning in particular the implementation of this Regulation, in six Member 
States11.  It  noted  numerous  failures  on  the  part  of  the  Member  States  and  in 
particular  recommended  that  the  Commission  carry  out  the  evaluation  and 
control  of  the  operation  of  systems  of  detection  and  communication  of 
irregularities  in  the  Member  States,  in  order  to  ensure  the  communications 

6 
7 
8 
9 
10 

11 

See previous note.  
See previous note. 
COM(2003) 154 final of 2 April 2003. 
OJ L 178, 12.7.1994, p. 43.  
Special report n°10-2001 concerning the financial control of the Structural Funds, Regulations 
(EC) n° 2064/97 and 1681/94 – OJ C 314,8.11.2001.  
Germany, Spain, France, Italy, the United Kingdom and Portugal.  

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reported were up to date and the process of drawing up of the reports was both 
exhaustive and relevant.  

The Commission12 carried out an analysis of the description of the systems in 
the 15 Member states. Secondly, it proceeded to carry out verifications, made 
jointly by the DG REGIO and OLAF, at national or regional level to check the 
effectiveness  of  the  system  in  question.  A  report  was  drafted  following  each 
mission and a synthesis of the main results, conclusions and recommendations 
were sent to the authorities of each Member State.  

Overall,  these  audit  missions  show  that  undeniable  progress  has  been  made 
since 2001. However, a number of the comments which had been made in the 
10/2001 Report of the Court of Auditors are still relevant.  

The  Commission  noted  that  problems  persisted  in  the  interpretation  of 
Regulation  (EC)  n°  1681/94  since  half  the  Member  States  did  not 
communicate  the  irregularities  to  the  Commission  (OLAF)  within  the  time 
limits,  or  did  not  provide  the  necessary  information13.  The  examination  also 
revealed that even when irregularities were notified, the way in which certain 
Member States carried out the follow up of cases and their communication did 
not allow the Commission database to be updated14.  

On the other hand, the internal follow up of irregularities and the procedures 
for recovery were judged satisfactory in the majority of the Member States – 
which leads to believe that the latter organise themselves better regarding their 
responsibilities related to sound management of the Structural Funds, as well 
as  dealing  with  irregularities  and  recovery,  and  that  they  generally  assume 
their tasks in an appropriate way.  

It is necessary, then, for Member States to improve their interpretation of the 
concept of irregularity so as to have a more complete and reliable image of the 
protection  of  financial  interests  and  the  fight  against  fraud  on  the  basis  of 
complete,  coherent,  precise  and  up  to  date  data.  The  Commission  sent  to  the 
various Member States specific recommendations to be implemented.  

Moreover,  a  summary  report  of  the  15  audit  reports15  draws  a  number  of 
conclusions  regarding  the  possibilities  for  improvement  of  the  system  of 
notification and follow up of the irregularities. A proposal for amendment  of 
the  regulatory  mechanism  (Regulation  (EC)  n°  1681/94)  will  be  tabled  for 
2005.  

12 

13 

14 
15 

In  the  context  of  the  discharge  2000  (COM(2002)  696,  item  71),  the  Commission  committed 
itself to carrying out these controls.  
Germany, Spain, France, Greece, Italy, United Kingdom and Walloon region in Belgium. In 2 
cases  (Luxemburg  and  Flemish  region  in  Belgium),  the  Commission  noted  that  no  system  of 
notification of irregularities had been set up. 
Austria, Denmark, Finland, Ireland, the Netherlands, Portugal, Sweden. 
"Examination of the systems and procedures of communication and follow up of irregularities 
within the framework of the Structural Funds" (Commission staff working paper of 19.12.2003). 

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1.2. 

Task  Force  on  recovery  work  in  the  field  of  the  EAGGF  Guarantee 
Section  

With  regard  to  Community  policies  carried  out  by  way  of  decentralised 
management  (EAGGF-Guarantee,  structural  funds  ),  it  is  up  to  the  Member 
States to carry out the recovery of the funds unduly paid to the final recipients 
and  to  repay  the  amounts  to  the  Community  budget.  For  its  part,  the 
Commission  is  required  to  follow  the  recovery  procedures  carried  out  by  the 
Member  States  and  to  apply,  if  necessary,  the  clearance  procedures.  The 
slowness  of  these  procedures  and  the  accumulation  of  Community  debts  is  a 
subject  of  concern  both  for  the  Commission,  the  Court  of  Auditors  and  the 
Budgetary authority.  

In  its  communication  of  3  December  200216  which  aims  in  particular  to 
strengthen recovery, the Commission decided to set up a Recovery Task Force 
in the area of EAGGF Guarantee Funds, made up of agents of OLAF and the 
DG  Agriculture.  The  total  arrears  of  irregularities  due  to  be  recovered  were 
estimated in 2002 at € 2.2 billion, according to the data communicated by the 
Member States under the terms of Articles 3 and 5 of Regulation n° 595/91.  

With regard to cases of irregularity communicated before 1999, the subject of 
the work of the Task Force, the amount is more than € 1 billion. With regard to 
the cases from the years 1995 to 1999 and the cases prior to 1995 relating to 
Italy,  the  Task  Force  examined  in  detail  433  cases  (of  which  343  concern 
Italy),  each  of  which  involved  an  amount  higher  than  500.000  €.  Once  this 
analysis  was  completed,  the  total  to  be  recovered  was  fixed  at  700  million  € 
for  nine  Member  States  (including  550  million  for  Italy),  instead  of  the 
initially  communicated  one  billion  €.  Moreover,  in  almost  all  the  Member 
States  concerned,  it  arises  from  these  audits  that  there  were  serious  cases  of 
"negligence" by the services and authorities which did not take precautionary 
measures or ensure an appropriate financial follow-up. It also follows that the 
slowness  and 
judicial 
procedures  and  the  absence  of  a  clear  attribution  of  the  responsibilities 
endanger the effective recovery of the Community funds.  

the  national  administrative  and 

inefficiency  of 

After  dealing  with  the  cases  above  500,000  euros,  the  Task  Force  will  also 
examine the other cases where the amounts are lower. 

1.3. 

A  Prevention  Policy:  A  more  visible  Procedure  for  Fraud  proofing 
Legislation  

In  its  overall  strategic  approach  as  regards  protection  of  the  Community’s 
financial interests, the Commission defined prevention as one of the four major 
priorities  of  its  action.  This  priority  is  implemented  by  the  action  of  fraud 

16 

Commission communication of 3 December 2002 (COM (2002) 671 final)"for a better recovery 
of EC funds resulting from the direct and shared management of Community expenditure". 

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proofing  defined  in  the  Communication  of  200117  which  became  effective  in 
2003.  

The  Commission  thus  set  up  a  consultation  process  involving  the  European 
Anti  Fraud  Office  as  far  upstream  as  possible,  so  as  to  benefit  from  its 
operational  experience  from  the  stage  of  the  drawing-up  of  the  legislative 
proposals.  

This  procedure  in  particular  strengthens  the  cooperation  between  the  lead 
Directorates-General  who  propose  legislative  initiatives  and  the  European 
Anti-Fraud  Office.  It  involves  also  the  other  institutions  because  the 
Commission draws its information not only from its own experience but also 
from  the  reports  of  the  European  Court  of  Auditors  and  the  supervisory 
authorities in the Member States, and from the resolutions of the Council and 
the European Parliament.  

This  mechanism  entered  its  active  phase  in  2003  and  was,  however,  for  this 
first full year of operation, of a primarily experimental nature.  

The  consultations  addressed  to  the  Office  by  the  Commission  departments 
concerned  in  particular  the  agricultural,  customs,  and  also  macro  financial 
assistance  to  third  countries  fields,  as  well  as  the  area  of  direct  expenditure, 
such as education, where OLAF took part at an early stage in the preparation 
of texts authorising the subsidy programmes.  

2. 

COOPERATION WITH THE MEMBER STATES AND THIRD COUNTRIES  

A strategy of cooperation and mutual assistance between all the public partners 
is  particularly  necessary  to  fight  efficiently  against  organised  criminality,  in 
particular  transnational  criminality,  affecting  the  Community’s  financial 
interests. The Commission assumes its responsibilities, in particular by giving 
its assistance in the field of intelligence and in the operational field.  

2.1. 

Analysis of intelligence in the framework of mutual assistance.  

In operational matters, the observation of frauds or irregularities prejudicial to 
the Community interests is essential in order to better direct the activity on the 
ground.  The  Commission  contributes  by  making  available  to  the  Member 
States information exchange systems.  

Member  States  and  candidate  countries  can  already  exchange  information 
among  themselves  and  with  the  Commission  (OLAF)  by  a  secure  and 
powerful communication network, named "Anti-fraud information System". In 
2003,  this  AFIS  network  was  extended  to  the  candidate  countries  and  some 
third countries.  

17 

Commission communication of 7.11.2001 on fraud proofing of Community legislation and the 
management of contracts – document SEC(2001) 2029 final.  

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The AFIS system is able to support several operational functionalities, among 
which:  

– 

– 

– 

– 

– 

– 

generic  information  exchanged  within  the  framework  of  mutual 
assistance (messages, communications on suspicions of irregularity 
or fraud); 

structured  information  conveyed  by  the  early  warning  system  on 
sensitive  goods  within  the  framework  of  the  customs  transit 
procedure;  

joint  monitoring  operations  in  customs  matters:  these  were 
extended to non maritime operations, and particularly to operations 
relating  to  containers.  The  Council,  in  its  resolution  of  2  October 
200318  on  a  strategy  relating  to  customs  cooperation,  stressed  the 
importance of these actions and the logistical and technical support 
provided by the Commission. 

An  instrument  of  communication  of  information  concerning 
cigarette seizures (CIGinfo) between the competent authorities and 
OLAF.  On  19  May  2003,  OLAF  and  the  World  Customs 
Organisation  agreed  to  allow  a  systematic  transfer  of  information 
on  cigarette  seizures  from  the  AFIS  network  towards  the  specific 
application "CEN" (Customs Enforcement Network).  

an instrument of registration of electronic communications (ECR) 
on  fraud  and  irregularities  in  the  Member  States,  necessary  for  a 
subsequent analysis.  

a mutual information system with Russia (electronic follow up of 
export  refunds  allowing  the  simplification  and  acceleration  of 
procedures). 

However,  as  the  AFIS  network  does  not  make  it  possible  to  store  sensitive 
information at European level, the Customs Information System (CIS) fills this 
gap.  It  has  made  it  possible,  since  24  March  2003,  for  the  competent 
authorities for the application of customs and agricultural legislation, to query 
directly  a  central  database  on  goods,  means  of  transport,  persons  and 
companies, when there are real indications of infringements  of regulations in 
these  fields.  The  aim  of  this  information  system  is  to  allow  a  Member  State 
which enters data into the system to ask another Member State to take one of 
the  following  actions:  study  and  report,  discreet  surveillance  or  specific 
control.  

The  Customs  Information  System  is  based  on  Council  Regulation  (EC) 
n°515/9719 and on the Convention on the use of information technology in the 

18 
19 

OJ C 247 of 15.10.2003.  
OJ L 82 – 22.3.1997, p. 1.  

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field of customs20, which came into provisional force on 1st November 2001. 
It  also  comprises  strict  rules  on  data  protection  of  a  personal  nature.  14 
Member States21 deposited the ratification instruments of the CIS Convention 
and are in a position to use the third pillar database. A handbook of operational 
procedures  and  a  user  guide  were  translated  into  official  languages  and 
training courses were organised for the implementation of the system.  

In addition, Member States agreed to the setting up of an identification file for 
customs  investigations  (FIDE),  a  cooperation  instrument  between  specialised 
national  services  within 
intergovernmental  customs 
the  framework  of 
cooperation22. The management of this third pillar instrument, which has to be 
supplemented  by  a  similar  instrument  intended  to  cover  the  fields  of 
Community  jurisdiction,  was  entrusted  to  OLAF.  The  Commission  included 
the amendment of Regulation (EC) n°515/97 in its 2004 work programme. 

2.2. 

Cooperation against certain forms of crime prejudicial to the interests of 
the Communities: protection of the European currency  

The  protection  of  euro  notes  and  coins  is  the  responsibility  of  the  competent 
national authorities, the European Central Bank, Europol and the Commission. 
The  Commission  (OLAF)  carries  out  this  responsibility  in  several  respects: 
coordination  of  action  by  the  Member  States  for  the  technical  protection  of 
euro  coins  against  counterfeiting,  including  the  European  Technical  & 
Scientific European Centre (ETSC), training and technical assistance thanks to 
the  "Pericles"  programme23,  legislation24  on  the  protection  of  euro  notes  and 
coins with the related sanctions.  

The  second  Commission  Report25  concerning  the  implementation  by  the 
Member States of the Council Framework decision of 29 May 2000 was also 
adopted in 2003; this report concludes that there was a generally satisfactory 
implementation and, overall, conformity with the national provisions with the 
system relating to the penal protection of the euro against counterfeiting.  

20 

21 

22 

23 

24 

25 

Convention  of  26.07.1995  (OJ  C  316  of  27.11.1995).  See  the  report  of  the  provisional 
Committee  envisaged  in  art.3  of  the  agreement  on  the  provisional  application  of  the  CIS 
Convention (Doc. n° 7361/04 of 12 March 2004).  
Austria,  Germany,  Denmark,  Spain,  Finland,  France,  Greece,  Ireland,  Italy,  Luxemburg,  the 
Netherlands, Portugal, Sweden, United Kingdom. 
Council  Act  of  8  May  2003  drawing  up  a  protocol  amending  the  Convention  on  the  use  of 
information technology in the field of the customs, with regard to the creation of a database for 
the identification of Customs files (OJ C 139 of 13.06.2003). 
Council  Decision  2001/923/EC  of  17.12.2001  drawing  up  an  action  programme  on  exchange, 
assistance  and 
the  euro  against  counterfeiting. 
(OJ L of 21.12.2001). 
(EC)  Regulation  of  the  Council  N°1338/2001  of  28  June  2001  (OJ  L  181  of  4.7.2001)  and 
Council Framework Decision 203/861/EC of 29 May 2000 on increasing protection by criminal 
penalties  and  other  sanctions  against  counterfeiting  in  connection  with  the  introduction  of  the 
euro (OJ L 140 of 14.6.2000). 
Report  based  on  Article  11  of 
(COM(2003) 532 final, of 3.9.2003).  

the  Framework  Decision  of  29  May  2000 

the  protection  of 

training 

for 

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In the field of the fight against counterfeiting, the protection of the euro in its 
metal  form  is  entrusted  to  the  ETSC,  managed  by  two  agents  of  the 
Commission. In 2003, the Council formally assigned26 to the Commission the 
responsibility  for  ensuring  the  smooth  operation  of  this  Centre  and  the 
coordination  of  the  actions  carried  out  with  a  view  to  protecting  euro  coins 
against counterfeiting.  

The  statistics  and  analyses  drawn  up  by  the  Centre  in  2003  indicate  a  strong 
increase  in  the  activity  of  counterfeiting  coins.  This  appears  not  only  in  the 
largest number of counterfeit coins detected in circulation (from 2,339 in 2002 
to 26,191 in 2003) but also in the sharp increase in the types of counterfeit and 
their variations (26 and 97 respectively).  

This development has not attacked the credibility of euro coins as feared. The 
number  of  counterfeit  coins  found  in  circulation  and  even  the  quantity  of 
counterfeits in circulation and potentially produced is very low, compared with 
the 49 billion coins in circulation. Moreover, all the known counterfeits should 
be  rejected  by  the  machines  to  be  sorted  or  the  distributors,  once  they  have 
been equipped and regulated in an appropriate way. 

2.3. 

Programme  for  the  promotion  of  actions in  the  field  of  the  protection  of 
the Communities’ financial interests: Hercules  

On  27  May  2003,  the  Commission  proposed  establishing  a  Community 
programme  for  the  promotion  of  actions  in  the  field  of  the  protection  of  the 
financial  interests  of  the  Community,  the  "Hercules"  programme27.  This 
programme covers subsidies granted to training activities, actions of technical 
assistance and exchanges of data as regards protection of Community financial 
interests,  or  to  actions  contributing  to  the  design  and  dissemination  of 
information  in  this  area,  such  as  for  example  studies,  conferences  or 
publications.  It  also  makes  it  possible  to  grant  operating  subsidies  to 
organisations  active  in  this  field  in  the  Member  States,  the  countries  of 
EFTA/EEA and the three applicant countries (Bulgaria, Romania and Turkey).  

The  decision  of  the  European  Parliament  and  the  Council  drawing  up  the 
Hercules  programme  was  adopted  on  6  April  200428.  It  proposes  that  the 
Hercules  programme  be  given  a  multiannual  budget  of  11,775,000  €,  for  a 
three-year period, as from 2004. 

26 

27 
28 

Council  Decisions  2003/861  and  2003/862  of  8.12.2003  concerning  analysis  and  cooperation 
with regard to counterfeit euro coins. (OJ L 325, 12.12.2003). 
COM(2003) 278 final. 
Council Decision n° 804/2004/EC of the European Parliament and of 21 April 2004 drawing up 
a Community action programme for the promotion of actions in the field of the protection of the 
financial interests of the Community (OJ, L. 143 of 30.4.2004).  

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3. 

AN  INTER-INSTITUTIONAL  APPROACH  TO  PREVENTING  AND  FIGHTING 
AGAINST FRAUD AND CORRUPTION  

Since May 1999, the Community has had an overall legal framework to fight 
against  fraud,  corruption  and  any  other  illegal  activity  affecting  its  financial 
interests and to investigate irregular behaviour29 inside the institutions, bodies 
and offices. Reflections on the reinforcement of this mechanism, which frames 
OLAF’s  activities,  advanced  in  2003,  including  on  the  basis  of  the 
Commission’s progress report (article 15) and experience in the Eurostat case.  

3.1. 

Deepening of the Antifraud Reform  

In  accordance  with  Article  15  of  Regulations  1073/99  and  1074/9930,  the 
Commission  adopted,  on  2  April  2003,  a  progress  report  on  the  activities  of 
OLAF, targeted on the evaluation of the legal framework. 

The report puts into perspective the development of the anti-fraud policy of the 
Commission up to the reform carried out in 1999 with the creation of OLAF, 
in  accordance  with  the  high-level  priority  given  to  the  fight  against  fraud, 
corruption  and  any  other  irregular  activity  against  the  Community  budget.  It 
examines  the  manner  in  which  OLAF  with  its  specific  statute  carries  out  its 
different functions. In addition to its principal task of carrying out internal and 
external  investigations  under  its  functional  independence,  OLAF  as  a 
Commission department ensures coordination with the national administrative 
and  judicial  authorities  and  police  responsible  for  preventing  and  fighting 
against fraud, provides technical assistance to the Member States, contributes 
to  the  design  of  the  anti-fraud  strategy  of  the  European  Union  and  takes  the 
initiatives necessary to strengthen existing legislation.  

The  report  shows  that  there  is  a  strong  complementarity  between  the 
operational activities of the Office and those of its partners at national, inter-
institutional  and  international  level  and  concludes  that  cooperation  with  the 
Commission departments and the partnership with the Member States has to be 
studied  in  greater  detail  in  future.  It  demonstrates  the  synergy  which  results 
from the proximity of the operational missions and the general assignments of 
the  Commission,  such  as  the  design  and  implementation  of  anti-fraud  policy 
and legislation. The report also points out that the mixed statute of OLAF may 
its  administrative  and  budget  management  and  make 
complicate 
communication with the institutions difficult.  

The  Commission  has  made  17  recommendations  whose  implementation 
concerns  the  overall  anti-fraud  policy  and  will  involve  the  drawing-up  of 
legislative  proposals  with  a  view  to  strengthening  the  structure  and 
functionality of the Office. The total organisational independence of OLAF is, 

29 

30 

Commission  Decision  n°1999/352  EC,  ECSC,  Euratom  of  28.04.1999  instituting  the  Office, 
Council Regulations (EC) n°1073/1999 of the European Parliament and (Euratom) n°1074/1999 
of  the  Council,  inter-institutional Agreement  concerning the  internal  investigations  carried out 
by the Office and model Decision (OJ L136 of 31.5.1999).  
COM(2003) 154 final of 2.4.2003. 

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12 

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however, in the opinion of the Commission, a prospect to be studied within the 
framework of a future amendment of the EC treaty and of a strengthening of 
the penal dimension of the fight against fraud.  

The European Parliament, while critical of the functioning of the Office, has at 
the  same  time  expressed  support  for  the  wish  to  concentrate  on  the 
investigative function and to improve the information flow between OLAF and 
the  institutions31.  It  stressed  the  importance  of  the  guarantees  with  regard  to 
the rights of the defence, the judicial control of these activities and the role of 
OLAF's  Supervisory  Committee.  Moreover,  it  doubted  the  adequacy  of  the 
corrective measures introduced by the Commission, after the Eurostat case, its 
policy  of  decentralisation  of  responsibilities  in  financial  matters  and  the 
measures intended to implement a zero tolerance policy as regards fraud and 
corruption.  

In  its  opinion32  of  18  June  2003,  the  Supervisory  Committee  concluded  that 
the provisions of Regulation 1073/99 had not had a full effect yet. The Council 
in  its  conclusions  of  22.12.200333  asked,  in  addition  to  the  evaluation  of  the 
legal  framework  of  the  Office,  for  an  evaluation  of  its  operational  activity 
while  considering  a  stabilisation  phase  to  be  necessary  before  envisaging  a 
modification of its statute or missions.  

In addition to the intermediate assessment envisaged by the legislator, the anti-
fraud  reform  is  progressing  in  a  complex  institutional  environment  where 
current events also bring their share of unforeseen events. Drawing the lessons 
from the Eurostat case in his speech of 25 September 2003 and his State of the 
Union  Address  on  18  November  2003  before  the  European  Parliament,  the 
President of the Commission presented an Action Plan aimed at going further 
than the 17 recommendations in the progress report of the Commission. 

A  code  of  conduct34  drawn  up  between  the  Commission  and  OLAF  in  July 
2003  provided  a  first  solution  to  one  of  the  principal  gaps  revealed  by  the 
current  practice  by  ensuring  and  improving  the  exchange  in  good  time  of 
information  on  internal  investigations  within  the  Commission.  It  however 
appeared necessary to use the legislative approach to guarantee the consistency 
of  these  rules  in  all  the  institutions  and  to  improve  the  substance  of  the 
information.  

The  main  points  of  the  proposal  for  a  regulation  of  the  European  Parliament 
and of the Council adopted by the Commission on 10 February 2004 are, for 
the Office: 

31 

32 

33 
34 

Resolution of 13 March 2003 on the protection of the financial interests of the Communities and 
the  fight  against  fraud  –  2001  Annual  Report.  Resolution  of  8  April  2003  on  the  discharge 
decision for 2001  and  Resolution  of 4 December 2003 on  the  Commission  Report  concerning 
the evaluation of the activities of the European Anti-Fraud Office.  
Opinion N° 2/03 accompanying the Commission Report "Progress report on the activities of the 
European Anti-Fraud Office (OLAF)" of 18.6.2003. 
Doc.16280/03 FINAL 644.  
SEC(2003) 871.  

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13 

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– 

– 

– 

– 

– 

the re-focusing of its activities on anti-fraud investigations and its 
operational priorities 

the  improvement  of  the  flow  of  information  with  the  institutions, 
bodies and agencies concerned in order to enable them to carry out 
their political responsibility and to take preventive measures 

the  definition  of  procedural  guarantees  for  persons  during 
investigations 

the reinforcement of the effectiveness of external investigations by 
specifying responsibilities with respect to economic operators, 

moreover, without interfering with the investigations progress, this 
new  framework  for  the  governorship  of  OLAF  enhances  the 
Supervisory  Committee’s  role  in  the  control  it  exerts  on  the 
execution of the investigations function. 

3.2. 

Progress in the implementation of the Reform within the Commission  

The  modernization  of  the  European  public  service  continued  to  progress 
during  200335,  in  parallel  to  the  work  relating  to  the  deepening  of  the  anti-
fraud  reform  of  May  1999.  In  particular,  the  financial  and  administrative 
reform conceived in the White Paper of March 2000 on the internal reform of 
the  Commission  is  being  completed  with  the  entry  into  force  of  the  new 
Financial  Regulation  on  1  January  2003  which  changes  in  particular  the 
internal  control  system,  and  the  decision  of  July  2003  on  the  Specialised 
Financial Irregularities Panel. As a result of the political agreement reached on 
19 May 2003 in the Council and the opinion of the European Parliament of 19 
June  2003,  the  Commission  adopted  an  amended  Proposal  for  the  Staff 
Regulation36. As from its entry into force on 1st May 2004, this Staff reform 
will  have  a  major  impact  on  the  managing  practices  of  departments  and  will 
contribute in particular to the prevention of irregularities. 

In  response  to  the  irregular  practices  detected  at  Eurostat,  the  Commission 
adopted  complementary  horizontal  reinforcement  measures:  the  September 
1999  Code  of  conduct  on  the  relations  between  the  Commissioners  and  their 
services  was  revised  in  order  to  improve  the  information  transmitted  to 
Commissioners and to enable them to assume their political responsibility.  

To this end, a group of Commissioners including the President ensured that all 
the  relevant  information  and/or  allegations  of  fraud,  irregularity  and  other 
reprehensible  acts  coming in  particular from OLAF, IDOC37 and the Internal 
Audit  Service  are  the  subject  of  a  rigorous  follow-up.  The  group  of 
commissioners is assisted by a high-level interdepartmental group.  

35 

36 
37 

Report  from  the  Commission  on  the  follow  up  of  the  reform  and  the  measures  to  be 
implemented in 2004 (COM(2004) 93 final).  
COM(2003) 721 final. 
Investigation and Disciplinary Office – Commission. 

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14 

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4. 

STRENGTHENING  OF  THE  CRIMINAL  LAW  PROTECTION  OF  THE 
COMMUNITIES’ FINANCIAL INTERESTS 

4.1. 

Towards concrete proposals on the creation of a European Prosecutor  

The  requirement  to  prosecute  in  a  more  effective  way  the  authors  of 
criminality undermining the Communities’ financial interests, a fortiori under 
an enlarged Europe, led the Commission to propose the creation of a European 
Prosecutor38.  In  2001,  the  Commission  had  adopted  a  Green  Paper39  on  the 
penal  protection  of  the  communities’  financial  interests  and  the  creation  of  a 
European Prosecutor and led a wide-ranging debate throughout 2002 with all 
the interested parties. The year 2003 will have been marked by the follow up 
of  this  debate  and  its  concrete  expression  in  the  proposals  of  the  European 
Convention  on  the  establishment  of  a  European  Public  Prosecutor,  on  which 
the decision is to be made by the Intergovernmental Conference (IGC). 

Assessment  of  the  public  consultation  on  the  creation  of  a  European 
Prosecutor  

In March 2003, the Commission presented a summary of some 200 reactions 
in  response  to  the  Green  Paper40.  It  has,  for  this  reason,  informed  the 
Convention  on  the  future  of  the  Union  about  this  report.  Basically,  reactions 
are for the most part favourable to the principle of the creation of a European 
Prosecutor,  the  government  authorities  on  this  point  remaining  overall  more 
reserved  than  the  experts  and  the  representatives  of  civil  society.  A  minority 
has firmly opposed the project.  

The  general  evaluation  gives  an  account  of  the  opinions  on  the  need  for  the 
creation  of  a  European  Prosecutor  and  reaffirms  in  detail  the  added  value 
which it would bring to the fight against criminality undermining Community 
finance.  The  thematic  evaluation,  for  its  part,  highlights  the  institutional  and 
legal affairs which have henceforth to be studied in greater detail to facilitate 
the  carrying  out  of  such  a  project:  articulation  with  the  existing  European 
authorities,  rights  of  defence  and  administration  of  the  evidence,  integration 
into national criminal law systems.  

In  this  report,  the  Commission  reaffirms  that  an  amendment  of  the  treaties 
establishing the European Communities is, on this point, essential in order to 
guarantee  effective  and  equivalent  protection  of  the  financial  interests  while 
respecting the basic rights of individuals.  

In addition, the Commission, by adopting the progress report on the activities 
of the European Anti-Fraud Office, on 2 April 200341, set out its vision of the 
development  of  OLAF  from  the  point  of  view  of  the  creation  of  a  European 

38 
39 
40 

41 

COM(2000) 608.  
COM(2001) 715. 
COM(2003)128: The follow up report, and all the answers gathered are available on the Internet 
(http://www.europa.eu.int/comm/anti fraud/green paper/index). 
COM(2003) 154.  

EN 

15 

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Prosecutor,  the  former  having  the  task  of becoming an  auxiliary of  justice  in 
the  service  of  the  latter.  The  Commission  also  reiterated  its  intention  to 
actively promote this idea within the IGC. 

For  its  part,  in  a  resolution  of  27  March  2003,  the  European  Parliament 
welcomed the Green Paper and supports the idea of the creation of a European 
Prosecutor.  

Proposal of the European Convention concerning the European Prosecutor’s 
Office  

These  efforts  led  to  a  first  recognition  of  the  project  aiming  to  endow  the 
Community  with  a  criminal  prosecution  function.  Under  the  constitutional 
draft  treaty  submitted  on  18  July  2003,  the  European  Convention  proposed  a 
legal basis allowing the creation of a European Prosecutor’s Office (article III-
175), whose functions will be similar to those proposed by the Commission42. 
The European Prosecutor’s Office would be qualified to detect, prosecute and 
refer for judgment in court the authors and accomplices of the offences falling 
within  its  competence.  It  would  carry  out  before  the  competent  courts  of  the 
Member States the public action concerning these offences.  

On the other hand, the organisation of this Prosecutor’s Office, created "from 
Eurojust", and its field of material competence, extended beyond the protection 
of  the  Community’s  financial  interests  to  serious  and  transnational  crimes, 
show  a  development  in  the  debate  since  the  first  Commission  proposals, 
starting with the follow-up report of the Green Paper.  

It is however to be feared that the unanimous decision method retained for the 
implementation  of  these  proposals  may  not  allow  them  to  be  achieved,  a 
fortiori in an enlarged Europe. Instead of envisaging the establishment of the 
European  Prosecutor’s  Office  in  the  constitutional  treaty  itself,  as  the 
Commission proposed, the Convention referred this choice back to the Council 
which will be able to decide, without any obligation or deadline, unanimously 
and after the approval of the European Parliament.  

This  is  why,  by  sending  its  opinion  to  the  IGC  on  the  basis  of  Article  48 
EUT43, the Commission recommended an additional extension which would be 
subject  to  qualified  majority  decision  in  relation  to  the  constitutional  draft 
treaty, including with regard to the decision to create the European Prosecution 
Service  for  the  sole  protection  of  the  Community’s  financial  interests. 
Unanimity  would  remain  necessary  to  establish  a  Prosecutor’s  Office  with 
broader  competence.  By  the  end  of  2003,  the  IGC  had  not  dealt  with  the 
question.  

42 
43 

OJ C 169 of 18.7.2003.  
COM(2003) 548.  

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16 

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4.2. 

Cooperation with Eurojust and Europol  

The  Tampere  Council  of  October  1999,  in  the  framework  of  the  project  of  a 
European  area  of  freedom,  security  and  justice,  recommended  strengthening 
the  partnership  between  the  bodies  set  up  within  the  framework  of  the  third 
pillar and the Community authorities responsible for the protection of financial 
interests. As a result of the extension of the mandate of Europol on 1 January 
200244 to all the serious forms of international criminality, among which fraud 
and  corruption,  and  of  the  creation  of  Eurojust45,  there  have  been  significant 
developments in the cooperation between the Commission and the judicial and 
police bodies, in 2003.  

An  administrative  cooperation  arrangement  was  signed,  between 
the 
Commission  and  Europol  on  18  February  2003,  for  consultation,  mutual 
assistance  and  exchange  of  information  in  fields  of  common  interest,  which 
also  covers  the  protection  of  Community  financial  interests.  On  the  basis  of 
these  provisions,  Europol  and  OLAF,  in  its  investigative  function,  concluded 
an administrative agreement on 8 April 2004 which stresses the strengthening 
of the exchanges of strategic and technical information (the exchange of data 
on  persons  being  excluded)  and  the  evaluation  of  threats  and  the  analysis  of 
risks in the areas of common interest. 

The memorandum of agreement signed on 14 April 2003 between OLAF and 
Eurojust envisages close coordination between OLAF’s Magistrates Unit and 
Eurojust members in order to articulate the cooperation provided for in Article 
280  (3) of  the EC treaty (i.e. between the competent authorities and with the 
Commission)  and  cooperation  between  national  authorities  organised  via  the 
third  pillar46. 
Eurojust  members  within 

framework  of 

the 

the 

44 
45 
46 

Council Decision of 6.12.2001 (OJ L C 362 of 18.12.2001).  
Council Decision N° 2002/187/JAI of 28.2.2002 (OJ L 63 of 6.3.2002).  
The  Council  Decision  indicates  in  its  recital  8  that  "the  Eurojust  competences  are  without 
prejudice to the competences of the Community as regards protection of the financial interests".  

EN 

17 

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TITLE  II  –  IMPLEMENTATION  OF  ARTICLE  280  BY  THE  MEMBER  STATES  IN  2003  - 
MEASURES TAKEN TO PROTECT THE COMMUNITY'S FINANCIAL INTERESTS 

In accordance with Article 280 of the EC Treaty, the second part of the Commission's Annual 
Report relates to the action taken by the Member States in the course of 2003 to combat fraud 
and other illegal activities adversely affecting the Community's financial interests. 

The Member States' contributions are based on a questionnaire agreed with them in Cocolaf 
(the Advisory Committee for the Coordination of Fraud Prevention) and amended each year 
in  the  light  of  past  experience,  so  as  to  facilitate  the  monitoring  of  measures  taken  by  the 
Member States. This year the questions were more detailed than in previous years, which has 
also  meant  that  the  Member  States  have  provided  more  detailed  answers,  although  there  is 
still room for improvement on this front. 

The Commission was keen to put the emphasis on structural measures, as it was in this area 
that  the  Court  of  Auditors’  special  report  No  10/2001  found  certain  shortcomings  in  the 
national  systems  for  detecting,  communicating  and  following  up  irregularities.  Audit  visits 
carried out by the Commission in a number of Member States between November 2002 and 
January 2003 revealed significant improvements, but also some persistent failings. In the light 
of  these  reports,  the  new  legislative,  regulatory  and  administrative  measures  adopted  by 
Member States in 2003 concerning structural measures warrant particular scrutiny. 

The  specific  subject  area  and  the  more  detailed  questionnaire  made  for  a  more  meaningful 
comparison of the new measures taken by the Member States. It would therefore seem wise to 
continue  using  this  method  in  the  future,  although  the  subject  area  and  the  questions  asked 
would vary from year to year. 

Title  II  was  drawn  up  in  the  form  of  a  summary  of  the  major  developments  based  on  the 
responses  given  by  the  Member  States.  Simultaneously  with  the  present  report,  the 
Commission  published a document  containing the full  text of  the Member  States' responses 
available in the form of a staff working document. 

As  in  last  year's  report,  the  first  chapter  summarises  the  new  legislative,  regulatory  and 
administrative  developments  relating  to  the  protection  of  Community  financial  interests 
against  fraud  and  irregularities  in  the  Member  States.  To  make  for  ease  of  comparison,  the 
analysis focuses on a few key issues, such as tougher penalties and improved notification of 
irregularities. 

The  second  chapter  concerns  the  organisation  of  the  departments  responsible  for  protecting 
the  Communities'  financial  interests  in  terms  of  staff  handling  structural  measures  (ERDF, 
ESF,  EAGGF-Guidance,  FIFG  and  the  Cohesion  Fund).  The  Commission's  analysis  of  the 
data provided by the Member States seeks to provide a snapshot of the state of play as regards 
national measures designed to protect Community financial interests.  

The  third  chapter  of  the  report  concerns  developments  in  coordination  between  national 
departments in 2003. Under the 2001-2003 anti-fraud action plan, cooperation between all the 
relevant authorities is the key to deploying resources effectively. This can be achieved only 
through effective coordination between authorities at both national and European level.  

EN 

18 

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The final chapter discusses the issue of recovering amounts wrongly paid in respect of direct 
expenditure.  Here  the  emphasis  is  on  whether  and  in  what  circumstances  the  European 
Communities can seek recovery by joining a civil action to criminal proceedings and also on 
the  arrangements  for  national  authorities  to  take  protective  measures  (such  as  seizing  or 
confiscating assets) in order to safeguard recovery. 

5. 

TEXTS  CONTRIBUTING  TO  THE  IMPLEMENTATION  OF  ARTICLE  280  OF  THE  EC 
-  PRINCIPAL  LEGISLATIVE,  REGULATORY  AND  ADMINISTRATIVE 
TREATY 
DEVELOPMENTS 

The provisions set out below are a representative selection of measures taken by the 
Member  States  to  combat  fraud  against  Community  financial  interests  in  2003  in 
respect of own resources, agricultural expenditure and structural funds . 

This  summary  indicates  that,  beyond  a  simple  implementation  of  the  Community 
legislation,  recourse  to  the  national  law  remains  essential  to  ensure  effective  and 
equivalent protection of the financial interests of the Communities.  

Since  the  Commission  report  is  produced  every  year,  the  fact  that  a  Member  State 
has not taken any new measures over the period in question should not be taken as 
indicative  of  the  general  level  of  protection  of  financial  interests  in  that  Member 
State. It may simply be that the country had done more in the previous period. 

5.1. 

Horizontal developments 

France  reported  its  adoption  of  the  Internal  Security  Act  on  18  March  2003, 
significantly  toughening  the  criminal  penalties  laid  down  in  the  Customs  Code  for 
the  offences  of  undeclared  importation  or  exportation  and  smuggling  when 
committed  by  an  organised  group.  This  represents  a  considerable  strengthening  of 
criminal  enforcement  in  respect  of  customs  offences,  since  the  Act  also  applies  to 
own resources  and  EAGGF-Guarantee.  Significantly, the Act also inserts a number 
of  articles  into  the  Code  of  Criminal  Procedure  providing  a  legal  framework  for 
searches and access to computer data. 

France adopted an order setting up a computerised anti-fraud support system, known 
as  the  SILCF,  at  the  Directorate-General  for  Customs  (DGDDI).  The  system  is 
intended  to  assist  in  the  smooth  operation  of  the  fraud  investigation,  identification, 
prosecution and enforcement work for which the DGDDI is responsible as part of its 
powers  in  the  fiscal  and  economic  fields  and  the  protection  of  national  and 
Community interests, including fraud affecting the Community budget. 

In Germany, the Federal Ministry of Finance, in conjunction with the Länder, drew 
up a new guide for reporting irregularities in line with Regulation (EEC) No 595/91 
and  Regulation  (EC)  No  1681/94.  The  guide  takes  account  of  amendments  to  the 
rules as well as developments in this field since the adoption of the Regulations and 
brings national directives up to date. The competent authorities now have up-to-date 
instructions on reporting irregularities and dispatch the reports to the Ministry in the 
form  of  a  simple  Excel  table.  This  has  made  the  administrative  procedure  more 
straightforward. 

EN 

19 

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In  Spain,  Law  No  11/2003  governs  the  setting-up  of  joint  investigation  teams 
between two or more Member States of the European Union. This Law also applies 
to joint investigation teams set up under the auspices of OLAF. 

Since  the  audit  conducted  in  2003  by  the  Commission  under  Regulation  (EC)  No 
1681/94,  the  Dutch  system  of  reporting  irregularities  and  recovering  amounts 
wrongly paid has undergone further administrative and contractual improvements.  

In  Portugal,  further  to  the  modification  introduced  by  Decree-law  No  38/2003,  the 
Penal  Code  envisages  from  now  on  penalties  against  a  debtor  who  avoids  the 
repayment  of  claims  by  third  parties.  The  Decree-law  No  93/2003  regulates  the 
conditions  for  cooperation,  access  and  analysis  of  the  relevant  information  for  the 
purposes of initiating an investigation into tax offences, by the judicial police and the 
tax administration. 

5.2. 

Own resources 

Noteworthy developments include Greece and Portugal's transposition into national 
legislation of Directive 2001/44/EC on mutual assistance for the recovery of claims 
in  respect  of  certain  levies,  customs  duties  and  other  measures.  The  provisions 
adopted define the scope of mutual assistance, which also applies to claims in respect 
of administrative penalties and fines.  

The 2003 Finance Act introduces into UK legislation a new system of civil penalties 
applicable  to  contraventions  of  national  and  Community  customs  legislation.  The 
penalties  primarily  apply  to  less  serious  cases  of  evasion  of  customs  duties  and/or 
import  VAT.  Customs  retains  the  right  to  investigate  such  cases  with  a  view  to 
prosecution. The penalties also apply to contraventions of national and Community 
laws  covering  imports  and  exports  where  evasion  is  not  a  factor.  These  penalties 
should provide an effective and proportionate sanction.  

In Portugal, Decree-Law No 93/2003, of 30 April 2003 regulates the form, scope and 
limits of the cooperation between the Judicial Police, the DGCI (Directorate-General 
of Taxes) and the DGAIEC (Directorate-General of Customs and Special Taxes on 
Consumption) in a coordinated manner, in the fields of the access to and processing 
of information.  

It  is  also  worth  mentioning  that  in  June  2003  the  WCO  Mutual  Assistance  Project 
Group, chaired by the UK, presented a final draft of the new Mutual Administrative 
Assistance  Convention.  The  work  involves  modernising  the  multilateral  Naples  II 
Convention. The draft is due to be approved in June 2004. Member States, such as 
the  Netherlands,  France,  Spain  and  the  United  Kingdom,  as  well  as  Cyprus,  have 
been actively involved in this work. Certain EU good practice will be extended on a 
global scale. 

In  Belgium,  an  “international  customs  cooperation”  division  is  from  now  on 
responsible for assuming the role of central coordination service and where necessary 
providing  the  interface  between  the  foreign  coordination  services  and  the  Belgian 
judicial authority. 

EN 

20 

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Ireland  passed  a  legislative  amendment  to the  Criminal  Justice  Act  of  1994,  which 
came into force on 5 May 2003, requiring suspicious transactions to be reported to 
the relevant authorities. 

5.3. 

Agricultural expenditure 

Major  developments  include  Italy's  approval  of  a  legislative  decree  whereby 
companies  in  receipt  of  EAGGF-Guarantee  funding  may  be  subject  to  an 
administrative fine equal to the payments received, if they fail to produce, claim they 
do  not  have  or  conceal  from  inspection  documents  required  to  be  produced  in  the 
course of an inspection carried out under Regulation (EEC) No 4045/89. The decree 
also provides for a fine of up to €10 500 for third parties who refuse to produce the 
requisite documents in the course of cross-checks. 

A Greek law provided for administrative penalties to be imposed for animal feed, in 
accordance  with  Community  and  national  rules,  by  way  of  a  decision  of  the 
Secretary  General  of  the  Ministry  of  Agriculture.  The  penalties  are  based  on  the 
seriousness  and  duration  of  the  infringement,  the  size  of  the  undertaking,  and 
whether the breach is deliberate or involves a repeat offence. 

In Portugal, the Decree No 193/2003 clarifies a number of concepts referred to in the 
Regulations  in  the  field  of  EAGGF-Guarantee,  and  particularly  regarding  sanctions 
to be applied in case of non-fulfilment. 

A Spanish law on tax, administrative and social measures amended the infringements 
and applicable penalties in relation to the milk quota regime.  

5.4. 

Structural measures 

Among  developments  affecting  all  the  funds,  Greece  highlighted  the  adoption  of  a 
joint ministerial decision introducing a new national system for financial corrections 
to  recover  amounts  unduly  or  unlawfully  paid  to  implement  part-financed 
programmes in the context of the Community Support Framework (CSF), Cohesion 
Fund and Community Initiatives for the programming period 2000-06. The decision 
governs  recovery  following  audits  carried  out  on  three  levels  by  the  managing 
authorities, paying authorities and Fiscal Control Committee. 

France adopted a decree conferring a new power on the CICC-Structural Funds (the 
Interministerial  Commission  for  Coordination  of  Controls  in  respect  of  operations 
part-financed by European Structural Funds) to supervise management and payment 
authorities. Such supervision applies to local authorities, but also to any individual or 
corporate body involved in implementation which receives the corresponding funds, 
the  organisations  through  which  such  funds  have  passed  and  the  various 
administrations.  The  Interministerial  Commission  may  make  recommendations 
directly  to  local  authorities  when  the  latter  act  as  management  and  payment 
authorities.  

In relation to the ERDF, Finland reported the entry into force in 2003 of an Act and a 
Decree  on  the  financing  of  regional  development  measures.  They  regulate  matters 
relating  to  the  granting,  payment,  follow-up,  audit  and  recovery  of  aid.  They  also 

EN 

21 

   EN 

 
enable the recovered amount to be increased in certain deliberate and extreme cases. 
They have a deterrent effect as well as consolidating ex-post measures. 

6. 

ORGANISATION  OF  DEPARTMENTS  FOR  THE  PROTECTION  OF  THE  COMMUNITIES' 
FINANCIAL INTERESTS IN THE FIELD OF STRUCTURAL ACTIONS 

Protection  of  the  Communities'  financial  interests  is  largely  based  on  the  primary 
responsibility  of  the  Member  States,  which  have  the  task  of  managing  more  than 
80% of expenditure and of collecting all the traditional own resources. The different 
types  of  control  provided  for  by  the  sectoral  regulations  involve  a  wide  range  of 
actors  and  staff  at  various  levels  of  the  national  administration  (payment  agencies, 
management  authorities,  central  and  decentralised  national  departments,  local 
authority departments). 

The Member States are required to ensure effective and equivalent protection of the 
European  Communities'  financial  interests  by  taking  the  same  measures  to  protect 
them as they take to protect their own financial interests. As structural measures are 
the  main  focus  of  this  year's  report,  the  review  of  the  organisation  of  departments 
will also concentrate on this field. It is an area where Member States are all the more 
concerned by the fight against fraud and irregularities since it involves part-financed 
programmes.  

The sectoral regulations lay down the main control arrangements which the Member 
States  have  to  implement.  They  consist  on  the  one  hand  of  what  are  known  as 
regularity controls, required by the sectoral regulations, and on the other of controls 
that are more targeted to the fight against fraud, as required by Article 280 of the EC 
Treaty.  

Regularity controls comprise documentary checks, sometimes called "first-level" or 
"ex ante" checks, aimed at assessing compliance with the procedures and the criteria 
laid down by the legislation for the granting of funding or of benefits (see endnote 2).  

They  also  include  "second-level"  or  "ex  post"  checks  made  after  payment  of  the 
funds,  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. They are often based on 
risk analysis, as required by Community legislation. 

In  addition,  Member  States  are  required  to  take  more  targeted  measures  to  combat 
fraud.  These  checks  (anti-fraud  investigations)  are  conducted  on  the  basis  of 
suspected  fraud  established  by  different  authorities,  depending  on  the  Member 
States: police, financial authorities, or the judicial authorities at an advanced stage.  

Since the organisation of departments is the Member States' sole responsibility, they 
were  asked  to  describe  their  control  activities  in  functional  terms  according  to  the 
above classification. This starts from the sector audited rather than the organisational 
entity to which the staff concerned are assigned1 (notes relating to Title II are situated at the 
end of the document).  

A number of tables set out the Member States' estimates of the manpower assigned in 
2003  to  each  type  of  check  (ex  ante,  ex  post  and  anti-fraud)  in  the  five  sectors 

EN 

22 

   EN 

 
covered (ERDF, ESF, EAGGF Guidance Section, FIFG, Cohesion Fund). To arrive 
at  comparable  data,  the  types  of  information  sought  and  the  control  concepts  were 
spelled out as clearly as possible.2  

The  two  last  columns  of  each  table  connect  this  manpower  with  the  amount  of  the 
budget which has to be controlled. This data will enable Member States to make an 
initial assessment of their efforts to afford effective and equivalent protection to the 
Community's  financial  interests  and  assign  them  the  same  status  as  their  own,  as 
required by Article 280 of the Treaty. Due to the fact that consolidated figures were 
not  available  at  the  time  of  drafting  this  report,  the  figures  used  were  those  that 
correspond to the provisional data of the execution report 2003 of DG Budget, as at 
April 28, 2004. 

Nonetheless,  since  the  data  involves  estimates  based  on  possibly  divergent 
definitions of control and of manpower, they should be interpreted with caution and 
treated  only  as  a  guide.  Their  main  value  is  to  reveal  some  overall  trends,  which 
would have to be looked at in more detail in a structured dialogue with the Member 
States. 

6.1. 

European Regional Development Fund (ERDF) 

The European Regional  Development Fund (ERDF)  contributes  mainly  to assisting 
regions  whose  development  is  lagging  behind  and  those  undergoing  economic 
conversion or experiencing structural difficulties. 

EN 

23 

   EN 

 
Table 6.1 — ERDF: manpower assigned by each Member State to the three types of control 

(1) 

(2) = 
(1)/(7) 

%  

(3) 

(4) = 
(3)/(7) 

%  

Ex ante 

Ex post 

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-fr
aud3 

% 

Total (three 
types of 
control) 

Budget to 
be 
checked 
(€ million) 

Budget to 
be 
checked 
per 
control 
officer 
(€ million) 

1054 

94.26.
% 

65 

5.74% 

- 6 

0.00% 

112 

64.04 

0.57 

30 

95.19% 

1 

0.25 

0.80% 

32 

25.42 

0.81 

4.00% 

8697 

88.49% 

1138 

11.51%

-9 

0.00% 

81 

79.41% 

21 

20.59%

314 

70.40% 

132 

29.60%

313 

84.37% 

58 

15.63 

IE 

344 

56.39% 

266 

43.61%

- 

- 

- 

- 

0.00% 

0.00% 

0.00% 

0.00% 

531 

60.14% 

208 

23.56%

144 

16.30% 

3 

1 

60.00% 

50.00% 

1 

1 

20.00%

1 

20.00% 

50.00%

0.00% 

982 

102 

446 

371 

610 

883 

513 

214 

1818.68 

1005.36 

4394.96 

1268.69 

294.30 

2869.57 

0.25 

116.97 

98 

90.74% 

10 

9.26% 

-16 

0.00% 

108 

151.85 

684 

58.26% 

246 

20.95% 24417 

20.78 

1174 

2392.51 

FI18 

10719 

81.31% 

2220 

16.72%

321 

2.27% 

SE 

100 

83.35% 

18.5 

15.40%

1,522 

1.25% 

UK23 

20424 

49.67% 

143 

34.75%

64 

15.50% 

132 

120 

411 

116.85 

195.36 

938.39 

1.85 

9.86 

9.85 

3.42 

0.48 

3.25 

0.05 

-15 

1.41 

2.04 

0.89 

1.63 

2.28 

BE 

DK 

DE 

EL 

ES10 

FR11 

IT12 

LU 

NL 

AT 

PT 

Total 

3,784 

68.95% 

1,247 

22.72%

457 

8.33% 

5,489 

15,653. 20 

2.85 

For  the  ERDF,  ex  ante  controls  appear  to  be  assigned  the  most  manpower  in  the 
majority of Member States (for all Member States, ex ante checks: 68.95%; ex post 
checks:  22.72%;  anti-fraud  investigations:  8.33  %).  However,  there  is  little 
uniformity between the Member States as regards the allocation of staff between the 
three types of control.  

EN 

24 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The case of Austria, Denmark and Belgium should be underlined as they all devoted 
more  than  90%  of  their  staff  to  ex  ante  checks  in  a  preventive  approach  focusing 
resources on detecting potential problems very early on in the control chain. 

According  to  the  data  provided,  only  four  Member  States  (Luxemburg,  Italy, 
Portugal and the United Kingdom) can confirm that they devote more than 15% of 
their manpower to anti-fraud investigations.  

However,  it  should  be  noted  that  some  Member  States  found  it  difficult  to  break 
down  their  data  by  type  of  control,  while  others  stated  that  their  staff  worked  on 
more than one sector, thereby preventing a more in-depth analysis.  

Moreover, several Member States were unable to give any figures on the manpower 
assigned  to  anti-fraud  investigations.  The  reason  for  this  is  either  that  there  is  no 
specific  anti-fraud  unit  (e.g.  in  Austria)  or  that  investigators  are  not  restricted  to 
working  in  one  specific  field.  As  their  activities  overlap,  it  is  difficult  to  state 
categorically how many staff are assigned to each fund. 

Despite  these  caveats,  the  figures  appear  to  indicate  that  the  Member  States  are 
implementing different control strategies based to a greater or lesser extent on one or 
other methodology. 

6.2. 

European Social Fund (ESF) 

The  European  Social  Fund  (ESF)  comes  into  play  mainly  in  the  context  of  the 
European Employment Strategy. 

EN 

25 

   EN 

 
Table  6.2  —  ESF:  manpower  assigned  by  each  Member  State  to  the  three  types  of  control 

(1) 

Ex ante 

(2) = 
(1)/(7) 

%  

(4) = 
(3)/(7) 

%  

(3) 

Ex 
post 

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-fr
aud25 

% 

Total (three 
types of 
control) 

Budget to 
be 
checked 
(€ million)  

Budget to 
be 
checked 
per 
control 
officer 
(€ million) 

BE 

DK 

DE 

EL 

ES33 

FR34 

IE 

IT35 

LU 

NL 

AT 

PT 

3826 

71.70% 

1527 

28.30% 

- 28 

0,00% 

20 

28.57% 

40 

57.14% 

1029 

14.29% 

59630 

84.90% 

10631 

15.10% 

-32 

0.00% 

53 

70 

702 

53 

33.34 

44.49 

0.63 

0.64 

1,392.42 

1.98 

684.39 

12.91 

0.00% 

38 

71.70% 

15 

28.30% 

1,292 

84.17% 

243 

15.83% 

120 

63.83% 

68 

36.17% 

16 

71.11% 

6.5 

28.89% 

- 

- 

- 

- 

0.00% 

1,535 

1,738.36 

1.13 

0.00% 

188 

579.97 

0.00% 

22.5 

113.85 

3.08 

5.06 

589 

67.80% 

215 

24.81% 

64 

7.37.% 

869 

1,078.73 

1.24 

0,00% 

1.82% 

4 

55 

5.28 

1.32  

77.72 

2 

40 

50.00% 

2 

50.00% 

72.73% 

14 

25.45% 

264 

99.44% 

1.5 

0.56% 

486 

77.64% 

140 

22.36% 

- 

1 

-36 

-37 

2 

FI38 

85.539 

87.51% 

1040 

10.34% 

SE 

108 

83.72% 

19.541 

15.12% 

1.542 

1.16% 

UK43 

70 

48.61% 

64 

44.44% 

Total 

3,764 

78.21% 

960 

19.95% 

10 

89 

0.00% 

265.5 

112.92 

0.00% 

2.15% 

6.94% 

626 

98 

129 

144 

740.27 

172.06 

167.29 

357.61 

1.41 

0.42 

1.18 

1.76 

1.29 

2.48 

1.84% 

4,813 

7298. 70 

1.52 

Once  again,  there  is  little  uniformity  between  the  Member  States  as  regards  the 
allocation of staff between the three types of control (ex ante and ex post checks and 
anti-fraud investigations). The staff assigned by the Member States to ex ante checks 
far  exceeded  the  staff  assigned  to  the  other  two  types  of  control  in  2003  (for  all 
Members  States,  ex  ante  checks:  78.21% ;  ex  post  checks:  19.95%;  anti-fraud 
investigations: 1.84%). 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
Only four Member States diverged significantly from the average. Denmark assigned 
less  than  half  of  its  staff  to  ex  ante  checks,  Luxemburg  and  the  United  Kingdom 
assigned some 50% of their human resources to such checks. At the other end of the 
scale, Austria assigned more than 99% of its staff to ex ante checks.  

For  most  Member  States,  anti-fraud  investigations  took  up  a  very  low  number  of 
staff  (less  than  10%).  However,  one  Member  State  was  an  exception  to  this 
(Denmark: 14.29%).  

The data shows that, as with the ERDF, the protection of the Communities' financial 
interests in the area of the ESF focused primarily on ex ante control.  

6.3. 

European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF)  -  Guidance 
section 

The  European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF) -  Guidance 
Section  helps  in  both  the  development  and  the  structural  adjustment  of  rural  areas 
whose development is lagging behind by improving the efficiency of their structures 
for the production, processing and marketing of agricultural and forestry products. 

EN 

27 

   EN 

 
Table  6.3  —  EAGGF  Guidance  section:  manpower  assigned  by  each  Member  State  to  the 
three types of control 

(1) 

Ex ante 

(2) = 
(1)/(7) 

%  

(4) = 
(3)/(7) 

%  

(3) 

Ex 
post 

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-fr
aud44 

% 

Total (three 
types of 
control) 

Budget to 
be 
checked 
(€ million)  

Budget to 
be 
checked 
per 
control 
officer 
(€ million) 

BE 

DK 

DE 

EL 

ES50 

FR51 

1145 

92.52% 

146 

7.48% 

1 

31.25% 

2 

68.75% 

332 

57.24% 

248 

42.76% 

40 

71.43% 

299 

85.43% 

16 

51 

28.57% 

14.57% 

55 

94.83% 

3 

5.17% 

IE 

113 

85,93% 

15,5 

11.79% 

- 47 

-48 

-49 

- 

- 

- 

3 

0.00% 

0.00% 

0.00% 

0.00% 

0.00% 

0.00% 

12 

3 

580 

56 

350 

58 

16.22 

1.04 

545.41 

136.28 

810.06 

102.36 

2.28% 

131.5 

16.61 

179.5 

61.90% 

46.5 

16.03% 

24 

8.28% 

250 

577.76 

IT52 

LU 

NL 

AT 

PT 

653 

3 

14 

34.15% 

66.67% 

75.00% 

254 

25.00% 

- 

0.00% 

5 

7 

36 

460 

59.76% 

0.5 

6.10% 

33.33% 

6.05% 

8.89% 

-56 

-57 

- 

0.00% 

0.45% 

FI58 

4059 

91.11% 

SE 

42 

90.67% 

3 

6.07% 

1.561 

3.25% 

559 

93.95% 

0.00% 

595 

294.15 

855 

8 

21 

0.105 

4.20 

25.93 

44 

46 

23.43 

22.24 

37.00 

UK62 

6063 

48.78% 

33 

26.83% 

Total 

1,755 

76.75% 

472 

20.66% 

30 

59 

24.39% 

123 

2.59% 

2,286 

2612.80 

1.32 

0.33 

0.94 

2.43 

2.31 

1.76 

0.13 

2.31 

0.01 

0.51 

1.23 

0.49 

0.53 

0.48 

0.30 

1.14 

For  the  EAGGF  Guidance  Section,  most  of  the  Member  States'  inspection  staff 
(76.75%)  were  likewise  assigned  to  ex  ante  checks.  Similar  disparities  as  for  the 
other  sectors  exist  between  Member  States as  regards  the  division  of  staff  between 
the three types of control. 

EN 

28 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
Belgium,  France,  Portugal,  Finland  and  Sweden  assigned  more  than  90%  of  their 
staff  to  ex  ante  checks,  while  Denmark  again  gave  priority  to  ex  post  checks 
(68.75%) over ex ante checks (31.25%).  

The Netherlands also assigned more staff to ex post than ex ante checks in this sector 
in 2003.  

Relatively  few  resources  (2.59%)  were  assigned  to  anti-fraud  investigations.  Some 
Member States indicated that anti-fraud investigations were included in the data on 
the other types of control. 

Fewer  staff  (2  286)  were  assigned  by  the  Member  States  to  this  sector  overall  (all 
types  of  control)  than  to  the  ERDF  (5489)  and  the  ESF  (4813)  while  remaining 
proportional  to  the  Budget  to  be  controlled.  Each  control  agent  controls  a  bigger 
share  in  the  budget  of  ERDF  (2.85  Million  €/agent)  and  a  smaller  one  in  EAGFF 
(1.14 Million €/agent). 

6.4. 

Financial Instrument for Fisheries Guidance (FIFG) 

The  Financial  Instrument  for  Fisheries  Guidance  (FIFG)  supports  structural 
developments in the fisheries sector. 

EN 

29 

   EN 

 
Table 6.4 — FIFG: manpower assigned by each Member State to the three types of control 

(1) 

Ex ante 

(2) = 
(1)/(7) 

%  

(4) = 
(3)/(7) 

%  

(3) 

Ex 
post 

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-fr
aud64 

% 

Total (three 
types of 
control) 

Budget to 
be 
checked 
(€ million)  

Budget to 
be 
checked 
per 
control 
officer 
(€ million) 

62.50% 

165 

37.50% 

- 

0.00% 

79.03.
% 

1 

20.97% 

0.00% 

2 

6 

1.44 

0.90 

25.51 

4.11 

27 

52.94% 

24 

47.06% 

21268 

100.00
% 

0.00% 

0.00% 

51 

34.78 

0.68 

0.00% 

212 

42.01 

0.19 

0.00% 

135 

281.72 

64.44% 

48 

35.56% 

93.10% 

60.00% 

2 

2 

6.90% 

40.00% 

52.38% 

28 

31.75% 

14 

15.87% 

-66 

-67 

- 

- 

- 

0 

- 

0 

-73 

-74 

0.00% 

0.00% 

- 

0.00% 

29 

5 

88 

- 

3 

0.00% 

10.5 

0.00% 

51 

1 

5 

87 

27 

3 

46 

- 

2 

BE 

DK 

DE 

EL 

ES69 

FR70 

IE 

IT71 

LU72 

NL 

AT 

PT 

- 

66.67% 

- 

1 

5 

- 

33.33% 

47.62% 

5.5 

52.38% 

39 

76.47% 

12 

23.53% 

FI75 

1276 

82.76% 

2.577 

17.24% 

- 

0.00% 

SE 

10 

74.07% 

UK79 

1080 

46.51% 

2 

0 

14.81% 

1.578 

11.11% 

0.00% 

11 

52.33% 

14.5 

13.5 

1181 

Total 

487 

77.01% 

129 

20.38% 

16.5 

2.61% 

632 

494. 87 

19.42 

6.94 

12.68 

0.150 

10.09 

0.22 

36.95 

8.94 

3.83 

10.19 

2.08 

0.67 

1.38 

0.14 

- 

3.25 

0.02 

0.72 

0.62 

0.28 

0.47 

0.78 

For  the  FIFG,  as  with  the  other  Structural  Funds,  most  of  the  Member  States' 
inspection staff (77.01 %) were assigned to ex ante checks.  

Again,  there  are  disparities  between  the  Member  States  as  regards  the  division  of 
staff between the three types of control, with Germany, Ireland and Austria assigning 
approximately  equivalent  manpower  to  ex  post  and  ex  ante  checks,  while  Finland 

EN 

30 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
and Denmark deployed about 80% of their staff on ex ante checks, France more than 
90%, and Greece 100%. 

6.5. 

Cohesion Fund 

The purpose of the Cohesion Fund is to provide a financial contribution to projects in 
the fields of the environment and of trans-European networks in the area of transport 
infrastructure. 

Table 6.5 — Cohesion Fund: manpower assigned by each Member State to the three types of 
control  

(1) 

Ex ante 

(2) = 
(1)/(7) 

%  

(4) = 
(3)/(7) 

%  

(3) 

Ex 
post 

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-fr
aud82 

% 

Total (three 
types of 
control) 

Budget to 
be 
checked 
(€ million)  

Budget to 
be 
checked 
per 
control 
officer 
(€ million) 

EL 

ES83 

IE 

PT 

16 

90 

18 

20 

61.54% 

72.58% 

10 

34 

38.46% 

27.42% 

69.23% 

8 

30.77% 

- 

- 

- 

Total 

144 

69.23% 

62.50% 

12 

64 

37.50% 

-84 

30.77% 

- 

- 

- 

- 

- 

- 

26 

124 

26 

32 

40.08 

1.54 

1724.73  

13.91 

172.09  

258.12  

6.62 

8.01 

208 

2195. 02 

10.55 

The  budget  to  be  checked  per  control  officer is  far  higher  than  in  the  other  sectors 
(€10.55 million as opposed to €2.85 million for the ERDF and €1.52 million for the 
ESF).  Cohesion  Fund  projects  tend  to  be  broader  in  scope  than  projects  under  the 
other  Structural  Funds.  This  could  create  economies  of  scale  for  the  control 
procedures and therefore could explain that the number of agents is lower compared 
to the amount of budget concerned. 

Once again in this sector, most staff in the Member States were assigned to ex ante 
controls (for all Member States, ex ante checks: 69.23%; ex post checks: 30.77%).  

The  distribution  of  staff  among  the  three  types  of  control  (ex  ante,  ex  post  and 
anti-fraud) is fairly similar for all Member States: two thirds on ex ante and one third 
on ex post checks.  

In this field, no staff were assigned solely to anti-fraud investigations. 

EN 

31 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
Conclusions 

In  interpreting  the  table,  the  various  caveats  set  out  by  the  Member  States  and 
included in Tables 6.1 to 6.5 should be borne in mind. 

Table  6.6.  -  Structural  measures:  manpower  assigned  by  each  Member  States  to  the  three 
types of control 

(1) 

Ex ante 

(2) = 
(1)/(7) 

%  

BE 

DK 

155 

87.06% 

56 

50.27% 

(3) 

Ex 
post 

23 

45 

(4) = 
(3)/(7) 

%  

(5) 

(6) = 
(5)/(7) 

(7) = 
(1)+(3)+(5) 

(8) 

(9) = 
(8)/(7) 

Anti-
fraud 
investi
gations 

% 

Total (three 
types of 
control) 

Budget to 
be 
controlled 
(M. €) 

Budget to 
be 
controlled 
(M. €) 

12.94% 

- 

0.00% 

40.46% 

10 

9.27% 

178 

111 

115.04 

96.46 

0.64 

0.87 

DE 

1,824 

78.79% 

491 

21.21% 

387 

86.19% 

62 

14.32% 

2,082 

80.39% 

508 

19.61% 

515 

79.72% 

131 

20.28% 

- 

- 

- 

- 

0.00% 

2,315 

3,791.29 

1.64 

0.00% 

449 

1,908.12 

4.42 

0.00% 

2,590 

8,949.83 

3.46 

0.00% 

646 

795 

1,970.44 

3.05 

603.79 

0.76 

494 

62.14% 

298 

37.48% 

3 

0.38% 

1,346 

64.40% 

498 

23.83% 

246 

11.77% 

2,090 

4,538.74 

2.17 

11 

46 

64.71% 

5 

29.41% 

1 

5.88% 

67.06% 

21 

30.75% 

1.5 

2.20% 

17 

68 

5.79 

208.98 

381.5 

94.20% 

23.5 

5.80% 

0.00% 

405 

290.92 

0.34 

3.07 

0.72 

1,788 

72.15% 

446 

18.00% 

244 

9.85% 

2,478 

3,722.00 

1.50 

245 

85.03% 

2,600 

84.19% 

38 

43 

13.27% 

13.86% 

5 

6 

1.70% 

1.94% 

UK 

344 

49.43% 

240 

34.83% 

105 

15.24% 

288 

309 

689 

321.28 

388.72 

1.11 

1.26 

1,343.19 

1.92 

EL 

ES 

FR 

IE 

IT 

LU 

NL 

AT 

PT 

FI 

SE 

Total 

9,934 

73.98% 

2,872 

21.39% 

622 

4.63% 

12,535 

28,254.59 

2.25 

It can be seen from the summary table that, in all the Member States and all the areas 
covered,  the  vast  majority  of  human  resources  were  assigned  in  2003  to  ex  ante 
checks (ex ante checks: 73.98%; ex post checks: 21.39%; anti-fraud  investigations: 
4.63%).  

EN 

32 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
This  tends  to  show  that,  in  general,  priority  was  given  to  supervision  and  prior 
verification mechanisms that come into play when requests for funding are vetted.  

From  a  quantitative  standpoint,  checks  on  the  use  of  funds  or  on  project 
implementation  (ex  post  checks)  usually  require  fewer  resources  since  they  are 
carried out on the basis of programming, sampling techniques or risk targeting.  

Without making judgement on the type of controls organisation chosen, which falls 
within  the  exclusive  competence  of  the  Member  States,  the  Commission  finds 
regrettable  that  only  nine  Member  States  were  able  to  provide  an  evaluation  of  the 
manpower devoted to the anti-fraud investigations. 

On the whole, Member States assigned most manpower to controls carried out in the 
field  of  the  ERDF:  5,489  agents,  against  4,813  for  the  ESF,  2,286  for  EAGGF 
Guidance  Section,  632  for  the  FIFG  and  208  for  the  Cohesion  Fund.  This  remains 
proportional to the budget to be controlled , since it is also higher for the ERDF than 
for the other funds. The amount to be checked by agent is 2.85 Million euro for the 
ERDF,  1.52  for  the  ESF,  1.14  for  the  EAGGF  Guidance  Section  and  0.78  for  the 
FIFG. In the field of the cohesion fund, this amount is largely higher, namely 10.55 
Million euro by agent.  

Comparing the data by Member States, the amount of the budget to be checked for 
all  the  funds  ranges  between  euros  0.34  and  4.42  Million  by  control  agent.  When 
analyzing  the  figures  of  each  fund  separately,  accentuated  differences  have  to  be 
considered, for example, for the ERDF: euros 0.05 to 9.86 Million by agent, for the 
ESF: euros 0.42 to 12.91 Million by agent.  

In general, it seems that most Member States focused heavily on prevention, which is 
why  human  resources  were  concentrated  on  ex  ante  checks.  Only  a  few  Member 
States  chose to divide staff  relatively uniformly between the three types of  control, 
reflecting  a  deterrent  approach  centred  on  repeated  checks  and  anti-fraud 
investigations. Trends identified in the 2002 annual report have been confirmed once 
again this year. 

7. 

COORDINATION BETWEEN DEPARTMENTS WITHIN THE MEMBER STATES

85 

The  effectiveness  of  checks  and  investigations  covering  Community  funds  and 
expenditure  depends  on  good  coordination  between  the  various  departments 
involved.  The  Court  of  Auditors'  special  report  No  10/200186,  as  well  as  audits 
performed  by 
in  a  number  of  Member  States  between 
November 2002 and January 2003, revealed various shortcomings in this area. Since 
then,  new  developments  have  taken  place  which  the  Member  States  sought  to 
highlight in their replies to the Article 280 questionnaire. 

the  Commission 

Some significant general developments are worth pointing out. In Italy, the regions, 
autonomous  provinces  and  regional  headquarters  of  the  Guardia  di  Finanza 
concluded new memoranda of understanding with a view to coordinating checks and 
exchanging information on structural measures. Moreover, the Structural Funds were 
the  subject  of  specific  activities  by  a  Central  Committee  and  20  regional  financial 

EN 

33 

   EN 

 
coordination  Committees,  comprising  representatives  of  the  previously  mentioned 
financial police, the Ragioneria Generale dello Stato and the Agenzia delle Entrate.  

Various  instructions  were  also  issued  by  the  central  authorities  with  a  view  to 
ensuring  uniform  application  of  control  procedures  and  communication  of 
irregularities.  They  took  account  of  the  lessons  learned  from  the  closure  of  the 
1994-99 Structural Funds programmes and the audit reports by the Court of Auditors 
and  the  Commission.  Instructions  of  this  kind  issued  in  the  course  of  2003  were 
reported  by  Italy  (regions  of  Veneto,  Tuscany  and  Campania),  the  UK  (guidance 
from  the  newly  created  Compliance  Group,  which  brings  together  the  various 
departments  responsible  for  the  management  of  the  Structural  Funds  in  England), 
and France (new control instructions drawn up by customs and a procedural guide for 
paying agencies and control bodies responsible for the EAGGF Guidance Section).  

Almost  all  the  Member  States  reported  measures  designed  to  improve  information 
exchange  and  facilitate  cooperation,  such  as  the  creation  of  coordination  units, 
meetings,  training  and  the  development  of  IT  systems.  Since  the  purpose  of  these 
improvements  is  primarily  to  facilitate  the  reporting  of  irregularities  to  the 
Commission (OLAF), they warrant particular attention. 

Belgium  referred  to  the  creation  of  a  coordinating  body  for  the  EAGGF  Guarantee 
Section paying agencies. A  cooperation  agreement was  signed between the  Federal 
State and the regions in the field of agriculture and fisheries. Certain tax and customs 
and  excise  officials  were  granted  the  status  of  auxiliary  officers  of  the  public 
prosecutor's  criminal  investigation  department  with  a  view  to  facilitating  anti-fraud 
investigations. 

Some  Member  States  set  up  units  bringing  together  the  control  managers  from  the 
different sectors. In Denmark, for example, the managers of the control function for 
the  ESF  and  ERDF  were  brought  together  within  the  same  unit  under  the  same 
Ministry  (Ministry  of  Economic  and  Business  Affairs).  Likewise,  the  UK  grouped 
the  paying  agency  function  for  the  two  sections  of  the  EAGGF  within  the  same 
agency  of  the  Department  for  Environment,  Food  and  Rural  Affairs.  In  Ireland,  a 
formal  mechanism  for  the  exchange  of  views  and  information  on  ESF  financial 
management  and  control  issues  (ESF  Financial  Control  Steering  Group)  has  been 
created.  

A  large  number  of  Member  States  reported  the  introduction  in  2003  of  regular 
meetings between audit managers from the different sectors (such as the EURONET 
group  in  Northern  Ireland)  or  between  those  responsible  for  the  different  types  of 
control  within  the  same  sector  (such  as  in  Denmark  with  respect  to  the  FIFG),  in 
order to promote the exchange of information and methodology. 

Training  courses  and  seminars  designed  to  improve  coordination  and  cooperation 
between  departments  were  organised  for  the  staff  of  the  different  departments  in 
France and Finland. 

The  Greek  Ministry  of  Economic  and  Financial  Affairs  and  the  paying  agency 
(OPEKEPE)  signed  a  memorandum  of  understanding  laying  down  an  information 
exchange framework for irregularities affecting export refunds. A similar agreement 

EN 

34 

   EN 

 
was signed by the authorities in Ireland on the carrying out of ex post controls and 
systems audits in accordance with the rules applicable to agriculture. 

Still on the subject of improving information exchange, mention must also be made 
of  improvements  to  IT  systems  in  order  to  enhance  data  transfer.  Developments  of 
this  kind  were  reported  by  the  UK  (modernisation  of  the  Management  Information 
System  used  by  the  Scottish  Executive  for  administration  of  ERDF  and  ESF), 
Belgium  (comparison  of  data  files  at  national  level  in  order  to  avoid  wrongly  paid 
VAT  refunds;  exchanges  of  information  between  the  managers  of  European 
programmes  with  the  aim  of  reducing  the  risks  of  double  part-financing,  and  Italy 
(Valle d'Aosta's IT system for the rural development plan). 

8. 

RECOVERY  BY  JOINING  A  CIVIL  ACTION  TO  CRIMINAL  PROCEEDINGS  UNDER 
MEMBER STATES' LEGISLATION 

Recovery of Community entitlements arising from expenditure directly managed by 
the Commission itself (“direct expenditure”) is an important issue in the framework 
of improving the protection of the financial interests of the Community.  

this  framework 

the  context  of 

two 
Within 
Communications  on 
recovery 
these 
Communications,  the  Commission  highlighted  OLAF’s  supportive  role  in  ensuring 
that  the  Commission  launches  ‘Civil  action  within  criminal  proceedings’  following 
OLAF investigations in the area of direct expenditure.  

the  Commission  has  adopted 

(2000  and  200287). 

improving 

In 

Civil action within criminal proceedings: With regard to ‘Civil action within criminal 
proceedings’  this  is  considered  an  efficient  instrument  to  protect  the  financial 
interests  of  the  Community.  It  leads  to  the  shortening  of  legal  proceedings  by 
combining  criminal  proceedings  with  civil  action.  This  combined  procedure  offers 
several advantages and will therefore, in general, facilitate the Commission’s efforts 
to recover debts in the field of direct expenditure. 

Against this background it was considered important to assess the conditions under 
which  the  Commission,  on  behalf  of  the  Community,  is  legally  entitled  in  national 
law to launch such civil action or comparable measures in cases of fraud concerning 
direct expenditure. 

In order to assess this recovery possibility, Member States were asked to provide an 
initial description of the legal basis for such actions within their legislation. 

The Member States’ responses88 provide the Commission with a general overview of 
the  possibilities  to  conduct  ‘Civil  action  within  criminal  proceedings’  under  the 
various Member States legal systems. 

With the exception of Member States with common law systems89, all other Member 
States90 allow the Community,  as  represented by the Commission, to initiate ‘Civil 
action within criminal proceedings’, providing that the prerequisites of national law 
are met. 

EN 

35 

   EN 

 
In those Member States where such actions are allowed, the request for ‘Civil action 
within  criminal  proceedings’  must  be  initiated  by  the  ‘damaged  party’  with  the 
competent  court  or  prosecution  authority. Additionally,  in  certain  Member  States91, 
the prosecutors are also given the authority to initiate such a procedure. 

The Member States92 indicated that the timing of the initiation of ‘Civil action within 
criminal proceedings’ was vital for the successful introduction of the civil claim. In 
some  Member  States93  ‘Civil  action  within  criminal  proceedings’  is  only  possible 
before  the  beginning  of  a  court  trial.  .  Other  legal  systems94  however,  require  that 
criminal proceedings have been already opened. In these legal jurisdictions a claim 
for ‘Civil action within criminal proceedings’ must be launched at the latest during 
the main hearing, and in any event before the closing speeches begin. 

In Member States having common law systems, although the Commission would not 
be entitled to launch ‘Civil action within criminal proceedings, it would nevertheless, 
be entitled to make a request for compensation. 

As far as the national judicial authorities in charge are concerned, in most Member 
States  it  was  found  that  the  judge  and/or  the  criminal  court  plays  a  key  role.  The 
Member  States’  responses  show  a  variety  of  conditions  which  apply  to  the  ‘Civil 
action  within  criminal  proceedings’,  however,  the  Commission  did  not  receive 
enough information from all Member States on this aspect to make a more detailed 
analysis. 

In all Member States statutes of limitation apply, however the overview indicates a 
great variety exists in the duration of the time-bar. In many Member States civil law 
contains  the  relevant  time-bar  provisions.  Time-bar  provisions  vary  in  general 
between long limitation periods of 20-30 years95 and shorter ones of only 3-5 years96.  

Safeguarding  measures:  in  addition  to  ‘Civil  action  within  criminal  proceedings’ 
there also exists the possibility of initiating ‘Safeguarding measures’ during criminal 
proceedings.  In  this  regard,  the  Member  States’  legal  systems  provide  various 
instruments, such as the confiscation or seizure of assets while penal proceedings are 
going  on.  These  instruments  might  already  apply,  in  certain  instances,  at  the 
preliminary ‘pre-court’ action stage. 

The  complexity  of  the  national  legal  systems  shows,  in  principle,  the  need  for  the 
Commission to have close co-operation with national judicial authorities in order to 
provide  for  an  effective  protection  of  the  Communities’  financial  interests,  also  in 
cases when these funds are directly managed by the Commission. 

1   In case certain staff are responsible for the performance of several types of control (ex-ante, ex post and/or 
anti-fraud), Member States were asked to base their figures on an estimate of the relative time spent by the 
staff concerned on each type of control.  

Similarly, should certain staff be responsible for the execution of controls covering several funds, Member 
States were invited to base their figures on an estimate of the relative time spent by the staff concerned on 
each sector. 

EN 

36 

   EN 

 
                                                 
 
If  the  performance  of  particular  control  tasks  has  been  delegated  to  outside  (private)  agencies  or  bodies, 
Member States were asked to include the manpower affected by these agencies or bodies for the performance 
of these tasks in the figures submitted. 

Figures are rounded off to the next whole number. Therefore, there might be some discrepancies in the total 
column between actual figures and rounded off figures.  

2    “Ex ante” controls consist: 

–  for the Structural Funds, of checks and inspections on projects or actions, carried out at the various levels 
(managing  authority,  payment  authority,  delegated  or  intermediate  authorities,  final  beneficiaries)  to 
verify the delivery of the products and services co-financed and the reality of expenditure claimed (checks 
of service done) in accordance with Articles 4 and 9(2), (3) and (4) of Regulation No 438/2001; 

–  for  the  Cohesion  Fund,  of  checks  and  inspections  carried  out  at  different  levels  (implementing  bodies, 
managing  authority,  payment  authority,  intermediary  authorities)  in  order  to  verify  the  authenticity  of 
expenditure  claimed  and  execution  of  the  project,  from  the  preparatory  phase  through  the  entry  into 
service of the financed investment in accordance with Articles 4 and 8(2), (3) and (4) of Regulation No 
1386/2002. 

In the meaning of the present report, “Ex post” controls consist: 

–  for  the  Structural  Funds,  of  “sample  checks”  which  cover  at  least  5%  of  the  total  eligible  expenditure, 
under Article 3 of Regulation (EC) No 2064/97 (for the 1994-1999 programming period) and Article 10 
of Regulation (EC) No 438/2001 (for the 2000-2006 programming period); 

–  for  the  Cohesion  Fund,  of  “sample  checks”  which  cover  at  least  15%  of  the  total  eligible  expenditure, 
under  Article  9  of  Regulation  (EC)  No 1386/2002,  allowing  verification  of  the  effectiveness  of 
management and control systems in place and expenditure declarations related to projects. 

Anti-fraud investigations include all investigations conducted on the basis of suspected fraud. 

3   Member States capable of doing so were also requested to include the manpower which criminal prosecution 

authorities (police services, judicial authorities) assigned to this type of investigation. 

4   4 Flemish Community staff, 95 Walloon Region staff, 6 Brussels Capital Region staff (0.42 of which for the 

programming period 1994-99). 

5   3 Flemish Community staff, 2 Walloon Region staff, 1.4 Brussels Capital Region staff (0.4 of which for the 

programming period 1994-99). 

6   Included in the first two columns.  

7   Germany  commented  that  given  the  variety  of  actions  and  large  number  of  departments  involved,  a 

considerable number of people dealt with controls, which meant that only an estimate could be given. 

8   On account of the overlapping of ex post controls for the programming periods 1994-99 and 2000-06 which 
occurred in 2003, the independent agency data are based on an estimate of the time which the individual staff 
members spent during the period under review on the respective programming periods. 

9   No  data  can  be  given  on  the  number  of  people  working  in  the  field  of  judicial  investigations  in  criminal 
proceedings. These people are responsible for a large number of cases which mainly extend beyond the field 
concerned. 

10   Some  institutions  consulted by  the  Spanish  authorities  did  not  submit  complete  information  on  manpower. 
No data could be communicated concerning police force and justice manpower. This is why the column of 
anti-fraud  manpower  was  not  completed,  but  the  figures  available  were  added  to  those  of  the  first  two 
columns. 

EN 

37 

   EN 

 
                                                                                                                                                         
 
 
11  France  underlines  the  lack  of  reliability  of  such  statistics  which  explains  the  caution  it  takes  in  its 

communication.  

12   The data for Italy relate to the programming periods 1988/1993, 1994/1999 and 2000/2006 for the authorities 

which replied to the questionnaire. 

13   Excluding Interreg and the former Objective 5b. 

14   On  account  of  the  decentralised  nature  of  the  programmes  concerned,  the  number  of  officials  actively 

involved in control work is not known by each ministry. 

15   Figures communicated by the Netherlands are incomplete in the area of ERDF, therefore the part of budget to 

be controlled by agent could not be calculated in order to make the overall result more reliable. 

16   There are no staff or departments specifically assigned to anti-fraud investigations in Austria. 

17   Including 195 PJ officers, 18 DCIAP (Central Department for Penal Investigation and Action) agents, and 31 
DIAP  (Departments  for  Penal  Investigation  and  Action)  officers.  These  agents  have  a  role  in  anti-fraud 
investigations in all areas (ERDF, ESF, EAGGF, FIFG and Cohesion Fund). 

18   For Finland, the data do not include figures on the use of police resources. 

19   5 of whom in the Åland Islands. 

20   Including 3 staff for the Åland Islands regional executive audit department (2 administration auditors and 1 

internal auditor). 

21   According  to  the  statement  by  the  Ministry  of  the  Interior,  the  contribution  of  public  prosecutors  is  0.1 
person/work-year.  This  figure  cannot  be  broken  down  by  fund,  i.e.  it  covers  all  funds.  According  to  the 
statement by the Finnish Ministry of the Interior, the contribution of the police is 1.5 person/work-year for all 
funds (the figure cannot be broken down). For the Åland Islands, the staff have been counted among the staff 
assigned to the first two types of control. 

22   All criminal investigations relating to the Structural Funds are investigated by the Economic Crimes Bureau. 
Manpower  totalling  6  full  year  equivalents  was  allocated  to  EU  fraud  investigations,  comprising  2 
prosecutors,  2  police  officers  and  2  auditors.  It  is  not  possible  to  state  how  the  workload  is  distributed 
between the funds. 1.5 full year equivalents are distributed equally between the four funds. 

23   The  UK  pointed  out  that  32  staff  for  ex  ante  controls,  19  for  ex  post  controls  and  8  for  anti-fraud 
investigations, making 59 in total, work on all funds, mainly in the devolved administrations. They have been 
counted among the staff assigned to the ERDF. 

24   122 staff carrying out ex ante checks on the ERDF in England also work on the EAGGF. 

25   Member States capable of doing so were also requested to include the manpower which criminal prosecution 

authorities (police services, judicial authorities) assigned to this type of investigation. 

26   Including 8 agents of the Flanders, 3.69 of the region of Brussels and 26 of the ESF Agency. 

27   Including 8 agents of the Flemish Community, 2 in the Walloon region, 1,14 in the Brussels-Capital region 

and 4 of the ESF Agency. 

28   Included in the first two columns.  

29   Denmark  estimates  that  the  Public  Prosecutor  for  Special  Economic  Crimes  had  1  person  engaged  in 

anti-fraud investigations in the area of the Structural Funds in 2003. 

EN 

38 

   EN 

 
                                                                                                                                                         
30   Germany  commented  that  given  the  variety  of  actions  and  large  number  of  departments  involved,  a 

considerable number of people dealt with controls, which meant that only an estimate could be given. 

31   On account of the overlapping of ex post controls for the programming periods 1994-99 and 2000-06 which 
occurred in 2003, the independent agency data are based on an estimate of the time which the individual staff 
members spent during the period under review on the respective programming periods. 

32   No  data  can  be  given  on  the  number  of  people  working  in  the  field  of  judicial  investigations  in  criminal 
proceedings. These people are responsible for a large number of cases which mainly extend beyond the field 
concerned. 

33   Some  institutions  consulted by  the  Spanish  authorities  did  not  submit  complete  information  on  manpower. 
No data could be communicated concerning police force and justice manpower. This is why the column of 
anti-fraud  manpower  was  not  completed,  but  the  figures  available  were  added  to  those  of  the  first  two 
columns. 

34  France  underlines  the  lack  of  reliability  of  such  statistics  which  explains  the  caution  it  takes  in  its 

communication.  

35   The data for Italy relate to the programming periods 1988/1993, 1994/1999 and 2000/2006 for the authorities 

which replied to the questionnaire. 

36   There is no staff or departments specifically assigned to anti-fraud investigations in Austria. 

37  All agents mentioned in ERDF manpower also have a role in anti-fraud investigations in this area. 

38   The  ESF  figures  communicated  by  the  Finnish  Ministry  of  Labour  do  not  include  the  work  of  police  and 

judicial authorities. 

39   Including 3 staff for the Åland Islands. 

40   Including 3 staff for the Åland Islands regional executive audit department (2 administration auditors and 1 

internal auditor). 

41   Of which five staff are assigned to administrative investigations. 

42   All criminal investigations relating to the Structural Funds are investigated by the Economic Crimes Bureau. 
Manpower  totalling  6  full  year  equivalents  was  allocated  to  EU  fraud  investigations,  comprising  2 
prosecutors,  2  police  officers  and  2  auditors.  It  is  not  possible  to  state  how  the  workload  is  distributed 
between the funds. 1.5 full year equivalents are distributed equally between the four funds. 

43   The  UK  pointed  out  that  32  staff  for  ex  ante  controls,  19  for  ex  post  controls  and  8  for  anti-fraud 
investigations, making 59 in total, work on all funds, mainly in the devolved administrations. They have been 
counted among the staff assigned to the ERDF. 

44  Member States capable of doing so were also requested to include the manpower which criminal prosecution 

authorities (police services, judicial authorities) assigned to this type of investigation. 

45   Of which 11.3 in the Walloon Region and 0.08 in the Brussels Capital Region (for the 1994-99 programming 

period). 

46   Of which 0.8 in the Walloon Region and 0.12 in the Brussels Capital Region (for the 1994-99 programming 

period). 

47   Included in the first two columns.  

EN 

39 

   EN 

 
                                                                                                                                                         
48   Denmark  estimates  that  the  Public  Prosecutor  for  Special  Economic  Crimes  had  1  person  engaged  in 

anti-fraud investigations in the area of the Structural Funds in 2003. 

49   No  data  can  be  given  on  the  number  of  people  working  in  the  field  of  judicial  investigations  in  criminal 
proceedings. These people are responsible for a large number of cases which mainly extend beyond the field 
concerned. 

50   Some  institutions  consulted by  the  Spanish  authorities  did  not  submit  complete  information  on  manpower. 
No data could be communicated concerning police force and justice manpower. This is why the column of 
anti-fraud  manpower  was  not  completed,  but  the  figures  available  were  added  to  those  of  the  first  two 
columns. 

51  France  underlines  the  lack  of  reliability  of  such  statistics  which  explains  the  caution  it  takes  in  its 

communication.  

52   The data for Italy relate to the programming periods 1988/1993, 1994/1999 and 2000/2006 for the authorities 

which replied to the questionnaire. 

53   Not assigned full-time to the checks concerned. 

54   Not assigned full-time to the checks concerned. 

55   Not assigned full-time to the checks concerned. 

56   There is no staff or departments specifically assigned to anti-fraud investigations in Austria. 

57   All agents mentioned in ERDF manpower also have a role in anti-fraud investigations in this area. 

58   The EAGGF Guidance Section figures communicated by the Finnish Ministry of Agriculture and Forestry do 

not include the work of police and judicial authorities. 

59   Including 2.75 staff for the Åland Islands. 

60   Of  which  0.5  staff  in  the  Åland  Islands  assigned  to  the  control  department  and  0.5  assigned  to  the  Åland 

Islands agriculture department. 

61   All criminal investigations relating to the Structural Funds are investigated by the Economic Crimes Bureau. 
Manpower  totalling  6  full  year  equivalents  has  been  allocated  to  EU  fraud  investigations,  comprising  2 
prosecutors,  2  police  officers  and  2  auditors.  It  is  not  possible  to  state  how  the  workload  is  distributed 
between the funds. 1.5 full year equivalents are distributed equally between the four funds. 

62   The  UK  pointed  out  that  32  staff  for  ex  ante  controls,  19  for  ex  post  controls  and  8  for  anti-fraud 
investigations, making 59 in total, work on all funds, mainly in the devolved administrations. They have been 
counted among the staff assigned to the ERDF. 

63   122 staff carrying out ex ante checks on the ERDF in England also work on the EAGGF. They have been 
counted  among  the  staff  assigned  to  the  ERDF.  The  figure  for  staff  assigned  to  ex  ante  controls  for  the 
EAGGF includes 6 Scottish Executive staff whose duties cannot be split between the categories. 

64  Member States capable of doing so were also requested to include the manpower which criminal prosecution 

authorities (police services, judicial authorities) assigned to this type of investigation. 

65   0.4 Flemish Community staff, 0.2 for the Walloon Region. 

66   Denmark  estimates  that  the  Public  Prosecutor  for  Special  Economic  Crimes  had  1  person  engaged  in 

anti-fraud investigations in the area of the Structural Funds in 2003. 

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67   No  data  can  be  given  on  the  number  of  people  working  in  the  field  of  judicial  investigations  in  criminal 
proceedings. These people are responsible for a large number of cases which mainly extend beyond the field 
concerned. 

68   This figure comprises 200 auditors serving with prefectural government authorities to monitor Fisheries OP 

projects (2000-06), 6 staff for the CSF and 6 other fisheries auditors. 

69   Some  institutions  consulted by  the  Spanish  authorities  did  not  submit  complete  information  on  manpower. 
No data could be communicated concerning police force and justice manpower. This is why the column of 
anti-fraud  manpower  was  not  completed,  but  the  figures  available  were  added  to  those  of  the  first  two 
columns. 

70  France  underlines  the  lack  of  reliability  of  such  statistics  which  explains  the  caution  it  takes  in  its 

communication.  

71   The data for Italy relate to the programming periods 1988/1993, 1994/1999 and 2000/2006 for the authorities 

which replied to the questionnaire. 

72   Not applicable to Luxembourg. 

73   There are no staff or departments specifically assigned to anti-fraud investigations in Austria. 

74   All agents mentioned in ERDF manpower also have a role in anti-fraud investigations in this area. 

75   The FIFG figures communicated by the Finnish Ministry of Agriculture and Forestry do not include the work 

of police and judicial authorities. 

76   Including 1.5 staff for the Åland Islands. 

77   Including 2 staff for the Åland Islands regional executive audit department. 

78   All criminal investigations relating to the Structural Funds are investigated by the Economic Crimes Bureau. 
Manpower  totalling  6  full  year  equivalents  has  been  allocated  to  EU  fraud  investigations,  comprising  2 
prosecutors,  2  police  officers  and  2  auditors.  It  is  not  possible  to  state  how  the  workload  is  distributed 
between the funds. 1.5 full year equivalents are distributed equally between the four funds. 

79   The  UK  pointed  out  that  32  staff  for  ex  ante  controls,  19  for  ex  post  controls  and  8  for  anti-fraud 
investigations, making 59 in total, work on all funds, mainly in the devolved administrations. They have been 
counted among the staff assigned to the ERDF. 

80   FIFG figures do not include Northern Ireland staff who also work on the EAGGF (they are included in the 

EAGGF figures: 54 staff on ex ante controls, 6 on ex post controls). 

81   This figure also includes one member of the Scottish Executive staff whose duties cannot be split between 

the categories. 

82  Member States capable of doing so were also requested to include the manpower which criminal prosecution 

authorities (police services, judicial authorities) assigned to this type of investigation. 

83   Some  institutions  consulted by  the  Spanish  authorities  did  not  submit  complete  information  on  manpower. 
No data could be communicated concerning police force and justice manpower. This is why the column of 
anti-fraud  manpower  was  not  completed,  but  the  figures  available  were  added  to  those  of  the  first  two 
columns. 

84   All agents mentioned in ERDF manpower also have a role in anti-fraud investigations in this area. 

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85   The Member States’ replies can be consulted in full in Tables 2.1 and 2.2 of the Commission Staff working 

document. 

86   Special  Report  No  10/2001  concerning  the  financial  control  of  the  Structural  Funds,  Commission 

Regulations (EC) Nos 2064/97 and 1681/94 (OJ C 314, 8.11.2001). 

87   See Commission Communications on: 

-  Action  96  of  the  White  Paper:  “More  effective  management  of  recovery  of  unduly  paid  funds” 
(SEC(2000)2204/4, 12.12.2000, point 4.4) and 

-  “Improving  the  recovery  of  Community  entitlements  arising  from  direct  and  shared  management  of 
Community expenditure” (COM (2002) 671 final, 03.12.2002). 

88   See Commission staff working document, simultaneously published with the present report. 

89   Ireland, United Kingdom. 

90   Austria,  Belgium,  Denmark,  Finland,  France,  Italy,  Germany,  Greece,  Luxembourg, Netherlands, Portugal, 

Spain, Sweden. 

91   Finland, Portugal, Sweden. 

92   Austria,  Belgium,  Denmark,  Finland,  France,  Italy,  Germany,  Greece,  Luxembourg, Netherlands, Portugal, 

Spain, Sweden. 

93   Austria, Finland, Netherlands. 

94   Germany, Greece and Italy (where it is only possible after the beginning of court proceedings and until the 

opening of the first instance hearing). 

95   Belgium, Denmark, Netherlands and Spain (where in accordance to the Spanish Supreme Court judgement 

the limitation for civil action arising from a criminal offence is 15 years).  

96   France, Greece, Luxembourg. 

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