Special report No 3/2007 concerning the management of the European Refugee Fund (2000 to 2004) together with the Commission's replies
Date: 2007-03-21
Institutions: European Court of Auditors
Subjects: aid to refugees, financing, fund (EU), refugee, report

31.7.2007

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IV

(Notices)

NOTICES FROM EUROPEAN UNION INSTITUTIONS AND BODIES

COURT OF AUDITORS

SPECIAL REPORT No 3/2007

concerning the management of the European Refugee Fund
(2000 to 2004) together with the Commission’s replies

(pursuant to Article 248(4), second subparagraph, EC)

(2007/C 178/01)

TABLE OF CONTENTS

Paragraph

Page

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The European Refugee Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Synthesis of main changes between ERF I and ERF II . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Audit scope, objectives and approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

WAS THE DISTRIBUTION OF FUNDS TO MEMBER STATES SOUND? . . . . . . . . . . . . . . . . .

Basis for the distribution of amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Statistical data used as allocation basis were incomplete and not reliable . . . . . . . . . . . .

Differences in interpretation among the Member States distort the basis . . . . . . . . . . . . .

Revisions of previously validated data were not fully taken into account for future distri-
butions or were not adequately documented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

WAS THE MANAGEMENT BY THE COMMISSION AND THE MEMBER STATES SOUND?

ERF implementing rules were published late . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Low efficiency of the allocation procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Different interpretation of ERF rules by Member States . . . . . . . . . . . . . . . . . . . . . . . . . .

Positive examples of ERF management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

I-VIII

1-16

1

2-9

10-13

14-16

17-25

17-19

20-22

23

24-25

26-39

26

27-33

34-36

37

Monitoring and remedial action by the Commission had insufficient results . . . . . . . . . .

38-39

3

3

3

3

4

5

5

5

6

6

6

7

7

7

8

8

8

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Paragraph

Page

WHAT WAS THE IMPACT OF THE ERF ON NATIONAL EFFORTS IN THE AREA OF ASY-
LUM? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

40-44

45-50

51-54

Annex I — Comparison of Community regulations for the 2000 to 2004 European Refugee Fund period
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(ERF I) and the 2005 to 2010 period (ERF II)

Annex II — Distribution of funds per Member State (2000 to 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Annex III — ERF allocation procedure of provisional amounts to Member States . . . . . . . . . . . . . . . . . . . .

The Commission’s replies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

9

10

11

15

16

19

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SUMMARY

I.
The European Refugee Fund (ERF or the Fund) was established in September 2000 for an initial five-
year period ending in 2004, with a financial reference amount of 216 million euro. The Fund’s creation
occurred at a time of increased EU activity in the rapidly evolving field of asylum and immigration.

II.
The aim of the ERF was to support and encourage the efforts made by the Member States in receiving
and bearing the consequences of receiving refugees and displaced persons. The management of the Fund was
shared between the Commission and the Member States. The Commission had the overall responsibility for
the correct implementation of the Fund, while the Member States were in charge of carrying out the actual
measures. Fundable measures were divided into three groups: conditions for the reception, integration,
and repatriation of refugees and displaced persons.

The Court carried out an audit of the management of the first phase of the European Refugee Fund

III.
(2000 to 2004), focusing on the following:

— was the distribution of funds to Member States sound?

— was the management by the Commission and the Member States sound?

— what was the impact of the ERF on national efforts in the area of asylum?

IV.
The distribution of funds was mainly based on the number of third-country nationals and stateless per-
sons, as defined by the ERF, that have entered the Member States. The Statistical Office of the European Com-
munities (Eurostat) was responsible for collecting statistical data on asylum figures from the Member States.
No harmonised definitions of the target groups as defined in the ERF rules existed, and Member States applied
different interpretations. Thus the basis used for the ERF allocations was not consistent, comparable and reli-
able. Serious discrepancies in the underlying statistical data were detected. In some cases, the data were changed
due to the evolution of the Member States’ legislation in the direction of greater harmonisation.

V.

The entire annual allocation procedure was cumbersome and its efficiency questionable.

VI.
Member States had sole responsibility for the management and administration of projects, while the
Commission had to ensure that Member States had smoothly functioning management and control systems.
Although shortcomings were detected and some corrective measures were taken by the Commission, not all
problems detected in the Member States had yet been resolved.

VII.
The Court’s audit has shown that some of the provisions of ERF I, in particular the eligibility rules,
were open to significant differences of interpretation. The Court recommends, taking account of its findings
and the changes already made in ERF II, that appropriate measures be taken to ensure that the ERF is more
clearly and precisely targeted for the future.

VIII.
Regarding the question of the impact of the ERF on national funding, information was limited both
in the Member States and at the Commission. In the light of the projects visited, some positive changes in
national efforts were noted, mainly with regard to testing innovatory projects and integrating their results into
national strategies.

INTRODUCTION

Background

Tampere (Finland) on a comprehensive programme, fixing politi-
cal guidelines and operational objectives, including the establish-
ment of a common European asylum system.

The European Refugee Fund

The Treaty of Amsterdam envisages the progressive estab-
1.
lishment of an area of freedom, security and justice (1). Pursuant
to this, the European Council agreed in October 1999 in

The European Refugee Fund (ERF or the Fund) was estab-
2.
lished in September 2000 for an initial five-year period ending in
2004 (2).

(1) Article 61 of the Treaty establishing the European Communities, as

(2) Council Decision 2000/596/EC of 28 September 2000 establishing

amended by the Treaty of Amsterdam.

the European Refugee Fund (OJ L 252, 6.10.2000).

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The ERF was created ‘to promote a balance in the efforts
3.
made by Member States in receiving and bearing the conse-
quences of receiving refugees and displaced persons’ (1). It was to
be based on the principle of solidarity between Member States,
and it should ensure fair burden-sharing between them.

4.
The Fund was to support measures that aim to achieve
appropriate reception conditions, as well as integrating refugees
and displaced persons into the society of a Member State. In addi-
tion, the ERF was to allocate resources to assist refugees and

displaced persons with repatriation, including help in taking an
informed decision to return to their country of origin.

5.
A financial reference amount of 216 million euro was allo-
cated to the ERF. The final appropriations amounted to 243 mil-
lion euro, including 49 million euro provided for emergency
measures but not used. As of the end of December 2006 the
Commission estimates that 141 million euro had been paid. The
following table shows the appropriations and commitments for
the years 2000 to 2004.

Appropriations and commitments 2000 to 2004

2000 to 2004

2004

2003

2002

2001

2000

Appro-
priations

Commit-
ments

Appro-
priations

Commit-
ments

Appro-
priations

Commit-
ments

Appro-
priations

Commit-
ments

Appro-
priations

Commit-
ments

Appro-
priations

Commit-
ments

(million euro)

Administrative expenditure
ERF

3,64

2,19

0,66

0,12

0,73

0,65

0,73

0,53

0,81

0,21

0,72

0,67

Operational expenditure ERF

189,02 189,00

42,27

42,27

42,27

42,27

45,08

44,99

34,19

34,19

25,28

25,28

Administrative expenditure
emergency measures ERF

Operational expenditure
emergency measures ERF

0,96

49,03

(*)

(*)

0,16

9,82

(*)

(*)

0,18

9,82

(*)

(*)

0,18

9,82

(*)

(*)

0,20

9,80

(*)

(*)

0,23

9,78

(*)

(*)

Total 242,65 191,19

52,91

42,39

53,00

42,92

55,81

45,52

45,00

34,40

36,01

25,95

(*) Appropriations foreseen for emergency needs and not used between 2000 and 2004.
Source: European Commission accounting system.

6.
The management of the ERF was shared (2) between the
Commission (Directorate-General for Justice, Freedom and Secu-
rity — JLS DG) and the Member States. The Commission had the
overall responsibility for the correct implementation of the Fund,
while the Member States were in charge of managing the actual
measures. Each Member State had appointed a national authority
which handled all communication with the Commission and was
responsible for the selection of individual projects and for their
financial management and administration.

7.
Persons targeted by the ERF were third-country nationals
or stateless persons who had refugee status as defined by the
Geneva Convention (3), as well as persons benefiting from inter-
national or temporary protection. Asylum seekers who had
applied for refugee status and persons whose right to temporary
protection was being examined in a Member State were also eli-
gible.

(1) Recital 2 of Decision 2000/596/EC.
(2) As defined in Article 53 of Council Regulation (EC, Euratom)
No 1605/2002 of 25 June 2002 on the Financial Regulation appli-
cable to the general budget of the European Communities (OJ L 248,
16.9.2002).

(3) Convention relating to the Status of Refugees, Geneva, 28 July 1951,
United Nations, Treaty Series, Vol. 189, p. 137. Adopted on
28 July 1951 by the United Nations Conference of Plenipotentiaries
on the Status of Refugees and Stateless Persons convened under Gen-
eral Assembly Resolution 429 (V) of 14 December 1950 entry into
force 22 April 1954, in accordance with Article 43.

8.
According to DG JLS, the number of asylum applicants,
refugees and persons under protection amounted to approxi-
mately 303 000 in 1996, which increased to 475 000 in 1999
and decreased to 374 000 in 2003.

Community aid was granted by the European Refugee
9.
Fund by means of co-financed actions. The co-financing was
established at a maximum of 50 % of the total cost of the mea-
sure. This share was increased to a maximum of 75 % for coun-
tries covered by the Cohesion Fund. Commission payments to
Member States were made in the form of pre-financing, interim
and final payments.

Synthesis of main changes between ERF I and ERF II

A second phase of the programme (ERF II) has since been

10.
launched, covering the period 2005 to 2010 (4).

11.
The following comparison highlights only the main dif-
ferences between ERF I and ERF II. It is neither an analysis nor an
evaluation of those changes. A detailed comparison between ERF I
and ERF II is given in Annex I.

(4) Council Decision 2004/904/EC of 2 December 2004 establishing the
European Refugee Fund for the period 2005 to 2010 (OJ L 381,
28.12.2004). Denmark is not participating in the ERF.

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Objectives and tasks:

— the objectives remain the same,

A review of the ERF II rules showed that the recommen-
12.
dations presented in this report have not been acted upon in
ERF II.

— the duration of ERF II will be six years (five years for ERF I),

— the definition of target groups has not changed substantially,

The Commission has also proposed a framework pro-
13.
gramme for the period 2007 to 2013 which would include
the ERF.

— ERF II introduces multiannual programming periods of three

years,

Audit scope, objectives and approach

— ERF II describes the actions (reception, integration, voluntary
return) in greater detail and also allows for a combination of
all three,

— for ERF II the Community actions put the emphasis on tran-
snational actions or actions of interest to the Community as
a whole.

Implementation and management provision:

— the management of the ERF remains shared. The responsi-
bilities of the Commission and the Member States are
described in greater detail for ERF II,

— the selection criteria have not changed,

— deadlines for the submission of relevant documentation have

been extended,

— the distribution of funds continues to be based mainly on sta-

tistical data on refugees and asylum seekers.

Financial management and supervision:

— the ERF II co-financing is still 50 % (75 % for Member States
covered by the Cohesion Fund). But the 50 % contribution
may be increased to 60 % for particularly innovative actions,

— the deadlines and requirements for payments are more pre-

cisely indicated for ERF II,

— the first pre-financing is still 50 % of the ERF co-financing,
while the second pre-financing may amount to a maximum
of 50 % (instead of 30 % for ERF I),

The Court carried out an audit of the management of the
14.
first phase of the European Refugee Fund (2000 to 2004). The
objectives of the audit were to conclude on the following
questions:

— was the distribution of funds to Member States sound?

— was the management by the Commission and the Member

States sound?

— what was the impact of the ERF on national efforts in the

area of asylum?

15.
In the context of this audit and the annual Statements of
Assurance for 2003 and 2004 (1), the relevant Commission ser-
vices (DG JLS and Eurostat) in Brussels and Luxembourg were
audited. In addition, responsible national authorities and final
beneficiaries were visited in the following Member States: Aus-
tria, France, Germany, Greece, Italy, Spain, Sweden and the United
Kingdom.

16.
According to the ERF rules (2), the Commission had to
submit a final report to the European Parliament and the Council
by 1 September 2005. The Court could not take into consider-
ation the results of the final report, as it was finalised after the
completion of the Court’s audit.

WAS THE DISTRIBUTION OF FUNDS TO MEMBER STATES
SOUND?

— for ERF II, at least 10 % of the total eligible expenditure must

be checked, for ERF I it was 20 %.

Basis for the distribution of amounts

Monitoring, evaluation and reports:

— for ERF II the Commission is to carry out regular monitoring

in cooperation with the Member States,

17.
ERF funds were distributed annually and were composed
of a small fixed amount and a larger variable amount. The fixed
amount has decreased from 500 000 euro per Member State for
2000 to 100 000 euro for 2004.

— for ERF II, obligations regarding evaluation have been
enhanced: the Fund is to be evaluated regularly by the Com-
mission in partnership with the Member States to assess the
relevance, effectiveness and impact of actions.

(1) Chapter 6, pp. 200 to 202, of the Annual Report concerning the
financial year 2003 (OJ C 293, 30.11.2004); Chapter 6, pp. 165
to 166, 176 of the Annual Report concerning the financial year 2004
(OJ C 301, 30.11.2005).

(2) Article 20 of Decision 2000/596/EC.

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The variable part of the annual allocation was distributed
18.
to the Member States in proportion to the number of third coun-
try nationals or stateless persons they had received (1) during the
three years preceding the programme year. 65 % of this alloca-
tion was based on the number of asylum seekers, while 35 % of
the allocation was based on the number of refugees (2). The dis-
tribution of funds for the years 2000 to 2004 is presented in
Annex II. The description of the allocation procedure is shown in
Annex III.

19.
The basis for the variable part of the annual allocation
had to be the most recent figures established by the Statistical
Office of the European Communities (Eurostat) (3), which were
provided by the Member States

Statistical data used as allocation basis were incomplete and not
reliable

20.
The Council Decision provided for a transitional period,
in which data supplied by Member States could be used if Euro-
stat statistics were incomplete. This transitional period should
have been limited to ERF 2000 and 2001, but it was extended to
ERF 2002 and 2003.

21.
It took the Commission until 2005, after several years of
preparatory actions, to make a proposal on harmonising Com-
munity statistics on migration and international protection (4). In
its proposal the Commission pointed out that ‘there are particu-
lar concerns about the large amounts of data that are missing
from the data collections. There are also serious problems relat-
ing to a lack of harmonisation — both in terms of the data sources
used and the definitions applied to the statistics’ (5).

22.
Another point is that the reliability of the data is ques-
tionable as long as they have been verified at Member State level
neither by the Commission nor the Member State.

Differences in interpretation among Member States distort the
basis

23.
The definition of target groups has been interpreted dif-
ferently by Member States and changed inside some Member
States over the years. In some cases, the data were changed due
to the evolution of the Member States’ legislation in the direction
of greater harmonisation.

(1) Article 3 of Decision 2000/596/EC.
(2) Article 10(2) of Decision 2000/596/EC.
(3) Article 10(3) of Decision 2000/596/EC.
(4) Proposal for a regulation of the European Parliament and of the Coun-
cil on Community statistics on migration and international protection
COM(2005) 375 final Brussels, 14 September 2005, 2005/0156
(COD).

(5) Proposal for a regulation of the European Parliament and of the Coun-
cil on Community statistics on migration and international protection
COM(2005) 375 final Brussels, 14 September 2005, 2005/0156
(COD), p. 4.

— For most countries, the number of asylum applications
indicated the number of individuals; in some countries, in
contrast, e.g. the United Kingdom and France, it indicated
the number of cases (one ‘case’ may include family mem-
bers in addition to the principal applicant) (6).

— Some Member States (Sweden, Ireland, Finland and Aus-
tria) did not make a distinction between first applications
and repeated applications.

— For Germany, the 1999 figure for asylum applications
indicated the number of cases, but the August 2002 fig-
ures indicated the number of individuals (7).

— In France major discrepancies were noted between the
figures provided in 2002 and 2003. The 2003 ERF fig-
ures for asylum applications included persons benefiting
from ‘territorial asylum’, a new category not included in
2002.

Revisions of previously validated data were not taken fully into
account for future distributions or were not adequately
documented

Over the entire ERF I period, some of the figures that had

24.
been validated one year were modified in subsequent years.

As an example, a data revision occurred between 2002
and 2003 in France, for which the number of persons declared
was increased by 17 606 (the total number of persons
declared for France for ERF 2003; cumulative total for the
years 1999 to 2001: 238 947).

The revision of official statistics is a common practice and is not
criticised as such. Nonetheless, when the Commission revises the
statistics ex post, it should take account of the revised information
not only for current distributions but also for previous years’
distributions.

In the case of Italy, the Commission reduced the allocation
significantly for 2004 (0,7 million euro) compared with the
year 2003 (2,4 million euro), mainly because it was not able
to validate the previous years’ statistics on the number of per-
sons declared by Italy for the reference period 2001.

In a number of cases, where the allocation of funds was based on
modified statistics, there was no documentation available on the
reasons why changes had been made either at DG JLS or at
Eurostat.

(6) CIREA (Centre for Information, Discussion and Exchange on Asylum)

annual report for 1999 and 2000.

(7) CIREA annual report for 1999 and 2000 and Monthly statistics on

asylum report — August 2002.

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The difficulties encountered could have been avoided if
25.
the ERF had been based on reliable and harmonised data from the
beginning. For ERF II the definition of target groups has not
changed significantly (1) and the allocation of funds continues to
be based on statistics produced by Eurostat (2) and those statistics
have not yet been harmonised.

In practice the timetable for allocation and payment was
29.
subject to significant delays. In each year there were two, not one,
Commission decisions on co-financing: a first decision based on
the draft budget for the coming year, and a revised decision based
on the budget that was finally adopted. These decisions were typi-
cally taken several weeks after the relevant steps in the budgetary
procedure. For ERF 2003 the example below illustrates the time-
table for all Member States in practice.

WAS THE MANAGEMENT BY THE COMMISSION AND THE
MEMBER STATES SOUND?

ERF implementing rules were published late

been adopted by the Commission

— In April 2002 the 2003 preliminary draft budget had

26.
As the ERF was a new programme, the Member States
ought to have been given clear management guidelines from the
start of the programme. The Commission published the rules
governing eligibility of expenditure (3) in April 2001, six months
after the launch of the ERF. However, the Commission published
the detailed rules for management and control systems more than
18 months after ERF had been established.

— The 2003 draft budget was established by the Council on

22 July 2002.

— On 19 September 2002 the Commission adopted the
decision on the preliminary allocation of funds to the
Member States.

— Following the preliminary allocation of funds, the Mem-
ber States had to submit their requests for co-financing.

— The 2003 final budget was adopted on 19 Decem-

Low efficiency of the allocation procedure

ber 2002.

27.
The allocation procedure was cumbersome in design and
subject to delays and inefficiencies in practice. The allocation pro-
cedure for ERF I set out in EU legislation was as follows:

— by 1 June the Commission was required to inform Member

States of their estimated allocations for the following year,

— Member States had until 1 October to submit a request for

co-financing,

— the Commission was required to approve requests for
co-financing within three months (i.e. at the latest by the end
of December), a Commission decision on co-financing had to
be approved,

— On 20 December 2002 the Commission approved the
decision on co-financing, which was based on the pre-
liminary allocations communicated to the Member States
in September 2002.

— On 12 February 2003 the Commission adopted the deci-
sion on the final allocation of funds to the Member States.

— In February and March 2003 submission and analysis of

revised requests for co-financing.

— On 20 March 2003 the Commission took a revised deci-
sion on co-financing, which was based on the final bud-
get adopted, increasing the Member States’ allocations by
3 million euro.

— the Commission was required to make an initial payment (i.e.
50 % of the sum due) as soon as it had adopted a decision on
co-financing (with subsequent interim and final payments).

30.
The Commission only made payments to Member States
after approval of the second, revised, Commission decisions on
co-financing.

28.
In the context of the distribution of resources to each
Member State, it is unclear what role the request for co-financing
was intended to play. As explained in paragraph 18 above, allo-
cations were based exclusively on asylum and refugee figures.

(1) Article 3 of Decision 2004/904/EC.
(2) Article 17(3) of Decision 2004/904/EC.
(3) Article 14(2) of Decision 2000/596/EC.

31.
These delays in Commission payments triggered delays
in payments by Member States to final beneficiaries, as most
Member States could only pay once they had received their share
of the Fund. As a result Member States encountered difficulties in
respecting the time limits on ERF-funded projects.

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In general, projects started before the first payments from
32.
the Member States had been received. In those cases final benefi-
ciaries had to pre-finance their expenditure: expenditure under-
taken before the approval of the Member State’s request for
co-financing was ineligible for funding under ERF I. This con-
straint favoured financially stronger organisations and discour-
aged smaller organisations from making further applications.

Under ERF II there have been some modifications in these

33.
arrangements:

— the deadlines in paragraph 27 above have all been extended,

with a view to resolving the problem in ERF I,

The funding of failed asylum seeke rs was co-financed by the
Fund, even when the decision to return home was not a volun-
tary one (3). This voluntary element (1) is highlighted in the ERF
rules and has been reinforced in ERF II (4).

36.
Likewise, the definition of eligible persons whose return
to their country of origin might be funded is inadequate, as illus-
trated below.

In the United Kingdom, failed asylum seekers from Central
European countries such as the Czech Republic and Poland,
who had sought asylum before EU accession, accounted for
the highest numbers of persons whose return flights were
funded by the ERF in 2003 (i.e. 332 Czech nationals and 125
Polish nationals).

— sums disbursed after 1 January of the year in question may
be eligible for support by the Fund regardless of when the
request for co-financing is approved (cf paragraph 32 above),

Individual Member States may apply policies on the individual
merits of asylum claims, that is, not based on the country of
origin.

— besides a 50 % initial payment, there may be an interim pay-

ment of up to 50 %, compared with 30 % in ERF I.

Different interpretation of ERF rules by Member States

34.
The audit revealed differences as regards the interpreta-
tion of the repatriation measure, which is indicatively described
as providing ‘information and advice about voluntary return pro-
grammes and the situation in the country of origin’. It may also
include ‘general or vocational training and help with resettle-
ment’ (1). The Council recognised that ‘practical support is needed
to create or improve conditions enabling refugees and displaced
persons to take an informed decision to leave the territory of the
Member State and return home, should they so wish’ (2). In some
Member States the repatriation measure was to a large extent used
to pay asylum seekers’ return air fares.

Major interpretation differences existed in the Member

35.
States over who could apply for repatriation assistance.

Germany and Sweden applied the stricter interpretation of eli-
gible groups, and only funded recognised refugees who were
permitted to reside in one of the Member States but who had
decided to return to their home countries. In contrast, the
United Kingdom and Italy mainly used the repatriation mea-
sure to fund failed and rejected asylum seekers, excluding
those who had been granted indefinite leave to remain or
refugee status.

(1) Article 4(4) of Decision 2000/596/EC.
(2) Preamble 7 of Decision 2000/596/EC.

Positive examples of ERF management

37.
Despite problems in the set-up and management of the
ERF, there were numerous examples of good management
systems.

Germany and Sweden introduced a well thought-out manage-
ment system, including procedures, forms and reports, which
allowed the national authority to handle a large number of
projects. In addition, close monitoring of the projects ensured
timely support to final beneficiaries.

Monitoring and remedial action by the Commission had
insufficient results

38.
The Member States are responsible for the selection,
financial management and administration of projects. The Coun-
cil Decision is intended to provide Member States with the nec-
essary freedom to implement the programme according to their
needs. In the first instance, Member States are required to take
responsibility for the financial control of an action. In particular,
they must ensure that the funds are used in accordance with the
principle of sound financial management. In spite of that, the
Commission itself is charged with ensuring that Member States
have smoothly functioning management and control systems so
as to make certain that Community funds are efficiently and cor-
rectly used.

(3) The European Council on Refugees and Exiles distinguishes between
voluntary, mandatory and forced return: ‘it is important to distinguish
between voluntary repatriation of persons who freely choose to exer-
cise their right to return to their country of origin or habitual resi-
dence and those who do not have a legal basis for remaining and con-
sent to return’. European Council on Refugees and Exiles, Statement
on Justice and Home Affairs Council 12–13 October 2005, p. 4.

(4) Article 4(1) of Decision 2004/904/EC.

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Overall, the Commission carried out monitoring visits
39.
for ERF I but could not always ensure sound management prac-
tices in all Member States. According to ERF II (1), the Commis-
sion is to carry out regular monitoring in co-operation with the
Member States, including evaluating the impact of actions and
their complementarity with other Community instruments.

In the United Kingdom the Court detected serious shortcom-
ings (e.g. an inadequate audit trail on project selection, insuf-
ficient monitoring of projects). Prior to the Court’s audit in
early 2005, the Commission had carried out one monitoring
visit in 2002 and one ex post audit in 2003. Nonetheless, sev-
eral shortcomings observed have not yet been resolved.

As already discovered by the Commission during a monitor-
ing visit to Austria, certain core tasks of the management of
the ERF actions had been delegated by the national authority
to a private company. This is not in conformity with the
Financial Regulation as regards delegation of tasks to third
parties. The corrective action recommended by the Commis-
sion was implemented late.

Italy launched one public call for proposals in four years. Fur-
thermore it was restricted to municipalities, thus excluding
other potential applicants from taking part in the ERF.

In the light of the projects it visited, the Court can state
43.
that the ERF produced some positive changes in national efforts,
mainly with regard to testing innovatory projects and integrating
their results into national strategies.

One successful United Kingdom project concerned a one-to-
one refugee mentoring scheme, whereby volunteer mentors,
who are nationals of the host country assist refugees to adapt
and integrate into the society of the country granting them
asylum. A personal integration scheme was designed which
included language training, getting to know the city of resi-
dence and persons outside the refugee community, learning
how to handle administrative issues and assistance with find-
ing employment. The project is now being financed with
national funds

44.
In other cases the ERF had a positive effect on national
asylum policy, as it triggered the creation ex novo of national
programmes.

The Italian National Asylum Programme was made possible
thanks to ERF co-funding, and aims to receive and assist asy-
lum seekers and refugees throughout the national territory. It
was initiated by the Ministry of the Interior, UNHCR and the
National Association of Italian Municipalities (ANCI).

WHAT WAS THE IMPACT OF THE ERF ON NATIONAL EFFORTS
IN THE AREA OF ASYLUM?

CONCLUSION

40.
The Court’s aim was to analyse whether the creation of
the ERF had resulted in a change in national spending in the area
of asylum. However, information was limited, both in the Mem-
ber States and at the Commission. This was partly due to the fact
that most Member States did not have specific budget lines for
expenditure on refugees or asylum seekers in their national bud-
gets. It was thus not possible to draw a final conclusion on this
point.

41.
The mid-term evaluation (2) did not examine the addi-
tionality of the Fund, but focused instead on how far Member
States had co-financed the individual ERF projects. The final
report has not been examined as it had not been adopted at the
time the audit was carried out.

Some indicators of the impact of actions with regard to
42.
persons concerned by the three measures were available, but they
were not monitored systematically. Similarly, the Commission
used Eurostat data on refugees for analysis purposes, but did not
systematically compare them with data received from the Mem-
ber States.

45.
The European Refugee Fund allocated its resources
according to statistical data. The Court found that these data were
not complete, consistent, comparable and reliable. It took the
Commission until 2005, after several years of preparatory actions,
to propose a regulation on the harmonisation of statistics (see
paragraphs 20 to 22).

46.
Certain implementing rules were published late by the
Commission, leaving the Member States without clear instruc-
tions in the start-up phase of the ERF. The cumbersome admin-
istrative process for the allocation of funds led to payment delays
in the Member States (see paragraphs 26 to 33).

47.
The Council Decision lacked clarity in defining the ERF
key terms (e.g. eligible target groups or fundable measures, see
paragraphs 34 to 36). The Commission did not always guide
Member States to help them avoid ambiguities in the interpreta-
tion of the rules. Although no systematic misuse of the rules was
observed, they were not applied in an equal way by the Member
States.

The Commission could not always ensure sound man-

48.
agement practices in the Member States (see paragraph 39).

(1) Article 27 of Decision 2004/904/EC.
(2) Justice and Home Affairs DG, Mid-term Evaluation of the European

Refugee Fund, Final Report, December 2003.

49.
There were limited data available on the impact of the
ERF on national efforts in the area of asylum (see paragraphs 40
to 42).

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The result of the final report could not be taken into con-
50.
sideration as it had not been adopted at the time the audit was
carried out (see paragraphs 16 and 41).

If the Commission cannot guarantee that the statistics are
53.
reliable and that the allocation of funds is in proportion to the
number of refugees and asylum seekers received, other ways of
allocating the funds, such as fixed amounts, should be considered.

RECOMMENDATIONS

51.
The Commission should continue its efforts to harmon-
ise the statistical data. Whilst harmonising the statistical data, the
Commission should lay down measures to allow the verification
of data.

The Commission has revised the statistical data. When
it should take

52.
the Commission revises the statistics ex post,
account of the revised information when distributing funds.

54.
The Court’s audit has shown that some of the provisions
of ERF I, in particular the eligibility rules, were open to signifi-
cant differences of interpretation. The Court recommends that the
Commission, the Parliament and the Council should consider, in
the light of the Court’s findings and the changes already made in
ERF II, whether they wish the ERF to be more clearly and precisely
targeted for the future.

This Report was adopted by the Court of Auditors in Luxembourg at its meeting of
21 March 2007.

For the Court of Auditors
Hubert WEBER
President

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ANNEX I

Comparison of Community regulations for the 2000 to 2004 European Refugee Fund period (ERF I)
and the 2005 to 2010 period (ERF II)

INTRODUCTION

This comparison is based on the following documents:

— Council Decision 2000/596/EC of 28 September 2000,

— Commission Decision 2001/275/EC of 20 March 2001,

— Commission Decision 2002/307/EC of 18 December 2001,

— Council Decision 2004/904/EC of 2 December 2004,

— Explanatory Memorandum and proposal for a Council Decision SEC 2004/161 establishing the European Refugee Fund

for the period 2005 to 2010,

— Extended Impact Assessment. Commission Staff Working paper, SEC (2004) 161, 12.2.2004.

The following comparison highlights only the main differences between ERF I and ERF II. It is neither an analysis nor an
evaluation of those changes.

I.

OBJECTIVES AND TASKS

Objective

Time period

The 2000 to 2004 programme

The 2005 to 2010 programme

The European Refugee Fund is a financial instrument, the prime objective of which is to sup-
port and encourage the efforts made by the Member States in receiving and bearing the con-
sequences of receiving refugees and displaced persons.

5 years, from 1 January 2000 to 31 Decem-
ber 2004.

6 years, from 1 January 2005 to 31 Decem-
ber 2010.

Target groups

Five target groups:

1. Geneva convention

2.

3.

4.

5.

international protection granted by a
MS

persons who have applied for protec-
tion cf. points 1 or 2

temporary protection in a MS

persons whose right to temporary pro-
tection is being examined in a MS.

(Article 3, 2000/596/EC)

No multiannual programmes, annual appro-
priations.

Programming

Four target groups:

1. Geneva convention

2.

3.

4.

subsidiary protection within the mean-
ing of Council Directive 2004/83/EC

persons who have applied for protection
cf. points 1 or 2

temporary protection within the mean-
ing of Directive 2001/55/EC (temporary
protection/mass influx).

(Article 3, 2004/904/EC)

Multiannual programming for two three-year
periods. For each programme phase, the Mem-
ber States have to present multiannual pro-
grammes to the Commission.

(Article 15, 2004/904/EC)

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Actions

There are three different types of measures
by the Member States: condition of recep-
tion, integration, and repatriation.

Reception
— infrastructure or services for accommo-

dation,

— supply of material aid,
— health care,
— social assistance,
— help with administrative and judicial
formalities, incl. legal assistance.

Integration
— social assistance in the area of housing,
means of subsistence and health care,
— actions to enable beneficiaries to adjust
to the society or to provide for them-
selves.

Repatriation
— information and advice about volun-
tary return programmes and the situa-
tion in the country of origin,

— general or vocational training and help

in resettlement.

(Article 4, 2000/596/EC)

Community actions

The eligible actions concern the following
areas: studies, exchanges of experience and
steps to promote cooperation, assessment of
the implementation of measures and techni-
cal assistance.

(Article 5, 2000/596/EC)

A combination of the actions (reception, inte-
gration, voluntary return) is allowed.

Possible actions to be funded are in parts more
specific.

There are eligible actions relating to reception
conditions and asylum procedures (accom-
modation, medical and psychological care,
social assistance, education, language train-
ing).

There are more eligible actions relating to
integration (actions to promote participation
in civil and cultural life; education, vocational
training, recognition of qualifications and
diplomas; actions to promote the integration
of these persons involving local authorities,
the general public or refugee associations, vol-
untary groups, social partners).

Eligible actions relating to voluntary return
include:
information and advisory services,
information on the country or region of ori-
gin, general or vocational training, actions
which facilitate the organisation and imple-
mentation of national voluntary return pro-
grammes.

Special emphasis is put on the specific situa-
tion of vulnerable persons.

(Article 4 to 7, 2004/904/EC)

Community actions put emphasis on transna-
tional actions or actions of interest to the
Community as a whole.

(Article 8, 2004/904/EC)

II.

IMPLEMENTATION AND MANAGEMENT PROVISION

The 2000 to 2004 programme

The 2005 to 2010 programme

Implementation

The Member States shall be responsible for
the implementation of actions supported by
the Fund. A responsible authority (public
administration) shall be appointed to com-
municate with the Commission.

The Member State appoints a responsible
authority. This must be a functional body of
the Member State or a national public body.
Some or all of the implementation tasks may
be delegated to a public administration or
private-law body governed by the law of the
Member State and having a public-service mis-
sion.

Respective responsibilities of the Commission,
the Member State and the responsible author-
ity are described in greater detail.

No minimum conditions for the responsible
authority.

Minimum conditions for
authority established.

the responsible

(Article 7, 2000/596/EC)

(Articles 12 to 13, 2004/904/EC)

Request for co-financing

The Member State submits a request for
co-financing each year.

(Article 8, 2000/596/EC)

According to the multiannual programming,
the Member State shall propose a draft
multiannual programme based on guidelines
provided by the Commission.

(Article 15, 2004/904/EC)

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III.

FINANCIAL MANAGEMENT

The 2000 to 2004 programme

The 2005 to 2010 programme

Financial provision

216 million euro.

(Article 2, 2000/596/EC)

114 million euro for the period 2005 to
2006. The annual appropriations will be
authorised by the budgetary authority within
the limits of the financial perspective.

(Article 2, 2004/904/EC)

Financing structure

The contribution from the Fund shall not
exceed 50 % of the total cost of the measure.
The proportion may be increased to 75 % in
Member States covered by the Cohesion
Fund.

The contribution from the Fund shall not
exceed 50 % of the total cost a specific action.
But this may be increased to 60 % for par-
ticularly innovative actions and to 75 % in
Member States covered by the Cohesion Fund.

(Article 13, 2000/596/EC)

The contribution shall not exceed 80 % of the
total cost of specific Community actions.

(Article 20, 2004/904/EC)

Technical and administra-
tive assistance

A sum not exceeding 5 % of a Member State’s
total allocation may be set aside for techni-
cal and administrative assistance.

In addition to 7 % of the annual amount set
aside for technical and administrative assis-
tance, a further 30 000 euro is added.

(Article 12, 2000/596/EC)

(Article 18, 2004/904/EC)

Annual breakdown

In the ERF I the fixed amount was degressive:

500 000 euro for
100 000 euro for year 2004.

the year 2000 and

(Article 10, 2000/596/EC)

Payments

Initial and interim payments and balance.

Fixed amount of 300 000 euro, abolishing the
degressive element of ERF I. Special aid of
500 000 euro for the new Member States for
the first three years of phase II.

(Article 17, 2004/904/EC)

First pre-financing payment, second pre-
financing payment and balance.

As soon as the Commission decision is
adopted, an initial payment of 50 % of the
amount shall be made.

A pre-financing payment of 50 % of
the
amount shall be made within sixty days fol-
lowing the adoption of the co-financing
decision.

An interim payment of up to 30 % shall be
made once the Member State states that it
has actually spent half of the initial pay-
ment.

A second pre-financing payment shall be
made no more than three months after the
Commission has approved a report on the
implementation of the annual work pro-
gramme and a declaration of expenditure
accounting for at least 70 % of the amount of
the initial payment. The amount shall not
exceed 50 % of the total amount or the bal-
ance of the amount for selected projects minus
the first pre-financing payment.

Balance shall be paid within three months of
approval of the accounts submitted by the
Member States and the annual report on
implementation of the programme.

(Article 17, 2000/596/EC)

Balance shall be paid no more than three
months after the Commission has approved
the annual programme’s final implementation
report and the final declaration of expendi-
ture.

(Article 23, 2004/904/EC)

At the Commission’s initiative, up to 5 % of
the Fund’s available resources may be used
to finance innovatory actions or actions of
interest
to the Community as a whole.
Besides, the Fund may provide up to 100 %
of the funding.

(Article 5, 2000/596/EC)

Up to 7 % of the Fund’s available resources
may be used to finance Community actions,
emphasis is put on transnational actions or
actions of interest to the Community as a
whole concerning asylum policy and mea-
sures applicable to refugees and displaced per-
sons. The ERF may provide up to 80 % of the
funding.

(Article 8, 2004/904/EC)

Resources for Community
actions

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IV.

MONITORING, EVALUATION AND REPORTS

Checks

The 2000 to 2004 programme

The 2005 to 2010 programme

The checks shall cover at least 20 % of total
eligible expenditure.

(Article 5, 2002/307/EC)

The checks shall cover at least 10 % of the
total eligible expenditure for each annual
implementing programme.

Monitoring and evaluation

The responsible authority shall take mea-
sures to monitor and evaluate actions.

(Article 20, 2000/596/EC)

Follow-up arrangements

Detailed rules for eligibility of expenditures
and reports on implementation.

(2001/275/EC)

(Article 25, 2004/904/EC)

The Commission shall carry out monitoring
and evaluation of the Fund in cooperation
with the Member States.

(Article 27, 2004/904/EC)

Reports by the Member
States

The responsible authority

The responsible authority

1)

shall submit each year a summary
report on the implementation of the
action in progress;

2) will send the Commission within six
months of the deadline fixed in the
co-financing decision for the execution
of expenditure a final report consisting
of:

1)

2)

— Financial accounts and a report on
the implementation of the action.
the
execution and of the effect of the
actions implemented.

— An assessment

report of

No separate evaluation of impact of pro-
gramme.

(Article 20, 2000/596/EC)

The recipients of reports
submitted by the Commis-
sion and type of reports

The Commission shall submit to the Euro-
pean Parliament and the Council a:

1) Mid-term report (2002).

2)

Final report (2005).

(Article 20, 2000/596/EC)

shall include clauses in the agreements
and contracts which oblige to submit
progress reports on the implementation
and a detailed final
implementation
report.

laid

shall
submit no more than nine
months after the eligibility deadline for
the
expenditure
co-financing decision for each annual
programme
implementation
final
report and a final declaration of expen-
diture.

down

in

a

The Member States shall submit:

1) An evaluation report on the implemen-
tation of actions co-financed no later
than 31 December 2006.

2) An evaluation report on the results and
impact of actions co-financed no later
than 30 June 2009.

3) An evaluation report on the results and
impact of actions co-financed no later
than 30 June 2012.

(Article 28, 2004/904/EC)

The Commission shall submit to the Parlia-
ment, the Council, the Economic and
Social Committee and the Committee of
the regions an:

1)

2)

3)

report on the

Intermediate
results
achieved and on qualitative and quantita-
tive aspects of implementation of the
Fund, together with any proposed amend-
ments no later than 30 April 2007.

Intermediate evaluation report and a
proposal on the Fund’s future develop-
ment no later than 31 December 2009.

Ex post evaluation report no later than
31 December 2012.

(Article 28, 2004/904/EC)

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ANNEX II

DISTRIBUTION OF FUNDS PER MEMBER STATE (2000 to 2004)

ERF 2004

ERF 2003

ERF 2002

ERF 2001

ERF 2000

(euro)

Total ERF 2000
to 2004

2 230 280

2 007 650

1 938 106

1 454 754

912 382

8 543 173

2 131 527

2 381 192

2 729 083

1 869 725

1 233 201

10 344 727

392 633

524 730

671 256

673 606

651 387

2 913 612

4 041 961

5 067 825

4 133 681

3 156 228

2 255 055

18 654 750

8 113 022

9 935 792

10 324 675

8 391 364

6 218 899

42 983 751

459 296

439 481

535 611

629 043

652 057

2 715 489

919 091

981 675

965 573

709 110

632 205

4 207 654

741 665

2 396 268

3 460 943

2 741 881

1 956 105

11 296 861

171 648

299 703

411 195

481 073

528 972

1 892 591

2 972 103

3 239 737

4 175 006

3 642 650

2 984 949

17 014 444

123 370

304 394

457 006

518 816

534 238

1 937 823

665 287

786 229

933 064

837 462

745 291

3 967 333

2 691 652

2 869 672

3 326 823

2 555 672

1 808 621

13 252 440

10 877 221

8 923 101

8 764 928

4 819 118

2 902 640

36 287 008

Austria

Belgium

Finland

France

Germany

Greece

Ireland

Italy

Luxembourg

Netherlands

Portugal

Spain

Sweden

UK

Acceding countries

3 626 695

3 626 695

Community action

2 113 550

2 113 550

2 254 050

1 709 500

1 264 000

9 454 650

Total

42 271 000

42 271 000

45 081 000

34 190 000

25 280 000

189 093 000

Source: Commission Decisions for the periods 2000 to 2004.

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ANNEX III

ERF allocation procedure of provisional amounts to Member States 2000 to 2001

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ERF allocation procedure of provisional amounts to Member States 2002 to 2003

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ERF allocation procedure of provisional amounts to Member States 2004

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THE COMMISSION’S REPLIES

SUMMARY

I.
The European Refugee Fund (ERF) was set up in September
2000 following the entry into force of the Treaty of Amsterdam
on 1 May 1999. It is the very first Community legal instrument
adopted in the field of asylum and immigration under this new
Treaty (Article 63 TEC).

The European Refugee Fund is an innovatory financial instrument
which is designed to support and encourage the efforts made by
Member States in receiving and bearing the consequences of
receiving refugees and displaced persons in a European context
where action has to be taken in what are emergency situations.

In the Commission’s view, differences in the implemen-
VII.
tation of measures reflect the Fund’s philosophy, which is based
on joint guidelines and the tailoring of measures to national
objectives and needs. The ERF’s limited resources make it impos-
sible to meet all objectives in the same way in each Member State
and the Commission considers that any interpretation is accept-
able as long as it complies with the general guidelines.

The framework programme on solidarity and management of
migration flows has given the European Union four financial
instruments with more detailed objectives and scope which will
overcome most of the concerns expressed by the Court.

As regards evaluation of the impact of ERF 2000 to
VIII.
2004, since the Court’s audit the Commission has published an
evaluation based on a study by independent experts which gives
a very positive verdict on the Fund’s achievements despite its
small budget over this five-year period.

II.
The Commission has overall responsibility for the imple-
mentation of the Community budget (under the Treaty) but the
ERF’s legal basis provides that ‘Member States shall be responsible
for implementing national actions supported by the Fund’.

INTRODUCTION

IV.
The purpose of gathering statistical data for the purposes
of calculating the budget allocations for each Member State is to
ensure funds are distributed according to genuine needs. The
Fund’s legal basis provides that data concerning refugees and dis-
placed persons for the last three years should be used but these
data are constantly changing. This puts the Commission in a
dilemma which it is addressing but which will never be totally
overcome. For the period 2000 to 2004, the Commission never-
theless considers it has used an equitable approach for the distri-
bution of funds between Member States and this has been con-
firmed by an independent external evaluation.

V.
The procedure for adopting co-financing decisions for the
Member States, which was adapted during negotiation of the
is hampered by the slight incompatibility
ERF I legal basis,
between the EU’s budgetary procedure timetable and that for ERF
I’s programming phase. In order to comply with the legal basis
and, above all, to enable Member States to plan the projects they
intend to implement, the Commission decided to adopt provi-
sional decisions at the end of the preceding year on the basis of
the preliminary draft budget and then to adopt amended deci-
sions following the approval of the final budget.

VI.
According to the ERF’s legal basis the Commission must
ensure Member States have smoothly functioning control sys-
tems. The corrective measures available to the Commission under
the shared management approach (suspension of payments or
financial corrections) often take time to implement as Member
States have the right to respond and only have an impact in the
medium term. The amendments to the Financial Regulation
which came into force at the start of 2007 clarify the responsi-
bilities of those involved in shared management.

2.
The European Refugee Fund (ERF) is the very first Com-
munity legal instrument to be adopted in the field of asylum and
immigration.

6.
A shared management approach was chosen to implement
the Fund to highlight the fact that the aid provided under this
instrument is more effective and better targeted if co-financed
projects take account of the situation and needs in each Member
State. According to the Council decision, the Commission is
assisted by a Committee, consisting of representatives of the
Member States, which is responsible in particular for adopting the
rules governing eligibility of expenditure.

10 and 11.
The Commission has proposed that the Council
adopt some of the improvements called for by the Court in the
annual reports covering previous years. On the basis of the Com-
mission’s proposals the Council has accepted amendments to the
legislation for the period 2005 to 2010 which will simplify the
implementing arrangements.

Target groups have been more carefully defined for ERF II as a
result of the adoption of new Community directives on asylum.

13.
instru-
The Commission has proposed new financial
ments for the period 2007 to 2013 under a framework pro-
gramme on solidarity and management of migration flows. The
rules governing these financial instruments resolve many of the
problems highlighted by the Court in its report.

16.
The final evaluation of ERF 2000 to 2004 follows a long
series of analyses by the Member States and the Commission. The
Commission had external consultants carry out a comprehensive
evaluation of the ERF 2000 to 2004. The consultants presented
their 1 125-page report in March 2006.

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The Commission does, however, acknowledge that the final
report published in December 2006 should have been sent to the
other Institutions by September 2005.

WAS THE DISTRIBUTION OF FUNDS TO MEMBER STATES
SOUND?

The Commission shared the budgetary resources
20 to 22.
based on data available, in constant dialogue with Member States.
There was no common statistical definition in 2000 of the target
groups and the methodology for collecting statistics on asylum
claims. The Member States’ annual data collection exercises were
not specifically related to the Commission’s requirements.

The harmonisation in this field (definition of terms, procedure of
data collection) took longer than expected. The Commission has
put in place tools to improve the quality and reliability of the data
collection. This process has improved gradually between 2000
and 2004 and is still on going. This reflects the complexity of the
asylum systems and the large differences between the Member
States in terms of how asylum applications and decisions are
defined and counted. The availability of the statistical data
required for the allocation of the Fund was reduced due to the
absence of specific statistical legislation obliging Member States to
supply asylum data to Eurostat. Certainly in the first years of this
data collection, much data was not yet systematically and timely
supplied by Member States. The provisional approach therefore
had to be continued longer than expected.

Meanwhile, the Commission brought forward a proposal in Sep-
tember 2005 for a Regulation of the European Parliament and of
the Council on Community statistics on migration and interna-
tional protection (COM (2005) 375 final). This proposal repre-
sents an important step towards harmonised Community statis-
tics on migration and asylum and should further improve the
situation.

The Commission did not have a mandate to undertake audits of
the asylum systems or the statistical data produced.

In some cases, Eurostat stated that it was unable to com-
24.
ment on or check alternative data proposed for the ERF alloca-
tion by Member States. This took place only when Member States
failed to supply appropriate metadata, when disaggregations by
month and/or citizenship were not supplied (meaning that the
internal consistency of the data could not be tested) or when there
were unexplained discrepancies with data previously supplied.

The Commission considers that it already takes account of the
variability of statistics in calculating budget allocations by Mem-
ber State since these allocations are based on the previous three
years, i.e. the impact of ex post revisions is spread over time. It is
the Commission’s view that ex post adjustment of allocations by
Member States is not feasible.

The Commission acknowledges that in the process of establish-
ing the statistics to be used for the allocation for the first two
years of the ERF I the outcome of exchanges of information
between Member States and the Commission should have been
better documented. However, efforts were undertaken, as in the
case of Italy, to make the adjustments in the best possible way.
The communication procedures in place between Eurostat and
the Member States in order to establish the asylum statistics reflect
accepted practice adopted for other areas of statistics. This is a
transparent process and offers adequate opportunities for Mem-
ber States to check and validate/revise their national data.

25.
Harmonised statistical data were not yet available at EU
level when the ERF was set up and the Commission proposed a
pragmatic and fair approach to the Council and Parliament.

WAS THE MANAGEMENT BY THE COMMISSION AND THE
MEMBER STATES SOUND?

26.
Delays at the beginning of a new programme are inevi-
table for the adoption of implementing rules. The Commission
recognises that there was a certain delay (1) caused by the neces-
sary consultations with the Member States and translation dead-
lines. However the Commission worked closely with the Member
States during the elaboration of the implementing rules, therefore
the delays in finalisation of the texts did not contribute to the dif-
ficulties of the Member States in administering the programme.

23.
Some of the differences in interpretation of statistical
data are due to differing national legislation but the data are still
reliable. The Commission recognises that the gathering of statis-
tical data was hampered by a number of factors but considers
that, in the final analysis, it has done its utmost to draw up an
equitable basis for the allocation of funds and this has been con-
firmed by the external independent evaluation of ERF I.

(1) Decision 2000/596/CE establishing the European Refugee Fund was
adopted on 28 September 2000. The Commission adopted Decision
C(2001) 736 on eligibility of expenditure and reports on implemen-
tation in the context of actions co-financed by the ERF on
20 March 2001. The Commission adopted Decision C(2001) 4372 on
the management and control systems as well as the process for the
implementation of financial corrections on 18 December 2001.

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C 178/21

The ERF was based on the principle of allocation of funds
27.
and programming at Member State level, both on an annual basis.
Consequently the Commission had to reconcile prior national
programming with the need to adjust allocations according to the
amounts approved by the budgetary authority. Programming
principles were improved for the subsequent ERF 2005 to 2013
phase but the approach was the same. Given the unavoidable
time required for examination and approval of annual pro-
grammes, the Commission had no choice but to ask Member
States to draw up their programmes on the basis of provisional
budgetary data and to adjust them in the light of the final data.

Under the Fund’s legal basis co-financing requests enable
28.
Member States to define their annual programming of actions
between the measures eligible under the ERF with justifications in
terms of national needs rather than simply take over the overall
budget allocations.

Co-financing of voluntary repatriation of failed or rejected asy-
lum seekers is eligible under the ERF’s legal basis and the State-
ment by the ECRE (European Council on Refugees and Exiles)
reflects a position which has nothing to do with the ERF’s scope
and implementing rules.

The Commission considers the definition of persons eli-

36.
gible for repatriation is generally adequate.

Co-financing of the repatriation of any national from a non-EU
country, including candidate countries before the entry into force
of the acts of accession, is compatible with the ERF.

Consequently there was no question of applying different treat-
ment to non-EU nationals according to whether or not they came
from candidate countries or belong to target groups for the mea-
sures co-financed by the ERF (reception, integration or return).

29.
The Commission takes the view that the example of
2003 demonstrates the incompatibility of the EU’s budgetary pro-
cedure timetable and that for ERF I programming. The initial
timetable proposed by the Commission was changed during
negotiation of the legal basis.

37.
The positive examples mentioned by the Court demon-
strate that the legal provisions and guidance provided by the
Commission have helped the Member States which wished to do
so to build sound control systems.

Individual co-financing decisions by Member States are preceded
by a decision allocating funds between Member States, by the
transmission and analysis of Member States’ annual programmes
and consultation of the Committee of Member States’ represen-
tatives. Each of these stages takes several weeks.

31 to 33.
Under ERF II, the Commission is able to disburse
up to 100 % of funds for the second pre-financing given to the
Member States. Consequently, the Member State has the possibil-
ity to disburse up to 100 % to the final beneficiary, without preju-
dice to the Member State’s own payment procedures. The new
scheduling of payments will be beneficial to all organisations,
regardless of their size.

34 and 35.
The main objective of having a financial instru-
ment based on shared management was to enable Member States
to tailor general measures to national needs. The fact that objec-
tives vary from one Member State to the next within the con-
straints of the Fund’s legal basis is considered by the Commission
to be evidence of the correct use of the ERF by Member States and
a guarantee of its effectiveness. The evaluation carried out by the
Commission on the basis of a report by external experts for the
ERF 2000 to 2004 phase demonstrated the effectiveness and
worth of this approach. The Commission considers that the repa-
triation measure could be used to co-finance return flights. The
list of measures in the legal basis illustrating the concept of prior
information and advice is indicative only.

In some Member States repatriation actions were limited initially
so that pilot studies could be carried out before they were intro-
duced as general practice.

The Commission considers that monitoring covers all
39.
contacts with Member States and not simply on-the-spot visits.
The meetings of the Committee of Member State representatives
have, for example, provided an opportunity for specific guidance
to be given on the ERF’s rules.

The Commission has established a programme of on-the-spot vis-
its to assist Member States within the constraints of its available
resources even though it is not required to do so under the ERF I
legal basis.

In view of the serious problems found by the Commission in the
United Kingdom, the Director-General of DG JLS entered a reser-
vation about this situation in his annual reports for 2004
and 2005. The Commission has proposed a 5 % financial correc-
tion for 2000 and 2001 reflecting the United Kingdom’s respon-
sibility for the shortcomings observed and this has been accepted
by the United Kingdom. The closure procedure for 2002 to 2004
has not yet been completed.

The excessive volume of delegated tasks in Austria was identified
by the Commission during a monitoring visit and immediately
pointed out to the national authorities. The type of delegated task
was changed under the new tendering procedure when contracts
were renewed.

In the light of the Court’s findings relating to Italy, the Commis-
sion has set in train two measures: an ex post inspection of ERF
2000 to 2004 and a monitoring visit to check control systems for
ERF II. The ex post inspection, which is being finalised, will make
a detailed examination of the way in which the ERF was imple-
mented and check that the procedures used for calls for propos-
als were compatible with the provisions governing the Fund’s
legal basis.

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Official Journal of the European Union

31.7.2007

At a more general level the Commission will ensure that the
shortcomings noted by the Court are corrected when annual pro-
grammes are closed and, where applicable, during its monitoring
visits.

WHAT WAS THE IMPACT OF THE ERF ON NATIONAL EFFORTS
IN THE AREA OF ASYLUM?

The Commission acknowledges that there was a signifi-
46.
cant delay in publishing some of the ERF’s implementing rules.
The implementing rules were presented to, and discussed by, the
Committee of Member State representatives well before their
adoption. The fund allocation procedure under ERF I was not per-
fect and some simplifications have already been made. The Com-
mission considers the current procedure is the only way of ensur-
ing ERF funds are deployed as quickly as possible in the Member
States on the basis of detailed annual programmes which have
been given the Commission’s prior approval.

41.
The ERF is based first and foremost on the idea of soli-
darity between Member States so that the costs of reception, inte-
gration and repatriation of refugees and displaced persons are
spread equally within the EU. Council Decision 2000/596/EC
does not contain any reference to public spending obligations,
and this is why additionality was not a issue for ERF I.

47.
Although it will of course continue its efforts to provide
clarification and guidance to the Member States on the ERF’s rules,
the Commission believes that differences in the way Member
States implement national projects reflect the fact that projects
are tailored to national needs rather than different interpretations
of the Fund’s legal basis.

42.
The Commission did not make a systematic comparison
but it did publish a Commission working paper (1) in December
2006 summarising several months of analysis of ERF projects in
the Member States. Its conclusions are based on an evaluation by
independent experts who give a very positive verdict on the
Fund’s achievements despite its limited budget over the five years
in question.

The evaluation carried out by the Commission also dem-

43.
onstrated that:

— social, material and medical assistance was provided in diffi-
cult circumstances under the projects carried out, which
directly concerned over 600 000 persons,

— the organisations which carried out the projects take a very

positive view of the Fund,

— seen from the angle of the Member States, some of which
have more budgetary resources than others in the field of
asylum, the Fund has helped to gradually establish a com-
mon asylum policy governed by Community legislation.

CONCLUSION

48.
The Commission has played an advisory and monitoring
role in relation to the Member States even though monitoring
was not an obligation laid down in the Fund’s legal basis. Mem-
ber States, however, bear prime responsibility for implementing
projects. The Commission can play a supervisory and even disci-
plinary role but can never itself correct shortcomings or problems
in Member States’ control systems. Whenever necessary, the
Commission takes the across-the-board corrective measures pro-
vided for in the Fund’s legal basis.

49 and 50.
The Commission was late, as it has acknowl-
edged, in publishing the conclusions of the ERF evaluation for the
period 2000 to 2004. Annual evaluations were nevertheless car-
ried out in each Member State. Despites it small budget the ERF
has helped a huge number of persons (600 000). In many Mem-
ber States it has helped to adapt or strengthen asylum legislation
and practices.

RECOMMENDATIONS

51.
The Commission accepts the recommendation for
greater harmonisation of statistics. It will work out with Member
States ways of ensuring more effective validation of data. The
Commission considers that a slight risk of poor quality data has
to be accepted in view of the nature of the information gathered.

The Commission believes it ensured an equitable alloca-
45.
tion of the ERF budget appropriations from 2000 to 2004 despite
statistical constraints. The ultimate objective of gathering statis-
tical data is to correctly assess the burden on each Member State
so that the cost of ERF projects can be spread fairly throughout
the European Union. The quality of statistical data is gradually
being improved.

The Regulation proposed by the Commission in September 2005
on asylum and immigration statistics should overcome this prob-
lem once it starts to have an impact on the gathering of asylum
data and the Commission and Member States will have to work
together more closely.

(1) SEC(2006) 1636, Final evaluation of the European Refugee Fund for

the period 2000 to 2004.

The new ERF (2008 to 2013) will include actions enhancing the
capacity to collect, analyse and disseminate statistics.

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C 178/23

The Commission accepts the recommendation concern-
52.
ing the need to make use of the revised statistics but considers it
already takes account of ex post revisions of data for previous
years by using the most up-to-date data for the previous three
years to allocate funds for a reference year. This procedure is
compatible with the Fund’s legal basis and the annual nature of
the Community budget.

53.
The current statistical approach used as a basis for the
allocation of funds is the result of detailed and difficult discus-
sions with the Council during the negotiation of the Fund’s legal
basis. The allocation of fixed amounts has already been used on
occasion (minimum threshold by Member State), but the Com-
mission does not believe it can go further in this direction or that

funds can be allocated totally on a fixed amount basis without
calling into question the ERF’s fundamental objective which is to
spread the burden of managing refugees and displaced persons
within the European Union.

54.
The Commission accepts the recommendation that dis-
cussions be initiated with the Council and Parliament on the clar-
ity and precision of the eligibility rules. It would, however, point
out that there was an in-depth discussion of eligible projects and
target groups during negotiation of the legal basis for ERF 2008
to 2013. The issue of persons eligible for repatriation will be
resolved when the European Return Fund comes into force.