Commission staff working document - Annex to the report from the Commission to the European Parliament and the Council - Protection of the financial interests of the Communities – Fight against fraud – Annual report 2007 - Implementation of Article 280 of the Treaty by the Member States in 2007 {COM(2008)475} {SEC(2008) 2300}
Date: 2008-07-22
Institutions: European Commission
Subjects: European Anti-fraud Office, activity report, financial control, fraud, fraud against the EU, impact study, statistics

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.7.2008 
SEC(2008)2300 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

Annex to the 2007 Report from the Commission on the protection of the European 
Communities’ financial interests and the fight against fraud 
STATISTICAL EVALUATION OF IRREGULARITIES- OWN RESOURCES, 
AGRICULTURE, STRUCTURAL MEASURES, PRE-ACCESSION FUNDS AND 
DIRECT EXPENDITURE -YEAR 2007 
{COM(2008)475} 
{SEC(2008)2301} 

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TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

The situation in 2007.................................................................................................... 6 

Legal bases and concepts ............................................................................................. 6 

Key Facts...................................................................................................................... 8 

1.2.1.  Traditional Own Resources.......................................................................................... 9 

1.2.2.  Agriculture ................................................................................................................... 9 

1.2.3.  Structural Measures...................................................................................................... 9 

1.2.4.  Pre-accession Funds ..................................................................................................... 9 

1.2.5.  Direct Expenditure – Centralised Direct Management .............................................. 10 

PART I - REVENUES ............................................................................................................. 11 

2. 

TRADITIONAL OWN RESOURCES (ANNEXES 1-10) ....................................... 11 

2.1. 

Management of Traditional Own Resources (TOR).................................................. 11 

2.1.1.  Monitoring of establishment and recovery of TOR ................................................... 11 

2.1.2.  Procedure for managing Member States' requests for write-off ................................ 12 

2.1.3.  Particular cases of Member State failure to recover TOR ......................................... 13 

2.2. 

2.3. 

Reporting Discipline .................................................................................................. 13 

General Trends ........................................................................................................... 14 

2.3.1.  Method of detection ................................................................................................... 15 

2.3.2.  Types of irregularity and fraud .................................................................................. 16 

2.3.3. 

Irregular and fraudulent import of monitors and televisions ..................................... 17 

2.3.4.  Data main sectors TOR .............................................................................................. 19 

2.4. 

Specific analysis......................................................................................................... 19 

2.4.1.  Specific facts TOR ..................................................................................................... 19 

2.4.2.  Classification of irregularities and fraud by Member States...................................... 20 

2.5. 

Recovery .................................................................................................................... 20 

2.5.1.  Recovery rate ............................................................................................................. 20 

2.5.2. 

Impact on the budget.................................................................................................. 21 

2.6. 

Conclusions ................................................................................................................ 22 

PART II - EXPENDITURE ..................................................................................................... 24 

3. 

AGRICULTURAL EXPENDITURE (Annexes 11-12) ............................................ 24 

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3.1. 

Reporting discipline ................................................................................................... 24 

3.1.1.  Timely reporting......................................................................................................... 25 

3.1.2.  Electronic format (AFIS/ECR-module 595) .............................................................. 26 

3.1.3.  Budget year, budget line and product affected........................................................... 27 

3.1.4.  Year of detection vs year reported ............................................................................. 28 

3.1.5.  Practices employed (Art. 3 (1) (e) Reg. 1848/2006).................................................. 29 

3.1.6.  Suspected fraud (Art. 3 (1) (f) Reg. 1848/2006)........................................................ 29 

3.1.7.  Legal/natural persons identification........................................................................... 31 

3.1.8.  Summary .................................................................................................................... 32 

3.2. 

General Trends ........................................................................................................... 33 

3.2.1.  Amounts involved ...................................................................................................... 33 

3.2.2. 

Impact on the budget.................................................................................................. 34 

3.2.3.  Method of detection ................................................................................................... 37 

3.2.4.  Types of irregularity................................................................................................... 39 

3.3. 

Specific Analysis........................................................................................................ 43 

3.3.1.  Analysis of support measures..................................................................................... 43 

3.3.2. 

Irregularity versus Suspected fraud............................................................................ 50 

3.4. 

Recovery and sanctions.............................................................................................. 54 

3.4.1.  Recovery .................................................................................................................... 54 

3.4.2.  Sanctions .................................................................................................................... 55 

3.5. 

Conclusions ................................................................................................................ 56 

4. 

SRTUCTURAL MEASURES (Annexes 13-17) ....................................................... 59 

4.1. 

Reporting Discipline .................................................................................................. 59 

4.1.1.  Timely reporting......................................................................................................... 59 

4.1.2.  Electronic reporting.................................................................................................... 61 

4.1.3.  Programme identification number (CCI code)........................................................... 62 

4.1.4.  Year of detection vs year of reporting........................................................................ 63 

4.1.5.  Practices employed (art. 3(1)(d) of Reg. NN. 1681/94 and 1831/94)........................ 63 

4.1.6.  Suspected fraud (art. 3(1)(e) of Reg. NN. 1681/94 and 1831/94).............................. 64 

4.1.7.  Legal/natural persons identification........................................................................... 65 

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4.1.8.  Summary .................................................................................................................... 65 

4.2. 

General Trends ........................................................................................................... 66 

4.2.1.  Amounts involved ...................................................................................................... 69 

4.2.2. 

Impact on budget........................................................................................................ 71 

4.2.3.  Detection methods...................................................................................................... 72 

4.2.4.  Types of irregularity................................................................................................... 73 

4.2.5.  Trends related to the programming period 2000-2006 .............................................. 74 

4.3. 

Specific analysis......................................................................................................... 77 

4.3.1. 

Irregularities affecting the different funds ................................................................. 77 

4.3.2. 

Irregularities by Objective – Programming Period 2000-2006.................................. 79 

4.3.3. 

Irregularities vs suspected frauds ............................................................................... 81 

4.3.4. 

Irregularities detected before payment....................................................................... 84 

4.4. 

4.5. 

5. 

Recovery .................................................................................................................... 85 

Conclusions ................................................................................................................ 86 

PRE-ACCESSION FUNDS (Annexes 18-21)........................................................... 89 

5.1. 

Reporting discipline ................................................................................................... 89 

5.1.1.  Timely reporting......................................................................................................... 90 

5.1.2.  Time gaps ................................................................................................................... 91 

5.1.3.  Personal data .............................................................................................................. 93 

5.1.4.  Reporting thresholds .................................................................................................. 93 

5.1.5.  Practices employed..................................................................................................... 94 

5.1.6.  Classification of irregularity ...................................................................................... 94 

5.1.7.  Summary .................................................................................................................... 95 

5.2. 

General Trends ........................................................................................................... 95 

5.2.1.  Amounts involved ...................................................................................................... 97 

5.2.2.  Method of detection ................................................................................................. 100 

5.2.3.  Types of irregularity................................................................................................. 101 

5.3. 

Specific analysis....................................................................................................... 102 

5.3.1. 

Irregularities affecting different funds ..................................................................... 102 

5.3.2. 

Irregularity vs suspected fraud ................................................................................. 104 

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5.4. 

5.5. 

6. 

6.1. 

6.2. 

Recovery .................................................................................................................. 105 

Conclusions .............................................................................................................. 107 

DIRECT EXPENDITURE – Centralised direct Management................................. 110 

Methodology ............................................................................................................ 110 

General analysis ....................................................................................................... 111 

6.2.1.  Method of detection ................................................................................................. 111 

6.2.2.  Types of irregularity................................................................................................. 112 

6.2.3.  Amounts involved .................................................................................................... 114 

6.3. 

6.4. 

6.5. 

Specific analysis....................................................................................................... 117 

Recovery .................................................................................................................. 118 

Conclusions .............................................................................................................. 118 

ANNEXES ............................................................................................................................. 119 

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1. 

THE SITUATION IN 2007 

1.1. 

Legal bases and concepts 

Community  legislation  provides  for  the  protection  of  the  Community’s  financial 
interests  in  all  areas  of  activity1.  Member  States  are  required  to  notify  the 
Commission  of  evidence  of  fraud  and  other  irregularities.  This  need  is  particularly 
evident in those sectors of the Community budget where the main responsibility for 
management  is  with  the  Member  States,  namely,  in  the  fields  of  Agriculture  and 
Structural Funds (on the expenditure side) and Own Resources (on the revenue side). 
In  these  areas,  Member  States  must  inform  the  Commission  of  all  irregularities 
involving more than €10,000 of community finances. This applies at all stages in the 
procedure for recovering monies unduly paid or not received. 

Regulation  No.  1848/20062  specifies  the  requirement  for  the  agriculture  sector, 
Regulations  Nos.  1681/943  and  1831/944,  as  amended,  respectively  by  Regulations 
Nos.  2035/2005  and  2168/2005,  for  structural  measures  and  Regulation  No. 
1150/2000  for  own  resources.  In  the  case  of  pre-accession  funds  the  obligation  to 
report  irregularities  is  specified  in  Community  legislation  and  in  the  Pre-Accession 
and Accession Agreements between the European Community and the Candidate and 
Acceding States.  

The  European  Parliament  and  the  Council  adopted  a  series  of  Regulations 
introducing  a  new  system  for  the  Structural  Funds  for  the  new  2007-2013 
programming  period5.  A  revised  system  for  management  and  control  was  adopted 
through  the  new  Regulations,  introducing  a  certification  authority  and  an  audit 
authority  (replacing  the  notions  of  paying  and  control  authority).  Some  new 
responsibilities  have  now  been  added  to  the  authorities,  strengthening  the  control 
framework.  The  rules  on  reporting  irregularities  to  the  Commission  have  been 

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5 

See  in  particular  Article  3(1)  of  Council  Regulation  (EEC)  No  595/91  of  4  March  1991  (OJ  L  67, 
14.3.1997),  Commission  Regulation  (EC)  No  1681/94  of  11  July  1994  (OJ  L  178  of  12.7.1994),  as 
amended by Regulation (EC) No 2035/2005 of 12 December 2005 (OJ L 328 of 15.12.2005), and No 
1831/94 of 26 July 1994 (OJ L 191, 27.7.1994), as amended by Regulation (EC) No 2168/2005 of 23 
December 2005 (OJ L 345 of 28.12.2005), for expenditure, and Article 6(5) of Council Regulation (EC, 
Euratom) No 1150/2000 for traditional own resources. 
As  of  1st  January  2007,  also  the  threshold  for  the  agriculture  sector  has  been  increased  to  €10,000 
following the provisions contained in article 6(1) of Regulation (EC) 1848/2006 of 14 December 2006 
(OJ L 355 of 15.12.2006). 
Regulation  1681/94  applies  to  the  Structural  Funds,  that  is  to  say  European  Regional  Development 
Fund  (ERDF),  European  Social  Fund  (ESF),  European  Agriculture  Guidance  and  Guarantee  Fund 
(EAGGF) – Section Guidance and Financial Instrument for Fishery Guidance (FIFG). 
Regulation 1831/94 applies to the Cohesion Fund. 
Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the 
European Regional Development Fund and repealing Regulation (EC) No 1783/1999; Regulation (EC) 
No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social 
Fund and repealing Regulation (EC) No 1784/1999; Council Regulation (EC) No 1083/2006 of 11 July 
2006  laying  down  general  provisions  on  the  European  Regional  Development  Fund,  the  European 
Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; Council Regulation 
(EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 
1164/94, OJ L 210, 31.7.2006. 

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retained,  but  the  communication  procedure  is  now  part  of  the  implementing 
Regulations6 rather than a separate Regulation, as was previously the case. The old 
Regulations have been repealed, but will continue to apply with reference to former 
programming periods. 

The provisions to be followed are mostly based on the Commission Regulation (EC) 
No 1681/1994. Member States are required to report irregularities under Article 3 of 
these regulation (for own resources the relevant provisions are contained in Article 6, 
paragraph 5. For agriculture, the relevant provisions are contained in article 3) within 
two months of the end of each quarter. Under Article 5 (again, Article 6, paragraph 5 
for  own  resources)  they  have  to  submit  updates  of  the  cases  communicated  and 
relevant information about the financial, administrative and judicial follow-up.  

The distinction between irregularities7 and fraud is that fraud8 is a criminal act that 
can only  be determined by the outcome  of  judicial proceedings.  As such, it is only 
when the judicial procedure has come to an end that the actual amount of fraud can 
be determined. While awaiting the results, the Commission works on the basis of the 
information  supplied  by  Member  States  concerning  cases  of  irregularities  some  of 
which,  in  the  opinion  of  the  reporting  Member  States,  give  rise  to  suspicions  of 
fraud9.  The  Commission's  statistical  assessment  of,  and  ability  to  respond  to, 

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(a) 
- 

Commission  Regulation  (EC)  No  1828/2006  of  8  December  2006  setting  out  rules  for  the 
implementation  of  Council  Regulation  (EC)  No  1083/2006  laying  down  general  provisions  on  the 
European  Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund  and  of 
Regulation  (EC)  No  1080/2006  of  the  European  Parliament  and  of  the  Council  on  the  European 
Regional  Development  Fund,  OJ  L  371,  27.12.2006.  This  repeals  Regulations  (EC)  No  1681/94  and 
(EC) No 1831/94. Commission Regulation (EC) No 498/2007 of 26 March 2007 laying down detailed 
rules  for  the  implementation  of  Council  Regulation  (EC)  No  1198/2006  on  the  European  Fisheries 
Fund.  
According to the definition provided for in Article 1(2) of Regulation No. 2988/1995, 'Irregularity` shall 
mean  any  infringement  of  a  provision  of  Community  law  resulting  from  an  act  or  omission  by  an 
economic  operator,  which  has,  or  would  have,  the  effect  of  prejudicing  the  general  budget  of  the 
Communities  or  budgets  managed  by  them,  either  by  reducing  or  losing  revenue  accruing  from  own 
resources  collected  directly  on  behalf  of  the  Communities,  or  by  an  unjustified  item  of  expenditure. 
Sectoral legislation now reproduce a very similar definition adapted to the specific sector concerned. 
According  to  the  definition  provided  for  in  Article  1  of  the  Convention  on  the  protection  of  the 
Community’s financial interests of 26 July 1995 (OJ C No 316 of 27.11.1995), which entered into force 
on 17 October 2002, «[…] fraud affecting the European Communities' financial interests shall consist 
of: 
in respect of expenditure, any intentional act or omission relating to: 
the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect 
the  misappropriation  or  wrongful  retention  of  funds  from  the  general  budget  of  the  European 
Communities or budgets managed by, or on behalf of, the European Communities, 

- non-disclosure of information in violation of a specific obligation, with the same effect, 
- the misapplication of such funds for purposes other than those for which they were originally granted; 
(b) in respect of revenue, any intentional act or omission relating to: 
- the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the 
illegal  diminution  of  the  resources  of  the  general  budget  of  the  European  Communities  or  budgets 
managed by, or on behalf of, the European Communities, 

- non-disclosure of information in violation of a specific obligation, with the same effect, 
- misapplication of a legally obtained benefit, with the same effect.» 
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According  to  the  definition  provided  for  in  Article  1a  of  Reg.  No.  1681/94  as  amended  by  Reg.  No. 
2035/2005, ‘suspected fraud’ means an irregularity giving rise to the initiation of administrative and/or 
judicial  proceedings  at  national  level  in  order  to  establish  the  presence  of  intentional  behaviour,  in 
particular fraud, such as is referred to in Article 1(1), point (a), of the Convention on the protection of 

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irregularities is influenced by the accuracy and timeliness of the notifications made 
by the Member States.  

The  practices  of  the  national  administrations  still  vary,  though  improvements  have 
been  achieved  thanks  to  the  efforts  made  to  harmonise  their  approaches.  The  data 
communicated  by  Member  States  is  sometimes  incomplete.  Furthermore,  the 
distinction  between  “suspected  frauds”  and  other  irregularities  is  not  consistent  as 
Member  States  do  not  always  have  the  same  definition  of  criminal  risk. 
Consequently,  a  significant  proportion  of  communications  received  by 
the 
Commission do not distinguish between suspected fraud and irregularity. 

The Commission works in close cooperation with the Member States to improve the 
notification system for irregularities, in particular to clarify the concepts of “fraud” 
and “irregularity”10 and as a result of this, attempts to measure the possible economic 
impact of fraud in certain sectors have been made. However, for the reasons outlined 
above,  the  figures  presented  below  should  be  interpreted  with  caution.  It  would  be 
particularly  inappropriate  to  draw  simple  conclusions  about  the  geographical 
distribution  of  fraud  or  on  the  efficiency  of  the  services  which  contribute  to  the 
protection of financial interests.  

1.2. 

Key Facts 

Annex  22  gives  an  overview  of  all  irregularities  communicated  by  Member  States 
under Regulation No. 1848/2006 for the agriculture sector, Regulations Nos. 1681/94 
and  1831/94  for  structural  measures  and  Regulation  No.  1150/2000  for  own 
resources.  No  irregularities  have  been  yet  communicated  under  Regulation  No. 
1828/2006. 

In general,  the number of irregularities notified for the year 2007 has decreased by 
9%. 

The following paragraphs will provide details concerning the different sectors of the 
budget analysed in this document. 

The  total  number  of  irregularities  has  increased  for  traditional  own  resources  and 
structural funds. It has also increased for the pre-accession funds. It has decreased for 
the cohesion fund and agriculture. 

However,  the  total  financial  amounts  affected  by  irregularities  notified  for  the  year 
2007 has increased by 19%. 

10 

the  European  Communities'  financial  interests.  Similar  definitions  are  inserted  in  relevant  sectoral 
regulations  as  Reg.  No.  1848/2006,  for  agriculture  and  Reg.  No.  1828/2006  for  the  Structural  Funds 
new programming period 2007-2013. 
The  Commission  opened  a  dialogue  with  the  representatives  of  the  Member  States  to  clarify  basic 
concepts and to re-assure Member States that the communication of irregularities in no way prejudices 
the outcome of criminal judicial proceedings. A working document on the practical modalities for the 
communication of irregularities was established. Discussions are continuing in the Advisory Committee 
on the Coordination of Fraud Prevention. 

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The  total  amounts  affected  by  irregularities  have  increased  for  traditional  own 
resources,  agriculture  and  structural  funds.  Irregular  amounts  also  increased  for  the 
pre-accession funds. They have decreased for the cohesion fund. 

1.2.1.  Traditional Own Resources 

In 2007, the number of cases of irregularities communicated by the Member States 
decreased from 5,705 to 5,321. However, the amount of TOR increased from EUR 
353 million to EUR 377 million. 

Communications from the ten new Member States have continued to grow since their 
accession in 2004. This is a result of increasing familiarity with the requirements of 
the reporting system. 

1.2.2.  Agriculture 

In  2007,  OLAF  processed  7,155  communications  under  Regulation  (EC)  No 
1848/2006.  A  large  number  of  these  communications,  i.e.  6,406,  were  updates  of 
cases that had been reported prior to 2007.  

Member States reported 1,548 new irregularities compared with 3,249 in 2006. The 
total amount affected in 2007 was about EUR 155 million, as against approximately 
EUR 87 million in 2006. 

Irregularities notified in this sector represent 0.33% of the agricultural budget. 

1.2.3. 

Structural Measures 

In  2007,  Member  States  reported  3,740  irregularities  under  Regulation  (EC)  No. 
1681/94 which covers the four Structural Funds and 92 under Regulation (EC) No. 
1831/94 (on the Cohesion Fund). In 2006 the reported irregularities were 2,988 and 
228 respectively. 

The  total  amount  affected  by  irregularities  in  2007  was  about  EUR  827.6  million, 
EUR 717.4 million of which was from the Structural Funds (EUR 516.6 million in 
2006) and EUR 110.2 million from the Cohesion Fund (EUR 186.6 million in 2006).  

Irregularities reported in this sector were equivalent to 1.83% of the budget allocated 
to structural measures in 2007. 

1.2.4.  Pre-accession Funds 

In  2007  Member  States  and  Acceding  Countries  sent  to  OLAF  1,615  reports  of 
which 332 new communications and 1,283 updates of cases which had been reported 
previously.  

The  total  amount  affected  by  irregularities  reported  in  2007  was  EUR  32  million 
where PHARE accounts for EUR 16 million (96 cases), SAPARD – EUR 11 million 
(150 cases), ISPA – EUR 6 million (86 cases). 

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Irregularities reported in this sector represent 2.46% of the budget allocated to pre-
accession measures in 2007. 

1.2.5.  Direct Expenditure – Centralised Direct Management 

In 2007, 411 cases of irregularities were detected by Commission Services. 

The  total  value  of  contracts  in  which  irregularities  have  been  detected  amounts  to 
EUR 300 million of which EUR 33 million has been identified as irregular 

The financial impact of these irregularities amounted to 0.30% of the total value of 
contracts managed on a centralised direct basis by the Commission. 

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PART I - REVENUES 

2. 

TRADITIONAL OWN RESOURCES (ANNEXES 1-10) 

2.1.  Management of Traditional Own Resources (TOR) 

The Community must have access to Traditional Own Resources ('TOR')11 under the 
best possible conditions. In conformity with Regulation (EC, Euratom) 1150/200012 
Member States are responsible for making available to the Commission, within  the 
deadlines  set,  TOR  that  they  have  established.  Established  amounts  of  customs  or 
agricultural  duties  which  have  been  recovered  and  debts  which  are  guaranteed  and 
not under appeal are to be made via the A-account. However where TOR has been 
established by a Member State but not yet recovered and where no security has been 
provided or the established amount has been disputed Member States may enter these 
TOR amounts in the B- account. These amounts of TOR are not then made available 
until actually recovered. Most fraud and irregularity cases relate to B-account items. 

2.1.1.  Monitoring of establishment and recovery of TOR 

In  order  to  get  the  right  picture  of  Member  States  TOR  recovery  activity  it  is 
important  to  keep  in  mind  that  over  95%  of  all  amounts  of  TOR  established  are 
subsequently recovered without particular problem. These amounts are entered in the 
A-account and made available to the Commission. This covers most of the 'normal' 
import  flows  where  release  for  free  circulation  gives  rise  to  a  customs  debt.  The 
remaining exceptional items are entered in the B-account. This proportion should be 
borne in mind when evaluating Member States' recovery activity. In return for their 
collection  task,  and  to  support  sound  and  efficient  management  of  public  finances, 
Member  States  may  keep  25%  of  the  amounts  involved.  In  its  capacity  as 
Authorizing Officer responsible for executing the EU budget, the Commission (DG 
Budget as delegated Authorizing Officer) monitors Member State activity concerning 
establishing and recovering TOR. 

The following three methods are used: 

1.  Overall monitoring of recovery of TOR via the write-off procedure; 

Regular  inspection  in  Member  States  of  the  establishment  and  recovery  of 

2. 
TOR, and B-account entries; 

3. 
Specific  monitoring  (in  close  cooperation  with  OLAF)  of  Member  States 
follow-up of recovery in individual cases with significant financial impact and which 
involve Mutual Assistance.  

These three methods allow the Commission to monitor Member States' performance 
without interfering too much in their day to day operations. 

11 
12 

These are mainly customs and agricultural duties. 
Regulation 1150/2000 of 22 May 2000. 

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2.1.2.  Procedure for managing Member States' requests for write-off  

take  all  available  measures 

Member  States  must 
that  amounts 
corresponding to the entitlements established are made available to the Commission. 
This  requirement  is  in  Article  17.1  of  Regulation  1150/2000.  That  article  also 
provides  that  a  Member  State  may  only  be  released  from  its  obligation  where 
established entitlements prove irrecoverable either: 

to  ensure 

(a) for reasons of force majeure; or 

(b) for other reasons which cannot be attributed to that Member State. 

Amounts of established entitlements become irrecoverable by one of two routes. The 
first  is  by  a  decision  of  a  Member  State  declaring  that  they  cannot  be  recovered  – 
this  declaration  may  be  made  at  any  time.  However,  TOR  must  be  deemed 
irrecoverable by a Member State at the latest five years from the date on which the 
amount  was  established,  or  in  the  event  of  an  administrative  or  judicial  appeal,  the 
final  decision  was  given,  or  the  last  part-payment  of  an  established  amount  was 
made,  whichever  is  the  later.  Where  the  irrecoverable  amount  of  TOR  exceeds  a 
threshold  of  EUR  50,000  the  write-off  must  be  reported  to  the  Commission.  For 
amounts under EUR 50,000, Member States do not have to communicate the case to 
the  Commission  unless  the  Commission  makes  a  specific  request.  A  2004 
amendment  to  Regulation  No  1150/200013  introduced  the  5-year  timeframe  within 
which a Member State has to provide the Commission with information on amounts 
of established entitlements of TOR deemed irrecoverable. As a result it is expected 
that  before  2009  there  will  be  a  marked  increase  in  requests  by  Member  States  to 
write-off  established  TOR  amounts  deemed  irrecoverable,  whereas  2007  showed  a 
decrease in requests compared with 2006 (↓ 60 requests). The increase will consist of 
old  cases  not  yet  reported  to  the  Commission,  but  which  meet  the  5-year  deadline 
triggering  application  of  the  write-off  procedure.  DG  Budget  is  preparing  to  deal 
with  the  anticipated  increase  in  the  number  of  cases.  A  new  IT-application  called 
WOMIS14 will be introduced in 2008 to support Member States and DG Budget in 
managing the write-off requests. 

In  2007  100  write-off 
to  EUR  37,854,293.39  were 
communicated to the  Commission  by 8 Member States. In total, 117 requests were 
processed in 200715 with the following result:16  

requests  amounting 

13 
14 
15 

16 

Regulation No. 2028/2004, amending Regulation No. 1150/2000. 
WOMIS: Write-Off Management and Information System.  
Origin of the cases: 8 cases from Belgium, 62 from Germany, 9 from Denmark, 8 from France, 2 from 
Italy, 1 from the Netherlands, 6 from Sweden and 4 from the UK. 
The breakdown between the amounts for each of the positions is, at present, only an estimate because 
sometimes  elements  from  the  same  case  may  be  partly  accepted,  considered  not  suitable  or  refused. 
Additional information from the Member States (in particular on the proportion covered by guarantee) 
is then needed to provide the final classification and quantification of the amounts concerned. 

EN 

12 

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Table OR 1: Write-off requests treated in 2007 – results  

Commission position 
Unsuitable exemption request 

Write-off accepted 

Required additional information 

Write-off refused 

TOTAL 

cases  % cases 

€ 

% amount 

0

79

23

16

0%

0 

66,90% 33,250,905.56 

19,60% 4,458,985.69 

13,55% 28,143,171.43 

118*

100% 65,953,062.68 

0%

50,41%

6,76%

42,67%

100%

* One case was part accepted and part refused so the total is 118. 

Examination  of  Member  States  diligence  in  these  cases  constitutes  a  very  effective 
mechanism for gauging their activity in the field of recovery. It encourages national 
administrations to intensify  their recovery activity  in  terms  of  regularity,  efficiency 
and  effectiveness,  since  a  lack  of  diligence  leading  to  failure  to  recover  results  in 
individual Member States having to foot the bill. During 2007 over EUR 16.5 million 
was paid by Member States, because of refused write-offs. 

2.1.3.  Particular cases of Member State failure to recover TOR  

Where  TOR  are  not  established  because  of  an  administrative  error  by  a  Member 
State, the Commission applies the principle of financial responsibility17. As a result 
during  2007  over  EUR  20  million  was  paid  by  Member  States,  aside  from  belated 
interest18.  

All  together  the  cases  of  financial  responsibility  dealt  with  by  DG  Budget  up  until 
the end of 2007 total nearly EUR 190 million. The main objective of this procedure 
is  to  encourage  individual  Member  States  to  improve  their  administrations' 
performance and to address weaknesses leading to a loss of TOR and national taxes. 
This money is in effect transferred back to the Member States in proportion to their 
contribution to the EU budget as it reduces their contributions via the GNI-resource. 

2.2. 

Reporting Discipline  

Under  Article  6(5)  of  Regulation  1150/2000,  Member  States  are  required  to 
communicate  to  the  Commission,  via  the  OWNRES  system19,  cases  of  fraud  and 
irregularity where the TOR-amount exceeds EUR 10,000. The requirement to report 
such cases is designed to inform the Budgetary Authority of the state of play relating 
to  fraud  and  irregularities  in  TOR.  This  political  dimension  is  a  clear  signal  to  all 
stakeholders  of  the  importance  of  prompt,  accurate  and  complete  reporting.  The 
OWNRES-database  is  a  key  tool  obtaining  data  for  global  analyses  of  fraud  and 
irregularities, and presents valuable information to the Budgetary Authority. 

17 

18 
19 

Case  C-392/02  of  15  November  2005.  These  cases  are  identified  on  the  basis  of  Articles  220(2)b 
(administrative errors not detectable by the operator) and 221(3) (time-barring resulting from Customs' 
inactivity ) of the Community Customs Code; of Articles 869 and 889 of the Provisions for application 
of  the  Code;  or  on  the  basis  of  non-observance,  by  the  customs  administration,  of  articles  of  the 
Community Customs Code giving rise to legitimate expectations on the part of an operator. 
In such a situation there is no registration in OWNRES of the fraud or irregularity. 
OWNRES is an abbreviation for Own Resources. 

EN 

13 

   EN 

 
                                                 
Because  all  TOR-amounts  exceeding  EUR  10,000  in  the  B-account  represent  an 
irregularity  (fraud  included)  by  definition  a  match  between  the  two  from  the 
perspective  of  the  B-account  should  be  100%20.  In  the  past  (2003-2006)  specific 
attention  was  given  to  this  question  in  ACOR21  meetings,  resulting  in  an 
improvement in matching from 30% in 2003 to over 90% in 2006. In the absence of 
any signals of significant changes in 2007 no new comparison has been demanded by 
the  Commission.  However,  previous  experience  had  shown  shortcomings  in 
registering  in  OWNRES  irregularities  where  no  debt  was  subsequently  established 
(most  commonly  cigarette  smuggling  where  the  goods  are  seized  and  subsequently 
confiscated thus extinguishing the debt) so a reminder was sent to Member States in 
2007. This has resulted in improvements in registration22. 

OWNRES is not a reliable source of data on fraud alone isolated from  irregularity. 
This is because (until a Court judgement  is obtained) the  distinction between  fraud 
and  irregularity  has  usually  been  made  on  subjective  grounds.  These  grounds  vary 
greatly  between  national  administrations  and  so  the  results  cannot  be  relied  upon. 
Please bear these considerations in mind, when looking at the following analysis of 
OWNRES data. 

Year of detection versus year reported  

Cases should be included in OWNRES upon the initial discovery of the irregularity 
or fraud case. As a result the year of the customs operation and the year of discovery 
of  the  irregularity  or  fraud  can  diverge.  Member  States  are  continually  adding  new 
cases  and  updating  existing  items.  So  the  information  generated  by  OWNRES 
represents  the  situation  on  the  date  of  the  query.  For  instance,  the  number  of 
irregularities  and  frauds  concerning  2006  in  last  year's  report  was  5,243  cases 
whereas the number of cases now shown for 2006 is 5,705 cases23. This continuing 
development is inherent to the system. 

2.3. 

General Trends  

The  number  of  cases  communicated  to  OWNRES  decreased  by  6.7%  in  2007  in 
comparison with 2006 (from 5,705 in 2006 to 5,321 in 2007), but the amount of TOR 
involved  increased  by  nearly  7%  (up  from  EUR  352  million  in  2006  to  EUR  377 
24.  The  trend  for  the  number  of  belatedly  discharged  transit 
million  in  2007)
operations  to  decrease  continued25,  although  their  proportion  of  the  amount 
increased. 

20 

21 
22 
23 

24 
25 

Items registered in OWNRES are not necessarily also in the B-account. Where a debt has been paid or 
not established (for instance where goods have been seized and confiscated) the amounts should not be 
entered in the B-account.  
ACOR= Advisory Committee on Own Resources, section Traditional Own Resources. 
See annex 8. 
The information generated by OWNRES used to produce the figures in this chapter was all requested 
by queries made on 9 March 2008. 
See annex 1 (table) and annex 2 (chart). 
In 2005 the number of cases of belatedly discharged Transit was 2,325 being 38.4% of the total number 
of cases registered and 3.7% of the total amount. In 2006 there were 1,440 cases (25.2% of the cases 
and 4.4% of the total amount) and in 2007 there were 1,193 cases (22.4% of the cases and 6.9% of the 
amount). 

EN 

14 

   EN 

 
                                                 
Communications from the ten new Member States have continued to grow since their 
accession in 2004, however the rate of growth has significantly slowed. 2007 shows 
12%  growth  when  compared  with  2006  whereas  when  2006  was  compared  with 
2005, it showed growth of 47%. If the comparisons are made using the amounts of 
TOR, the growth rates are 22% and 123% respectively. 

The OWNRES database now contains 44,103 cases in total (1989-2007), showing an 
increase of over 16% during 2007. Significant changes in the number of registrations 
in  2007  compared  with  2006  can  be  seen  for  Poland  (+129%),  Latvia  (+43%), 
Portugal  (+35%),  the  Czech  Republic  (-38%),  and  Spain  and  Hungary  (-35%). 
Significant  changes  in  amounts  can  be  seen  in  Poland  (+374%),  Belgium  (+90%), 
Portugal (-52%), the UK (+87%) and Spain (-57%). 

2.3.1.  Method of detection 

A  variety  of  detection  methods  can  reveal  irregularity  or  fraud.  Judging  from  the 
2007  data  the  most  fruitful  methods  are  national  post-clearance  inspections  and 
primary national inspections (either physical inspections or inspections of documents 
– the latter category featuring most frequently). Post-clearance inspections feature in 
43.6% of the cases discovered whereas primary national inspections cover 36.5%. 

It seems that the shift which could already be seen in 2006 from primary (38.4%) to 
post-clearance inspections (41.1%) is continuing in 2007. It may mark the beginning 
of  a  trend  related  to  ongoing  changes  in  declaration  and  control  procedures.  The 
relative  importance  of  inspections  by  anti-fraud  services  was  stable  with  6.9%  in 
2007 compared to 7.9% in 2006. 

Chart OR 1: Method of detection 2005-2007 

NUMBER OF CASES

METHOD OF DETECTION 2005-2007

2.500

2.000

1.500

1.000

500

0

Audit of the
accounts

Comm unity
ins pections

Ins pection by
anti-fraud
s ervices

Ins pection vis it National pos t-

clearance
ins pections

Prim ary
national
ins pections

Tax audit

Voluntary
adm is s ion

METHOD OF DETECTION

2005

2006

2007

EN 

15 

   EN 

 
 
2.3.2.  Types of irregularity and fraud 

A  breakdown  of  frauds  and  irregularities  by  customs  procedure  and  by  mechanism 
type  confirms  that  release  for  free  circulation  is  the  procedure  most  commonly 
specified  (64%  of  the  cases26).  Smuggling,  misdescription  and  false  declarations 
(incorrect  value,  origin,  and  preferential  arrangements)  are  the  mechanisms  most 
frequently mentioned. 

The  goods  (defined  by  the  first  two  numbers  of  the  CN-code27)  most  affected  by 
fraud and irregularities in 2007, as in previous years, are TVs/monitors etc. (CN 85) 
and tobacco products (CN 24). Vegetables (specifically garlic) (CN 07) increased in 
importance  when  compared  to  2006  as  did  footwear  (CN  64),  (parts  of)  cars  and 
motors (CN 87) and clothing (CN 61-62), whereas meat (CN 02), articles of iron and 
steel (CN 73) and cereals (CN 10) went down28. 

Chart OR 229: Fraud and irregularities – breakdown by goods in 2007 

Fraud and Irregularities - breakdown by goods in 2007 in Mio. €  

Others 46 (12%)

Animals and products 

thereof 14 (4%) 

Metals 16 (4%) 

Footwear 18 (5%) 

Chemical products 20 (5%) 

Vehicles etc. 24 (6%) 

TV's, (computer) monitors 

 etc.113 (31%) 

Vegetables 28 (7%)

Textile 46 (12%)

Food, Drinks and

Tobacco 50 (14%) 

Analysis of the origin of goods subject to fraud and irregularity30 reveals that, just as 
in 2006, goods originating from China, Japan, the USA, Thailand and South Korea 
remain very much affected. The number of cases in the origin category non-specified 
decreased, as in 2006, in parallel with the decrease in Transit cases. 

26 

27 
28 
29 

30 

See annex 3. In 2005 there was a decrease in importance of the customs procedure free circulation (53% 
of  the  cases)  which  was  directly  related  to  an  increase  in  cases  of  transit  (38%  of  the  cases).  This 
increase of transit cases was in its turn linked to an improvement in registering those cases. 
Combined nomenclature or CN - nomenclature of the Common Customs Tariff. 
See annex 4 and 5. 
The product description in the chart is a generic description the goods involved. See annexes 4 and 5 for 
detailed analyses.  
See annex 6. 

EN 

16 

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2.3.3. 

Irregular and fraudulent import of monitors and televisions 

Specific OWNRES queries were made about imports in CN 8531 and for CN 85 28 
specifically (TVs and monitors), because these goods showed the highest risk in past 
years therefore gaining the attention of Parliament and the Commission.  

Interpreting the data in OWNRES presented below, it is important to realize that the 
date  on  which  an  irregularity  or  fraud  is  discovered  by  customs  does  not  have  to 
coincide with the date of occurrence of the fraud or irregularity itself. In OWNRES 
Member States register the date upon the initial discovery of the irregularity or fraud. 
This  means  that  no  conclusions  about  the  date  of  occurrence  of  the  fraud  or 
irregularity itself can be drawn based on the OWNRES data alone, unless the fraud 
or  irregularity  was  discovered  as  a  result  of  primary  national  inspections  involving 
the release for free circulation customs procedure. In that case the discovery usually 
coincides  with  the  moment  of  the  import  declaration  (presuming  the  case  is 
registered  accurately  by  the  Member  State).  As  a  result  one  should  be  very  careful 
drawing  conclusions  about  fraud  or  irregularities  by  extrapolating  the  figures  and 
interpreting them as today's risks. 

The cases for 2007 relating to CN 85 (932 cases) indicate a TOR impact of EUR 93 
million,  whereas  both  in  2006  (1031  cases)  and  in  2005  (1102  cases)  the  amount 
involved was EUR 65 million. Of the 932 cases for 2007, 622 are closed (i.e. paid or 
no  longer  due)  leaving  310  cases  open,  of  which  98  cases,  representing  EUR  14 
million (15% of the total amount), are indicated as fraudulent. Of these 98 cases, 44 
cases  were  discovered  during  a  primary  national  inspection  during  the  release  for 
free circulation customs procedure, involving EUR 8 million. For this last group of 
cases, where in principle the date of discovery coincides with the date of the fraud, 
one  could  conclude  there  is  a  current  risk  of  this  type  of  fraud,  however  in  those 
circumstances the traditional own resources that could be due are usually guaranteed 
before the goods are released for free circulation. In the table below the figures are 
compared with 2005 and 2006. 

Table OR2: open fraud cases free circulation customs procedure - 2005-2007 

2005 

2006 

2007 

Total 
(I) 

Open  fraud 
cases (II) 

Open fraud cases 
free  circulation 
(III) 

Total (I) 

Open 
cases (II) 

fraud 

Open fraud cases 
free  circulation 
(III) 

Total (I) 

Open 
cases (II) 

fraud 

Open  fraud  cases 
free 
circulation 
(III) 

1102 

90 

37 

1031 

122 

53 

932 

98 

44 

€65 
MLN 

€8 MLN 

€1.2 MLN 

65 MLN 

€8 MLN 

€ 4 MLN 

€ 93 MLN 

€ 14 MLN 

€ 8 MLN 

(1) Total number of cases of irregularity and fraud. 

(II)Open cases registered as fraud. 

(III) Open fraud cases discovered during primary national inspections during release for free circulation customs procedure  

Incorrect  classification  is  the  primary  cause  -  EUR  40  million  of  the  total  amount 
registered.  Half  of  that  relates  to  TVs  and  monitors  proper  to  CN  85  28  being 

31 

CN  85:  Electrical  machinery  and  equipment  and  parts  thereof;  sound  recorders  and  reproducers, 
television image and sound recorders and reproducers, and parts and accessories of such articles. 

EN 

17 

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initially  declared  as  computer  monitors  (CN  84  71).  Another  cause  was 
misdescription  of  origin  -  this  accounted  for  some  EUR  13  million  of  the  amounts 
registered in 2007, but actually related to goods from China (TVs (CN 85 28)) all of 
which  had  been  imported  in  earlier  years.  This  trade  was  the  focus  of  inquiries  as 
types  of 
Member  States  followed  up  MA  communication  2002/06.  Other 
irregularities (or fraud) totalled EUR 3 million. Summarizing, for 2007, 93% of the 
cases involving CN 85 28 were related to incorrect classification, making it, just as in 
previous years, the most common type of irregularity or fraud.  

Focusing  on  CN  85  28,  the  financial  impact  trend  of  all  cases  is  up  overall  after  a 
drop last year. In 2005 the amount involved was EUR 28 million (226 cases), in 2006 
(247 cases) the amount involved dropped to EUR 13 million, whereas in 2007 (246 
cases) the amount increased to EUR 56 million.  

In the table below you will find the figures for 2005-2007 where the total number of 
cases  involving  CN  85  28  is  compared  with  the  cases  discovered  during  primary 
national  inspections  regarding  the  release  for  free  circulation  customs  procedure 
85). 
(identical 

analysis 

above 

like 

CN 

for 

EN 

18 

   EN 

 
Table OR3:comparison of cases involving CN85 28 with cases free circulation 2005-
2007 

2005 

2006 

2007 

Total (I) 

Open 
cases (II) 

fraud 

Open fraud cases 
free  circulation 
(III) 

Total (I) 

Open fraud cases 
(II) 

fraud 
free 

Open 
cases 
circulation 
(III) 

Total (I) 

Open  fraud 
cases (II) 

fraud 
free 

Open 
cases 
circulation 
(III) 

226 

29 

8 

247 

26 

10 

246 

37 

23 

€28 MLN 

€2.3 MLN 

€0.3 MLN 

€13.5 

€1.6 MLN 

€1.2 MLN 

€ 56 MLN 

€ 8.5 MLN 

€ 6.7 MLN 

MLN 

(1) Total number of cases of irregularity and fraud. 

(II)Open cases registered as fraud. 

(III) Open fraud cases discovered during primary national inspections during release for free circulation customs procedure. 

The  figures  show  an  increase  in  registered  fraud  cases  during  the  release  for  free 
circulation  customs  procedure  in  2007  for  CN  85  28,  however  before  drawing 
conclusions, further analysis is necessary. OWNRES does not provide enough details 
or background information for that. 

MA communications 

In 2007 there was a reference to an MA communication in 9% of the cases regarding 
CN  85  involving  an  amount  of  EUR  14  million  (15%  of  the  total  amount)32.  The 
percentage  of  cases  in  which  there  is  a  reference  to  MA  communications  remains 
relatively  stable,  having  been  7%  in  2005  and  6%  in  2006.  The  percentage  of  the 
amount involved is more volatile as in 2005 it was 18%, and in 2006, 28%. We also 
looked specifically at references for MA communications for those items relating to 
CN 85 28. We found that 24 references (10%) had been made in 2007 for an amount 
of EUR 9 million (16%)33. 

2.3.4.  Data main sectors TOR 

See annex 1-10. 

2.4. 

Specific analysis 

2.4.1. 

Specific facts TOR 

In  2007  there  were  182  cases  registered  of  seized  and  confiscated  cigarettes  (CN 
code 24 02 20 90) involving estimated34 TOR of over EUR 15 million. The twelve 
new Member States were responsible for registering in OWNRES 73 cases totalling 
EUR 5.5 million with newcomer Romania detecting 19 cases. In 2006 the number of 
registered  cases  concerning  seized  and  confiscated  goods  was  147  totalling  EUR 

32 

33 
34 

These 81 cases with a reference to an MA communication, involving €14 million, do not coincide with 
the 98 open cases involving €14 million as well. 
MA 2005/009 was the most important involving 20 cases and €7.5 million.  
See annex 8. The numbers for this year differ significantly from last year's report in an effort to correct 
for variations between Member States' methods of registering these cases. 

EN 

19 

   EN 

 
                                                 
10.5  million  of  which  the  then  ten  new  Member  States  had  detected  59  cases 
involving EUR 3.5 million.  

2.4.2.  Classification of irregularities and fraud by Member States 

OWNRES cases concern custom operations involving irregularity or fraud. Of all the 
cases  registered  in  2007  23%  (1215  of  5321  registered  cases)  are  categorised  as 
frauds,  that  is  the  same  proportion  as  in  2006  (1327  of  5705  registered  cases)35. 
However,  differences  between  Member  States  in  the  proportion  so  categorised  are 
relatively large. For instance in 2007, the United Kingdom categorised only 103 out 
of  1,069  cases  as  fraud  (equivalent  to  9.6%)  whereas  Greece  so  categorised  100% 
(53  out  of  53  cases  communicated)  and  France  46.4%  (149  out  of  321  cases 
notified).  For  2006  the  figures  were  for  the  UK  0.11%  (1  out  of  882),  for  Greece 
100%  (46  out  of  46)  and  for  France  10.2%  (32  out  of  314).  These  figures 
demonstrate that the categorisation of irregularity and fraud in OWNRES is not yet 
fully reliable. 

2.5. 

Recovery 

2.5.1.  Recovery rate 

Member States have to recover established amounts including those they register in 
OWNRES.  However,  for  a  variety  of  reasons  an  established  amount  may  not  be 
completely  recovered,  despite  Member  States'  efforts.  The  proportion  varies  from 
Member  State  to  Member  State.  Differences  arise  from  things  such  as  the  type  of 
fraud or irregularity, and the type of debtor or judicial procedures involved. Amounts 
established may change because of additional information or judicial procedures, or 
the debt may be deemed irrecoverable because of the debtors' financial problems.  

The  Recovery  Rate  ('RR')  expresses  the  percentage  of  the  established  debt  that  is 
actually  recovered.  It  is  constantly  changing  because  of  the  ongoing  processes  of 
recovery  in  Member  States.  The  overall  RR  for  2006  recorded  in  last  year's  report 
was 32% although it has since climbed to 40%. At present the RR for 2007 is 40%36 
which  is  a  good  starting  position,  because  over  the  last  decade  the  RR  has  varied 
between 40% and 55% (see OR: Chart 3)  

The RR of the 10 Member States which acceded in 2004 is, at the moment, slightly 
below  the  relatively  good  start  they  had  displayed.  They  will  now  be  facing  a 
growing  number  of  post-clearance  controls  covering  periods  after  their  accession. 
The  RR  for  Romania  and  Bulgaria  is  relatively  low,  however  excluding  cases  of 
smuggled and seized cigarettes it is above the average rate of the EUR-27. 

35 
36 

See annex 9. 
See annex 7. 

EN 

20 

   EN 

 
                                                 
 
Chart OR 3: Recovery rates 1996-2007 

Recovery Rates 1996-2007

60,00%

50,00%

40,00%

%

30,00%

20,00%

10,00%

0,00%

EUR-15 

EUR-10

EUR-2

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Year

* For 2001 the average RR is only 26%, because of the impact of Italy's RR, which is 2.14 % on an 
established amount of EUR 94 million. 

Recovery in case of fraud 

OWNRES shows that the amount of TOR due in fraud cases decreased in 2007. As 
part  of  the  overall  amount  of  irregularities  and  fraud  cases  registered  the  share  of 
fraud was EUR 106 million compared to EUR 158 million in 200637.  

The amount recovered in cases of fraud was EUR 18 million in 2007, which gives a 
fraud recovery rate of 17.3%. For 2006 the total has reached EUR 32 million which 
gives a rate of 20.2%. However, one can not say yet that 2006 was better, because 
the recovery rates, as mentioned before, change with elapsed time. The recovery rate 
in  cases  of  fraud  is  clearly  much  lower  than  that  for  irregularities  since  the  overall 
recovery rate in 2007 is 40%. This can be explained by the length and complexity of 
procedures. 

2.5.2. 

Impact on the budget 

The amounts that were registered in OWNRES for 2007 have a financial impact of 
EUR 377 million. Over the last decade the value of amounts has ranged from EUR 
200  million (year  1997)  up  to  EUR  377  million  (year  2007).  The  amounts  change 
continuously, as the figure is based on established amounts registered in OWNRES 
which are updated with corrections that can be significant38.  

37 
38 

See annex 10. For the delay in registration see the paragraph on reporting discipline. 
E.g.  for  the  year  2000  the  maximum  impact  was  initially  €  516  million.  Corrections  of  over  €250 
million because of remissions changed it to €244 million at present. 

EN 

21 

   EN 

 
 
                                                 
Chart OR 4: Financial Impact TOR 1997-2007 

Financial Impact TOR 1997-2007

Million 
Euro

600

500

400

300

200

100

0

Total Member States

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Year

2.6. 

Conclusions  

In its capacity as Authorizing Officer, the Commission (DG Budget is the delegated 
Authorizing  Officer)  monitors  the  establishment  and  recovery  of  TOR  by  Member 
States  in  various  ways.  The  monitoring  is  carried  out  in  partnership  with  different 
Commission services, including OLAF.  

Once  a  debt  is  established  a  Member  State  can  only  be  discharged  from  the 
obligation to make the TOR available to the Commission because of force majeure 
or  for  reasons  which  can  not  be  attributed  to  the  Member  State  concerned.  As 
Member States are responsible for making TOR available to the EU Budget, should 
they  wish  to  be  released  from  their  obligation  in  a  particular  instance  they  need  to 
prove  that  one  of  these  circumstances  exists.  Where  debts  are  not  established 
although they should have been, Member States are held liable for the TOR foregone 
(these  cases  are  not  registered  in  OWNRES).  As  a  result  Member  States  made 
available over EUR 36 million in 2007. Some actions are still ongoing and new cases 
are being given appropriate follow up.  

Because  of  the  particular  interest  the  Budgetary  Authority  has  in  recovery,  reliable 
information  regarding  the  number  of  cases  of  irregularity  and  fraud  and  their 
development  must  be  entered  in  OWNRES.  Member  States  have  a  special 
responsibility  to  ensure  that  appropriate  statistical  information  on  irregularity  and 
fraud  is  provided  to  the  Commission.  Therefore  in  2007  Member  States  were 
requested to address the shortcomings in registration in OWNRES of cases where no 
debt needed to be established (usually smuggled cigarettes). 

Regarding the reliability of information in OWNRES, making a distinction between 
irregularity and fraud or analysing fraud separately is risky and the output is not very 
useful. Only Court decisions make it certain whether a case is one of irregularity or 
fraud,  whereas  within  OWNRES 
is  usually  based  on  a 
prognostication  made  by  Member  States'  administrations. The figures  in  OWNRES 
showing  marked  differences  in  the  proportions  of  cases  denoted  as  frauds  or 
irregularities  between  Member  States  point  that  out  clearly. OWNRES  can  only  be 

this  distinction 

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22 

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used for global analysis and monitoring. For cases where there is no debt (seized and 
confiscated smuggled goods) reporting is improving but still not reliable.  

The amounts of TOR at stake in irregularity and fraud are, according to OWNRES, 
up  to  EUR  377  million  in  2007.  Recovery  rates  over  the  last  decade  have  rarely 
exceeded 50% and in cases of fraud have been even lower. The opening figure for 
2007  is  respectable,  but  past  experience  suggests  that  the  improving  the  overall 
outcome will remain challenging.  

The goods involved in irregularities and frauds demanding Member States' attention 
are very diverse, notably TVs and monitors, clothing, foods, vegetables and of course 
tobacco.  TVs  and  monitors  keep  their  relevance  in  2007,  being  once  again  (one  of 
the most) important goods involved in registered cases of irregularity (or fraud), just 
like  previous  years.  The  origin  of  the  goods  concerned  is  equally  varied,  although 
some  countries  remain  continuously  at  the  top  of  the  rankings  (like  China,  USA, 
Japan). When irregularity or fraud is discovered by a Member State it is mostly in the 
customs  procedure  of  free  circulation  (misdescription,  undervaluation  or  simply 
smuggling) as in previous years. 

The Commission encourages Member States to continue their activities in the field of 
recovery  and  providing  statistical  information.  In  particular  concerning  statistical 
information Member States need to step up their involvement to make OWNRES a 
fully  reliable  source,  including  also  those  cases,  smuggling  in  the  main,  where  no 
establishment was required. The Budgetary Authority is entitled to have available the 
best possible information when monitoring TOR and recovery issues. 

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23 

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PART II - EXPENDITURE 

3. 

AGRICULTURAL EXPENDITURE (ANNEXES 11-12) 

The  analysis  is  a  descriptive  analysis  based  on  the  communications  forwarded  by 
Member  States  under  Commission  Regulation  (EC)  No.  1848/2006  in  the  budget 
year 2007 (16 October 2006 – 15 October 2007). 

It  should  be  noted  that  not  all  irregularities  are  reported.  Under  Reg.  1848/2006, 
Member  States  must  only  inform  the  Commission  of  irregularities  involving  more 
than EUR 10,000. Reg. 1848/2006 repealed Reg. 595/1991 and came into force on 1 
January  2007.  Under  Reg.  595/1991  Member  States  were  obliged  to  inform  the 
Commission of irregularities involving more than EUR 4,000.  

In  2007,  OLAF  processed  7,155  communications  under  Reg.  1848/2006.  A  high 
percentage  of  these  communications,  (6,406),  were  updates  of  cases  that  had  been 
reported prior to 2007. 

Member States reported 1,577 new irregularities (under Reg. 1848/2006) compared 
with  3,249  irregularities  in  2006.  During  2007,  Member  States  reclassified  29  of 
these  irregularities  as  non-irregularities.  The  total  number  of  new  irregularities  is 
therefore  1,548. The  total amount  affected  in  2007  was  about  EUR  155  million,  as 
against approximately EUR 87 million in 2006. 

Irregularities notified in this sector represent only 0.33% of the agricultural budget.  

Annex  12  gives  an  overview  per  Member  State,  indicating  the  number  of 
irregularities, the amounts involved and the percentage of agricultural expenditure. 

Since  the  information  system  of  irregularities  was  established,  Member  States 
reported 43,712 irregularities, involving some EUR 3,508 million. The total amount 
affected  by  irregularities  detected  before  payment  was  approximately  EUR  282 
million and after payment approximately EUR 3,226 million.  

Under Reg. 595/91, Member States were required to indicate the amounts recovered. 
There  is  no  such  requirement  under  Reg.  1848/2006.  This  means  that  from  2007 
onwards, the statistical annex of the annual report will no longer contain figures on 
the  recovery  of  unduly  paid  amounts  based  on  information  reported  under  Reg. 
1848/2006. 

3.1. 

Reporting discipline 

Reg. 1848/2006 came into force on 1 January 2007. The year 2007 was announced as 
the "zero tolerance year": communications that did not fulfil the requirements of Reg. 
1848/2006 would be "refused" and Member States would be asked to forward a new 
communication to fulfil their obligations. 

Article  3  and  article  5  of  Reg.  1848/2006  lay  down  the  reporting  obligations  of 
Member  States.  The  reporting  obligations  as  stipulated  in  article  3,  paragraph  1, 

EN 

24 

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letters a – p of Reg. 1848/2006 are used to determine the reporting discipline and the 
level  of  compliance  of  the  Member  States.  The  focus  however,  will  be  on  those 
obligations that are crucial for (strategic) analysis. Per topic, a compliance rate will 
be indicated. The compliance rate is based on a quantitative analysis, which implies 
that the data quality was not yet an important factor to determine the compliance rate. 

Member  States  should  not  forget  the  main  purpose  of  forwarding  information:  to 
enable  the  Commission  to  perform  risk  analyses  (see  art.  10  Reg.  1848/2006).  For 
that  purpose,  OLAF  needs  to  receive  reliable,  consistent  and  complete  data  and  as 
early as possible.  

3.1.1.  Timely reporting 

Under  Reg.  1848/2006  Member  States  are  required  to  report  at  the  latest  within  2 
months  after  the  end  of  the  quarter  in  which  an  irregularity  was  the  subject  of  a 
primary  administrative  or  judicial  finding  and/or  new  information  about  an 
irregularity  that  has  already  been 
reported  becomes  known.  Member 
States  indicate  the  reporting  quarter 
and  the  date  of  communication. 
These 2 (two) indicators can be used 
to  determine  if  a  Member  State 
complied  with  the  rules.  6  Member 
States  failed  to  comply  to  forward 
the 
all  communications  within 
period  of  2  months  after 
the 
"reporting  quarter".  Table  AG1  on 
the right hand side gives an overview.  

TABLE AG1
TIMELY REPORTING
BUDGET YEAR: 2007

4%
99%
24%
73%
13%
24%
9%

27
1
111
3
13
19
1.431

28
94
147
11
15
25
1.577

AT
DE
FR
LV
SE
SK
total

reported
timely
(< 01/12/2007)

reported
too late
(≥ 01/12/2007)

1
93
36
8
2
6
146

reported
too late
in %

reported
in total

download 5 Februari 2008

Art. 3 (1) Reg. 1848/2006

MS

It is however, more interesting to examine the time gap between the detection and the 
reporting of the irregularity.  

Member States are obliged to indicate the date on which the primary administrative 
or judicial finding on the irregularity was established on the basis of art. 3(1) k Reg. 
1848/2006.  

The time gap should be maximum 5 month (3 months (quarter) + 2 months). Table 
AG2 gives per Member State an overview of the time gap between the discovery of 
the irregularity and the reporting.  

For convenience sake, a time lap of 6 (six) months is taken to indicate the level of 
compliance  of  Member  States.  Member  States  reported  in  total  510  out  1,548  of 
cases timely.  

The average time gap is 1.2 years. For Austria and Sweden this gap is far above the 
average,  3.4  years  and  2.3  years  respectively.  Irregularities  should  be  reported  as 
soon as possible, which means immediately after discovery. An average gap of more 
than 1 year is therefore too high.  

Late  reporting  of  an  irregularity  could  imply  that  a  Member  State  failed  to  take  all 
necessary actions to limit or to reduce its financial impact. Audits have revealed that 

EN 

25 

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some Member States wait until recovery procedures are underway before reporting. 
Recovery  becomes  even  more  difficult  when  the  authorities  have  informed  the 
beneficiary  of  the  control  results  and  no  immediate  recovery  action  has  been 
undertaken.  

For 37 cases Member States needed between 4 and 8 years to report an irregularity 
after  its  discovery.  In  29  cases,  Member  States  even  needed  more  than  8  years  to 
report the irregularity after its discovery.  

Table AG2: Time gap between discovery and reporting  

Table AG2
TIME GAP BETWEEN DISCOVERY AND REPORTING OF IRREGULARITY
budget year 2007
> 2 year
and
≤ 3 year

> ½ year
and
≤ 1 year

average
in
years

> 4 year
and
≤ 8 year

> 3 year
and
≤ 4 year

> 1 year
and
≤ 2 year

≤ ½ year

> 8 year

compliance

MS

MS

total

BG
LU
MT
RO
FI
CY
SI
IE
IT
BE
FR
EL
UK
CZ
NL
PT
HU
DE
SK
EE
AT
DK
LT
LV
SE
PL
ES
total

20
6
9
26
237
34
147
86
95
10
64
190
12
94
23
16
27
20
10
11
14
62
335
1,548

18
5
7
17
152
21
80
45
44
4
19
53
3
15
3
2
3
2
1
1
1
3
11
510

1
1
1
5
28
8
38
21
25
2
7
66
4
49

4
3
5
6
10
4
27
125
440

0
0

1

1
2
16
4
13
7
18
4
18
71
5
29
6
7
4
9
3
0
3
32
140
393

Art. 3 (1) k Reg. 1848/2006

download 5 February 2008

1
9

7
3
6

18

14
3
1
3

2

27
94

4

4
10
1

2

3
1

1

19
45

1
1

5

1

1

12

3

13
37

0.4
0.4
0.4
0.8
1.6
0.9
1.0
1.0
0.9
0.7
1.4
0.8
1.1
0.9
1.9
1.3
3.4
1.4
0.9
0.6
2.3
1.0
1.5
1.2

27
1

1

29

BG
LU
MT
RO
90%
FI
83% CY
78%
SI
65%
IE
64%
IT
62% BE
54% FR
52% EL
46% UK
40% CZ
30% NL
28% PT
25% HU
16% DE
13% SK
13% EE
11% AT
10% DK
10% LT
9% LV
7% SE
5% PL
3% ES
33% total

Prescription has also to be taken into account. A late acting of authorities could lead 
to no follow up, neither administrative nor judicial. 

Last but not least: risk analyses with added value can only be provided if information 
is forwarded immediately after the discovery of an irregularity.  

The EU-27 compliance rate is 33%.  

3.1.2.  Electronic format (AFIS/ECR-module 595) 

The  system  of  electronic  reporting  of  irregularities,  AFIS/ECR-module  595, 
introduced in 2001 for agriculture, has led to an improvement in data quality and in 
reduced  misunderstandings  and 
It  has  also 
the 
misinterpretations and has consequently improved compliance with the regulations.  

timeliness  of 

reporting. 

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26 

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AFIS/ECR-module  595  is,  however,  not  used  by  all  Member  States.  At  the  end  of 
2007,  three  Member  States  (Germany39,  Spain  and  Latvia)  were  still  not  using  this 
module.  

3.1.3.  Budget year, budget line and product affected 

The obligation to indicate the common market organisations affected, the sectors and 
products concerned can be found in Art. 3(1) (a) Reg. 1848/2006. 

Expenditure is based on the appropriations for a given year. As far as the EAGF and 
EAFRD  are  concerned,  the  budget  year  does  not  coincide  with  the  calendar  year. 
Therefore,  Member  States  should  indicate  the  budget  year  as  well  as  the 
appropriation  in  their  communications  so  that  the  support  measure  (budget  line) 
affected by the irregularity can be identified.  

Table AG3 gives an overview per Member State of the number of cases in which the 
budget year, the budget line and the product has been indicated. 
Table AG3: budget year, budget line and product affected by the irregularities 

TABLE AG3 MEASURE
BUDGET YEAR, PRODUCT AND MEASURE
BUDGET YEAR 2007
measure  compliance

compliance

product  compliance

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
97%
96%
87%
77%
76%
68%
67%
44%
35%
18%
0%
0%
58%

27
6
10
20
16
12
10
11
62
14
9
237
23
147
26
86
190
95
64
20
34
335
11
1.548

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
12%
100%

27
6
10
20
16
12
10
11
62
14
9
237
23
147
26
86
190
95
64
20
34
335
34
1.548

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
36%
100%

total 

MS 
BG
LU
MT
RO
100% AT
100% CY
100% CZ
100% DK
100% EE
100% HU
100% LT
100% LV
100% PL
100% SE
100%
SI
99%
IT
99% SK
96% FR
92%
IE
92% EL
89% PT
89% UK
81% NL
78%
FI
73% BE
67% ES
16% DE
86% total

MS 
BG
LU
MT
RO
AT
CY
CZ
DK
EE
HU
LT
LV
PL
SE
SI
IT
SK
FR
IE
EL
PT
UK
NL
FI
BE
ES
DE
total

total

year 

27
6
10
20
16
12
10
11
62
14
9
237
23
147
26
86
190
95
64
20
34
335
94
1.548

27
6
10
20
16
12
10
11
62
14
9
229
22
128
20
65
130
64
28
7
6
0
0
896

Art. 3(1) a Reg. 1848/2006

download 5 February 2008

A  large  number  (11)  of  Member  States  comply  fully  with  this  obligation.  For  all 
other Member States, attention needs to be paid to indicating the budget year and the 
measure affected.  

39 

On  7  April  2008,  Germany  and  OLAF  agreed  during  a  high  level  meeting  on  an  IMS-pilot  (IMS  = 
Irregularity  Management  System).  IMS  is  a  web  based  application  to  report  irregularities  which  will 
replace the current electronic reporting module. The pilot will start in summer 2008. This will allow a 
considerable improvement of the reporting of irregularities. 

EN 

27 

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Member  States  with  a  low  compliance  rate  are  Germany  (16%)  and  Spain  (67%). 
These  are  also  the  2  Member  States  that  are  not  using  AFIS/ECR-module  595  to 
report irregularities40.  

The EU-27 compliance rate is 86%. 

3.1.4.  Year of detection vs year reported 

Member States are obliged to report the date, or dates, on which the irregularity was 
committed and the date of discovery of the irregularity. Art. 3 (1) i Reg. 1848/20016 
obliges Member States to indicate the period during which, or the moment at which, 
the  irregularity  took  place.  Member  States  are  obliged  to  indicate  the  date  of 
discovery on the basis of art. 3 (1) k Reg. 1848/2006. Table AG4 shows the time gap 
between the date on which the irregularity took place, the discovery and the reporting 
of the irregularity.  

Table AG 4: Time gap between irregularity, discovery and reporting 

TABLE AG4
TIME GAP BETWEEN IRREGULARITY, DISCOVERY AND REPORTING
BUDGET YEAR 2007

CASES 
indication of
date on which the irregularity took place
no date
indicated indicated

error
date

date

compliance

average time gap
between
irregularity and discovery

average time gap
between
discovery and reporting

average
time
gap

days

years

days

years

Total

6
26
9
10
62
10
20
12
23
95
16
64
147
20
11
190
34
94
335
14
86
27
237
1.548

6
12
9
10
61
10
15
11
23
94
16
64
147
20
11
73
34
94
335
14
30
27
237
1.353

14

2

1

5
1

1

117

56

1

2

1

195

6

100%
46%
100%
100%
98%
100%
75%
92%
100%
99%
100%
100%
100%
100%
100%
38%
100%
100%
100%
100%
35%
100%
100%
87%

166
373
559
454
479
592
719
579
326
712
633
764
915
767
1.108
1.108
1.218
1.229
1.206
1.377
1.929
1.158
1.974
1.171

0,5
1,0
1,5
1,2
1,3
1,6
2,0
1,6
0,9
2,0
1,7
2,1
2,5
2,1
3,0
3,0
3,3
3,4
3,3
3,8
5,3
3,2
5,4
3,2

130
274
151
338
365
260
139
414
679
314
487
497
350
524
218
304
340
338
548
835
369
1.230
592
450

0,4
0,8
0,4
0,9
1,0
0,7
0,4
1,1
1,9
0,9
1,3
1,4
1,0
1,4
0,6
0,8
0,9
0,9
1,5
2,3
1,0
3,4
1,6
1,2

0,8
1,8
1,9
2,2
2,3
2,3
2,3
2,7
2,8
2,8
3,1
3,5
3,5
3,5
3,6
3,9
4,3
4,3
4,8
6,1
6,3
6,5
7,0
4,4

MS 
BG
LU
MT
RO
CY
IE
SI
LT
PL
CZ
FI
HU
SK
UK
EE
NL
FR
DK
LV
PT
BE
DE
ES
SE
EL
AT
IT
total

MS 
BG
LU
MT
RO
CY
IE
SI
LT
PL
CZ
FI
HU
SK
UK
EE
NL
FR
DK
LV
PT
BE
DE
ES
SE
EL
AT
IT
total

art. 3 (1) i, k Reg. 1848/2006 

download 5 February 2008

The  table  shows  that  although  the  reporting  discipline  of  Member  States  has 
improved,  it  still  needs  attention.  In  195  cases,  Member  States  did  not  indicate  the 
date  on  which  the  irregularity  took  place.  Especially  Greece,  Finland,  Ireland  and 
Portugal should pay particular attention to this obligation. In 6 cases Member States 
indicated an error value.  

The average time gap between an irregularity being committed and its discovery is 
3.2  years;  the  average  time  gap  between  the  discovery  of  an  irregularity  and 
reporting  it  to  the  Commission  is  1.2  year.  As  already  mentioned,  irregularities 

40 

See footnote 39.  

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28 

   EN 

 
 
                                                 
should be reported as soon as possible, which means immediately after discovery. An 
average time gap of more than 1 year is therefore, too high. The system of electronic 
reporting offers the possibility to report an irregularity as soon as it is discovered. 

The average time gap between an irregularity being committed and it being reported 
to  the  Commission  is  4.4  years.  For  Austria,  Greece,  Italy  and  Sweden  counts  that 
the average gap is more than 6 years.  

One  cause  for  concern  is  that  Member  States  are  reporting  a  relatively  high 
proportion of cases (approximately 30%) in which the irregularity or fraud took place 
more  than  four  (4)  years  ago,  i.e.  before  2003.  This  is  of  particular  concern  as  the 
chances of recovery decreases with time.  

Member  States  were  unable  to  indicate  the  year(s)  in  which  the  irregularity  took 
place in 201 cases (195 (blank) + 6 (error)).  

In 91 cases Member States reported that the irregularity started or took place before 
1998. Spain and Italy were responsible for 37 and 41 of these cases respectively.  

3.1.5.  Practices employed (Art. 3 (1) (e) Reg. 1848/2006) 

Art. 3(1) (e) Reg. 1848/2006 contains the obligation to report the practices employed 
in  committing  the  irregularity  (modus  operandi).  The  practices  employed  can  be 
indicated  by  code  as  well  as  with  text.  The  codes  are  in  a  pick  list  that  contains  a 
collection  of  different  types  of  irregularity.  The  reporting  module  also  offers  the 
possibility to use written text to describe more precisely the practices employed.  

Only  Germany  did  not  use  codes  to  indicate  the  type  of  irregularity.  All  other 
Member States indicated the type of irregularity by code. The latter indicates a EU-
27  compliance  level  of  94%.  Finland  however,  reports  code  999  (“other 
irregularities”) in a rather high percentage (60%) of cases.  

Member  States  also  described  in  more  detail  the  practises  employed  in  committing 
the  irregularity.  A  more  precise  description  of  the  irregularity  helps  to  improve  the 
quality  of  the  analysis  therefore  Member  States  are  requested  to  forward  more 
detailed information on the modus operandi. Copying the findings of the audit report 
directly into the reporting module would already improve the quality of the reporting. 

The  compliance  rates  of  Italy  (26%),  Ireland  (35%)  and  the  Netherlands  (50%)  are 
rather low. 

The EU-27 compliance rate is 81%. 

3.1.6. 

Suspected fraud (Art. 3 (1) (f) Reg. 1848/2006) 

Art.  3  (1)  (f)  Reg.  1848/2006  obliges  Member  States  to  indicate  if  the  practice 
amounts to a suspected fraud or not. Member States classified approximately 71% of 
the  reported  cases.  Table  AG5  gives  an  overview  of  the  classification  per  Member 
State  and  by Member State. Member States that did not classify all or part of their 
reported cases are: 

EN 

29 

   EN 

 
compliance level 0% 
Spain 
Germany41 
compliance level 0% 
Belgium 
compliance level 18% 
The Netherlands  compliance level 42% 
compliance level 65% 
Finland 
Germany and Spain together reported 429 cases which is approximately 28% of the 
total number of cases.  
Table AG5: Classification per Member State and by Member State 

TABLE AG5
CLASSIFICATION OF THE IRREGULARITY
BUDGET YEAR 2007
IRQ3

no classification

IRQ2

IRQ5

27
6
10
20
16
82
142
11
222
10
4
6
186
14
9
23
83
25
13
21
6

4

4
1
1
15

7
56
4

11

6

936

105

4

1
1
7
37
28
94
335
503

compliance

MS 
BG
LU
MT
RO
100% AT
100% CY
100% CZ
100% DK
100% EE
100%
EL
100% FR
100% HU
100%
IT
100%
LT
100%
LV
100%
PL
100%
PT
100% SE
100%
SI
100% SK
99% UK
96%
IE
65%
FI
42% NL
18% BE
0% DE
0% ES
68% total

suspected or 
established 
fraud in %

0%
0%
0%
0%
0%
5%
3%
8%
6%
0%
64%
90%
2%
0%
0%
0%
12%
0%
0%
22%
0%

10%

MS 
BG
LU
MT
RO
AT
CY
CZ
DK
EE
EL
FR
HU
IT
LT
LV
PL
PT
SE
SI
SK
UK
IE
FI
NL
BE
DE
ES
total

total

27
6
10
20
16
86
147
12
237
10
11
62
190
14
9
23
95
26
20
64
34
94
335
1.548

IRQ2 = irregularity

IRQ3 = suspicion of fraud

IRQ5 = established fraud

blank = not classified by Member State

Art. 3 (1) f Reg. 1848/2006

download 5 February 2008

Reg. 1848/2006 introduced the obligation to identify the suspected fraud cases. The 
average level of suspected fraud cases is 10%, calculated on the basis of the number 
of classified cases. In the right-hand column of table AG5 an overview is given per 
Member State. 

To avoid misunderstandings: the rate of 10% is based solely on the classification by 
Member States. Cases that have not been classified have not been taken into account. 

The EU-27 compliance rate is 68%. 

41 

Germany will classify its cases when it starts to use IMS (summer 2008). See footnote 39. 

EN 

30 

   EN 

 
 
 
                                                 
3.1.7.  Legal/natural persons identification 

Member  States  are  also  required  to  give  detailed  information  on  the  identity  of  the 
natural  and  legal  persons  involved.  Art.  3(1)  l  Reg.  1848/2006  states  that  the 
identities of the natural and/or legal persons involved, or of other entities which have 
taken part in the commission of the irregularity, should be indicated. 

The reporting of personal data, including addresses, still needs the attention of some 
Member States. In particular Finland, Spain and Ireland need to pay attention to this 
obligation.  

Germany42  informed  the  Commission  about  restrictions  in  its  national  legislation 
with respect to the reporting of personal data. Germany is the only Member State that 
does not report any personal data. Nevertheless, in 3 cases Germany did forward the 
names  of  the  natural  persons  involved.  Table  AG6  provides  an  overview  of  the 
reporting of personal data. 

Table AG6: personal data reported 

TABLE AG6
PERSONAL DATA
budget year 2007

CASES
total

NAME

STREET

POST CODE

indicated

compliance

indicated

compliance

indicated

compliance

CITY
indicated compliance

overall 
compliance

MS

BG
LU
MT
RO
AT
BE
CY
CZ
DK
SI
LV
FR
UK
SE
HU
PT
PL
SK
EL
LT
NL
EE
IT
IE
ES
FI
DE
TOTAL

27
34
6
10
20
9
11
147
95
14
12
190
62
23
86
10
64
16
237
26
335
20
94
1,548

27
34
6
10
20
9
11
147
95
14
12
190
57
23
86
10
57
16
237
26
335
5
3
1,430

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
92%
100%
100%
100%
89%
100%
100%
100%
100%
25%
3%
92%

27
34
6
10
20
9
11
136
95
12
11
170
57
11
77
9
42
16
236
11
0
0
0
1,000

100%
100%
100%
100%
100%
100%
100%
93%
100%
86%
92%
89%
92%
48%
90%
90%
66%
100%
100%
42%
0%
0%
0%
65%

27
34
6
10
20
9
11
147
84
14
11
170
57
23
31
2
42
15
3
3
0
0
0
719

100%
100%
100%
100%
100%
100%
100%
100%
88%
100%
92%
89%
92%
100%
36%
20%
66%
94%
1%
12%
0%
0%
0%
46%

27
34
6
10
20
9
11
147
95
14
12
170
57
22
86
10
57
1
234
12
0
0
0
1,032

100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
89%
92%
96%
100%
100%
89%
6%
99%
46%
0%
0%
0%
67%

MS

BG
LU
MT
RO
AT
BE
CY
CZ
DK
SI
LV
FR
UK
SE
HU
PT
PL
SK
EL
LT
NL
EE
IT
IE
ES
FI
DE

100%
100%
100%
100%
100%
100%
100%
98%
97%
96%
96%
92%
92%
86%
81%
78%
77%
75%
75%
50%
25%
6%
1%

68% TOTAL

Art. 3 (1) l Reg. 1848/2006

download 5 February 2008

Germany,  Finland  and  the  Netherlands  only  reported  personal  data  in  a  limited 
number  of  cases.  This  does  not  mean  however,  that  all  other  Member  States  fully 
comply with Reg. 1848/2006. Member States should also remember to indicate the 
complete  address  of  the  persons  involved.  The  post  code  is  particularly  useful  in 
helping to identify the regions and areas that are more affected by irregularities. 

The EU-compliance rate is 68%. 

42 

For this issue possible solutions were also discussed in the meeting on 8 April 2008. See footnote 39. 

EN 

31 

   EN 

 
 
                                                 
3.1.8. 

Summary 

Table  AG7  contains  an  overview  of  the  compliance  rate  per  reporting  obligation. 
Member  States  are  ranked  in  order  of  compliance.  The  table  focuses  on  reporting 
obligations that have a high added value for analysis purposes. The letters above the 
columns  refer  to  the  reporting  obligations  that  are  contained  in  Art.  3  (1)  of  Reg. 
1848/2006.  

Table AG7: compliance per Member State year 2007 

table AG7
COMPLIANCE
budget year 2007

timely
reporting
1

measure
affected
a

practices
employed
e

classification

f

date
committed
i

personal
data
l

compliance

83%
78%
40%
54%
46%
25%
10%
9%
11%
13%
7%
5%
10%
13%
64%
62%
52%
28%
90%
65%
30%
3%
16%
33%

100%
100%
100%
96%
89%
100%
100%
100%
100%
99%
100%
100%
100%
100%
99%
73%
92%
89%
78%
92%
81%
67%
16%
86%

100%
100%
100%
90%
99%
100%
100%
100%
96%
100%
93%
100%
100%
100%
26%
91%
79%
86%
90%
35%
50%
99%
100%
81%

100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
18%
100%
100%
65%
96%
42%
0%
0%
68%

100%
100%
100%
100%
95%
92%
100%
100%
100%
100%
100%
98%
100%
100%
100%
100%
35%
38%
75%
46%
100%
100%
100%
87%

100%
100%
100%
98%
97%
96%
100%
100%
100%
86%
96%
92%
78%
75%
75%
100%
81%
92%
6%
50%
77%
25%
1%
68%

97%
96%
90%
90%
88%
85%
85%
85%
85%
83%
83%
83%
81%
81%
77%
74%
73%
72%
67%
64%
63%
49%
39%
70%

MS 

BG
LU
MT
RO
CY
SI
CZ
FR
UK
HU
DK
LV
AT
SK
SE
PL
LT
EE
IT
BE
EL
PT
FI
IE
NL
ES
DE
total

MS 

BG
LU
MT
RO
CY
SI
CZ
FR
UK
HU
DK
LV
AT
SK
SE
PL
LT
EE
IT
BE
EL
PT
FI
IE
NL
ES
DE
total

Art. 3 (1) a - p Reg. 1848/2006

download 5 February 2008

Bulgaria,  Luxembourg,  Malta,  and  Romania  had  no  irregularities  to  report  and  are 
therefore  considered  to  be  100%  compliant.  The  rates  of  Bulgaria,  Luxembourg, 
Malta  and  Romania  have  not  been  taken  into  account  to  calculate  the  EU-27 
compliance rate. 

In  general,  Member  States  do  try  to  comply  with  Reg.  1848/2006  but  there  is  still 
room for improvement. Timely reporting will lead to a higher compliance rate by a 
large number of Member States. 

Germany is the Member State with the lowest compliance rate, partly due to the fact 
that no personal data was forwarded and due to the lack of other basic information 
such as budget lines or measures affected and the classification of the irregularities. 

Member  States  with  low  compliance  rates  are  Germany  (39%)  and  Spain  (49%). 
Both of them do not use the system of electronic reporting as provided by OLAF. 

The EU-27 compliance rate is 70%. 

EN 

32 

   EN 

 
 
 
 
 
3.2. 

General Trends 

This analysis is a descriptive analysis, the aim of which is to provide feedback to the 
Member States on the communications that were received by the Commission in the 
budget year 2007 and to give an overall view for the period 1971 - 2007.  

One should bear in mind that Member States must only inform the Commission of 
irregularities involving more than EUR 10,000.  

The  threshold  of  EUR  10,000  was  introduced  by  Reg.  1848/2006  that  came  into 
force  on  1  January  2007.  Under  Reg.  595/91,  the  threshold  was  EUR  4,000.  The 
increase  of  the  threshold  from  EUR  4,000  to  EUR  10,000  has  to  be  taken  into 
account  when  this  report  is  compared  with  report  of  the  previous  years.  The 
descriptive analysis of this report therefore, cannot be right away compared with the 
results of previous years.  

Bulgaria, Luxembourg, Malta and Romania did not report any irregularity in 2007.  

The budget year 2007 runs from 16 October 2006 – 15 October 2007. 

3.2.1.  Amounts involved 

The total number of irregularities reported in the budget year 2007 was 1,548. These 
1,548  cases  amount  to  approximately  EUR  155  million.  Table  AG8  provides  an 
overview per Member State of the irregularities reported and the amounts affected by 
these irregularities in the budget year 2007. 
Table AG8: Irregularities reported in the budget year 2007 

MS

reported

cases
no irregularity
(IRQ 0)

Table AG 8
irregularities reported and amounts affected
budget year 2007

amounts in €

irregularity

total
expenditure

amount affected
by irregularity

detected
before payment

detected
after payment

AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

28
35

6
10
94
20
17
90
335
20
147
13
28
237
10

11

64
64
199

15
9
25
100
1,577

1
1

0
0
0
0
1
4
0
0
0
1
2
0
0

0

0
2
9

1
0
2
5
29

27
34

6
10
94
20
16
86
335
20
147
12
26
237
10

11

64
62
190

14
9
23
95
1,548

430,748
14,044,367

232,013
103,168
12,176,901
16,195,943
201,670
4,845,037
88,843,891
412,855
6,589,053
601,932
490,043
43,601,904
321,847

401,511
13,866,333

83,362
103,168
2,854,876
15,257,984
83,985
4,185,084
23,609,346
338,508
32,637,233
233,052
490,043
43,063,210
232,242

31,771
64,102

67,932
28,038
193,951
4,693,325
0
601,483
48,542
0
34,324
0
119,233
256,927
102,322

369,741
13,802,231

15,430
75,130
2,660,925
10,564,659
83,985
3,583,601
23,560,804
338,508
32,602,909
233,052
370,810
42,806,283
129,920

141,835

141,835

0

141,835

26,748,104
2,335,930
33,740,566

839,098
232,894
2,206,415
15,740,236
271,076,449

4,349,283
1,099,347
5,570,368

284,714
232,894
1,707,309
4,167,640
154,993,326

696,042
911,944
15,881

3,103
0
0
45,782
7,914,703

3,653,241
187,403
5,554,487

281,611
232,894
1,707,309
4,121,858
147,078,624

MS

AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

Art. 3(1) m, n Reg. 1848/2006

download 5 February 2008

Member  States  reported  initially  1,577  cases.  During  2007,  29  cases  were 
reclassified as “non-irregularity” (IRQ 0).  

EN 

33 

   EN 

 
 
The number of reported cases decreased in 2007 by more than 50% compared with 
2006. The decrease can be explained for a large part by the introduction of the new 
threshold of EUR 10,000.  
There is however a remarkable increase of the amounts affected by the irregularities. 
It is the highest amount affected since 2004 (see annex 11). 

Chart AG1: Irregularities communicated by Member States (1971-2007) 

s
e
s
a
C

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

500

450

400

350

300

250

200

150

100

50

0

€

s
n
o

i
l
l
i

m
n

i

s
t
n
u
o
m
A

1
7
9
1

2
7
9
1

3
7
9
1

4
7
9
1

5
7
9
1

6
7
9
1

7
7
9
1

8
7
9
1

9
7
9
1

0
8
9
1

1
8
9
1

2
8
9
1

3
8
9
1

4
8
9
1

5
8
9
1

6
8
9
1

7
8
9
1

8
8
9
1

9
8
9
1

0
9
9
1

1
9
9
1

2
9
9
1

3
9
9
1

4
9
9
1

5
9
9
1

6
9
9
1

7
9
9
1

8
9
9
1

9
9
9
1

0
0
0
2

1
0
0
2

2
0
0
2

3
0
0
2

4
0
0
2

5
0
0
2

6
0
0
2

7
0
0
2

cases

amounts in €

amounts in € -/- peak

trend line

Chart AG1 reflects these trends. The “amounts in EUR” line shows two peaks, one in 
1994, the other in 2000. These peaks are the result of three Italian cases in 1994 and 
two Italian cases in 2000. Leaving aside these exceptional cases, since 1994 there has 
been  a  clear  steady  downward  trend  in  the  total  amounts  affected  by  irregularities. 
This  can  be  explained  by  the  introduction  of  the  direct  aid/payment  section,  the 
introduction  of  the  integrated  administration  and  control  system  (IACS)  and  the 
move towards direct aid and payments decoupled from production.  

The amounts affected by irregularities increased in 2007 with almost 80%. The total 
amount  affected  by  irregularities  was  about  EUR  155  million,  as  against 
approximately  EUR  87  million  in  2006.  However,  it  should  be  noted  that  two  (2) 
cases notified by France represent 31% of this increase. 

In 2007, the countries which reported the highest number of cases were Spain, Italy, 
Portugal and France with 335, 237, 190 and 147 cases respectively.  

In monetary terms, Italy reported the highest amounts affected by irregularities, more 
than  EUR  43  million,  followed  by  France  which  reported  a  total  amount  of 
approximately EUR 32.6 million. France however, reported 2 cases in which the total 
amount affected was approximately EUR 27 million. 

Annex 12 gives an overview for each Member State. 

3.2.2. 

Impact on the budget 

Table AG9 provides an overview of the total expenditure in 2007 per budget chapter. 
The total expenditure is approximately EUR 47.3 billion.  

EN 

34 

   EN 

 
 
 
 
 
Table AG9: Expenditure and irregularities per budget chapter43 

Table AG9
EXPENDITURE AND IRREGULARITIES PER BUDGET CHAPTER
budget year 2007

budget 
chapter

description

non-Annex 1 products
Food programmes
Sugar

Textile plants
Fruit and vegetables
Products of the wine-growing sector
Promotion

050201 Cereals
050202 Rice
050203
050204
050205
050206 Olive oil
050207
050208
050209
050210
050211 Other plant products/measures
050212 Milk and milk products
050213
Beef and veal
050214
Sheepmeat and goatmeat
050215
Pigmeat, eggs and poultry, bee-keeping and other animal products
050216
Sugar Restructuring Fund
050301 Decoupled direct aids
050302 Other direct aids
050303
050304

Additional amounts of aid
Ancillary direct aids (reliquats, small producers, agrimonetary aids, etc.)
Rural development financed by the EAGGF Guarantee Section - Completion of earlier 
programme (2000 to 2006)
Transitional Instrument for the financing of rural development by the EAGGF Guarantee 
Section for the new Member States
Rural development financed by the European Agricultural Fund for Rural Development 
(EAFRD) (2007 to 2013)
Combination of several support measures affected by irregularities was indicated by MS

050401

050404

050405

total

total amount
expenditure
in €

-140,940,536
-701,984
185,480,304
250,688,751
456,103,298
64,378,045
20,028,255
1,250,913,067
1,452,857,308
47,790,781
363,594,426
638,469,656
98,405,333
0
174,659,430
551,426,309
30,373,161,575
6,263,815,742
434,037,089
-371,366

total amount
irregularity
in €
1,497,405
253,038
1,883,729
306,371
27,244,937
4,154,116
335,953
32,139,133
3,785,331
499,961
4,312,504
38,731,014
11,720,317
910,893
1,478,295
0
1,060,474
1,118,007
0
11,031

irregularity
in % of
expenditure

-1.1%
-36.0%
1.0%
0.1%
6.0%
6.5%
1.7%
2.6%
0.3%
1.0%
1.2%
6.1%
11.9%

0.8%
0.0%
0.0%
0.0%
0.0%
-3.0%

-29,957,929

21,502,442

-71.8%

2,016,076,720

2,451,057,379

0

0

0
46,920,971,655

2,048,375
154,993,326

0.0%

0.0%

0.3%

download 4 April 2008

total amount of expenditure updated on 16 May 2008

The highest expenditure concerned “decoupled direct aids” and was about EUR 30.4 
billion which is 65% of the total expenditure in the agricultural sector. “Decoupled 
direct aids” (chapter 05 03 01) was introduced in 2006. Member States reported for a 
total  amount  affected  by  irregularities  of  approximately  EUR  1.1  million.  France 
received  the  highest  sum  of  approximately  EUR  5.7  billion,  followed  by  Germany 
that  received  approximately  EUR  5.4  billion.  France  reported  in  2007  no 
irregularities concerning “decoupled direct aids”. Germany reported 30 cases with a 
total  amount  affected  of  approximately  EUR  0.5  million.  The  low  number  of 
irregularities can be explained by the fact that the expenditure per beneficiary does 
not exceed the threshold of EUR 10,000 in a large number of cases. 
The highest amount affected by irregularities were reported for the budget chapters 
concerning “milk and milk products” (05 02 12), “fruit and vegetables” (05 02 08), 
“sugar” (05 02 05) and “rural development – guarantee section (05 04 01, 05 04 04 
and 05 04 05) with a total amount affected of EUR 38.7 million, EUR 32.1 million, 
EUR 27.2 million respectively EUR 21.5 million. 
In  percentage  of  the  total  expenditure,  the  highest  amounts  were  reported  for  the 
budget chapter concerning “beef and veal” (05 02 13) with 11.9%. 
Also  of  interest  is  the  level  of  irregularities  as  a  percentage  of  agricultural-
expenditure  per  Member  State.  Belgium  has  the  highest  percentage  with  1.62%, 
followed by Denmark, Italy and Portugal with 1.40%, 0.82% and 0.68% respectively. 
Annex 12 gives an overview of these percentages.  

Some Member States report more irregularities than others. It is possible that some 
Member  States  are  underreporting.  Table  AG10  shows  the  relationship,  in 
percentages, between the total amount allocated per Member State, the total amount 
affected by irregularities per Member States and the total number of irregularities per 
Member State.  

43 

Information provided by DG AGRI. Negative amounts are caused by corrections made in 2007. 

EN 

35 

   EN 

 
 
                                                 
Member  States  are  ranked  in  order  of  their  budget  allocation,  starting  with  the 
Member  State  receiving  the  highest  amount.  France  received  the  highest  amount 
(EUR 9.7 billion) whilst Bulgaria received the lowest amount (EUR 0.2 million). 

Table AG10: total agricultural expenditure and irregularities 

Table AG10
EXPENDITURE AND IRREGULARITIES PER MS
budget year 2007
irregularities

expenditure

irregularities

MS

FR
DE
ES
IT
UK
EL
PL
IE
NL
DK
SE
BE
AT
PT
FI
HU
CZ
LT
SK
SI
LV
EE
LU
CY
RO
MT
BG
total

total

9,735,649,588
5,974,923,975
5,918,501,718
5,222,263,584
4,341,392,612
2,879,299,650
2,297,395,215
1,723,322,002
1,144,013,906
1,086,244,832
950,822,180
853,634,814
826,654,840
821,932,364
808,532,115
651,132,609
539,853,347
324,411,585
302,271,528
168,520,479
165,727,510
79,073,910
46,742,889
45,447,412
6,893,688
6,136,125
177,176
46,920,971,655

in % of
total
expenditure

total
amount
affected

in % of
total amount
affected

total
cases

in % of
total cases
reported

MS

20.7%
12.7%
12.6%
11.1%
9.3%
6.1%
4.9%
3.7%
2.4%
2.3%
2.0%
1.8%
1.8%
1.8%
1.7%
1.4%
1.2%
0.7%
0.6%
0.4%
0.4%
0.2%
0.1%
0.1%
0.0%
0.0%
0.0%
100.0%

32,637,233
2,854,876
23,609,346
43,063,210
4,167,640
4,185,084
490,043
103,168
1,099,347
4,349,283
15,257,984
284,714
13,866,333
5,570,368
401,511
338,508
233,052
1,707,309
232,242
232,894
141,835
0
83,985
83,362
0
0
0
154,993,326

21.1%
1.8%
15.2%
27.8%
2.7%
2.7%
0.3%
0.1%
0.7%
2.8%
9.8%
0.2%
8.9%
3.6%
0.3%
0.2%
0.2%
1.1%
0.1%
0.2%
0.1%
0.0%
0.1%
0.1%
0.0%
0.0%
0.0%
100.0%

147
94
335
237
95
86
26
10
62
64
20
14
34
190
27
20
12
23
10
9
11
0
16
6
0
0
0
1,548

9.5% FR
6.1% DE
21.6% ES
IT
15.3%
6.1% UK
5.6% EL
1.7% PL
0.6%
IE
4.0% NL
4.1% DK
1.3% SE
0.9% BE
2.2% AT
12.3% PT
FI
1.7%
1.3% HU
0.8% CZ
1.5% LT
0.6% SK
0.6%
SI
0.7% LV
0.0% EE
1.0% LU
0.4% CY
0.0% RO
0.0% MT
0.0% BG
100.0% total

Together France, Germany, Spain, Italy and the United Kingdom receive more than 
66%  of  the  total  agricultural  budget,  i.e.  approximately  EUR  31.2  billion.  In  2007, 
France  received  more  than  EUR  9.7  billion.  Germany  and  Spain  received  both 
almost  EUR  6.0  billion.  Italy  received  more  than  EUR  5.2  million  and  the  United 
Kingdom more than EUR 4.3 billion.  

In  2007,  France  received  approximately  EUR  9.7  billion,  which  is  approximately 
20.7%  of  the  total  agricultural  budget.  The  reported  French  cases  were  responsible 
for 21.1% of the amounts affected by irregularities. In the period 2004-2006, France 
reported  a  relatively  low  amount  affected  by  irregularities.  The  relatively  high 
percentage of 2007 can be explained by 2 cases in which the total amount affected 
was approximately EUR 27.5 million. It concerned in both cases the product butter 
(CN-code 0405) and cases for which France went to court (penal procedure) in the 
period 1999 – 2000. These cases should have been reported in 2000. If these cases 
would not be taken into account, the French cases would only be responsible for 4% 
of  the  amounts  affected  by  irregularities.  The  number  of  reported  irregularities  by 
France is also rather low: 9.5%. This rather low rate could indicate underreporting. 
The  latter  counts  also  for  Member  States  as  Germany  and  Ireland.  The  rather  low 
percentage of cases reported could indicate underreporting.  

A  relatively  high  number  of  cases  and  high  total  amount  is  reported  by  Portugal, 
Spain  and  Italy.  Portugal  received  1.8%  of  the  total  agricultural-budget  and  is 

EN 

36 

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responsible for 3.6% of the total amounts affected by irregularities and 12.3% of the 
total number of reported irregularities. Spain received 12.6% of the total agricultural-
budget and reported 15.2% of the total amounts affected by irregularities and 21.6% 
of the total number of reported irregularities. Italy received approximately 11.1% of 
the  total  agricultural  budget  and  reported  27.8%  of  the  total  amounts  affected  by 
irregularities and 15.3% of the total number of reported irregularities. 

Spain and Portugal reported also in the period 2004-2007 a relatively high number of 
irregularities as well as a relatively high amount affected by irregularities.  

3.2.3.  Method of detection 

Member  States  are  obliged  to  indicate  the  manner  in  which  the  irregularity  was 
discovered (see art. 3(1)g Reg. 1848/2006). To indicate the manner, Member States 
have  the  possibility  to  indicate  the  reason  why  an  audit,  check  or  scrutiny  was 
performed and how it was performed.  
The common agricultural policy (CAP) was reformed in 1992 based on a system of 
direct aid for farmers, which significantly increased the number of beneficiaries but 
also  the  risk  of  irregularity  and  fraud.  The  integrated  administration  and  control 
system (IACS)  was therefore introduced by Council Regulation (EEC) No 3508/92 
to meet those risks. The system consists of five elements: 

1. 

2. 

3. 

4. 

5. 

a computerised database 

an identification system for agricultural land parcels,  

a system of identification and registration of animals,  

aid applications,  

an integrated system for administrative controls and field inspections.  

In  the  EU,  all  IACS  aid  applications  are  processed  and  checked  administratively. 
These checks are complemented by on-the-spot controls, selected on the basis of risk 
analysis.  In  the  budget  year  2007,  almost  85%  of  agricultural  expenditure  under 
EAGF was processed through IACS.  

Member States indicated that in 54 cases the irregularity was discovered thanks to a 
check  or  audit  performed  on  basis  of  IACS.  This  is  approximately  3%  of  the  total 
number  of  reported  irregularities.  In  413  cases,  Member  States  did  not  indicate  the 
reason why an audit, check or scrutiny was performed, which is approximately 27% 
of the total amount of reported irregularities. It concerned mainly cases reported by 
Germany, Spain and The Netherlands. Table AG11 gives an overview. 

EN 

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Table AG11: Reasons for performing an audit, control, scrutiny 

Table AG11
DETECTION OF THE IRREGULARITY
budget year 2007

reason for performing a control, audit, scrutiny etc.

alone *)

shared **)

total

in %

blank (no information given by MS)
administrative enquiry
other other
judicial enquiry
scrutiny on basis of Reg. 4045/1989
routine
random check
comparison of data
risk analysis
scrutiny on basis of Reg. 3508/1992 & 1782/2003 (IACS)
tip from informant, whistleblower, etc.
spontaneous confession
control on basis of Reg. 386/1990
information and/or request from EU-body
other described occassions
total
*) alone = only 1 reason for performing a control etc. was indicated

**) shared = more than 1 reason for performing a control etc.was indicated

Art. 3(1) g Reg. 1848/2006

download 5 February 2008

173
206
153
129
104
81
58
45
39
22
13
8
3
3
1037

48
8
22
18
30
18
9
16
15
9
4
1
5
13
216

413
221
214
175
147
134
99
67
61
54
31
17
9
8
16
1666

27%
14%
14%
11%
9%
9%
6%
4%
4%
3%
2%
1%
1%
1%
1%

Member States are also under an obligation to perform certain controls on the basis 
of Council Regulation (EEC) No 4045/89 and Council Regulation (EEC) No 386/90.  

Council  Regulation  (EEC)  No  4045/89  relates  to  the  scrutiny  of  the  commercial 
documents of entities receiving or making payments relating directly or indirectly to 
the  system  of  financing  by  the  EAGF  in  order  to  ascertain  whether  transactions 
forming part of the system of financing by the EAGF have actually been carried out 
and have been executed correctly.  

Member States indicated that in 147 cases the irregularity was discovered thanks to 
an audit performed on basis of Reg. 4045/1989. This is approximately 9% of the total 
number of reported irregularities. 

Council  Regulation  (EEC)  No  386/90  lays  down  certain  procedures  for  monitoring 
whether operations conferring entitlement to the payment of refunds on, and all other 
amounts  in  respect  of,  export  transactions  have  been  actually  carried  out  and 
executed correctly. 

Member States indicated that in 9 cases the irregularity was discovered thanks to a 
check  performed  on  basis  of  Reg.  386/1990.  This  is  approximately  1%  of  the  total 
number of reported irregularities. 

In 175 cases, the reason to perform a control was based on a judicial enquiry. This is 
approximately  10%  of  the  total  amount  of  reported  irregularities.  Member  States 
classified 15 of these cases as suspected fraud or established fraud.  

In  table  AG11  an  overview  was  given  of  the  reason  why  a  control  was  performed. 
Table AG12 provides an overview how an audit, check or scrutiny was performed.  

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38 

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Table AG12: type/method of control 

Table AG12
DETECTION OF THE IRREGULARITY
budget year 2007

type of control, audit, scrutiny etc.

alone

other other
control of accounts
control on the premises of the company
control of documents
ex post control
face vet / documentary check
initial enquiry
on the spot control of achievement of project or action
other Customs controls, checks, audits, scrutinies etc.
analysis of samples
control of production
physical check of goods
preventive check
control of movement
control of products
teledetection
total
*) alone = only 1 type of control etc. was indicated

**) shared = more than 1 type of control etc.was indicated

Art. 3(1) g Reg. 1848/2006

download 5 February 2008

444
256
273
118
14
53
46
35
29
20
11
3
6
1
1
0
1310

shared *)
83
188
39
127
165
11
5
6
9
11
1
8
2
3
0
0
658

total

in %

527
444
312
245
179
64
51
41
38
31
12
11
8
4
1
0
1968

34%
29%
20%
16%
12%
4%
3%
3%
2%
2%
1%
1%
1%
0%
0%
0%

Member  States  indicated  in  527  cases  “other  other”,  which  is  34%  of  the  total 
amount of reported irregularities.  
In 29% of the cases, the control was performed via a control of the accounts of the 
persons involved.  
According to the notifications of the Member States, teledetection did not lead to the 
discovery of any irregularities.  

3.2.4.  Types of irregularity 

Member  States  are  also  obliged  to  report  and  to  describe  the  practices  employed 
(modus operandi) of the detected irregularity (see art. 3(1)e Reg. 1848/2006). A clear 
overview  of  the  (most  recently  used)  modus  operandi  in  committing  irregularities 
will support the Member States and the Commission in their fight against fraud and 
help to reduce the number of irregularities.  

The Annual Report 2005 and the Annual Report 2006 noted that “almost all Member 
States  seem  to  have  developed  a  preference  for  one  or  two  codes  which  permit  no 
detailed  breakdown”.  The  latter  was  a  reaction  from  the  Member  States  to  a  first 
attempt by OLAF to estimate the level of (suspected) fraud in the agricultural sector 
on the basis of the types of irregularity and modus operandi reported. By indicating 
only  one  or  two  (general)  codes,  it  became  more  difficult  to  estimate  the  level  of 
(suspected) fraud. Member States were requested to pay some attention to this point 
especially where codes such as 499, 699 and 999 were reported. These codes indicate 
“other irregularities” and do not help to identify the modus operandi.  

Member  States  have  improved  their  reporting  of  the  type  of  irregularity  and  the 
modus operandi. The EU-27 compliance rate on type of irregularity is 94%.  

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In 6% of the cases, no code was indicated. It concerns cases reported by Germany. 
OLAF  has  tried  to  “translate”  the  sometimes  basic  descriptions  in  the  German 
communications into codes. Finland used the code 999 (= other irregularities) in 60% 
of its cases.  

Table AG13 gives an overview of the types of irregularity most frequently reported 
by Member States. The types of irregularity are clustered by main group. 

Table AG13: Irregularities and frequency of used types of irregularities 

Table AG13
TYPE OF IRREGULARITY PER GROUP
budget year 2007

cases

description

number

in %

group
1600
1500
1400
1100
1700
1300
1200
1900

(non-)action
product, species and/or land
documentary proof
request for aid
customs - movement of goods
accounts and records
beneficiary
other
combinations
total
Art. 3(1)g Reg. 1848/2006

627
301
192
144
53
41
38
35
117
1,548

41%
19%
12%
9%
3%
3%
2%
2%
8%
100%

amount in €
50,579,560
65,892,038
9,763,043
8,159,166
11,473,190
1,264,547
935,218
1,223,232
5,703,332
154,993,326

in %

33%
43%
6%
5%
7%
1%
1%
1%
4%
100%

download 5 February 2008
Group 1100 request for aid 
In 9% of the reported irregularities it concerned cases in which the irregularity was 
directly linked to the request for a support measure. As example, can be mentioned 
an  “incorrect  or  incomplete  request  for  aid”.  These  cases  should  normally  be 
discovered before payment.  

Table AG 14
IRREGULARITIES DISCOVERED BEFORE / AFTER PAYMENT
budget year 2007

before
payment

MS 

before 

payment 

The  overall  rate  of  irregularities 
detected 
is 
approximately  5%,  e.g.  78  cases 
out of 1,548. Table AG14 provides 
an  overview  per  Member  State. 
The  obligation  to  indicate  if  an 
irregularity is discovered before or 
after  a  payment  can  be  found  in 
art.  3(1)n  Reg.  1848/2006.  In  56 
cases  Member  States  did  not 
indicate  if  the  detection  of  the 
irregularity  took  place  before  or 
after payment. Also no information 
was given on the amounts affected 
by these irregularities. The latter is 
even  more  surprising  now  a  large 
amount of these cases were already 
closed  by 
the  Member  States 
which  implies  that  no  information 
about the amounts affected will be forwarded.  

AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

Art. 3(1)n Reg. 1848/2006

download 5 February 2008

discovery of irregularity

before & after
payment

after
payment

no
information

total

1

5
1

6

8
20

2

43

23
27

1
9
81
19
9
80
321
20
137
12
22
224
4

11

53
4
189

12
9
18
85
1,370

4

7
5
13

8

5

2

5
7
56

27
34

6
10
94
20
16
86
335
20
147
12
26
237
10

11

64
62
190

14
9
23
95
1,548

3
3

5
1
8

1
1

2

4
2
6

3
36
1

3
79

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the 

Table AG15
IRREGULARITIES CONCERNING THE REQUEST FOR AID
budget year 2007

Table  AG13  shows  that  in  9%  of  the  amount  of  reported  irregularities,  the 
irregularity  was  already  committed  during  the  request  phase.  Table  AG15  provides 
an  overview  of 
types  of 
irregularities  which  were  applied 
during  the  request  phase.  The  most 
frequent  irregularity  was  “incorrect 
or incomplete request”. Rather high 
is  also  the  amount  of  irregularities 
in  which  the  modus  operandi  is 
described  as  “not  eligible  for  aid”. 
United  Kingdom,  Denmark  and 
Lithuania  indicated  in  respectively 
7, 3 and 1 cases that the applied modus operandi was “false or falsified request for 
aid”. All 11 cases were classified as irregularity (IRQ2) and not as suspected fraud 
(IRQ3).  

description
product, species, land or measure not eligible for aid
incorrect or incomplet request
other irregularities concerning the right to aid
false or falsified request
overfinancing
incompatible cumulation of aid
several requests for the same object
total
Art. 3(1) e Reg. 1848/2006

3,766,520
3,233,031
580,115
356,269
140,507
82,724
0
8,159,166

cases
29
64
30
11
5
4
1
144

download 5 February 2008

amounts in €

Group 1200 beneficiary 
Table AG12 shows also that in 38 cases the irregularity was linked to the beneficiary 
itself. It concerned in 16 cases an incorrect identity.  

Group 1600 (non-) action 
In 39% of the reported irregularities it concerned cases in which the irregularity was 
directly linked to an action performed or not performed by the involved persons. In 
those  cases,  the  support  measure  demands  that  a  certain  action  is  undertaken.  The 
beneficiary however, did not perform this action or did not implement, complete or 
finalise the action.  
Group 1500 product, species and/or land 
In 19% of the cases, representing 43% of the total amount affected by irregularities, 
the  irregularity  concerned  the  product,  species  (animals)  or  land  for  which  the 
subsidy was granted. As example, can be mentioned the over-declaration of land and 
the  declaration  of  fictitious  land.  Especially  in  the  sector  “rural  development”, 
irregularities were committed by an over-declaration of land. In some cases it even 
concerned the declaration of fictitious land. Over-declaration can be considered as an 
error or mistake as declaration of fictitious land needs to be considered as (suspected) 
fraud. 

cases

description

amount 

affected 

the 
the  product, 

Table AG16
IRREGULARITIES CONCERNING PRODUCT
budget year 2007

Table  AG13  shows  that  in  19%  of 
the  cases,  representing  43%  of  the 
by 
total 
irregularity 
irregularities, 
concerned 
species 
(animals)  or  land  for  which  the 
subsidy  was  granted.  Table  AG16 
provides  an  overview  of 
the 
practises  employed  for  these  types 
of irregularities. In 5 cases, Member 
States  reported  that  it  concerned  a  falsification  of  the  product.  The  total  amount 
affected  was  rather  high,  e.g.  almost  EUR  30  million.  1  Case  was  classified  as 
suspected  fraud  (IRQ3)  and  concerned  the  export  of  beef  and  veal.  4  cases  were 
classified as established fraud (IRQ5) and concerned butter. 

falsification of the product
incorrect classification or tariff heading
fictitious use or processing
inexact quantity
inaccurate product declaration
inexact composition
declaration of fictitious land
variation in quality or content
other
total
Art. 3(1) e Reg. 1848/2006

29,711,934
14,465,380
12,528,552
3,542,047
1,237,829
1,174,386
983,596
523,977
1,724,336
65,892,038

5
12
9
102
46
13
59
12
43
301

download 5 February 2008

amounts in €

EN 

41 

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The  9  cases  in  which  the  practises  employed  was  described  as  “fictitious  use  or 
processing” were also all classified by Member States as “suspected fraud” (IRQ3). 
It  concerned  in  all  cases  the  fruit  and  vegetables  sector.  The  total  amount  affected 
was also here rather high, approximately EUR 12.5 million. 

In  12  cases  the  Member  States  described  the  practises  employed  as  “incorrect 
classification or tariff heading”. It concerned in all cases export refunds concerning 
especially pig meat. All cases were classified as “irregularity” (IRQ2).  

The practises employed “declaration of fictitious land” occurred mainly in the sector 
“rural  development”  and  “decoupled  direct  aids”  (Single  Payment  Scheme  and 
Single Area Payment Scheme). Germany, Hungary and Poland reported these cases. 
Poland  classified  all  its  cases  as  “suspected  fraud”  (IRQ3),  Hungary  classified  all 
their cases as “irregularity” (IRQ2) and Germany did not classify any of its cases.  

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3.3. 

Specific Analysis 

In  2007  Member  States  reported  1,548  cases  of  irregularities  involving  a  total 
amount  affected  of  approximately  EUR  155  million.  Member  States  must  only 
inform the Commission of irregularities involving more than EUR 10,000. 

Member  States  must  inform  the  Commission  of  the  common  market  organisations 
affected,  the  sectors  and  products  concerned  by  irregularities.  Unfortunately,  some 
Member States do not comply fully with this rule. Some Member States do not report 
any budget lines or indicate only a part of the budget line. The incomplete reporting 
makes it difficult to perform detailed analysis.  

3.3.1.  Analysis of support measures 

Table  AG17  gives  an  overview  of  the  irregularities  reported  per  main  category  of 
support  measure.  The  division  into  the  different  types  of  measures  is  based  on  the 
indications given by Member States of the: 
•  measures affected, 
•  regulations infringed,  
•  modus operandi. 

Table AG 17: Irregularities per main category of support measure 

Table AG17
IRREGULARITIES PER BUDGET CHAPTER
BUDGET YEAR 2007

description

cases

Milk and milk products
Fruits and vegetables
Sugar
Rural development
Beef and veal
Olive oil
Wine
Other measures - environment & forestry
POSEI
non-annex-1 products
Other plant products - dried fodder
Cereals
Pigmeat, eggs, poultrymeat, bee-keeping
Tobacco
Decoupled direct aids (SPS)
Sheep and goats
Other measures - other
Promotion measures
rural development & decoupled direct aids (reproted by PL)
other \ other
Seeds & food programmes (reported by EL)
Textile plants
Food programmes
Beef and veal & sheep and goats (reported by IT)
Seeds, hops and rice
Cereals & beef and veal & sheep and goats (reported by IT)
Olive oil & seeds & milk (reported by IT)
Seeds & milk (reported by IT)
Decoupled direct aids (SAPS)
Sugar & milk & beef and veal (reported by NL)
Seeds & milk & rural development (reported by IT)
Non-annex 1 products & food programmes (reported by NL)
Cereals & milk (reported by IT)
Cereals & seeds (reported by IT)
Agri-monetary aid
COP-area payments

76
118
10
589
78
85
154
38
15
27
24
47
30
26
61
53
29
2
32
11
1
2
2
7
8
1
1
2
12
1
1
1
1
1
1
1
1,548

average

amounts in € amounts in €
509,619
272,366
2,724,494
33,029
150,260
48,872
24,580
53,911
136,108
69,768
69,742
31,860
49,276
42,781
16,285
17,187
20,589
249,981
14,684
41,050
380,423
167,977
153,186
38,091
31,630
143,351
117,285
39,109
5,593
50,000
36,526
20,597
19,767
14,118
11,031
5,710
100,125

38,731,014
32,139,133
27,244,937
19,453,831
11,720,317
4,154,116
3,785,331
2,048,611
2,041,619
1,883,729
1,673,816
1,497,405
1,478,295
1,112,297
993,355
910,893
597,069
499,961
469,898
451,555
380,423
335,953
306,371
266,637
253,038
143,351
117,285
78,218
67,119
50,000
36,526
20,597
19,767
14,118
11,031
5,710
154,993,326

in % of
total

25%
21%
18%
13%
8%
3%
2%
1%
1%
1%
1%
1%
1%
1%
1%
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
100%

group

20
15
11
40
21
12
16
50
32
30
13
10
23
17
70
22
36
38
40 / 75
99
18 / 31
14
31
21 / 22
18
10 / 21 / 22
12 / 18 / 20 / 21 / 22
18 / 22
75
11 / 20 / 21 / 23
18 / 22 / 40
30 / 31
10 / 20
10 / 18
39
80

total
art. 3 (1) a Reg. 1848/2006

download 5 February 2008

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The  highest  amounts  affected  by  irregularities  reported  related  to  “milk  and  milk 
products”.  Member  States  reported  a  total  of  76  cases  involving  milk  and  milk 
product measures (group 20). These cases alone amount to almost EUR 38.8 million, 
which is approximately 25% of the total amount affected by irregularities.  

The  second  most  affected  sector  is  “fruits  and  vegetables”  (group  15),  where 
Member  States  reported  118  cases  involving  approximately  EUR  32.1  million.  A 
rather  high  amount  affected  by  irregularities  is  reported  for  the  group  “sugar”. 
Member States reported 10 cases involving more than EUR 27 million. This implies 
that  the  average  amount  per  irregularity  is  relatively  high  for  cases  reported  in  this 
group.  The  high  amount  is  caused  by  2  irregularities  reported  by  Belgium  and 
Denmark. The amount affected by was EUR 12.6 respectively EUR 14.2 million.  

The  highest  number  of  irregularities  reported  related  to  “rural  development”. 
Member  States  reported  a  total  of  589  cases  involving  rural  development  measures 
(group  40).  These  cases  alone  amount  to  almost  EUR  19.5  million,  which  is 
approximately 13% of the total amount affected by irregularities.  

The last group of particular concern is “beef and veal” (group 21). In this sector 78 
cases  were  reported  involving  approximately  EUR  11.7  million.  These  4  groups 
together  account  for  about  56%  of  the  total  number  of  reported  irregularities  and 
about 83% of the total amount affected by irregularities. 

Some  Member  States  reported  for  some  cases  a  combination  of  different  measures 
affected by the same irregularity. This is indicated in table AG16. The Netherlands 
for  instance  reported  1  case  in  which  support  measures  concerning  “sugar”,  “milk 
and  milk  products”  and  “beef  and  veal”  were  affected  by  one  and  the  same 
irregularity.  Italy  reported  a  case  in  which  support  measures  concerning  “cereals”, 
“beef  and  veal”  and  “sheep  and  goats”  were  affected  by  one  and  the  same 
irregularity. These peculiar cases are not taking into account in the rest of the specific 
analysis.  

Milk and milk products (group 20) 

Member  States  reported  a  total  of  76  cases  affecting  milk  and  milk  products 
measures (group 20). These cases alone amount to approximately EUR 38.8 million, 
which  is  approximately  25%  of  the  total  amount  affected  by  irregularities.  This  is 
relatively high.  

Table  AG18  shows  the  measures  that  were  mostly  affected  by  irregularities, 
indicating  the  number  of  cases,  the  total  amounts  and  average  amount  per 
irregularity.  

The largest number of irregularities and the highest total amounts affected related to 
“butter  and  butter  oil  –  export  refund”  (code  2000  R).  These  irregularities  were 
reported  by  9  Member  States  (BE,  CY,  CZ,  DE,  ES,  FR,  IE,  NL  and  UK).  The 
practises employed (modus operandi) can be summarised as: 

•  non-arrival at final destination 

•  product non-eligible for export refund 

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Table AG18: Milk and milk products: measures affected by irregularities 

Table AG18
MILK AND MILK PRODUCTS
budget year 2007

cases

code
2000 R butter and butter oil - export refund

description

2040 S

butter - concentrated butter, butter for making 
icecream and pastries etc.

2099 S milk and milk products - other
2071 S milk - additional levy
2002 R cheese - export refund
2033 S milk and milk products - intervention storage
2001 R skimmed milk powder - export refund

other

total

art. 1 (1) a Reg. 1848/2006

download 5 February 2008

number

in % of
total

22%

amount in €
16,114,080

14%

12,707,200

3%
21%
9%
1%
5%
24%
100%

8,789,283
252,628
222,288
98,755
96,249
450,531
38,731,014

17

11

2
16
7
1
4
18
76

amounts
in % of
total

42%

33%

23%
1%
1%
0%
0%
1%
100%

average
amount in €
947,887

1,269,699

2,933,163
15,789
31,755
98,755
24,062
293,521
5,614,633

France indicated in 1 case that it concerned (established) fraud. In 2 cases, Member 
States were not able to indicate the measure affected. It concerned cases reported by 
Italy  and  the  Netherlands.  These  2  Member  States  indicated  code  2099  S,  which 
stands for “other”. The Italian case however, concerns almost EUR 8.8 million. The 
irregularity started in 2002 and ended in 2004. Italy as  well as  the Netherlands did 
not describe the practises employed in these 2 cases. 

Member  States  classified  in  49  cases  (64%)  the  irregularities  as  irregularity  or  as 
(suspected  or  established)  fraud.  The  average  level  of  (suspected  or  established) 
fraud cases is 22%, calculated on the basis of the number of classified irregularities. 
It concerned in almost all cases support measures concerning butter. 

Fruit and vegetables (group 15) 

Member States reported a total of 118 cases affecting measures to support the fruit 
and  vegetables  sector  (group  15).  These  cases  alone  add  up  to  approximately  EUR 
27.2  million,  which  is  approximately  18%  of  the  total  amount  affected  by 
irregularities  (see  table  AG17).  This  is  also  relatively  high.  Table  AG19  shows  the 
measures  which  were  hit  by  irregularities,  indicating  the  number  of  cases,  the  total 
amounts and the average amount per irregularity.  

Italy, Greece, Spain and United Kingdom reported 8 cases in which the total amount 
affected by the irregularity was more than EUR 1 million per case. Italy reported 5 
cases as the other 3 Member States reported each 1 case with an amount affected of 
more than EUR 1 million.  

In recent years, Member States have consistently reported a relatively high number 
of irregularities relating to citrus fruits (code 1515 S). This trend was confirmed in 
2007.  Although  Member  States  reported  fewer  irregularities,  the  amounts  affected 
increased  from  EUR  4.3  million  to  EUR  14  million.  These  cases  were  reported  by 
three (3) Member States. Italy reported 5 cases with a total amount affected of EUR 
13.4  million.  Spain  and  Portugal  together  reported  the  other  12  cases  with  a  total 
amount affected of EUR 0.6 million. 

For  the  measure  “operational  funds  for  producer  organisations”  (code  1502  S) 
Member  States  have  also  consistently  reported  a  relatively  high  number  of 

EN 

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irregularities.  7  Member  States  reported  68  cases  with  a  total  amount  affected  of 
almost EUR 13.2 million. Almost 98% of the total amount affected concerned cases 
reported by Italy, Spain and United Kingdom. Italy is responsible for approximately 
53%  of  the  amounts  affected  by  irregularities  as  Spain  and  United  Kingdom  are 
responsible  for  26%  respectively  19%.  Spain,  Italy  and  United  Kingdom  reported 
each one (1) case involving a total of more than EUR 1.5 million. 

Table AG 19: Fruit and vegetables: measures affected by irregularities 

Table AG19
FRUIT AND VEGETABLES
budget year 2007

description

code
1515 S citrus fruits
1502 S operational funds for producer organisations
1511 S processed tomato products - production aid
1513 A dried grapes and figs
1512 S fruit-based products - production aid
1507 S nuts
1508 A bananas - compensation aid
1590 V other
other
total

art. 1 (1) a Reg. 1848/2006

download 5 February 2008

cases

number

in % of
total

17
68
2
1
2
4
8
7
9
118

14%
58%
2%
1%
2%
3%
7%
6%
8%
100%

amounts
in % of
total

44%
41%
4%
3%
3%
2%
1%
1%
1%
100%

average
amount in €
825,252
194,764
603,574
1,108,875
546,643
167,813
30,996
22,995
41,826
272,366

amount in €
14,029,282
13,243,930
1,207,148
1,108,875
1,093,285
671,250
247,971
160,962
376,430
32,139,133

Member  States  classified  in  68  cases  (58%)  the  irregularities  as  irregularity  or  as 
(suspected) fraud. The average level of (suspected) fraud cases is 21%, calculated on 
the  basis  of  the  number  of  classified  irregularities.  Spain,  as  main  supplier  for 
irregularities in the fruit and vegetables sector, did not classify any irregularity. 

Sugar (group 11) 

Member  States  reported  a total  of 10 cases affecting measures to support the sugar 
sector  (group  11).  These  cases  alone  add  up  to  approximately  EUR  32.1  million, 
which is approximately 21% of the total amount affected by irregularities (see table 
AG16). This is rather high. The rather high financial impact is mainly caused by 2 
cases reported by Belgium and Denmark. Belgium and Denmark reported both 1 case 
in  which  the  total  amount  affected  was  EUR  12.6  million  respectively  EUR  14.2 
million.  

The Danish case concerned the support measure “production refunds on sugar used 
in  the  chemical  industry”.  Belgium  indicated  “restructuring  of  the  sugar  industry”. 
Denmark classified the case as an irregularity (IRQ 2) as Belgium did not give any 
classification.  

Rural development (group 40) 

Member  States  reported  a  total  of  589  cases  affecting  rural  development  measures 
financed by the EAGGF guarantee section (group 40). These cases alone amount to 
approximately  EUR  19.5  million,  which  is  approximately  13%  of  the  total  amount 
affected  by  irregularities  (see  table  AG17).  Table  AG20  shows  the  measures  that 
were  mostly  affected  by  irregularities,  indicating  the  number  of  cases,  the  total 
amounts  and  average  amount  per  irregularity.  The  largest  number  of  irregularities 
related to “forestry – former system” (code 4072 A). 

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Table AG 20: Rural development: measures affected by irregularities 

Table AG20
RURAL DEVELOPMENT
budget year 2007

cases

number

in % of
total

description

code
4072 A
4050 A
4080 A a improvement of land

forestry - former system
agri-environment - new system

4060 A

improving the processing and marketing of agricultural 
products
agri-environment - old system

4051 A
4081 A c encouragement of tourist and craft-based activities
4081 A d environmental protection & improvement of animal welfare
4070 A
other

forestry - new system (art. 31 - objecive 1)

total

art. 1 (1) a Reg. 1848/2006

download 5 February 2008

amount in €
5,251,360
2,583,331
2,021,089

19%
22%
2%

4%

1,973,631

14%
3%
3%
2%
32%
100%

1,348,921
1,120,804
560,118
513,337
4,081,240
19,453,831

amounts
in % of
total

27%
13%
10%

10%

7%
6%
3%
3%
21%
100%

average
amount in €
46,472
19,571
168,424

89,711

16,862
74,720
37,341
51,334
21,480
33,029

113
132
12

22

80
15
15
10
190
589

Member  States  classified  in  442  cases  (75%)  the  irregularities  as  irregularity  or  as 
(suspected) fraud. The average level of (suspected) fraud cases is 7.2%, calculated on 
the  basis  of  the  number  of  classified  irregularities.  Spain,  as  main  supplier  for 
irregularities in the fruit and vegetables sector, did not classify any irregularity.  

The  highest  amount  affected  by  irregularities  is  reported  for  the  support  measure 
“forestry – former system” (code 4072 A) as the highest number of irregularities is 
reported for the support measure “agri-environment – new system” (code 4050 A).  

The measures “forestry – former system” (code 4072 A), “agri-environment” (codes 
4050 A and 4051 A) – together account for approximately 55% of the total amount 
of irregularities connected to rural development. 

cases

in % of
total

amounts
in % of
total

Table AG21
FORESTRY
budget year 2007

Member States reported in total 125 
irregularities  relating 
to  forestry 
measures  (codes  4070  A,  4071  A 
and  4072  A)  and  a  total  amount 
affected  by  forestry  measures  of 
almost  EUR  5.8.  It  concerned  in 
more  than  90%  of  the  cases  the 
support  measure  “forestry  –  former 
system”.  Table  AG21  on  the  right 
hand  side  gives  an  overview  of 
and 
irregularities.  Spain 
those 
Portugal 
highest 
number  of  cases  with  the  highest 
amount affected. The average amount per case is fairly high in the cases reported by 
Italy and Spain, at about EUR 63,500 respectively EUR 55,000. The modus operandi 
in  47%  of  the  cases  can  be  described  as  “not  respecting  deadlines”  or  “irregular 
termination”.  Poland  classified  2  cases  as  suspected  fraud  (IRQ  3),  in  one  of  those 
cases the irregularity was committed by a declaration of fictitious land. Spain and the 
Netherlands  did  not  classify  any  of  their  cases.  All  other  Member  States  classified 
the cases as an irregularity (IRQ 2).  

average
amount in €
54,510
35,853
63,569
32,369
15,018
9,399
5,561
46,358

MS number
67
ES
43
PT
8
IT
1
NL
2
FR
PL
2
UK
2
125
total

amount in €
3,652,159
1,541,700
508,551
32,369
30,035
18,797
11,121
5,794,732

54%
34%
6%
1%
2%
2%
2%
100%

63%
27%
9%
1%
1%
0%
0%
100%

reported 

download 5 February 2008

art. 1 (1) a Reg. 1848/2006

the 

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the 

expenditure

Table AG22
AGRI-ENVIRONMENT
budget year 2007

Table  AG22  on  the  right  hand  side  gives  an  overview  per  Member  State  of  the 
number  of  irregularities  reported  and  the  amounts  affected  for  “agri-environment” 
measures  (code  4050  A  and  4051 
A).  It  is  surprising  that  Portugal 
the  highest  number  of 
reports 
irregularities 
highest 
and 
amounts  affected  by  irregularities. 
the  EU-
Approximately  4%  of 
budget 
“agri-
concerning 
environment”  measures  is  spent  in 
Portugal.  The  total  amount  affected 
is 
by 
irregularities 
approximately  26%  of 
total 
expenditure in 2007. Member States 
as  France,  Spain  and  Germany 
receive  a  far  higher  level  of  support  but  report  a  far  lower  percentage  amount 
affected by irregularities: 1%, 1% and 6% respectively.  

amount
in €
337,519
198,573
717,474
655,348
736,332
261,948
304,099
720,959
212 3,932,252

amount
in €
34,394,978
15,140,304
11,584,071
5,776,803
2,786,328
2,409,777
609,763
215,718
72,917,742

in % of
expenditure
1%
1%
6%
11%
26%
11%
50%

cases
25
11
31
35
36
4
16
54

MS
FR
ES
DE
EL
PT
DK
IT
other
total

however 
the 

47%
21%
16%
8%
4%
3%
1%

download 5 February 2008

art. 1 (1) a Reg. 1848/2006

in % of
total

irregularity

100%

5%

Most  frequently  occurring  modus  operandi  can  be  summarised  as  “missing 
documents”  and  “action  not  completed”.  Member  States  classified  in  169  cases 
(80%)  the  irregularities  as  irregularity  or  as  (suspected)  fraud.  None  of  these  cases 
was classified as (suspected) fraud (IRQ 3). Germany and Spain did not classify any 
of their cases. 

Member  States  reported  a  limited  number  of  irregularities  relating  to  the  measures 
“improving  the  processing  and  marketing  of  agricultural  products”  (code  4060  A) 
and “improvement of land (code 4080 A a). The financial impact, however, is high: 
almost  EUR  4  million  (see  table  AG  20).  The  Netherlands  reported  1  irregularity 
with an amount affected of almost EUR 1.1 million.  

Poland reported 42 cases in which the support measures “transitional instrument for 
the financing of rural development” (code 4095 A) and “single area payment scheme 
(SAPS)” (code 7500 A) were involved. All these cases were classified as “suspected 
fraud” (IRQ 3). The financial impact of these cases was almost EUR 0.5 million. The 
modus operandi in more than 90% of the cases can be described as “declaration of 
fictitious land”.  

Beef and veal (group 21) 

Member States reported a total of 78 cases relating to beef and veal measures (group 
21). These add up to approximately EUR 11.7 million, approximately 8% of the total 
amount affected by irregularities. The highest amounts affected by irregularities and 
the  largest  number  of  irregularities 
were  reported  for  export  refund 
followed  by 
(code  2100  R), 
“extensification  premiums”  (code 
2125  A).  Table  AG  23  on  the  right 
hand  side  provides  an  overview. 
Spain  reported  25  “export  refund 
cases”  (code  2100  R)  in  which 

code
2100 R export refunds
2125 A extensification premiums
other
total

amount in €
6,029,168
4,496,707
1,194,442
100% 11,720,317

Table AG23
BEEF AND VEAL
budget year 2007
cases

number
35
17
26
78

51%
38%
10%
100%

download 5 February 2008

art. 1 (1) a Reg. 1848/2006

in % of
total

in % of
total

45%
22%
33%

amounts

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almost  EUR  5.9  million  was  affected  by  irregularities.  Italy  reported  sixteen  (16) 
cases  concerning  the  support  measure  “extensification  premium”.  The  amount 
affected by these irregularities was approximately EUR 4.5 million.  

Member  States  classified  in  51  cases  (65%)  the  irregularities  as  irregularity  or  as 
(suspected) fraud. Only 2 cases were classified as (suspected) fraud (IRQ 3). Spain, 
as  main  supplier  of  irregularities  in  the  beef  and  veal  sector,  did  not  classify  any 
irregularity. 

Export refunds 

Table  AG24  gives  an  overview  of  the  irregularities  per  Member  State  relating  to 
export  refunds.  The  number  of  irregularities  and  the  amounts  affected  by 
irregularities in this area are decreasing, accounting for approximately 9% of the total 
number  of  irregularities  reported  in  2007.  Only  14  Member  States  reported 
irregularities  related  to  export  refunds.  As  mentioned  earlier,  this  is  one  of  the 
consequences of the reforms in the Common Agricultural Policy.  

Table AG 24: Irregularities in export refunds per Member State 

MS 
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

total 2007

27
34

6
10
94
20
16
86
335
20
147
12
26
237
10

11

64
62
190

14
9
23
95
1548

art. 1 (1) a, n Reg. 1848/2006

download 5 February 2008

cases
export refunds
19
19

1
1
18
5

2
37

9

3

15
3
1

13
146

Table AG24
EXPORT REFUNDS
budget year 2007

in % of total

total 2007

70%
56%

17%
10%
19%
25%

2%
11%

6%

12%

23%
5%
1%

14%
9%

401,511
13,866,333

83,362
103,168
2,854,876
15,257,984
83,985
4,185,084
23,609,346
338,508
32,637,233
233,052
490,043
43,063,210
232,242

141,835

4,349,283
1,099,347
5,570,368

284,714
232,894
1,707,309
4,167,640
154,993,326

amounts in €
export refunds
285,270
551,631

17,508
14,217
1,135,541
126,894

681,015
6,797,770

16,018,290

85,441

626,643
4,714
22,245

459,467
26,826,647

in % of total

71%
4%

21%
14%
40%
1%

16%
29%

49%

17%

14%
0%
0%

11%
17%

Member  States  reported  146  cases  relating  to  export  refunds  and  a  total  amount 
affected of almost EUR 26.9 million, which is 17% of the total amount affected by 
irregularities.  

France reported the highest total amount affected by irregularities. The total amount 
affected by irregularities was more than EUR 16 million: the number of cases was 9.  

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The  rather  high  amount  affected  by  the  irregularities  is  mainly  caused  by  1  (one) 
irregularity reported by France. France reported in 1 case a total amount affected of 
almost  EUR  15.4  million.  It  concerned  export  refund  of  butter.  The  case  was 
classified  as  “established  fraud”.  This  implies  that  a  final  court  decision  was 
achieved.  It  is  also  remarkable  that  a  final  court  decision  has  been  achieved  in  the 
year  of  (first)  reporting.  According  to  the  French  communication,  the  expenditure 
was based on a budget line of the year 2000 as the irregularity started in 1997 and 
ended in 2000. 

In Austria irregularities in export refunds, account for approximately 71% of the total 
number of irregularities.  

Spain reported 37 cases with a total amount affected of almost EUR 6.8 million.  

2 (two) cases were qualified as “suspected fraud” of which one (1) case had a total 
amount affected of more than EUR 1 million.  

code

cases

description

Table AG25
EXPORT REFUNDS PER MEASURE
budget year 2007

Table  AG25  on  the  right  hand  side 
shows 
the  product  groups  most 
often  involved  in  export  refund 
irregularities.  The  highest  amounts 
affected are for measure concerning 
butter and butter oil (code 2000 R). 
It concerns a case for which France 
went  to  court  (penal  procedure)  in 
2000.  This  case  therefore,  should 
have been reported in 2000 and not 
in 2007. The total amount affected of this case was approximately EUR 15.4 million. 
Excluding this French case of the analysis, the highest number of cases reported and 
the highest amounts affected are for the measures concerning beef and veal. Member 
States reported 35 cases with a total amount affected of more than EUR 6 million.  

butter and butter oil
beef and veal (CN 0201, 0202, 1602)
non-annex-1-products
pigmeat
sugar and isoglucose
cheese
wine
wheat grain and flour

2000 R
2100 R
30xx R *)
2300 R
1100 R
2002 R
1600 R
1000 R
other
total
art. 3(1)a Reg. 1848/2006

16,114,080
6,029,168
1,904,326
1,205,260
417,400
222,288
143,723
136,906
653,495
26,826,647

*) Germany did not specify the specific non-annex-1 measure affected by irregularities

17
35
28
25
7
7
4
2
21
146

download 5 February 2008

amounts in €

Spain  reported  the highest  number of irregularities: 25 cases. Spain reported by far 
the highest amount affected by irregularities, almost EUR 5.9 million and in 2 cases 
the  amounts  affected  were  more  than  EUR  1  million.  The  most  frequent  modus 
operandi is “missing (supporting) documents”. 

More  than  40%  of  the  irregularities  relating  to  the  export  of  non-annex-1-products 
(code 30xx R) were reported by Germany. Unfortunately, Germany was not able to 
indicate which products were exported and to precise the measure affected.  

A small number of irregularities (2) are classified as “other” (code 9920 R), which 
means  that  the  Member  State  did  not  specify  the  measure  involved.  These 
irregularities were reported by Denmark. These irregularities concern most likely the 
export of “non-annex-1-products”. 

3.3.2. 

Irregularity versus Suspected fraud 

With the introduction of the electronic reporting system in mid-2001, Member States 
were asked to classify the irregularities reported. To assist them, an extra field was 
added  to  the  module  offering  four  possibilities:  mistake,  irregularity,  (suspected) 

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fraud and organised crime. The field was modified in 2004 and 2006 and now offers 
four possibilities:  

•  IRQ 0 = no irregularity 

•  IRQ 2 = irregularity 

•  IRQ 3 = suspected fraud  

•  IRQ 5 = established fraud 

Reg. 1848/2006, which came into force on 1 January 2007, introduced the obligation 
to  identify  fraud  cases.  Unfortunately,  not  all  Member  States  comply  with  this 
obligation. Germany and Spain did not classify any cases. Belgium, Finland and the 
Netherlands should pay extra attention to this obligation. 

Classification of irregularities by Member States 

Table  AG26  gives  an  overview  of  the  classification  of  irregularities  by  Member 
States. Fraud as a percentage of the total amount of cases involved in irregularities is 
about  10%.  The  term  fraud  includes  “suspicion  of  fraud”  (IRQ3)  and  “established 
faud” (IRQ5). The non-irregularities (IRQ0) have not been taken into account for the 
analysis. As mentioned earlier, Member States still need to improve their reporting, 
therefore the figures shown in the table should be treated with caution. 

Table AG 26: Classification of irregularities by Member States 

Table AG26
CLASSIFICATION OF THE IRREGULARITY
budget year 2007
IRQ5

blank

IRQ3

compliance

total

IRQ2

27
34

6
10
94
20
16
86
335
20
147
12
26
237
10

11

64
62
190

14
9
23
95
1,548

27
6

6
10

20
16
82

13
142
11
25
222
10

4

21
6
186

14
9
23
83
936

28

94

335
7

1

37

1
503

100%
18%

100%
100%
0%
100%
100%
100%
0%
65%
100%
100%
96%
100%
100%

100%

42%
100%
100%

100%
100%
100%
99%
68%

4

1
1

15

7

6
56
4

11
105

4

4

fraud in %

MS 
0% AT
0% BE
BG
0% CY
0% CZ
DE
0% DK
0% EE
5% EL
ES
0%
FI
3% FR
8% HU
0%
IE
6%
IT
0%
LT
LU
64% LV
MT
22% NL
90% PL
2% PT
RO
0% SE
0%
SI
0% SK
12% UK
10% total

MS 
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

IRQ2 = irregularity

IRQ3 = suspicion of fraud

IRQ5 = established fraud

blank = not classified by Member State

fraud = (IRQ3 + IRQ5) / total

art. 3 (1) f Reg. 1848/2006

download 5 February 2008

EN 

51 

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Classification of irregularities by OLAF 
In  previous  reports,  OLAF  classified  all  cases.  In  the  period  2000  –  2006  the 
percentage of irregularities classified as “suspected frauds” varied between 10% and 
13% of the total number of irregularities reported.  
In case OLAF would classify the 2007-irregularities by applying the same method as 
used  for  the  period  2000  -  2006,  the  irregularities  to  be  classified  as  “suspected 
frauds”  would  be  14%  of  the  total  number  of  reported  irregularities.  The 
classification by OLAF is based on the classification by Member States, the types of 
irregularities  (codes)  as  indicated  by  Member  States,  the  modus  operandi  as 
described by the Member States and additional comments made by Member States.  
The higher fraud rate can be explained by the classification of the German cases and 
the reclassification of some cases of other Member States. 
A  rather  large  number  of  French  cases  would  be  reclassified  from  “irregularity” 
(IRQ2) into “suspicion of fraud” (IRQ3) due to the modus operandi applied in these 
cases. The practices employed for a large number of these cases can be summarised 
as “false and/or falsified accounts or false and/or falsified documents”. OLAF would 
classify these cases as “suspicion of fraud” (IRQ3).  
Germany  did  not  classify  any  of  its  reported  irregularities.  The  cases  in  which  the 
modus  operandi  can  be  summarised  as  “declaration  of  fictitious  land”  were 
considered as “suspicion of fraud” cases. 

As  said,  table  AG  26  and  the  OLAF-rate  should  be  treated  with  caution.  Member 
States still need to improve their reporting. 

Estimated level of fraud 
On  the  basis  of  the  irregularities  reported  in  the  period  2000-2007  an  attempt  has 
been made to estimate the level of “suspected fraud” in the agricultural sector. Chart 
AG2  reflects  the  results  of  this  analysis  and  shows  the  percentage  of  irregularities 
which can be classified as “suspected fraud” and/or “established fraud” cases, both in 
terms of the number of cases and the amounts affected by the irregularities. 

Given that it is still an early attempt to estimate the level of fraud in the agricultural 
sector,  the  figures  should  be  interpreted  cautiously.  Nevertheless,  the  results  of  the 
analysis  are  in  line  with  the  results  of  those  Member  States  which  classify  the 
irregularities.  

Chart AG 2: Irregularities and “suspected fraud” 

60%

50%

40%

30%

20%

10%

0%

2000

2001

2002

2003

2004

2005

2006

2007

cases calculated by OLAF
amounts calculated by MS

cases calculated by MS
amounts calculated by OLAF

EN 

52 

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One  early  conclusion  is  that,  as  a  percentage  of  the  total  number  of  reported 
irregularities, “suspected fraud” varied between approximately 10% and 14% in the 
period  2000–2007.  The  chart  shows  that  the  level  of  “suspected  fraud”  cases,  as  a 
percentage of the total number of irregularities reported, is relatively stable.  

“Suspected fraud” as a percentage of the total amounts affected by the irregularities 
reported varied between approximately 14% and 45% during the period 2000–2007. 
A greater difference between the percentage of “suspected fraud” cases based on the 
amounts and the percentage based on the number of “suspected fraud” cases was to 
be expected; amounts vary more and differ per irregularity reported. 

It should be reiterated that the obligation to indicate “fraud” was introduced by Reg. 
1848/2006, which came into force on 1 January 2007. 

EN 

53 

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3.4. 

Recovery and sanctions44 

3.4.1.  Recovery 

Pursuant to Article 6 of Regulation (EC) No. 885/2006 Member States had to report 
to  the  Commission  the  amounts  to  be  recovered  at  the  end  of  financial  year  2007. 
These  amounts,  which  are  certified  by  the  Certification  Bodies  in  each  Member 
State, include all recovery cases (irregularities and administrative errors) irrespective 
of the amount concerned. Therefore, the information provided below is not limited to 
irregularity  cases  notified  to  OLAF  under  Regulation  (EC)  No.  1848/2006.  On  the 
basis of the tables submitted by the Member States to the Commission (DG AGRI), 
situation as of 11 April 2008, the amounts are the following: 

•  EUR  154.3  million  was  recovered  by  Member  States  and  credited  to  the 

Community budget during financial year 2007; 

•  EUR 165.8 million was declared irrecoverable by Member States on the basis of 

Article 32(6) of Regulation (EC) No. 1290/2005 in financial year 2007; 

•  The total outstanding amount that remains to be recovered by the Member States 

was EUR 1,438.2 million at the end of financial year 2007. 

Table AG27 gives a breakdown of these amounts on Member State level. 

Table AG27: financial information on recovery 

44 

The  analysis,  text  and  table  concerning  recovery  are  provided  by  DG  AGRI.  Under  Reg.  1848/2006 
Member States are not required to indicate the amounts to recover to OLAF. 

EN 

54 

   EN 

 
                                                 
Table AG27
Financial information on recovery cases from Tables 1-4 of Annex III of Regulation (EC) No 885/2006
Financial year 2007

MS
AT
BE
BG
CY
CZ
DE
DK
EE
ES
FI
FR
GB
GR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
Total

Recovered during FY 
2007

2,691,366.29
4,914,909.76
0
0
194,184.88
24,272,453.07
5,669,409.85
937,624.16
23,304,438.91
2,631,183.66
23,938,989.20
15,320,082.16
1,328,190.75
3,046,296.02
6,793,276.81
12,466,435.97
1,992,817.36
70,910.00
590,571.42
5,573.33
10,479,316.30
2,650,224.33
6,551,177.97
0
3,146,909.72
1,285,270.12
12,988.08
154,294,600.11

Recovered in % of total
1.70%
3.20%
0.00%
0.00%
0.10%
15.70%
3.70%
0.60%
15.10%
1.70%
15.50%
9.90%
0.90%
2.00%
4.40%
8.10%
1.30%
0.00%
0.40%
0.00%
6.80%
1.70%
4.20%
0.00%
2.00%
0.80%
0.00%
100%

Declared irrecoverable 
during FY2007

Outstanding at the end 
of FY 2007

Outstanding in % of 
total

57,161.62
26,068.27
0
0
0
4,864,365.16
1,132,705.24
16,753.65
20,551,894.75
242.48
5,854,248.07
10,349,849.62
10,841.64
0
214,788.14
121,625,153.07
76.86
0
54.09
0
666,852.42
630.29
302,961.28
0
36,503.54
0
78,107.13
165,789,257.32

8,544,331.19
49,614,092.40
0
0
2,876.96
72,897,029.93
12,040,203.82
249,688.84
172,392,029.75
881,768.21
334,092,963.72
71,036,700.82
44,669,181.50
28,606,596.52
11,040,538.62
553,849,675.67
611,936.91
52,472.06
331,396.28
10,346.43
23,442,819.05
383,370.22
49,929,716.70
0
1,110,496.42
610,532.42
1,772,496.44
1,438,173,260.89

0.60%
3.40%
0.00%
0.00%
0.00%
5.10%
0.80%
0.00%
12.00%
0.10%
23.20%
4.90%
3.10%
2.00%
0.80%
38.50%
0.00%
0.00%
0.00%
0.00%
1.60%
0.00%
3.50%
0.00%
0.10%
0.00%
0.10%
100%

3.4.2. 

Sanctions 

The  agricultural  sector  is  renowned  for  its  severe  penalty  system.  Community 
legislation  provides  a  mandatory  system  for  imposing  penalties.  Reg.  1848/2006 
obliges Member States to report details concerning the initiation or abandonment of 
any procedures for imposing administrative or criminal sanctions as well as the main 
results of such procedures.  

Table AG28 gives an overview of penalties concerning the year 2007 reported under 
Reg. 1848/2006 to OLAF.  

Table AG 28: Penalties and sanctions 

EN 

55 

   EN 

 
 
Table AG 28
PENALTIES AND SANCTIONS
budget year 2007

total number
of cases

cases
information
on penalties

information in % total amount

of total cases

affected

amounts
penalties
in €

27
34

6
10
94
20
16
86
335
20
147
12
26
237
10

11

64
62
190

14
9
23
95
1,548

19
18

3
1
0
8
1
3
4
0
13
0
3
6
0

7

6
39
1

0
0
6
14
152

70%
53%

50%
10%
0%
40%
6%
3%
1%
0%
9%
0%
12%
3%
0%

64%

9%
63%
1%

0%
0%
26%
15%
10%

401,511
13,866,333

83,362
103,168
2,854,876
15,257,984
83,985
4,185,084
23,609,346
338,508
32,637,233
233,052
490,043
43,063,210
232,242

141,835

4,349,283
1,099,347
5,570,368

284,714
232,894
1,707,309
4,167,640
154,993,326

525,851
288,716

0
0
0
17,122
15,039
1,363,489
99,427
0
140,422
0
17,294
13,255
0

0

20,807
1,115
2,225

0
0
0
189,259
2,694,021

penalties in %
of total amount

MS 
131% AT
2% BE
BG
0% CY
0% CZ
0% DE
0% DK
18% EE
33% EL
0% ES
0%
FI
0% FR
0% HU
4%
IE
0%
IT
0% LT
LU
0% LV
MT
0% NL
0% PL
0% PT
RO
0% SE
0%
SI
0% SK
5% UK
2% total

MS 
AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
total

art. 5(1) Reg. 1848/2006

download 5 February 2008

In 2007, Member States reported 1,548 cases. In 152 cases, Member States indicated 
that a sanction had been imposed, still has to be imposed or will not be imposed. In 
all other 1,396 cases, no information was received from Member States. 

The  total  amount  of  penalties  imposed  in  2007,  according  to  the  reports  received 
from  Member  States,  is  2%  of  the  total  amount  affected  by  irregularities.  The 
percentage  is  rather  “high”  thanks  to  the  fact  that  Austria  and  Greece  reported  a 
relatively high percentage of penalties, 131% respectively 33%.  

One  of  the  reasons  for  this  rather  low  percentage  is  the  fact  that  only  a  limited 
number of Member States are reporting the penalties applied and, in addition, some 
of the Member States which do report the penalties imposed, only do so in a limited 
number of cases.  

The  penalties  and  sanctions  in  the  agricultural  sector  are  included  in  the  working 
programme 2008 of the European Court of Auditors. 

3.5. 

Conclusions 

Introduction 

•  Member States reported 1,548 new irregularities in 2007; 

•  the total amount affected in 2007 was about EUR 155 million; 

•  Bulgaria, Luxembourg, Malta and Romania had no irregularities to report in 2007; 

EN 

56 

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•    Reporting discipline: 

•  the  reporting  discipline  of  Member  States  improved  in  2007,  but  further 

improvements are still necessary; 

•  Germany,  Spain  and  Latvia  are  not  using  the  electronic  reporting  module  as 

provided by OLAF to forward communications45; 

•  the average time between committing an irregularity and reporting the irregularity 

to the Commission is 4.4 years; 

•  the average time between the discovery and the reporting of an irregularity is 1.2 

year; 

•  Austria has an average time gap between discovery and reporting of 3.4 years; 

•  Austria, Greece, Italy and Sweden have an average time gap of more than 6 years 

between the moment that an irregularity was committed and its reporting; 

•  33% of the irregularities were reported within 6 months after the discovery; 

•  Germany and Spain did not classify any of its irregularities as suspicion of fraud 

or established fraud; 

•  Germany is the only Member State that is not reporting any personal data46; 

•  The EU-27 compliance rate is 70%. 

General trends: 

•  EUR  30.4  billion  of  the  total  expenditure  (EUR  46.9  billion)  concerned 

“decoupled direct aids” (05 03 01).  

•  total amounts affected by irregularities concerning “decoupled direct aids” (05 03 

01) was only EUR 1.1 million; 

•  the number and amounts of irregularities are not equally spread over all Member 

States; 

•  Spain,  Italy  and  Portugal  report  a  relatively  high  number  of  irregularities  and  a 

relatively high total amounts affected by irregularities; 

•  Belgium, Germany, France, Ireland and Poland report a relatively low number of 

irregularities; 

•  Most frequently occurring type of irregularity (41%) concerned the action or non-

action of a beneficiary; 

45 
46 

See footnote 39. 
See footnote 42. 

EN 

57 

   EN 

 
                                                 
•  5% of the irregularities were detected before payment; 

Specific analysis: 

•  the five main categories most affected by irregularities are: 

–  Milk and milk products : 76 cases involving EUR 38.7 million 

– 

– 

– 

– 

Fruit and vegetables 

: 118 cases involving EUR 32.1 million 

Sugar 

: 10 cases involving EUR 27.2 million 

Rural development 

: 589 cases involving EUR 19.5 million 

Beef and veal 

: 78 cases involving EUR 11.7 million; 

– 

– 

the  “suspicion  of  fraud”  level  for  the  category  “milk  and  milk  products”  is 
22%; 

France  and  Spain  report  a  relatively  low  number  of  irregularities  and  a 
relatively  low  amount  affected  by  irregularities  for  the  category  “agri-
environment”; 

Irregularity vs suspected fraud: 

•  “suspected  fraud”  and  “established  fraud”  cases,  as  a  percentage  of  the  total 
number  of  irregularities  reported,  vary  between  10%  (classification  by  MS)  and 
14% (classification by OLAF). 

Penalties and recovery: 

•  the total amount of penalties reported to OLAF is approximately 2% of the total 

amount affected by irregularities; 

•  Austria, Greece and Estonia reported to OLAF more penalties and sanctions than 

other Member States. 

EN 

58 

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4. 

SRTUCTURAL MEASURES (ANNEXES 13-17) 

In  2007,  Member  States  reported  3,740  irregularities  under  Regulation  (EC)  No 
1681/94 which covers the four Structural Funds47 and 92 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). The total amount affected by irregularities in 2007 
was about EUR 827.6 million, EUR 717.4 million of which was from the Structural 
Funds and EUR 110.2 million from the Cohesion Fund. Irregularities reported in this 
sector were equivalent to 1.83% of the budget allocated to it in 2007. 

Since the information system of irregularities was established, Member States have 
reported  25,757  irregularities,  of  which  24,875  related  to  the  Structural  Funds  and 
882 to the Cohesion Fund. 

4.1. 

Reporting Discipline 

In  2007,  the  Commission  received  7,026  communications  under  Regulations  (EC) 
Nos  1681/9448  and  1831/9449,  of  which  3,194  were  updates  of  cases  that  had  been 
previously reported (under Article 5 of the abovementioned regulations). For the first 
time, irregularities were received from all 25 Member States. Bulgaria and Romania 
benefit  from  the  Structural  funds  since  their  accession  and  under  the  new 
programming  period  2007-2013,  but  as  these  programmes  are  not  yet  in  their 
operational phase, no irregularities have yet been reported. 

4.1.1.  Timely reporting 

in  which  an 

Under  Reg.  1681/94  and  Reg.  1831/94 
Member States are required to report at the 
latest  within  2  months  after  the  end  of  the 
quarter 
irregularity  was 
detected  and/or  new  information  about  an 
irregularity  that  has  already  been  reported 
becomes  known.  Member  States  indicate 
the  reporting  quarter  and  the  date  of 
communication.  These  2  (two)  indicators 
can be used to determine if a Member State 
complied with the rules. 14 Member States 
all 
failed 
communications  within  the  period  of  2 

forward 

comply 

to 

to 

47 
The European Regional Development Fund (ERDF), supporting primarily productive investment, infrastructure 

The four Structural Funds are: 

and development of SMEs; 

The European Social Fund (ESF), supporting measures to promote employment (education systems, vocational 

training and recruitment aids); 

The  Guidance  Section  of  the  European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF-Guidance), 

supporting measures for the adjustment of agricultural structures and rural development; 

The Financial Instrument for Fishery Guidance (FIFG), supporting measures for the adjustment of the fisheries 

48 
49 

sector and the ‘accompanying measures’ of the common fishery policy. 
As amended by Regulation (EC) No 2035/2005. 
As amended by Regulation (EC) No 2168/2005. 

EN 

59 

   EN 

 
                                                 
months  after  the  "reporting  quarter".  However,  in  the  case  of  4  countries  (Italy, 
Portugal,  Luxembourg  and  the  Czech  Republic),  only  a  very  limited  number  of 
irregularities was reported too late. Table SF1 provides an overview.  

The  situation  is  improving.  In  2006  63%  of  irregularities  were  reported  on  time, 
while  in  2007  the  share  of  irregularities  reported  on  time  grew  to  75%.  The 
increasing use of electronic means for reporting has positively influenced this result 
(see infra, par. 4.1.2). However still some countries send an important part of their 
communications  well  after  the  deadline  indicated  in  the  legislation  and,  therefore, 
need to put more attention on this aspect. 

It  is,  however,  more  interesting to verify how long  a Member  State needs after the 
detection  of  an  irregularity  to  report  it  to  the  Commission  services.  As  a  matter  of 
fact,  Member  States  are  requested  to  indicate  «the  date  on  which  the  primary 
administrative  or  judicial  finding  on  the  irregularity  was  established»50.  They  have 
failed to indicate a precise date in 142 cases on 3,832 (less than 4%. For more details 
see infra par. 4.1.4). For the remaining 3,690 cases, the gap  between  detection and 
reporting is indicated by Member State in the table SF2 below. 

Table SF2: Years of delay between irregularity detection and reporting - 2007 

50 

See art. 3(1) lett. (j) of Regulations NN. 1681/94 and 1831/94 as amended, respectively, by Regulations 
NN. 2035/2005 and 2168/2005. 

EN 

60 

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It is positive that more than 82% of the irregularities are reported with a maximum of 
one  year  of  delay  to  the  Commission.  A  certain  delay  is  understandable  in  a 
management system quite complicated like that of the Structural funds. It is less easy 
to  understand,  however,  delays  that  exceed  the  2  years,  which  happens  in  almost 
18%  of  the  cases.  This  situation  is  particularly  true  for  Member  States  like  Ireland 
(for which the delay of more than 2 years concerns 94% of the irregularities reported 
in 2007), France (26%), Finland (19%), Italy (16%), Denmark (11%) and Greece and 
Portugal (10%). These countries should pay particularly attention in the future to this 
aspect. 

Timeliness is of the outmost importance in order to allow the Commission to analyse 
correctly and in the right moment in time the changing trends and patterns related to 
irregularities across Europe. 

4.1.2.  Electronic reporting 

The systematic use of the electronic reporting system from Member States is steadily 
increasing51.  In  2006,  51%  of  all  irregularities  were  reported  electronically  through 
the AFIS/ECR system, while in 2007 the proportion of irregularities reported through 
electronic means has reached 75% of the total, as detailed in chart SF1 below. 

Chart SF 1: Reporting of irregularities – used formats 

The number of irregularities reported on paper has decreased by 37.5% in relation to 
the  previous  year,  while  those  reported  through  the  electronic  modules  of  the 
Commission  has  increased  by  28%.  Also  the  number  of  irregularities  reported 
through other electronic means (electronic file) has increased by 11%. 

The  increased  use  of  the  AFIS/ECR  modules  1681  and  1831  is  leading  to  an 
improvement  in  data  quality  and  in  timeliness  of  reporting.  Using  these  electronic 
modules  reduces  the  risk  of  Member  States  interpreting  the  reporting  requirements 

51 

It  should  be  noted  that  electronic  reporting  is  not  compulsory  for  Member  States,  as  article  6a  of 
Regulations NN. 1681/94 and 1831/94, as amended, respectively, by Regulations NN. 2035/2005 and 
2168/2005, indicates that information required «shall be sent, whenever it is possible to do so, using the 
module provided by the Commission». 

EN 

61 

   EN 

 
 
                                                 
and  technical  aspects  in  different  ways  and,  therefore,  improves  the  consistency  of 
the information submitted to the Commission. 

There  are  still  8  countries  that  do  not  use  the  AFIS/ECR  modules  1681  and  1831: 
Estonia,  France,  Germany,  Ireland,  Luxembourg,  Latvia,  Spain  and  Sweden. 
Germany  and  Estonia  send  an  electronic  file  via  the  AFIS-mail,  which  still  needs 
some processing. Table SF3 indicates the reporting formats used by Member States 
and the relative number of irregularities forwarded to the Commission. 

Table SF 3: Reporting formats used by the Member States 

4.1.3.  Programme identification number (CCI code) 

One  of  the  most  important  information  to  be  communicated  is  the  Common 
Identification  Code  (CCI  from  the  French  acronym),  which  allows  for  the  correct 
identification  of  the  programme  that  was  affected  by  the  irregularity.  This  piece  of 
information is absolutely essential for a correct financial follow-up and for a reliable 
analysis of the irregularities by the Commission services. 

Member  States  have  been  particularly  compliant  from  this  point  of  view,  because 
only for 14 irregularities on 3,832 the identification number was not provided. 

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62 

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4.1.4.  Year of detection vs year of reporting 

The analysis of the gap between detection and reporting has been already described 
under  par.  4.1.1.  The  table  below  indicates  in  how  many  cases  the  Member  States 
failed to provide «the date on which the primary administrative or judicial finding on 
the irregularity was established»52. 

The  table  indicates  only  the  Member  States  which  have  failed  to  indicate  the 
appropriate  information  in  some  of  the  irregularities  communicated  to  the 
Commission.  

The  non-compliance  level  is,  in general,  very  low  (3.7%).  It  is  clear  that  in  certain 
cases, like France, Finland, Greece, the 
Netherlands,  Portugal,  Poland  and 
Sweden,  the  non  compliance  is  very 
limited and it is due to just a few cases 
of  irregularities  (1,  maximum  2)  for 
which  the  Member  States  did  not 
indicate  the  date  of  establishment  of 
the  irregularity.  These  are  not  serious 
failures to comply with the regulations. 

the 

In some other cases, the percentage of 
irregularities  where 
required 
element  was  not  indicated  is  still 
relatively  low  on  the  total:  this  is  the 
case  of  countries  like  Spain,  Italy  and 
the United Kingdom. It should also be 
noted  that  these  countries  are  among 
those  which 
the  highest 
reported 
number of irregularities. 

More  serious  appears  the  situation  of 
the  Czech  Republic,  Hungary  and 
Slovakia, 
the  missing 
information  represents  a  higher  share 
of the total. 

where 

4.1.5.  Practices employed (art. 3(1)(d) of Reg. NN. 1681/94 and 1831/94) 

Art. 3(1) (d) of Reg. NN. 1681/94 and 1831/94 contain the obligation to report the 
practices  employed  in  committing  the  irregularity  (modus  operandi).  The  practices 
employed can be indicated by code as well as with text. The codes are in a pick list 
that contains a collection of different types of irregularity. The reporting module also 
offers  the  possibility  to  use  written  text  to  describe  more  precisely  the  practices 
employed.  

52 

See art. 3(1) lett. (j) of Regulations NN. 1681/94 and 1831/94 as amended, respectively, by Regulations 
NN. 2035/2005 and 2168/2005. 

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Only in 5.5% of the cases, Member States failed to describe the modus operandi in 
details. However, only in 2 cases they missed to provide a short description using the 
codes from the pick list. Compliance rate is therefore very high. 

4.1.6. 

Suspected fraud (art. 3(1)(e) of Reg. NN. 1681/94 and 1831/94) 

Art. 3(1)(e) of Reg. NN. 1681/94 and 1831/94 obliges Member States to indicate if 
the  practice  amounts  to  a  suspected  fraud  or  not.  Member  States  classified 
approximately  67%  of  the  reported  cases.  Table  SF5  gives  an  overview  of  the 
classification  by  Member  State.  Member  States  that  did  not  classify  any  of  their 
reported cases are Spain, France, Ireland and Luxembourg. Denmark, Germany and 
Sweden  qualified  a  very  low  percentage  of  the  reported  irregularities  (between 
18.2% and 34%). The compliance rate of the other Member States can be evaluate as 
satisfactory to very satisfactory. 

Table SF5 Classification of reported irregularities by Member State 

For a more detailed analysis of this information see infra section 4.3.3. 

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4.1.7.  Legal/natural persons identification 

Member States are also required to provide information on the identity of the natural 
and legal persons involved. Art. 3(1)(k) of Reg. NN. 1681/1994 and 1831/94 states 
that  the  identities  of  the  natural  and/or  legal  persons  involved,  or  of  other  entities 
which have taken part in the commission of the irregularity, should be indicated. 

Germany informed the Commission about restrictions in its national legislation with 
respect  to  the  reporting  of  personal  data.  Nevertheless,  in  3  cases  Germany  did 
forward the names of the natural persons involved53. 

Table SF6 provides an overview of the reporting of personal data. 

The compliance rate of 87% is high.  

4.1.8. 

Summary 

Table SF7 contains an overview of the compliance rate per reporting obligation. The 
table summarises the findings of the previous paragraphs as the examined reporting 
obligations have a high added value for analysis purposes.  

53 

Germany will classify its cases when it starts to use the IMS (summer 2008). See footnote 39. 

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Table SF7: compliance per Member State year 2007 

In  general,  Member  States  do  try  to  comply  with  the  reporting  obligations  and 
important progresses have been found in relation to previous years starting from the 
timeliness  of  the  reporting.  There  is  still  room  for  improvement,  in  particular  from 
countries  like  Germany54,  France,  Ireland  and  Spain  which  score  far  below  the 
average.  

The EU-25 compliance rate is 84%. 

4.2. 

General Trends 

Overall trends 

In  2007  the  number  of  reported  irregularities  increased  by  around  19.2%  as 
compared  to  the  year  before.  Also  the  related  irregular  amounts  increased  of  about 
17.7%, the irregularities reaching EUR 827.6 million (including the Cohesion Fund). 
As far as the number of irregularities communicated is concerned, it has reached its 
peak in 2002 with more than 4,500 irregularities notified. This situation was due to 
the closure of the programming period 1994-1999. As shown in chart SF5, since then 
the  number  of  irregularities  has  oscillated  between  2,500  and  3,800.  In  2006,  the 
number  of  irregularities  reported  decreased  in  comparison  to  the  situation  in  2005. 
That  was  caused  mostly  by  the  change  in  the  legislation.  The  Regulations  Nos. 

54 

See footnote 39. 

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2035/2005  and  2168/2005  amending,  respectively,  Regulations  Nos.  1681/94  and 
1831/94 raised the reporting threshold from EUR 4,000 to EUR 10,000.  

Chart  SF  2:  1998-2007  trend  concerning  number  of  reported  irregularities  for  the 
Structural Funds, the Cohesion Fund and in total 

In  2007,  however,  the  number  of  irregularities  increased  again,  up  to  3,832 
(including the Cohesion Fund). The main explanations for this new increase seem to 
be mainly two.  

In first place, a higher number of irregularities from the new Member States (EU10), 
as a result of full implementation of the programmes and a better understanding and 
implementation  of  the  reporting  obligation.  The  number  of  irregularities  from  the 
EU10 increased by 31.5% in relation to 2006. 

In the second place, it should be stressed that the sector of the Cohesion policy has 
been  subject  to  a  particular  “pressure”  from  the  control  authorities  and  this  is 
reflected  in  a  higher  number  of  irregularities  in  relation  to  2006  also  from  the  old 
Member States (EU15). The increase from the EU15 was of 23.5%. 

The  irregular  amounts  grew  as  well,  reaching  a  new  maximum  level  after  that  of 
2006. However, their relative impact on the overall Cohesion Policy budget remained 
stable (for a detailed analysis about the impact on budget see infra par. 4.2.3). The 
explanations for such a further increase are the same two explained above. 

Chart  SF  3:  1998-2007  trend  concerning  irregular  financial  amounts  for  the 
Structural Funds, the Cohesion Fund and in total 

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The  variation  in  relation  to  the  year  2006  has  been  again  greater  for  the  EU10 
(+56.8%) than for the EU15 (+37.7%).  

The  difficulty  in  interpreting  charts  SF2  and  SF3  consists  in  the  fact  that  projects 
financed through the Cohesion policy budget are implemented through several years 
and the number of irregularities and related financial impact is only calculated on the 
reporting  year.  It  can  also  happen  that  Member  States  still  report  irregularities 
referred  to  the  Programming  Period  1994-1999  and  these  are  included  in  the  chart 
too  (for  an  analysis  per  programming  period,  see  infra  paragraph  4.2.5). 
Furthermore,  as  of  2007,  the  new  programming  period  2007-2013  comes  into 
relevance. The budget allocated to the Cohesion policy 2007, in fact, refers to its first 
year, but no irregularities can be related to it, considering that the programmes under 
which  the  financed  projects  and  operations  will  be  implemented  were  under 
negotiation  and  no  real  financing  occurred.  As  a  matter  of  fact,  the  reported 
irregularities  are  referred  exclusively  to  the  programming  periods  1994-1999  and 
2000-2006 (for more details see infra par. 4.2.5). 

Furthermore, only some of these irregularities have real financial consequences and 
constitute a specific potential loss to the European budget. In fact, some irregularities 
are detected before any payment is made and the question of recovery does not arise 
(for more details see infra paragraph 4.3.3). 

Moreover,  the  majority  of  irregularities  having  a  real  financial  impact  are  not 
fraudulent  and,  once  an  irregular  situation  has  been  identified,  corrective  measures 
are adopted and recovery procedures started. These may take some time. In cases of 
suspected  fraud,  however,  penal  or  judicial  procedures  are  activated  and  longer 
delays can be expected. 

Trend related to Member States 

Like in previous years, the irregularities are not distributed equally among Member 
States.  

Taking into consideration how the irregularities are split among Member States, like 
in  previous  years  the  biggest  countries  and  those  with  the  highest  overall  funding 
from the Cohesion policy report the most irregularities. In 2007, the highest number 
of irregularities was reported by Italy (658, -12%), Spain (647, +51%) Portugal (544, 
+19%), the United Kingdom (502, +125%) and Germany (412, +28%). Apart from 

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Italy, all other countries having reported a high number of irregularities, presented a 
significant increase. Another Member State which registered a significant increase in 
terms of number of reported irregularities in 2007 is Poland (295, +88%). 

In  the  analysis  of  the  particular  funds,  the  irregularities  are  split  differently  among 
the Member States than in the total number of cases.  

For example, in the European Social Fund (ESF) irregularities, Portugal remains also 
in 2007 the Member State having reported the highest number of irregularities (224), 
followed by Italy (208), the United Kingdom (170) and Germany (143).  

In  the  European  Regional  Development  Fund  (ERDF)  the  countries  reporting  the 
most  irregularities  are  Spain  (391),  Italy  (306),  the  United  Kingdom  (280)  and 
Portugal (263).  

In  the  European  Agriculture  Guarantee  and  Guidance  Fund  –  Guidance  section 
(EAGGF-Guidance),  Italy  reported  the  highest  number  of  irregularities  (134), 
followed  by  Poland  (94),  Spain  (70)  and  Portugal  (47).  Concerning  Poland,  the 
EAGGF-Guidance irregularities stand up for almost one third of the total number of 
irregularities reported by this Member State.  

In  the  Financial  Instrument  for  Fishery  Guidance  (FIFG),  irregularities  from  Spain 
(18), the United Kingdom (11) and Italy (10) account for 65% of the total number of 
reported irregularities affecting this Fund. 

Finally,  concerning  the  Cohesion  Fund,  Spain  reported  more  than  one  third  of  the 
received  irregularities  (34)  for  this  fund.  Greece,  which  in  the  previous  years  had 
reported the greatest share of the irregularities affecting this Fund, comes in second 
place  (28),  followed  by  Poland  (9).  Concerning  this  Fund,  the  number  of  reported 
irregularities  appears  too  low  in  relation  to  the  other  funds  and  the  allocated 
resources. 

In 2007, for the first time since the enlargement of 2004, all Member States reported 
irregularities to the Commission services. This is a very positive element, because it 
shows  and  improved  understanding  from  the  Member  States  of  the  reporting 
obligations. 

4.2.1.  Amounts involved 

As far as amounts per country are concerned, they go more or less in line with the 
number of the reported cases, with the countries reporting the highest numbers, also 
reporting the highest irregular financial amounts.  

The  number  of  reported  irregularities  and  related  amounts  is  clearly  linked  to  the 
budget that is allocated to each Member State, as showed in chart SF4. This “rule” is 
in general confirmed, with some exceptions. 

On one side, the United Kingdom appears over-represented in this chart. This is due 
to  the  fact  that  2007  has  been  a  special  year  for  the  number  of  irregularities  and 
related  irregular  amounts  reported  by  this  country,  as  a  result  of  extensive  controls 
carried  out.  On  the  other,  in  relation  to  the  budget  allocated,  the  number  of 

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69 

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irregularities  and  related  amounts  reported  by  France  appear  too  low  and  this  is  a 
confirmation  of  what  already  highlighted 
the  previous  years.  Similar 
considerations  can  also  be  expressed  for  Belgium  in  relation  to  the  other  Member 
States  which  have  a  comparable  level  of  resources  allocated,  such  as  Hungary  and 
Finland,  though,  in  this  case,  the  difference  is  less  evident  than  France  and  his 
“neighbours”. 

in 

Those  significant  differences  between  Member  States  in  terms  of  number  of 
irregularities and amounts affected do not necessarily mean that one country is more 
fraudulent than another. The reason for the high number of irregularities in the given 
country could be as well a higher number of controls carried out in the analysed year. 
This constitutes another reason why more efforts need to be undertaken in view of an 
improved harmonisation of reporting of irregularities.  

Chart  SF  4:  Number  of  cases  and  amounts  affected  by  irregularities  per  Member 
State (in the order of increasing SF budget) 

€

n

i

s
t
n
u
o
m
a

r
a

l

u
g
e
r
r
I

200,000,000

180,000,000

160,000,000

140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

0

700

600

500

400

300

200

100

0

N
°
o
f

i
r
r
e
g
u

l

a
r
i
t
i

e
s

CY MT LU SK EE LV DK LT SI CZ AT HU BE FI SE IE NL PL FR UK PT EL IT DE ES

Irregular amounts in € N° of irregularities

However, as not all Member States benefit also from the Cohesion Fund, the analysis 
will  first  focus  on  the  four  structural  funds  and  then  a  different  subparagraph  will 
present the situation concerning the Cohesion Fund55. 

The four Structural Funds 

55 

The Cohesion Fund finances big infrastructure projects related to transports, energy and environment in 
those Member States whose average income pro capita is lower than 90% of the European average. 

EN 

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Spain  reported  the  highest  irregular  financial  amounts  (181  MEUR,  +112%  in 
relation to  the  year 2006),  followed by  the  United Kingdom (161 MEUR, +170%), 
Italy (158 MEUR, -31%) and Portugal (50 MEUR, +34%). 

In the analysis of the particular funds, the situation varies slightly. 

In  the  ERDF,  Spain  (163  MEUR)  is  followed  by  Italy  (122  MEUR),  the  United 
Kingdom  (114  MEUR)  and  Germany  (41  MEUR).  Poland  is  the  first  of  the  EU10 
(26 MEUR). 

In  the  ESF,  the  United  Kingdom  and  the  Netherlands  (24  MEUR)  are  followed  by 
Italy  (21  MEUR)  and  Portugal  (15  MEUR).  The  first  of  the  EU10  is  the  Czech 
Republic (3 MEUR). 

In the EAGGF section Guidance, the highest irregular financial amounts have been 
reported by the United Kingdom (21 MEUR), Italy (14 MEUR), Greece (7 MEUR) 
and  Spain  (6  MEUR).  Poland  is  the  Member  State  of  the  EU10  group  with  the 
highest reported irregular amounts (3 MEUR). 

In  the  FIFG,  Portugal  (1.7  MEUR)  is  followed  by  Italy  (1.4  MEUR),  the  United 
Kingdom (0.99 MEUR) and Spain (0.8 MEUR). 

The Cohesion Fund 

For the Cohesion Fund, once more Greece is the Member State having reported the 
highest irregular amounts (67 MEUR), though with a significant decrease in relation 
to  2006  (-43%);  it  is  followed  by  Spain  (32.6  MEUR,  -26.6%)  and  Ireland  (6.6 
MEUR, no irregularities reported in 2006).  

Among  the  EU10,  Latvia  (0.77  MEUR)  and  Hungary  (0.63  MEUR)  come  before 
Poland (0.59 MEUR). For the second consecutive year, the Czech Republic failed to 
indicate the estimated irregular amounts for the reported irregularities. 

4.2.2. 

Impact on budget 

Since  2002  the  impact  of  reported  irregularities  has  been  oscillating  between  2.0% 
(in 2002) and 1.6% (in 2003), as showed in chart SF5. 

Chart SF 5: Impact of irregularities on SF budget 

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2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Impact on budget 0.15% 0.39% 0.45% 0.68% 2.01% 1.57% 1.95% 1.62% 1.83% 1.83%

In  particular,  the  impact  on  the  budget  of  the  reported  irregularities  has  remained 
stable from 2006 to 2007.  

On  the  one  hand,  this  supports  the  conclusion  that  a  certain  consistency  and 
continuity have been achieved in the reporting of irregularities by Member States. 

However,  on  the  other  hand,  there  is  a  great  difficulty  in  analysing  correctly  this 
information.  As  already  indicated  above  (see  supra  par.  4.1),  the  reported 
irregularities refer to programmes and projects that are of a multi-annual nature and, 
furthermore,  a  part  of  the  reported  irregularities  refers  to  a  different  programming 
period (for more details see paragraph 4.2.5 below). Furthermore, the budget for the 
year 2007, on which the impact of irregularities reported by the Member States has 
been  calculated,  is  indicating  the  resources  allocated  to  the  first  year  of  the 
programming  period  2007-2013,  while  none  of  the  reported  irregularities  can  be 
referred to it. 

This  implies  that  a  correct  estimation  of  the  impact  of  irregularities  and  suspected 
frauds  on  the  part  of  the  European  budget  dedicated  to  the  Cohesion  policy  is 
possible  only  by  analysing  the  irregularities  by  programming  period.  Paragraphs 
4.2.5 and 4.3.2 will deal with these specific issues. 

4.2.3.  Detection methods 

Table  SF8  shows  the  most  frequent  detection  methods  and  the  related  detected 
amounts. 

Table SF8: detection methods 

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Table SF8
DETECTION METHODS
Year 2007

Description

Frequency

Detected 
amounts

Average detected 
amounts

Control of documents
Other facts
National administrative of financial control
On the spot control of achievement of project 
or action
Ex post control
Documentary check
Control on the premises of the company
Routine
Art 3(1) lett (f) Reg NN. 1681/94 and 1831/94

Download 15/04/2008

779
693
401

284
308
236
203
203

102,126,093
195,351,017
115,023,951

21,142,123
49,565,839
25,209,383
79,023,324
71,316,589

131,099
281,892
286,843

74,444
160,928
106,819
389,277
351,313

Two aspects need to be underlined. In the first place the excessive use of a generic 
description of the detection method used: “other facts”. Secondly, the extremely high 
average  amounts  detected  through  “Controls  on  the  premises  of  the  company”  and 
“Routine controls”. 

4.2.4.  Types of irregularity 

Differences  remain  among  Member  States  as  to  the  types  of  irregularities  reported 
and,  to  a  certain  extent,  these  are  consistent  with  last  year.  The  majority  of  cases 
involve irregularities of an “administrative” nature that are normally detected in the 
course of the routine documentary checks which are conducted before any payment 
of European money is made. To demonstrate this, among the most frequent types of 
irregularity  reported  by  Member  States  are  the  “not  eligible  expenditure”  and 
“missing  or  incomplete  supporting  documents”.  Once  again,  Italy  was  the  country 
where the most falsifications of documents were detected. Italy was not the only MS 
to  report  this  kind  of  situation  as  similar  cases  were  also  reported  by  Poland, 
Germany, the United Kingdom, Portugal, Latvia, Luxembourg, Hungary, the Czech 
Republic and France. 

Table SF9 shows the most frequent types of irregularities together with the amounts 
involved and the indicative average amount:  

Table SF9: Most frequent types of irregularities reported 

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It  is  important  to  underline  that  the  most frequent  types  of  irregularities  are  almost 
the  same  as  in  the  last  four  years  confirming  a  certain  consistency  in  patterns  and 
trends  relating  to  structural  measures  and  consistency  in  reporting  by  the  Member 
States.  

The consistent pattern across all the funds is that the “non-eligible expenditure” is the 
most reported typology. “Infringement of rules concerned with public procurement” 
is the second most reported typology for the ERDF and the Cohesion Fund. 

“Missing or incomplete supporting documents” is the second most reported typology 
for the ESF and FIFG. 

It  should  be  underlined  that  the  generic  code  “other  irregularities”  is  still  the  third 
most used typology (the second for the EAGGF – section Guidance), with an impact 
of  8.5%  on  the  total  reported  irregularities.  Member  States  should  still  pay  some 
attention to this aspect. 

4.2.5.  Trends related to the programming period 2000-2006 

In 2007, about 97% of the reported irregularities were referred to the programming 
period 2000-2006, as showed in chart SF6. The number of irregularities still referred 
to the programming period 1994-1999 is therefore decreasing. In 2006, the share of 
irregularities  related  to  the  old  programming  period  was  still  about  9%  of  the  total 
reported irregularities. 

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Chart SF 6: Distribution of reported irregularities per programming period 

This is to be expected as the attention of the controls is naturally focussed on running 
projects rather then closed operations. 

Chart  SF7 shows  the trend of reported irregularities (in terms of both numbers  and 
financial amounts involved) referred to the 2000-2006 programming period alone as 
from the year 2000. 

Chart  SF  7:  1998-2006  trend  concerning  number  of  reported  irregularities  and 
irregular amounts – Programming Period 2000-2006 

Irregularities related to the current programming period have been steadily increasing 
year  after  year.  This  is  due  to  the  fact  that  controls  on  the  projects  also  progressed 
with  the  advancing  of  the  financed  operations.  It  is  worth  remembering  that  the 
projects financed through the Structural Funds are implemented during several years. 

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Chart  SF8  puts  in  comparison  the  trend  related  to  the  programming  period  2000-
2006 with that of the previous period in terms of numbers of reported irregularities. 

Chart  SF  8:  1998-2006  trend  concerning  number  of  reported  irregularities  and 
irregular amounts – Programming Period 2000-2006 

The  chart  clearly  shows  that  the  number  of  irregularities  related  to  the  current 
programming period reported in the first 8 years since its beginning are many more 
than those related to the previous. 

This is due to a number of reasons. The increased resources allocated to the structural 
measures,  the  higher  number  of  Member  States  that  benefit  from  them,  a  better 
understanding  of  the  reporting  obligations  from  national  authorities,  but  also, 
probably, a growing attention to this sector and improved controls. 

This  difference  between  the  two  programming  periods  also  induces  to  foresee  that 
the  peak  referred  to  the  year  of  closure  of  the  current  programming  period  will  be 
probably lower than that of the previous round (in correspondence with Year 9-Y10). 

See paragraph 4.3 for more analysis about the programming period 2000-2006. 

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4.3. 

Specific analysis 

4.3.1. 

Irregularities affecting the different funds 

Table SF10 shows the repartition of the irregular amounts reported for 2007 between 
the different Funds (including the Cohesion Fund). 

The numbers have increased in comparison to last year due to the already mentioned 
change  in  the  legislation.  In  2006  the  Member  States  communicated  to  the 
Commission 3,216 irregularities; in 2007 it was 3,832 (increase by 19.2%). 

Like in previous years, most of the irregularities were communicated for the ERDF 
and  ESF.  About  83%  of  the  irregularities  were  reported  for  those  two  funds  alone. 
The other three funds have seen a decrease as compared to 2006.  

This situation is showed in details in chart SF9 and table SF10 below. 

Chart SF 9 Cases of irregularities per Structural Fund (CF included) 

Table SF 10: Number of reported irregularities by fund in 2007 as compared to 2006 

2007
2006

Difference 
Variation % 

ERDF 
1,906 
1,225 
681 
55.6% 

ESF 
1,290 
1,133 
157 
13.9% 

EAGGF-G 
484 
548 
-64 
-11.7% 

FIFG 
60 
82 
-22 
-26.8% 

CF 
92 
228 
-136 
-59.6% 

TOTAL 
3,832 
3,216 
616 
19.2% 

As far as the amounts are concerned, the total irregular amounts grew by 17.7% as 
compared to 2005.  

Like  in  the  number  of  cases,  the  ERDF  has  also  the  biggest  share  in  the  irregular 
amounts – 64%. However, differently than in the number of cases, the ESF accounts 
only for 14% of the amounts and the Cohesion Fund for 13%. That difference in the 
share of different funds in the total number of cases and total amounts is due to the 
fact  that  the  average  costs  of  projects  vary  significantly  according  to  the  financing 
fund (and therefore according to the type of project/operation financed). The projects 
carried  out  in  the  framework  of  the  Cohesion  Fund  can  be  extremely  costly, 
wherefrom very high values of irregularities.  

Chart SF10 represents graphically the described situation. 

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Chart SF 10: Amounts affected per Structural Funds (CF included) 

As  compared  to  2006,  the  share  of  the  ERDF  has  greatly  increased  (as  last  year  it 
represented 50% of the amounts). The total irregular amount for the ERDF has risen 
by  48%  in  comparison  to  2006.  Two  other  funds  experienced  an  increase  of  the 
irregular amounts in 2007 in relation to the previous year. In the EAGGF-Guidance a 
growth  of  13.7%  was  observed,  while  the  ESF  increased  by  20%  in  value.  Table 
SF11 provides details concerning all the funds. 

Table SF 11: Irregular amounts by fund as compared to 2006 (amounts in € 1,000) 

ERDF 

ESF 

EAGGF-G  FIFG 

CF 

TOTAL 

2007
2006

Difference 
Variation % 

534,363 
360,024 
174,339 
48.4% 

114,138 
94,955 
19,183 
20.2% 

62,874 
55,317 
7,557 
13.7% 

6,056 
6,401 
-345 
-5.4% 

110,223 
186,605 
-76,382 
-40.9% 

827,654 
703,302 
124,352 
17.7% 

While  comparing  the  share  of  funds  in  the  total  irregularities,  the  most  striking 
conclusion is the difference in the Cohesion Funds share in the total amounts and in 
the number of cases. This however is due, as already mentioned, to the high value of 
projects carried out in its framework.  

If  only  the  four  Structural  Funds  are  taken  in  consideration,  the  distribution  of  the 
reported irregularities and related involved financial amounts is that presented in the 
following charts SF11 and SF12. 

Chart SF 11 (left): Number of irregularities per Structural Fund (CF excluded) 

Chart SF 12 (right): Amounts affected per Structural Funds (CF excluded) 

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Table  SF12  below  shows  how  irregularities  among  the  funds  are  distributed  in 
relation to the financial allocations of the different funds (Cohesion Fund excluded). 
The  data  contained  in  the  table  highlight  an  over-representation  of  irregularities 
related  to  the  ERDF.  A  possible  explanation  is  the  fact  that  the  ERDF  finances 
projects  of  greater  financial  value  than  the  other  funds  and,  therefore,  related 
irregularities may affect higher financial amounts. 

Table  SF  12:  Irregularities  by  fund  (number  and  amounts)  in  relation  to  budget 
allocated 

4.3.2. 

Irregularities by Objective – Programming Period 2000-2006 

The  Cohesion  policy,  as  already  specified  in  paragraph  4.1,  aims  at  supporting  the 
economy  of  regions  lagging  behind  or  in  a  difficult  contingent  economic  situation. 
The  European  support;  which  is  always  accompanied  by  a  national  support,  varies 
according to the fact that a region falls within the area of a given objective.  

EN 

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Charts SF13 and SF14 show how the irregularities reported in 2007 and related to the 
programming period 2000-2006 were distributed among the different objectives56. 

Chart SF 13 (left): distribution of irregularities related to PP2000-2006 by number, 
according  to  objective  –  2007  –  reported  irregularities  (left)  and  related  irregular 
amounts (right) 

Chart SF 14 (right): distribution of irregularities related to PP2000-2006 by value, 
according to objective – 2007 

The  distribution  of  the  irregularities  is  very  much  in  line  with  the  allocation  of  the 
financial resources among the different objectives, with a slight over representation 
of  irregularities  related  to  objective  3  programmes  and  an  under  representation  of 
irregularities  affecting  objective  2  regions  and  programmes  for  fisheries  out  of 
objective 1 regions as showed in the table SF13. 

Table  SF  13:  Irregularities  by  objective  (by  numbers  and  amounts)  in  relation  to 
budget allocated 

56 
Objective  1:  promote  the  development  and  structural  adjustment  of  regions  whose  development  is  lagging 

Three general objectives are foreseen for the programming period 2000-2006: 

behind; 

Objective 2: supporting the economic and social conversion of areas experiencing structural difficulties; 
Objective  3:  supporting  the  adaptation  and  modernisation  of  education,  training  and  employment  policies  and 

systems in regions not eligible under Objective 1. 

Furthermore, through the Funds are also financed the so called “Community Initiatives” , aimed at intervening 
on  specific  aspects  such  as,  for  example,  stimulating  interregional  cooperation  (INTERREG); 
promoting the design and implementation of innovative models of development for the economic and 
social regeneration of troubled urban areas (URBAN).  

EN 

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4.3.3. 

Irregularities vs suspected frauds 

First estimations of which proportion of the reported irregularities could be defined 
as  “suspected  frauds”  were  presented  in  the  Annual  Reports  since  2004.  These 
attempts were mainly based on specific analyses of the information reported by the 
Member  States  concerning  the  modus  operandi,  the  type  of  irregularity,  the 
administrative  state  of  an  irregularity  and  the  additional  information  given  in  text 
fields. 

After the modifications introduced by Regulations Nos. 2035/2005 and 2168/2005 to 
the  basic  Regulations  Nos.  1681/94  and  1831/94,  as  of  January  1st  2006,  Member 
States  have  to  classify  the  reported  irregularity,  indicating  whether  the  reported 
irregularity  is  a  “suspected  fraud”  or  not.  The  concept  of  “suspected  fraud”  is 
necessary, because a given situation can be defined as fraud only after a sentence is 
issued by a competent court.  

As  already  indicated  under  paragraph  4.1.6,  Member  States  were  able  to  classify 
67%  of  the  reported  irregularities  (that  is  to  say  that  they  indicated  whether  the 
reported  situation  was  evaluated  as  an  administrative  irregularity  or  a  suspected 
fraud). It is an encouraging progress in relation to the previous year, when only 51% 
of the reported cases provided for this indication, but it also shows that there is still 
room for improvement, in particular from certain Member States (4 Member States 
have still not provided any qualification at all; other 3 Member States could provide 
the  classification  only  for  a  limited  part  of  their  reported  irregularities.  For  more 
details, see supra par. 4.1.6). 

The data sample is, therefore, particularly significant and the results of this analysis 
base now on more solid grounds than in the past. 

About  15%  of  the  2,582  irregularities  for  which  qualification  has  been  provided, 
were  qualified  as  “suspected  frauds”.  This  result  is  fully  in  line  with  last  years’ 
estimations.  

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Furthermore,  by  applying  the  same  analytical  techniques  of  the  previous  years57  to 
the data set classified by the Member States, the results obtained are rather consistent 
with those obtained on the portion of information received from the Member States 
as indicated in table SF14 below. In fact, the results differ in only 4% of the cases. 

Table  SF14:  Comparison  between  Commission  and  Member  State  classification  of 
irregularities 

It  should  be  also  highlighted  that  from  a  very  detailed  analysis  of  the  cases  where 
differences exist, elements provided by the Member States induce to consider correct 
the re-classification operated by the Commission. 

Table  SF15  shows  the  different  results  based  on  the  classification  provided  by  the 
Member States (and limited to the 2,582 irregularities for which the qualification has 
been  provided)  and  that  operated  by  the  Commission  on  the  whole  data  set  for  the 
year 2007.  

Table  SF  15:  Percentage  of  irregularities  qualified  as  “suspected  fraud”  and 
estimation of “suspected frauds” on the reported irregularities per Fund 

The  differences  between  the  percentages  can  be  explained  by  the  fact  that  the  two 
data set are not the same.  

As already indicated under paragraph 4.1, in relation to the reporting of irregularities 
affecting  the  Cohesion  Fund,  there  seems  to  be  a  discrepancy  with  the  other  funds 
that induces to think that still many progresses are needed in relation to compliance 
with reporting obligations. 

57 

The  estimation  method  has  remained  basically  the  same,  with  some  minor  variations,  following  the 
lessons  “learned”  in  analysing  the  cases  directly  classified  by  the  Member  States.  This  slightly 
“revised” method has been applied again to the entire database of reported irregularities for the years 
2000-2007  in  order  to  produce  Chart  SF15.  The  different  method  used  explains  the  different  values 
showed on that chart in comparison with similar charts appeared on the statistical annexes to the annual 
reports for the years 2005 and 2006. 

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Table  SF16  presents  the  same  comparison  between  the  classification  provided  by 
Member States and Commission’s analysis in relation to the amounts reported. 

Table SF 16: Percentage of reported financial amounts involved in cases qualified as 
“suspected fraud” and estimation of “suspected fraud” amounts per fund 

This  table  shows  even  more  the  need  for  a  deeper  attention  by  Member  States 
reporting irregularities affecting the Cohesion Fund. The 0% indicated above is due 
to  the  fact  that  the  irregular  amounts  for  the  cases  classified  as  “suspected  frauds” 
still need to be assessed by the national authorities. 

Despite  the  consistent  and  positive  results  showed  above  in  terms  of  comparability 
and  compatibility  of 
the 
Commission’s),  it  is  still  recommended  to  take  a  lot  of  caution  in  assessing  the 
meaning  of  these  figures.  A  100%  classification  from  the  Member  States  would 
remove this caution, but the results are, indeed, encouraging.  

two  approaches  (the  Member  States’  and 

the 

Chart  SF1558  presents  the  trend  of  the  percentage  of  suspected  frauds  on  the  total 
reported 
the 
in 
Commission’s estimations. 

last  eight  years  calculated  according 

irregularities 

the 

to 

A  striking  aspect  is  the  relatively  stable  percentage  of  irregularities  that  could  be 
estimated  as  suspected  fraud  in  the  last  four  years.  It  is  around  12%  of  the  total 
reported (black line on the chart). 

58 

As data  referred  to  the  Cohesion fund  are considered not  reliable,  they have  been  excluded from  this 
chart. See also footnote 51 for more details about data showed on this chart. 

EN 

83 

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Chart SF 15: Level of “suspected frauds” on total reported irregularities from 2000 
to 2007 

The  lowest  level  of  suspected  fraud  as  a  percentage  of  total  reported  irregularities 
was registered in 2002. This was also the year in which the highest number of cases 
of irregularities was reported to OLAF, coinciding with the closure of the 1994-1999 
programming period.  

On  the  basis  of  this  estimation,  in  2007,  reported  “suspected  frauds’  affect  about 
0.31% of the commitments. 

However,  this  does  not  mean  that  this  amount  is  effectively  defrauded  or  turns  out 
into  a  loss  for  the  European  budget.  In  fact,  these  amounts  relate  to  suspected 
fraudulent behaviours that have been detected by national authorities and for which 
recovery procedures are undergoing. Moreover, when these situations were detected 
in  early  stages  of  the  process,  the  “potential”  loss  is  even  decreased,  because  no 
payments or only interim payments have been granted. 

By  analysing  only  the  cases  estimated  to  be  considered  as  “suspected  frauds”,  the 
amounts still to be recovered related to them impact on the EU budget for 0.20%. 

4.3.4. 

Irregularities detected before payment 

Therefore, an interesting aspect to examine in the framework of the protection of the 
Communities’  financial  interests  is  what  proportion  of  irregularities  is  detected 
before any payment is effectively made to the beneficiaries. 

This  aspect  can  provide  some  concrete  elements  also  concerning  Member  States’ 
preventive action. 

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Table SF17 shows the total number of irregularities reported by each Member State 
(column  A);  the  number  of  irregularities  detected  before  any  payment  is  made 
(column B); what percentage B  represents  on  A  (column  C);  the  financial  amounts 
reported  as  irregular  (column  D)  and  those  related  to  the  irregularities  detected 
before  payment  (column  E);  and  finally  what  percentage  of  the  total  irregular 
financial amounts reported have been identified before payment (column F). 

Table SF 17: irregularities detected before payments per Member States - 2006 

Very high rates  of  detection  before  payment emerge  especially in some of the new 
Member  States  (namely  Hungary,  Malta,  Poland  and  Slovakia)  and  in  Sweden,  the 
Netherlands and Ireland.  

4.4. 

Recovery 

In 2007, Member States communicated, pursuant to Regulation No. 1681/94, 3,740 
irregularities for a total financial amount of EUR 717,431,387 (see Annex 15).  

The situation as regards recovery in 2007 (see Annex 16) is as follows:  

–  Member States recovered EUR 153,465,848; 

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– 

– 

the sum to be recovered was EUR 418,231,399;  

in  the  same  period,  the  amount  declared  irrecoverable  pursuant  to  Article  5, 
par. 2 of  Regulation No. 1681/94, and  which is awaiting a formal decision is 
EUR 216,644  

Pursuant  to  Regulation  No.1831/94,  Member  States  reported  92  irregularities  for  a 
total amount of EUR 110,222,823 (see annex 17), of which EUR 39,298,464 remain 
to be recovered. 

4.5. 

Conclusions 

Introduction 

•  Member States reported 3,832 irregularities in 2007; 

•  The total financial amount affected in 2007 was about EUR 828 million. 

Reporting discipline 

•  The number of irregularities reported through the Electronic modules AFIS/ECR 

has been increasing and represent now over 75% of the total; 

•  Eight  (8)  Member  States  still  do  not  use  the  electronic  modules  AFIS/ECR: 

Estonia, France, Germany, Ireland, Luxembourg, Latvia, Spain and Sweden; 

•  Germany and Estonia send an electronic file via the AFIS-mail, which still needs 

some processing; 

•  Member  States  need  to  pay  more  attention  to  submit  the  irregularities  within 
deadlines established by regulations, but the situation is improving in relation to 
the past; 

•  The  time  gap  between  detection  and  reporting  is  satisfactory  for  82%  of  the 

irregularities; 

•  Germany is the only country that does not communicate personal data; 

•  The  classification  of  the  irregularity  (indicating  whether  or  not  it  is  a  case  of 
“suspected’ fraud) is an element of the reporting that needs to be strengthened. In 
2007,  the  classification  was  provided  in  67%  of  the  irregularities,  increasing  in 
comparison with 2006; 

•  Despite  the  clarifications  and  simplifications  introduced  with  Regulations  Nos. 
2035/2005  and  2168/2005,  there  is  still  need  for  further  harmonisation  of 
reporting between Member States. 

General trends 

•  The  number  of  irregularities  reported  to  the  Commission  increased  by  19.2%  in 

relation to 2006; 

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•  The irregular financial amounts related to those irregularities increased by 17.7%; 

•  The impact of irregularities on the total Structural actions budget remained stable 

(1.83%); 

•  Italy,  Spain,  Portugal,  the  United  Kingdom  and  Germany  are  the  countries  that 
reported the highest number of irregularities in 2007. Poland is the first among the 
EU10; 

•  Spain, Italy, the United Kingdom and Germany are the countries that reported the 

highest amounts. Poland is the first of the EU 10; 

•  Higher irregular financial amounts reported by a given country do not necessary 
imply that in this country more frauds and irregularities occur than in others. The 
reason could be a higher number of controls; 

•  The most frequent method for detecting irregularities is the control of documents. 
The  method  which  has  the  highest  average  detected  amount  is  “control  on  the 
premises of the company”; 

•  Not eligible expenditure is the most frequently reported type of irregularity. The 

other reported typologies are in line with previous years; 

•  Concerning  the  programming  period  2000-2006,  the  trend  is  increasing  for  both 

number of irregularities and related amounts. 

Specific analysis 

•  ERDF  remains  the  fund  to  which  the  highest  number  of  irregularities  and  the 
highest amounts are related. This is normal considering that it is the Fund with the 
largest resources available.  

•  ERDF was also the fund having showed the highest increase in terms of number 

of reported irregularities and related amounts.  

•  Irregular amounts increased also in relation to ESF and EAGGF. They decreased 

for FIFG and the Cohesion Fund; 

•  The  greatest  majority  of  irregularities  related  to  the  programming  period  2000-
2006  are  referred  to  Objective  1  regions  which  are  also  the  regions  benefiting 
from  the  greatest  support.  In  general,  there  is  a  certain  correlation  between  the 
budget allocated and the irregularities reported; 

•  “Suspected frauds”, as a percentage of the total number of reported irregularities, 

represent around 12-15% in 2007. This result is in line with previous years 

•  High  rates  of  detection  before  payment  emerge  especially  in  some  of  the  new 
Member States (namely Hungary, Malta, Poland and Slovakia) and in Sweden, the 
Netherlands and Ireland. 

Recovery 

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•  In  2007,  the  irregular  financial  amounts  increased  and  so  did  the  amounts  to  be 

recovered; 

•  63% of the reported irregular amounts are to be recovered, while they represented 

51% of the total reported irregular amounts in 2006; 

•  The amounts to be recovered are declining for the Cohesion Fund. 

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5. 

PRE-ACCESSION FUNDS (ANNEXES 18-21) 

In  2007  Member  States  and  Candidate  Countries  sent  1,615  reports  on  three  pre-
accession funds (PHARE, SAPARD, ISPA) to the Commission/OLAF of which 332 
new  communications  and  1,283  updates  of  cases  which  had  been  reported 
previously. The total amount affected by irregularities in 2007 was EUR 32,384,953 
where  PHARE  accounts  for  EUR  15,787,226  (96  cases),  SAPARD  –  EUR 
10,789,619 (150 cases), ISPA – EUR 5,808,108 (86 cases). 

5.1. 

Reporting discipline 

The  obligation  to  report  irregularities  in  the  area  of  pre-accession  assistance  is 
established  in  the  Financing  Agreements  signed  between  the  acceding  countries, 
Candidate  countries  and  the  European  Community  and  is  in  accordance  with  the 
provisions of Commission Regulation (EC) 1681/199459. 

Pre-accession assistance related irregularities are reported using standard paper form. 
Afterwards the submitted information is inserted in the data base managed by OLAF. 
The  reporting  countries  tend  to  misinterpret  the  obligatory  fields  in  the  form, 
therefore the consistency and comparability of the reported information remains to be 
an issue. 

Table PA 1: Share of reliability of reported information in 2007 

Table PA1
Reliability of reported information 2007
Cases with 
mistakes
40
34
10
8
8
4
4
2
1
1
0
0
0
112

Communications 
2007
347
639
57
25
380
70
31
23
20
6
2
11
4
1615

Reliability %
88.47%
94.68%
82.46%
68.00%
97.89%
94.29%
87.10%
91.30%
95.00%
83.33%
100.00%
100.00%
100.00%
93.07%

Country
BG
RO
SK
HU
PL
CZ
LT
EE
LV
TR
HR
MT
SI
Total

Insufficient  quality  of  reported  information  remains  to  be  an  outstanding  problem 
although  some  improvements  have  been  achieved.  Inconsistencies  and  even 
contradictions in different sections of the same report still occur. In absolute numbers 
Bulgaria  has  the  highest  number  of  notifications  containing  one  or  more  content 

59 

As amended by Regulation (EC) No 2035/2005 

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mistakes (40), followed by Romania (34). In relative terms Hungarian notifications 
are the least reliable. The same countries were identified in the 2006 report. 

The share of reliable reports in Table PA 1 has to be interpreted with caution60. Most 
common  mistakes  are  incorrect  or  incomplete  financial  aspects  of  the  reports, 
missing  practices  employed 
types  of 
irregularities.  

irregularities,  missing 

in  committing 

A  number  of  technical  nature  mistakes  occur  in  Bulgarian,  Hungarian,  Czech,  and 
Romanian  reports,  namely,  numbering  of  the  cases  is  not  sequential,  reporting 
quarters are mixed, some pages are missing, project details are not precise.  

The incorrect numbering of the cases becomes a hindrance to cooperation with MSs’ 
authorities on follow up of related issues. Sequential numbering is an important pre-
condition and some progress is expected from some reporting authorities.  

The  irregularity  management  team  in  OLAF  performs  quality  checks  and  tries  to 
clarify all the inconsistencies found in the reports. Frequently they occur in financial 
aspects  as  miscalculations  or  result  from  different  exchange  rates  used.  A  more 
responsible approach towards the preparation of reports by the reporting authorities 
would  enable  the  Commission  to  minimize  the  quality  checks  and  correspondence 
related to these issues.  

At the end of 2007 a thorough overview61 of OLAF data base and cross check of all 
the  communications  sent  by  reporting  countries  were  carried  out.  It  resulted  in 
clarifying  financial  aspects  sections  as  well  as  deleting  duplicate  cases.  Member 
States’ authorities have been contacted and requested to provide further information 
on cases detected before 2007 which contain inconsistencies and were not followed-
up  (no  information  provided  on  administrative  or  judicial  measures  taken  and 
recoveries).  Bulgaria,  Czech  Republic,  Hungary,  Latvia,  Lithuania,  Poland, 
Romania,  Slovakia,  and  Slovenia  received  lists  of  cases.  Bearing  in  mind  the 
approaching closure of the programmes data on the financial aspects should be up to 
date and precise. 

5.1.1.  Timely reporting 

Timely  reporting  of  irregularities  continues  to  be  one  of  the  problems  OLAF  is 
facing when working with analysis of the reported information. In 2007 5 countries 
out of 14 missed the reporting deadline62 for at least one of the pre-accession funds. 
The  deadlines  were  fully  respected  by  Cyprus,  Czech  Republic,  Estonia,  Latvia, 
Lithuania, Malta, Romania, and Slovenia. Some special cases are worth bringing into 
the light. Bulgaria missed the reporting deadline for ISPA for all 4 reporting quarters 
in 2007. Croatia started reporting first cases in 2007 (only ‘nil’ reports had been sent 

60 

61 
62 

Mistakes are calculated on a case basis. If there are several mistakes in one report it is counted as one. 
A  comparison  is  then  drawn  between  problematic  cases  and  all  communications  (new  and  updates) 
received from the reporting country in 2007. 
Consequently eligible amounts and irregular amounts may differ from the ones indicated in 2006 report. 
Following  the  two  months  at  the  end  of  each  quarter,  Member  states  and  Candidate  Countries  are 
obliged  to  report  to  the  Commission  any  irregularities  which  have  been  the  subject  of  initial 
administrative or judicial investigations. 

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before), however, the deadlines were missed. Hungary failed to report PHARE and 
SAPARD on time for three quarters in 2007. Turkey does not keep to the reporting 
schedule. 

Table PA 2: Timely reporting 

Table PA2
TIMELY REPORTING

Country
HR
HU
SK
BG
PL

Reported too 
late
2
19
26
88
57

Reported on 
time
0
6
31
259
323

Total reports
2
25
57
347
380

% of late 
reports
100.00%
76.00%
45.61%
25.36%
15.00%

Failure to respect reporting deadlines by the Member States and Candidate Countries 
makes the preparation of a thorough analytical overview of detected irregular cases 
rather  difficult.  Since  pre-accession  assistance  related  irregularities  are  reported  in 
paper some time is needed to process them.  

5.1.2.  Time gaps 

In  accordance  with  the  Regulation  1681/94  there  are  three  obligatory  dates  to  be 
filled  in  (date  of  first  information,  the  period  of  irregularity,  date  when  the 
irregularity was established). The calculations are based on the dates presented in the 
first notifications sent in 2007. Failure to indicate at least one of the required dates 
affects the compliance. Some reporting countries tend to leave out the dates therefore 
more attention should be concentrated on this aspect.  

Table PA 3: Compliance in 2007 – missing dates 

Table PA3
COMPLIANCE 2007 - MISSING DATES

Country
BG
CZ
EE
HR
HU
LV
MT
PL
RO
SI
SK
TR
 Total

No cases
76
7
8
2
7
2
2
44
164
1
13
6
332

Cases with 

dates missing % Compliance 

22
1
0
0
6
0
1
1
8
1
1
2
43

71.05%
85.71%
100.00%
100.00%
14.29%
100.00%
50.00%
97.73%
95.12%
0.00%
92.31%
66.67%
87.05%

Table  PA  4  presents  the  average  time  period  that  each  reporting  country  takes  to 
detect an irregularity and then to report it to the Commission. Cyprus and Lithuania 
did  not  report  any  cases  in  2007.  The  analysis  takes  into  account  the  start  date  of 

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irregularity,  the  date  of  establishment,  and  the  date  of  reporting  the  case  to  the 
Commission. Due to missing dates in a number of cases Table PA 4 is compiled on a 
limited dataset. 

Table PA 4: Timely reporting – time gap in 2007 cases 

Table PA4
TIMELY REPORTING - TIME GAP 2007 CASES

Country
BG
CZ
CY
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
TR
Total 

Average time gap in months
Irregularity - Detection Detection - Reporting

14.26
19.91

22.03
4.87
42.57

22.58
4.77
32.49
22.31

4.68
1.80
17.48

2.56
9.77

1.95
0.82
5.13

0.83
4.80
5.39
2.50

7.55
2.23
3.96

The  average  time  span  for  relevant  authorities  to  detect  an  irregularity  is  17,48 
months. However, for Hungary it is 3.5 years, for Poland almost 3 years. This time 
period also signals the end of the project cycle. 

A  maximum  period  of  5  months  (3  months  +  2  months)  to  report  a  detected 
irregularity is established  by Regulation No. 1681/1994. According to the provided 
information, it takes almost 4 months on average to report the detected irregularities. 
Czech Republic and Slovakia were late to submit the information on detection to the 
Commission. 

Some  very  short  periods  between  detection  and  reporting  (less  than  a  month)  give 
rise  to  doubts  on  the  correct  interpretation  of  ‘the  date  of  establishment’  by  the 
reporting  countries.  Reporting  countries  are  required  to  fill  in  the  date  of  primary 
administrative or judicial finding63. If the data are correct the result is very positive. 

63 

As  defined  in  Art.  1a  (3)  of  the  Commission  regulation  1681/94  "primary  administrative  or  judicial 
finding"  means  a  first  written  assessment  by  a  competent  authority,  either  administrative  or  judicial, 
concluding on the basis of specific facts that an irregularity has been committed, without prejudice to 
the  possibility  that  this  conclusion  may  subsequently  have  to  be  revised  or  withdrawn  as  a  result  of 
developments in the course of the administrative or judicial procedure. 

EN 

92 

   EN 

 
 
                                                 
5.1.3.  Personal data 

Personal data relate to one more aspect of reporting discipline. Reporting countries 
are  obliged  to  give  information  on  the  identity  of  the  natural  or  legal  persons 
involved in the irregularity64. 

Table PA 5: 2007 cases containing personal data 

Table PA5
PERSONAL DATA 2007

Country No cases

BG
CZ
EE
HR
HU
LV
MT
PL
RO
SI
SK
TR

 Total

76
7
8
2
7
2
2
44
164
1
13
6

332

Missing 
names
0
0
0
0
0
0
1
1
3
0
2
0

Compliance %
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
97.73%
98.17%
100.00%
84.62%
100.00%

7

97.89%

In  general  the  situation  is  very  satisfactory  and  only  Malta,  Poland,  Romania,  and 
Slovakia need to slightly improve. 

5.1.4.  Reporting thresholds 

Different thresholds to report the detected irregular cases to the Commission apply to 
pre-accession  assistance,  namely  EUR  4000  for  SAPARD,  EUR  10,000  for 
PHARE65, and no threshold for ISPA related irregularities. Some reporting countries 
keep  sending  cases  where  the  Community  amount  affected  is  below  the  reporting 
threshold.  Table  PA  6  shows  the  number  of  cases  reported  below  the  threshold  in 
2007. 

Table PA 6: Irregularities reported in 2007 below the threshold 

64 

65 

Missing personal data at some instances might be justified by provisions of Article 3(3) of Regulation 
1681/94  stipulating  ‘If  national  provisions  provide  for  the  confidentiality  of  investigations, 
communication of information shall be subject to the authorization of the competent court of tribunal’. 
Since 1st January 2006 

EN 

93 

   EN 

 
 
                                                 
Table PA6
CASES BELOW THE THRESHOLD

Country

All funds €

BG
CZ
EE
LV
PL
RO
SK
Total

No Reports
25
1
3
1
2
1
3
36

Eligible amount
3,215,329
164,033
13,492
46,548
18,757
40,878
371,309
3,870,346

Irregular amount Amount to be recovered

92,169
798
4,787
1,227
6,745
1,436
12,180
119,342

61,479
0
2,846
943
6,745
0
6,716
78,729

5.1.5.  Practices employed 

Reporting countries are obliged to indicate the practices employed in committing the 
irregularity  (modus  operandi)66.  This  can  be  done  by  using  the  provided  codes  or 
giving a description. The list of codes provides a collection of types of irregularities. 
If  the  reporting  countries  do  not  choose  the  relevant  code  OLAF  picks  the  most 
appropriate code on the basis of the description. This is necessary to make the data 
reported  by  different  countries  comparable.  Failure  to  provide  clear  and  accurate 
descriptions  by  reporting  authorities  leads  to  difficulties  in  analyzing  the  data. 
Reporting countries should be more precise in providing such information. 

5.1.6.  Classification of irregularity 

Reporting countries are obliged to indicate  whether the reported irregularity  can be 
considered as ‘suspected fraud’ or not. When the reporting countries fail to classify 
the reported cases OLAF does it on the basis of the overall information provided in 
the report. Table PA 7 provides a rate of compliance with respect to classification of 
irregularity. 

Table PA 7: Compliance in 2007 - classification of irregularities  

Table PA7
CLASSIFICATION OF CASES 2007 

Country
CZ
MT
SI
TR
PL
SK
HU
LV
EE
RO
BG
HR
 Total

Blank
7
2
1
6
33
9
4
1
3
57
21

144

Fraud Irregularity No of cases Compliance %

7
2
1
6
44
13
7
2
8
164
76
2
332

0.00%
0.00%
0.00%
0.00%
25.00%
30.77%
42.86%
50.00%
62.50%
65.24%
72.37%
100.00%
56.63%

3

10
8

21

8
4
3
1
5
97
47
2
167

66 

Article 3 of Commission Regulation (EC)1681/94 

EN 

94 

   EN 

 
 
 
 
                                                 
Croatia  fully  complied  but  only  two  cases  were  reported.  Czech  Republic,  Malta, 
Slovenia,  and  Turkey  did  not  classify  any  of  the  reported  irregularities  in  2007. 
Cyprus and Lithuania have not reported any new cases in 2007 so they do not appear 
in the compliance assessment. On average 56.6% of cases were classified. There is a 
decrease in compliance with reference to 2006.  

5.1.7. 

Summary  

Table PA 8 makes a summary of different aspects of compliance rate. The countries 
are listed in order of compliance with the requirements established by the Regulation 
1681/94.  Inconsistencies  for  each  country  are  more  precisely  seen  by  analysing 
separate columns. Cyprus and Lithuania did not report new cases in 2007 therefore 
their  compliance  could  only  be  measured  on  the  basis  of  updates  but  could  not  be 
complete. 

The summary reveals that countries reporting very few cases like Malta and Slovenia 
get to the bottom of the list because mistakes get high weighting. They should pay 
more  attention  to  the  classification  of  cases  and  dates.  As  for  Hungary  the  low 
overall result is a matter of great concern.  

Summary compliance of 82.4% manifests some limitations with reference to further 
analysis  carried  out  in  the  report.  Low  compliance  with  the  reporting  obligation 
might imply some weaknesses in administrative set up of the reporting mechanism in 
the Member States and Candidate Countries concerned. 

Table PA 8: Compliance per reporting country 2007 

Table PA8
SUMMARY COMPLIANCE %
Missing 
names

Missing 
dates

Country
EE
RO
LV
BG
PL
HR
CZ
TR
SK
MT
SI
HU
 Total

100.00% 100.00%
95.12%
98.17%
100.00% 100.00%
71.05% 100.00%
97.73%
97.73%
100.00% 100.00%
85.71% 100.00%
66.67% 100.00%
84.62%
92.31%
50.00%
50.00%
0.00%
100.00%
14.29% 100.00%
97.89%
87.05%

Classification 
of cases
62.50%
65.24%
50.00%
72.37%
25.00%
100.00%
0.00%
0.00%
30.77%
0.00%
0.00%
42.86%
56.63%

Timely 
reporting
100.00%
100.00%
100.00%
74.64%
85.00%
0.00%
100.00%
100.00%
54.39%
100.00%
100.00%
24.00%
87.88%

Summary 
compliance %
90.63%
89.63%
87.50%
79.52%
76.36%
75.00%
71.43%
66.67%
65.52%
50.00%
50.00%
45.29%
82.36%

5.2. 

General Trends 

The  intention  of  this  descriptive  analysis  is  to  provide  an  overview  of  the  reported 
irregularities in 2007 as well as comparison with the trends observed for the period 
2002 -2006.  

EN 

95 

   EN 

 
 
One  should  take  into  account  that  Member  States  and  Candidate  Countries  must 
report to the Commission cases exceeding the established thresholds. As presented in 
Table  PA  6  reports  below  the  threshold  are  included  in  the  overall  analysis.  Since 
reporting  countries  decided  to  report  them  to  the  Commission  it  is  possible  that 
irregular amounts are only indicative and will be specified. Therefore they are likely 
to get higher in the follow up reports. 

Overall trend 

The  number  of  cases  reported  (first  communications)  in  2007  decreased  by  15.9%, 
however,  the  number  of  follow-up  reports  increased  by  55.9%  in  comparison  to 
2006.  

A  sharp  decrease  by  53.2%  is  observed  in  the  number  of  PHARE  cases,  a  small 
decrease by 8.5% in SAPARD cases, and an enormous increase by 230.7% (from 26 
in 2006 to 86 in 2007) in ISPA cases. This reflects that less new cases are detected 
because pre-accession funds are undergoing the final stages of the project cycle. The 
high number of updates illustrates that beneficiary countries are actively proceeding 
with  administrative  or  judicial  measures  concerning  cases  detected  previously. 
However,  the  high  number  of  updates  is  not  characteristic  to  all  the  reporting 
countries. Some of them just started reporting in 2007. 

Irregularities  are  not  distributed  equally  among  the  reporting  countries  due  to 
different  periods  of  eligibility  of  expenditure.  Three  groups  of  reporting  countries 
can  be  distinguished,  namely  2004  accession  Member  States,  2007  accession 
Member  States,  and  Candidate  countries  –  Croatia  and  Turkey.  In  2007  EU-10 
account  for  25.3%,  Bulgaria  and  Romania  –  72.3%,  Croatia  and  Turkey  –  2.4%  of 
the total number of reported cases. Talking about the total irregular amount reported 
EU-10 make 19.7%, Bulgaria and Romania – 76.1%, Croatia and Turkey – 4.1%. 

Chart PA 1: Irregularities communicated by reporting countries (2002-2007) 

35000000

30000000

R
U
E
s
t
n
u
o
m
A

25000000

20000000

15000000

10000000

5000000

32,384,953

395

341

332

227

17,372,538

13,774,244

10,426,644

104

5,344,938

6

14,890

0

2002

2003

2004

2005

2006

2007

450

400

350

300

250

200

s
e
s
a
C

150

100

50

0

EN 

Amounts

Cases

96 

   EN 

 
 
 
5.2.1.  Amounts involved 

For  the  purposes  of  this  report  the  term  eligible  amount  stands  for  the  amount 
committed  to  be  paid  at  the  signature  of  the  contract  if  the  expenditure  incurred  is 
justified and eligible.  

With regard to the amounts involved both eligible and irregular total amounts went 
up. 

In  2007  the  eligible  amount  increased  by  208%  in  comparison  to  2006.  This  was 
caused  by  a  big  increase  of  eligible  expenditure  for  ISPA  (432%).  The  decrease  in 
PHARE  and  SAPARD  could  not  counterbalance  the  ISPA  increase.  In  PHARE 
eligible expenditure declined by 77% and in SAPARD it went down by 17%.  

EU-10  does  not  report  ISPA  irregularities  any  longer  due  to  the  transfer  of 
expenditure into the Cohesion Fund. Consequently, only Bulgaria and Romania sent 
communications  for  ISPA  in  2007  (see  Annex  18).  There  is  a  striking  difference 
between both the number of cases and amounts involved as reported by Bulgaria and 
Romania. The number of ISPA cases reported by Romanian authorities has increased 
four times combined with 5 time increase in the irregular amounts. As for Bulgaria 
the number of cases increased twice (from 2 to 4) but the irregular amount almost 15 
times.  The  eligible  amount  reported  by  Bulgarian  authorities  is  relatively  small 
bearing in mind that the average value of ISPA contracts is a million euro or more. 
Obviously there is a difference in the approach to irregularity reporting in those two 
countries.  

Irregular  amount  reported  in  2007  went  up  by  135%.  The  irregular  amounts  in  all 
three funds went up sharply, especially for ISPA. There are several reasons behind it. 
Many  projects,  which  did  not  get  into  the  audit  samples  before,  are  being  checked 
only  at  the  final  stages  of  the  implementation  when  the  final  payment  claims  are 
tabled. Since all the projects are being checked before final payments are made, this 
triggers the detection of irregularities. Big irregular amounts manifest the fact that a 
number of projects failed to be implemented or violated eligibility rules, therefore the 
whole amount of the contract becomes irregular.  

Chart PA 2: Irregular amounts by fund 

EN 

97 

   EN 

 
R
U
E
n
o

i
l
l
i

m

t
n
u
o
m
a

r
a
l

u
g
e
r
r
I

18

16

14

12

10

8

6

4

2

0

2002

2003

2004

2005

2006

2007

ISPA

PHARE

SAPARD

The charts have to be interpreted with caution. The number of reporting countries is 
growing therefore it results in the increasing amounts. What is more, pre-accession 
assistance  funded  projects  run  over  several  years  while  the  affected  amounts  are 
calculated with reference to the reporting year. While the closure of the programmes 
is  approaching  the  remaining  projects  (possibly  contracted  at  the  beginning  of  the 
programme and with several addenda) are frequently problematic.  

Furthermore,  a  distinction  has  to  be  made  between  cases  with  potential  financial 
impact detected before the payments and real financial impact resulting in recoveries 
(see 5.3.2 and 5.4). 

The  major  part  of  irregular  cases  is  not  fraudulent  and  undergoing  corrective 
measures (see 5.3.2). 

Countries benefiting from the biggest support (Romania, Poland, Bulgaria, Hungary) 
reported  the  highest  number  of  irregularities  (164,  76,  44  and  7  respectively).  The 
pattern,  however,  is  different  with  reference  to  the  irregular  amounts.  Romania, 
Bulgaria,  Hungary,  and  Slovakia  reported  the  highest  irregular  amounts.  Annex  18 
presents all the figures in detail per each reporting country. 

The differences in the number of reported cases and irregular amounts do not imply 
higher vulnerability to irregularities by some countries. The reasons for high number 
of irregularities reported could be a higher number of controls carried out by national 
authorities or Community audits in the reporting year. 

Impact on the budget 

After  the  accession  of  EU-10  no  new  expenditure  was  committed  (except  for 
SAPARD where some commitments were made up at the end of 2004). For Bulgaria 
and  Romania  the  last  commitment  year  was  2006.  2007  was  the  first  year  of 

EN 

98 

   EN 

 
 
 
 
 
commitments  under  Instrument  of  Pre-Accession  Assistance  (IPA)67  focusing  on 
Candidate and Potential Candidate countries for the programming period 2007- 2013. 

Chart  PA  3:  Reported  irregular  amount  as  share  of  the  eligible  amount  under 
reported irregular projects 

60.00%

52.88%

50.00%

40.00%

30.00%

20.00%

10.00%

t
n
u
o
m
a

r
a
l

u
g
e
r
r
i

f
o
e
r
a
h
S

0.00%

39.86%

38.89%

36.97%

27.43%

22.79%

16.15%

13.66%

9.66%

6.39%

1.08% 0.86% 0.43% 0.42%

1.92%

BG SI

HU HR TR EE

SK LV CZ MT RO LT PL CY

 Total

Member States - Candidate Countries

The  comparison  is  drawn  between  the  total  values  of  the  projects  reported  and  the 
total irregular amounts per country. The share of irregular amount makes 1.92%. The 
chart illustrates that the share of irregular amount is very little. Big beneficiaries of 
pre-accession  assistance  like  Poland  and  Romania  report  relatively  little  irregular 
amounts detected, therefore it influences the overall figure. Bulgaria, Slovenia, and 
Hungary  report  cases  with  rather  high  irregular  share  which  sometimes  equals  the 
total value of the project. 

The impact of irregularities reported in 2007 on budgetary allocations for the same 
year is 2.46% (EUR 32 million irregular amounts on EUR 1.3 billion of allocations). 
However, this figure should be read with great caution as budgetary allocations for 
2007 refer to different beneficiaries68. 

If  the  impact  of  irregularities  is  calculated  on  the  whole  programming  period 
(therefore  on  the  “real”  beneficiaries),  in  fact,  the  result  is  quite  different:  0.49% 
(EUR 79 million total irregular amounts reported so far on an overall budget of about 
EUR 16 billion). 

67 
68 

Council Regulation (EC) No 1085/2006 
As  of  1st  January  2007,  the  countries  benefiting  from  pre-accession  assistance  are:  Croatia,  Turkey, 
FYROM, Albania, Bosnia-Herzegovina, Serbia (and Kosovo) and Montenegro. See footnote 66. 

EN 

99 

   EN 

 
 
 
 
 
                                                 
5.2.2.  Method of detection 

Reporting countries are required to indicate the manner in which the irregularity was 
discovered69.  Despite  the  fact  that  pick  list  for  possible  methods  of  detection  had 
been  provided,  few  reporting  authorities  made  use  of  it.  Therefore  the  codes  were 
attributed  on  the  basis  of  the  descriptions  (frequently  very  laconic  and  vague) 
presented in the reports. 

Most of the irregularities in 2007 were detected by means of ‘Control of documents’. 
This  method  is  becoming  more  frequent  in  comparison  to  all  years.  This  could  be 
explained  by  checks  of  the  final  payment  requests  due  to  the  closure  of  many 
projects. On the other hand this method is of a rather general nature and can be used 
throughout the project cycle. 

Table PA 9: Method of detection by number of reported irregularities 

Table PA9 
METHODS OF DETECTION

Description

Control of documents
National administrative or financial control
On the spot control of achievement of project or action
Ex post control
Interservice collaboration
Control of accounts
National fiscal control
Community controls
Control by national anti-fraud service

Total

2007

All years

Cases

%

Cases

%

114
63
61
21
17
16
10
4
4
22
332

34.34%
18.98%
18.37%
6.33%
5.12%
4.82%
3.01%
1.20%
1.20%
6.63%
100.00%

414
420
194
82
23
29
42
13
25
163
1405

29.47%
29.89%
13.81%
5.84%
1.64%
2.06%
2.99%
0.93%
1.78%
11.60%
100.00%

The Table PA 10 below presents an overview of methods of detection which helped 
to  trace  the  highest  irregular  amounts.  Half  of  irregular  amounts  in  2007  were 
detected by means of ‘Control of documents’. This is the most frequent method for 
all  reporting  years.  The  major  difference  between  two  tables  is  that  in  terms  of 
detected irregular amounts ‘On the spot control of achievement’ appeared to be more 
effective. ‘National administrative or financial control’ in 2007 traced less irregular 
amounts  in  comparison  to  all  the  years  while  ‘On  the  spot  control  of  achievement’ 
discovered  more  in  comparison  to  overall  tendencies.  All  three  methods  imply  ex-
ante and ex-post controls. It is a natural outcome since the data set involves projects 
under different stages of implementation (from procurement to final payments).  

Table PA 10 : Method of detection by irregular amounts reported 

69 

Article 3 of Commission Regulation (EC)1681/94 

EN 

100 

   EN 

 
 
                                                 
Description

2007

All years

Table PA10 
METHODS OF DETECTION

Control of documents
On the spot control of achievement of project or action
National administrative or financial control
Information published in the media
Community controls
Interservice collaboration
Additional control on request by the Commission
National fiscal control

Total

5.2.3.  Types of irregularity  

 Amount

16,854,135
5,827,667
4,572,144
1,521,578
1,176,577
853,733
364,021
302,538
912,560
32,384,953

%

52.04%
17.99%
14.12%
4.70%
3.63%
2.64%
1.12%
0.93%
2.82%
100.00%

Amount

30,531,162
9,050,114
22,901,988
1,777,645
1,248,069
1,224,260
364,021
1,245,144
10,975,804
79,318,207

%

38.49%
11.41%
28.87%
2.24%
1.57%
1.54%
0.46%
1.57%
13.84%
100.00%

Most  common  type  of  irregularity  by  number  of  received  cases  in  2007  was  ‘Non 
eligible  expenditure’  just  like  in  2006.  22%  percent  of  cases  were  of  this  type. 
Second  most  frequent  modus  operandi  ‘Failure  to  fulfil  commitments  entered  into’ 
changed  in  comparison  to  2006.  This  is  yet  another  indication  that  a  number  of 
projects failed to be implemented. 

Table PA 11: Types of irregularities by number of reported irregularities 

Table PA11 
TYPES OF IRREGULARITIES 

Description 

NON-ELIGIBLE EXPENDITURE 

FAILURE TO FULFIL COMMITMENTS ENTERED INTO 

FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS 

UNJUSTIFIED EXPENDITURE 

INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT 

ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES 

ACTION NOT IMPLEMENTED 

FALSIFIED SUPPORTING DOCUMENTS 

OTHER IRREGULARITIES (TO BE SPECIFIED) 

Total 

2007 

All years 

Cases 

% 

Cases 

% 

74 

70 

66 

32 

13 

10 

9 

9 

8 

22.29% 

21.08% 

19.88% 

9.64% 

3.92% 

3.01% 

2.71% 

2.71% 

2.41% 

249 

129 

157 

65 

77 

62 

20 

81 

96 

17.72% 

9.18% 

11.17% 

4.63% 

5.48% 

4.41% 

1.42% 

5.77% 

6.83% 

41 

12.35% 

469 

33.38% 

332 

100.00% 

1405 

100.00%

‘Failure  to  respect  other  regulations  or  contract  conditions’  was  the  most  frequent 
modus operandi in 2007 for PHARE (33%) followed by ‘Actions not carried out in 
accordance  with  rules’  (10%).  There  is  a  change  in  comparison  to  2006  when  the 
types of irregularities were more related to project implementation and justification 
of  expenditure  incurred.  As  for  ISPA  in  2007  the  most  common  type  was  ‘Non 
eligible expenditure’ (53%) and ‘Unjustified expenditure’ (34%). This tendency did 
not change with reference to 2006. As for SAPARD the most recurrent was ‘Failure 
to fulfil commitments entered into’ (44%) and ‘Failure to respect other regulations or 
contract conditions’ (21%). 

EN 

101 

   EN 

 
 
  
  
 
 
3,92%  of  cases  reported  in  2007  had  an  element  of  fraud  i.e.  falsified  supporting 
documents, false or falsified certificates or declarations, false or falsified request for 
aid70. In PHARE they made 10%, SAPARD 2% of the reported cases.  

A comparative analysis based on the affected irregular amount in Table PA 12 shows 
a slightly different result. The most frequent types of irregularities involving higher 
amounts  in  2007  were  ‘Failure  to  respect  other  regulations  or  contract  conditions’ 
followed by ‘Falsified supporting documents’. This is the outcome of high share of 
these types in PHARE, respectively 34% and 47% of irregular amount in this fund. 
Irregularities  detected  in  SAPARD  involved  ‘Failure  to  fulfil  commitments  entered 
into’ (70%), in ISPA – ‘Non eligible’ expenditure’ (47%). 

‘Failure to respect other regulations or contract conditions’ is the most common type 
of irregularity looking at the overall tendency. This implies that project results were 
affected by certain infringements. 

Table PA 12 : Types of irregularities by reported irregular amounts 

Table PA12 
TYPES OF IRREGULARITIES 

Description 

FAILURE TO FULFIL COMMITMENTS ENTERED INTO 

FALSIFIED SUPPORTING DOCUMENTS 

2007 

All years 

Amount 

% 

Amount 

% 

9,707,885 

29.98% 

12,721,116 

16.04% 

4,678,147 

14.45% 

8,836,819 

11.14% 

FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS 

4,333,913 

13.38% 

10,646,655 

13.42% 

NON-ELIGIBLE EXPENDITURE 

3,714,600 

11.47% 

7,160,854 

9.03% 

INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT 

1,244,739 

3.84% 

2,388,268 

3.01% 

UNJUSTIFIED EXPENDITURE 

ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES 

OPERATOR/BENEFICIARY NOT HAVING THE REQUIRED QUALITY 

OTHER IRREGULARITIES (TO BE SPECIFIED) 

 Total 

5.3. 

Specific analysis 

5.3.1. 

Irregularities affecting different funds 

1,170,296 

3.61% 

1,903,159 

2.40% 

1,100,499 

3.40% 

2,213,248 

2.79% 

616,937 

1.91% 

618,002 

0.78% 

483,708 

1.49% 

3,071,622 

3.87% 

1,294,245 

4.00% 

29,691,223 

37.43% 

32,384,953  100.00%  79,318,207  100.00%

The total number of cases changed in comparison to 2006 (-15.9%). Just as during 
previous  years  most  irregularities  were  communicated  for  PHARE  and  SAPARD. 
Those two funds made 74% of irregularities reported. 

As  demonstrated  by  Chart  PA  4  the  highest  number  of  cases  reported  in  2007 
concerned  SAPARD  and  made  almost  half  of  the  total  cases  reported  in  numbers. 
The biggest share of irregular amount was reported for PHARE (49% of the total).  

70 

3,92% presents a total sum of the number of reported cases including an element of fraud. The 
- 
share of some separate modus operandi is rather small and is not reflected in the table PA 11 of most 
frequent types. 

EN 

102 

   EN 

 
  
  
 
 
                                                 
Chart PA 4: Distribution of communications per fund in 2007 

Num ber of cases 2007

Cases by irregular amount

45%

33%

26%

29%

18%

49%

ISPA

PHARE

SAPARD

ISPA PHARE

SAPARD

Taking  a  closer  look  at  ISPA 
reports  one  observes  that  the  number  of  cases  does  not  correlate  with  the  irregular 
amounts reported. Usually ISPA projects are huge in value but the irregular amounts 
reported are relatively little (no reporting threshold) and sometimes not indicated at 
all.  

It is similar for SAPARD as in some cases irregular amounts are under calculation. 
However  the  ones  indicated  almost  coincide  with  the  amounts  to  be  recovered. 
Consequently  most  of  SAPARD  cases  were  detected  after  the  payments  had  been 
made. This could be related to the fact that SAPARD was closed in 200771 but not 
for  Romania  and  Bulgaria  which  reported  highest  numbers  of  irregularities.  The 
checks  can  be  carried  out  5  years  after  the  final  payments  had  been  made,  so  it  is 
likely that some new irregularities will still be detected in the coming years. 

The situation is different for PHARE as the share of the number of cases is smaller 
than  the  share  of  irregular  amount.  The  reason  could  be  related  to  a  rather  high 
reporting threshold of EUR 10,000. 

Chart PA 5 presents the fluctuation of the number of cases throughout a period of 6 
years.  The  lowest  numbers  of  cases  continue  to  be  detected  in  ISPA  with  a  drastic 
increase in 2007. For PHARE and SAPARD the numbers were steadily growing till 
2007.  The  overall  trend  had  changed  as  PHARE  cases  decreased  in  numbers,  but 
SAPARD remained relatively stable. So far the trend was dominated by PHARE and 
SAPARD,  but  there  was  a  significant  increase  for  ISPA  which  was  likely  to  be 
underreported.  However,  the  greater  part  of  ISPA  cases  in  2007  were  reported  by 
Romania. 

After  the  accession  of  10  Member  States,  no  more  allocations  were  given  under 
PHARE  programme;  however,  financial  assistance  was  provided  under  Transition 
Facility  in  2004-2006.  2006  was  the  final  programming  year  for  the  Transition 
Facility,  although  contracting  is  envisaged  to  continue  until  2008  and  payment  of 

71 

Chech Republic (in 2006), Estonia, Hungary, Latvia, Lithuania, Poland, Slovenia, and Slovakia; Cyprus 
and Malta did not benefit from SAPARD. 

EN 

103 

   EN 

 
                                                 
funds until 2009. 10 Member States have not detected any Transition Facility related 
cases. This could be explained by the fact that final project beneficiaries have been 
Member  States’  institutions  and  relevant  supervision  has  been  insured  at  different 
stages of the project cycle. However it is possible that some of them were reported as 
PHARE. 

Chart PA 5: Distribution of cases by number  

s
e
s
a
c

f
o

o
N

250

200

150

100

50

0

6

0

0

2002

165
151

205

164

25

26

150

96
86

133

68

26

52

34
18

2003

2004

2005

2006

2007

ISPA

PHARE

SAPARD

5.3.2. 

Irregularity vs suspected fraud  

In  general  reporting  countries  are  rather  reluctant  to  classify  the  reported 
irregularities as proved by Table PA 7 representing 56.6% compliance. In 2007 cases 
classified  as  suspected  fraud  made  up  9.1%  (30)  of  irregularities  and  15.5%  of 
irregular  amount.  For  the  sake  of  transparency  it  is  worth  mentioning  that  these 
figures  result  from  OLAF  classification.  According  to  the  reporting  countries’ 
classification,  the  share  of  suspected  fraud  cases  is  6.3%  (21).  Bulgaria,  Romania, 
and  Poland  classified  some  cases  as  suspected  fraud.  There  was  an  increase  in 
comparison  with  2006.  It  indicates  that  larger  scale  projects  were  reported  as 
allegedly fraudulent. 

Distribution of fraud cases across the funds is not adequate. There are no suspected 
fraud  cases  in  ISPA  in  any  years.  For  SAPARD  6  suspected  fraud  cases  were 
reported in 2007 and 67 for all the years. For PHARE 24 reported in 2007 and 97 in 
total. 

3.9%  of  cases  reported  in  2007  had  an  element  of  fraud  i.e.  falsified  supporting 
documents,  declarations. In PHARE  they make 10%,  SAPARD  2% of  the  reported 
cases.  This  has  to  be  interpreted  with  caution  as  reporting  countries  sometimes 
classify the case as fraud but indicate the modus operandi which is more likely to be 
an  administrative  infringement  than  criminal  offence.  An  in  depth  analysis  is 
necessary of a case basis. 

EN 

104 

   EN 

 
 
 
 
Relatively  low  figures  justify  the  argument  that  the  major  part  of  reported 
irregularities  is  not  fraudulent  and  is  undergoing  corrective  actions.  The  cases 
classified  as  suspected  fraud  do  not  imply  actual  losses  for  the  EU  budget.  On  the 
contrary, they reflect adequate measures taken by the national authorities to prevent 
malpractices.  The  real  pre-accession  assistance  related  losses  for  EU  budget  could 
only  be  estimated  when  the  programmes  and  the  reported  cases  are  closed  (when 
deductions are made, recoveries are finalized, or final court rulings are published). 

Chart PA 6: Share of suspected fraud in reported cases 

18.00%

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

16.90%

13.16%

14.22%

15.63%

15.55%

12.47%

8.07%

9.01%

7.53%

9.12%

0.00%
0.00%

2002

2003

2004

2005

2006

2007

%  amount

%  cases

The  share  of  amount  of  cases  classified  as  suspected  fraud  in  relation  to  the  total 
eligible  amount  of  the  reported  projects  is  0.23%.  The  total  irregular amount  of  all 
the reported projects in relation to the total eligible amount is 1.92%. The percentage 
of  the  sum  of  suspected  fraud  in  relation  to  the  total  allocated  amount  for  period 
2002-2006 is 0.06% (EUR 9 million). For the year 2007 alone, it is 5 million euros, 
that is to say 0.38% of the annual budget, but the impact on the annual budget has the 
same limits highlighted in paragraph 5.2.2.. The figure is twice as high in comparison 
to 2006 report data. This is a natural outcome as no new allocations were given to the 
reporting  countries  for  PHARE,  SAPARD,  and  ISPA  but  follow  up  reports  were 
received  and  the  financial  aspects  were  specified.  In  addition,  new  cases  were 
detected in 2007. 

5.4. 

Recovery 

The estimation of proportion of irregularities detected before any payments had been 
made reveals the extent of preventive actions taken by the reporting countries at the 
early stages.  

EN 

105 

   EN 

 
 
Chart PA 7: Detection after payment 

90.40%

72.26%

41.11%

46.62%

44.04%

17.38%

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

2002

2003

2004

2005

2006

2007

Chart PA 7 reveals the tendency that most of the reported irregularities were detected 
after  payments  had  been  made.  It  is  characteristic  to  the  recent  years  and  is  a 
consequence  of  the  final  stages  of  the  projects.  A  decrease  in  comparison  to  2006 
could  be  explained  by  Croatian  and  Turkish  cases  detected  before  payment  during 
the contracting period. 

Table PA 13 demonstrates the recovery situation per country. The table comprises of 
all the years and all the funds. It presents the recovery rate which is the percentage of 
the total amount recovered and the total amount to be recovered. 

The lowest amount to be recovered for all years is in ISPA – EUR 2.8 million. For 
2007 the situation is different as the lowest amount to be recovered concerns PHARE 
-  EUR  1.9  million.  The  highest  amount  to  be  recovered  in  2007  comes  from 
SAPARD. 

ISPA  has  the  highest  recovery  rate  of  68.6%  talking  about  the  total  amount  to  be 
recovered, while for SAPARD the rate is 22.7% and for PHARE – 32.8%. 

Table PA 13: Recovery by reporting country 

EN 

106 

   EN 

 
 
Amount recovered
492,282
0
375,724
2,639,872
0
1,382,043
180,786
52,719
33,927
1,853,276
13,238,375
0
922,184
0
21,171,186

Table PA 13
RECOVERIES

Amount to be recovered
6,978,801
0
1,230,998
886,853
0
984,537
530,484
258,454
65,961
1,496,184
11,994,889
52,294
3,287,345
360,898
28,127,698

Country
BG
CY
CZ
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
TR
Total

Recovery rate
6.59%
#DIV/0!
23.38%
74.85%
#DIV/0!
58.40%
25.42%
16.94%
33.97%
55.33%
52.46%
0.00%
21.91%
0.00%
42.94%

The  overview  in  Table  PA  14  points  out  delays  in  the  recovery  process.  There  are 
some amounts to be recovered detected in 2003 where the risk for losses is high. The 
highest  recovery  rate  is  for  cases  dated  2004.  It  might  be  influenced  by  a  special 
procedure  required  by  SAPARD  Multiannual  Financing  Agreement.  SAPARD 
related Community amounts which are to be recovered in accordance with Part 2.8 
Article 14 of MAFA have to be written off two years after recording in the debtors’ 
ledger  and  deducted  from  the  next  application  for  payment.  The  situation  with 
respect  to  2006  is  unsatisfactory,  although  it  is  expected  to  improve  in  2008. 
Reporting countries should undertake recovery measures soon after the detection of 
irregularities and inform the Commission about deductions made.  

Table PA 14: Recovery rate by reporting year 

Table PA 14
RECOVERIES

Amount recovered
6,122
588,258
3,393,179
4,603,118
3,397,973
9,182,537
21,171,186

Amount to be recovered
0
340,562
1,467,346
3,047,978
9,053,849
14,217,963
28,127,698

Year
2002
2003
2004
2005
2006
2007
Total

Recovery rate
100.00%
63.33%
69.81%
60.16%
27.29%
39.24%
42.94%

5.5. 

Conclusions 

Member  States  and  Candidate  Countries  reported  332  new  irregularities  in  2007 
where the total financial amount affected was around EUR 32 million. 

Reporting discipline 

The  reporting  countries  tend  to  misinterpret  the  obligatory  fields  in  the  form, 
therefore consistency and comparability of the reported information remains an issue. 

EN 

107 

   EN 

 
 
 
A  more  responsible  approach  towards  the  preparation  of  reports  by  the  reporting 
authorities is necessary to increase the reliability of the submitted information. 

The  classification  of  irregularities  is  an  element  of  reporting  which  needs  further 
improvement. In 2007 the compliance rate was only 56.6%. 

The rate of summary compliance with the reporting obligation is 82.4%. 

Low  compliance  with  the  reporting  obligation  might  imply  some  weaknesses  in 
administrative  set  up  of  the  reporting  mechanism  in  the  Member  States  and 
Candidate Countries concerned. 

General trends 

The number of cases reported in 2007 decreased but the amount affected increased.  

Irregularities  are  not  distributed  equally  among  the  reporting  countries  due  to 
different periods of eligibility of expenditure. 

The increase in the irregular amounts is justified by the enhanced controls at the end 
of the project cycle and the growing number of reporting countries. 

The differences in the number of reported cases and irregular amounts do not imply 
higher vulnerability to irregularities by some countries. 

Most of the irregularities in 2007 were detected by means of ‘Control of documents’. 

Most  common  type  of  irregularity  by  number  of  received  cases  in  2007  was  ‘Non 
eligible expenditure’ just like in 2006. 

Countries benefiting from the biggest support (Romania, Poland, Bulgaria, Hungary) 
reported  the  highest  number  of  irregularities  (164,  76,  44  and  7  respectively).  The 
pattern is different with reference to irregular amounts. Romania, Bulgaria, Hungary, 
and Slovakia reported the highest irregular amounts. 

Specific trends 

The highest number of cases reported in 2007 concerned SAPARD and made almost 
half of the total cases reported in numbers. The biggest share of irregular amount was 
reported for PHARE (48% of the total). 

Dominance by PHARE and SAPARD irregularity reports is observed but there was a 
significant increase for ISPA in 2007 which was likely to be underreported. 

In 2007 cases classified as suspected fraud made up 9.1% of irregularities and 15.5% 
of irregular amount. 

Distribution of fraud cases across the funds is not adequate. There are no suspected 
fraud  cases  in  ISPA  in  any  years.  For  SAPARD  6  suspected  fraud  cases  were 
reported in 2007 and 67 for all the years. For PHARE 24 reported in 2007 and 97 in 
total. 

EN 

108 

   EN 

 
Estimation  of  the  impact  on  the  budget  is  based  on  reported  information  and  is 
inextricably  linked  to  countries’  approach  to  reporting  and  cooperation  with  the 
Commission. 

EN 

109 

   EN 

 
6. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT  

6.1.  Methodology 

This chapter contains a descriptive analysis of information concerning irregularities 
and cases of suspected fraud relating to expenditure directly managed by staff in the 
Commission departments through ‘centralised direct management’72.  

Given that the changes to the Commission's accounting system ABAC, as described 
in the main body of this report, only became operational in 2008 it was necessary to 
identify  an  interim  solution  for  the  2007  reporting  period  in  order  to  provide  an 
initial overview of irregularities and fraud detected in the area of the budget managed 
by the Commission.  

It was important that any interim solution strike the right balance between providing 
a  sufficient  level  of  detail  whilst  not  imposing  a  disproportionate  burden  on 
Commission  Services.  It  was  decided  that  for  this  report  the  information  should  be 
based  as  much  as  possible  on  existing  data  sources  already  held  within  the 
Commission and particularly on “centralised direct management”. This is one of four 
different implementation modes through which the Commission may implement the 
budget: 

Centralised  Management  –  both  directly  when  the  budget  is  spent  by  the 
Commission services and indirectly when the Commission delegates executive tasks 
to  community  agencies  or  National  Agencies  in  the  Member  States  such  as  is  the 
case for a significant part of education programmes. 

In Shared Management the implementation of the Budget is delegated to the Member 
States as is the case for much the Agriculture and Structural Funds budget.  

Under certain conditions financial management of parts of external aid programmes 
are  (partly  or 
through  Decentralised 
Management. 

totally)  delegated 

third  countries 

to 

And  in  limited  circumstances  Commission  may  delegate  certain  implementation 
tasks 
international  organisations  under  Joint 
Management. 

intergovernmental  and/or 

to 

It was also decided that this year the data should be restricted to irregularities where 
a  recovery  order  or  forecast  of  revenue  has  been  established  by  the  Commission 
service  concerned,  as  irregular  amounts  which  were  recovered  via  expense 
documents  by  offsetting  subsequent  payments  have  only  been  systematically 
captured  in  the  Commission’s  accounting  system  from  this  year.  Under  these 

72 

In  accordance  with  Article  53a  of  the  revision  of  Financial  Regulation  and  its  Implementing  Rules, 
Council  Regulation  (EC,  Euratom)  No  1995/2006  of  13  December  2006  amending  Regulation  (EC, 
Euratom) No 1605/2002 on the Financial Regulation applicable to the general budget of the European 
Communities  (OJ  L  390  of  30.12.2006,  p.  1)  and  Commission  Regulation  no.  478/2007  of  23  April 
2007, amending Commission Regulation no. 2342/2002 (OJ L 111 of 28.4.2007, p.1) 

EN 

110 

   EN 

 
                                                 
conditions  a  number  of  irregularities  will  have  been  excluded  from  this  exercise, 
notably  those  where  the  irregular  amounts  have  lead  to  reduced  final  payments.  It 
should also be noted that many recovery orders are linked to neither irregularities nor 
fraud  and  are  therefore  not  covered  in  this  analysis  and  on  some  occasions  the 
irregular amount is an estimation as the extent of the problem can only be determined 
following further verification. 

The relevant data was collated by means of a questionnaire sent to all Commission 
Directorates General in which they were requested to provide qualifications for cases 
of  irregularity  and  suspected  fraud  detected  in  2007  based  on  recovery  orders  or 
forecasted  recovery.  However,  in  some  cases  it  was  necessary  for  operational 
services to estimate the amount involved as the allegation was subject to an ongoing 
OLAF  investigation.  Given  the  nature  of  this  kind  of  data  capture  and  potential 
differences  in  interpreting  the  data  requested  the  reliability  and  consistency  of  the 
information received should be treated with caution.  

6.2. 

General analysis 

In  response  to  the  survey  a  total  of  411  cases  of  irregularities  and  suspected  fraud 
detected  in  2007  were  communicated  to  OLAF  by  Commission  Services.  The  total 
value  of  contracts  in  which  irregularities  and  suspected  fraud  have  been  detected 
amounts  to  EUR  300  million  of  which  EUR  33  million  has  been  identified  as 
irregular73. 

6.2.1.  Method of detection 

The  vast  majority  of  cases  (81%)  were  detected  by  means  of  routine  ex-post  audit 
controls at community level; representing a total of 335 of the 411 cases reported to 
OLAF.  Excluding  those  cases  where  the  method  of  detection  has  been  qualified  as 
“other”,  the  next  most  common  method  of  detection  was  community  level  ex-ante 
and ex-post desk controls (accounting for 18 and 10 cases respectively). In 15 cases 
the  irregularity/fraud  was  detected  as  a  result  of  information  received  from  an 
informant.  

Table DE1: Method of detection 

METHOD OF DETECTION 

NO OF CONTRACTS

IRREGULAR AMOUNT 
INVOLVED 

Community  audit  control  –  ex-
post 
Informant 
Community  desk  control  ex-
post 
Other 
National control 
Community  desk  control  ex-
ante 

335 
15 

10 
31 
1 

18 

SHARE 

€ 

SHARE 

81.5% 
3.6% 

2.4% 
7.5% 
0.2% 

4.3% 

16,891,649.38 
8,657,960.13 

5,032,090.15 
676,771.00 
740,226.00 

51.2% 
26.3% 

15.2% 
2.1% 
2.2% 

975,451.16 

2.9% 

73 

In  cases  of  suspected  fraud,  an  initial  determination  of  the  financial  impact  can,  usually,  only  be 
established  following  the  conclusion  of  the  OLAF  investigation,  and  it  is  only  when  the  judicial 
procedure has come to an end that the actual amount of fraud can be determined. 

EN 

111 

   EN 

 
 
  
                                                 
European Court of Auditors 

TOTAL 

1 

411 

0.2% 

100%  

4,275.24 

32,978,423.06 

0.01% 

100%  

However, when looking at the irregular amounts of the contracts, the share resulting 
from  community  ex-post  audit  controls  drops  to  51.2%  (EUR  16.9  million)  of  the 
total irregular amounts, followed closely by informants 26.3% (EUR 8.7 million) and 
community ex-post desk controls 15.2% (EUR 5 million). 

If differentiated between cases of irregularities and suspected fraud, Community ex-
post audit control was the most common method of detection of cases classified as 
irregularity;  256  cases  were  detected  by  these  means  (93%  of  cases).  When 
compared by  irregular amount,  in those cases classified as irregularity, Community 
ex-post audit control still remains the main method of detection but its share drops to 
72%,  followed  by  informant  12%.  Among  the  cases  classified  as  suspected  fraud, 
both  Informant  and  Community  audit  control  ex-post  were  the  most  frequent 
methods  of  detection  by  irregular  amount  (respectively  38%  and  34%  of  irregular 
amount detected). However by number of occurrence, cases detected by Community 
ex-post audit controls were six fold more frequent than cases detected via informant. 
Among  136  cases  of  suspected  fraud  79  were  detected  by  the  Community  audit 
control  ex-post  (58%).  In  23%  of  suspected  fraud  cases  the  Commission  services 
indicated method of detection as “other”. 

Table DE2: Method of detection by qualification of irregularity 

QUALIFICATION 
OF 
IRREGULARITY

Irregularity 

METHOD OF DETECTION 

Community audit control – ex-post
Informant 
Community desk control ex-post 
Community desk control ex-ante 
European Court of Auditors 

TOTAL OF IRREGULARITY 
Informant 

Suspected 
fraud/OLAF 
notified 

Community audit control – ex-post
Community desk control ex-post 
National control 
Other 

Community desk control ex-ante 

NO OF 
CONTRACTS 

IRREGULAR AMOUNT 
INVOLVED 

SHARE 

€ 

SHARE

256 
2 
5 
11 
1 

275 
13 

79 
5 
1 
31 

7 

93.1% 
0.7% 
1.8% 
4.0% 
0.4% 

9.6% 

58.1% 
3.7% 
0.7% 
22.8% 

5.1% 

10,683,779.82 
1,840,815.00 
1,774,224.20 
559,213.91 
4,275.24 

14,862,308.17 
6,817,145.13 

6,207,869.56 
3,257,865.95 
740,226.00 
676,771.00 

416,237.25 

71.9% 
12.4% 
11.9% 
3.8% 
0.0% 

37.6% 

34.3% 
18.0% 
4.1% 
3.7% 

2.3% 

TOTAL OF SUSPECTED FRAUD/OLAF NOTIFIED 

136 

18,116,114.89 

6.2.2.  Types of irregularity 

By  number  of  cases,  by  far  the  most  common  type  of  irregularity  is  non-eligible 
expenditure (315 cases representing 77% of all cases); although this is significantly 
reduced in terms of irregular amounts to only 42% of the total amount affected (EUR 
13.9  million).  Missing  or  incomplete  document  is  the  next  most  common  type  of 
irregularity  by  number  (37  cases  or  9%  of  all  cases),  this  again  is  reduced  when 
looking at the amounts concerned as it accounts for only EUR 2.3 million or 6.9% of 
the total affected amount. 

EN 

112 

   EN 

 
  
 
  
  
  
Table DE 3: Type of irregularity/suspected fraud type74 

TYPE OF IRREGULARITY 

Non-eligible expenditure75 
Documents falsified 
Corruption 
Other 
Documents missing or incomplete 
Action not in accordance with rules 
Action not implemented 
Public procurement infringements 
Operator/beneficiary below quality 

Incompatible accumulation of aid 

TOTAL 

NO OF CONTRACTS

IRREGULAR AMOUNT 
INVOLVED 

SHARE 

€ 

SHARE 

76.6% 
2.7% 
1.7% 
5.8% 
9.0% 
1.2% 
1.5% 
0.7% 
0.5% 

0.2% 

315 
11 
7 
24 
37 
5 
6 
3 
2 

1 

411 

13,867,501.90 
7,338,921.60 
4,198,767.00 
2,493,229.32 
2,289,464.68 
2,260,592.49 
381,231.10 
82,747.00 
45,497.97 

20,470.00 

32,978,423.06 

42.1% 
22.3% 
12.7% 
7.6% 
6.9% 
6.9% 
1.2% 
0.3% 
0.1% 

0.1% 

Among  cases  classified  as  irregularities  non-eligible  expenditure  was  identified  in 
315  cases  (77%).  Next  most  frequent  typology  in  this  category  was  missing  or 
incomplete  documents,  37  cases.  Together  they  constitute  almost  90%  of  types  of 
irregularity in this category. If analysed by irregular amount the share of non-eligible 
expenditure  drops  to  42%,  followed  by  the  falsified  documents  22%.  Missing 
documents and actions not in accordance with rules both constitute 7% of the modus 
operandi by irregular amount. 

Table DE 4: Type of irregularity by qualification of irregularity 

QUALIFICATION 
OF 
IRREGULARITY

Irregularity 

TYPE OF IRREGULARITY 

Non-eligible expenditure 
Documents missing or incomplete 
Action not in accordance with rules 
Other 
Action not implemented 
Operator/beneficiary below quality 
Incompatible accumulation of aid 

Public procurement infringements 

Total of Irregularity 

Suspected 
fraud/OLAF 
notified 

Documents falsified 
Non-eligible expenditure 
Corruption 
Other 
Action not in accordance with rules 

Public procurement infringements 

Total of Suspected fraud/OLAF notified 

NO OF 
CONTRACTS 

SHARE 

IRREGULAR AMOUNT 
INVOLVED 
€ 

SHARE

205 
37 
2 
20 
6 
2 
1 

2 

275 

11 
110 
7 
4 
3 

1 

136 

74.5% 
13.5% 
0.7% 
7.3% 
2.2% 
0.7% 
0.4% 

0.7% 

8.1% 
80.9% 
5.1% 
2.9% 
2.2% 

0.7% 

8,414,021.69 
2,289,464.68 
2,002,815.00 
1,708,807.73 
381,231.10 
45,497.97 
20,470.00 

0.00 

14,862,308.17 

7,338,921.60 
5,453,480.21 
4,198,767.00 
784,421.59 
257,777.49 

82,747.00 

18,116,114.89 

56.6% 
15.4% 
13.5% 
11.5% 
2.6% 
0.3% 
0.1% 

0.0% 

40.5% 
30.1% 
23.2% 
4.3% 
1.4% 

0.5% 

74 

75 

It should be noted that these classifications have been used solely within the context of this exercise and 
it was not always possible to retrospectively qualify into the sub-categories of non-eligible expenditure.  
The  entirety  of  irregularities  related  to  Eurostat  has  been  reported  under  the  generic  qualification  of 
“non-eligible  expenditure”,  without  providing  further  specifications  about  the  reasons  of  the  non-
eligibility (as, for example, the absence of documents or an incomplete documentation). 

EN 

113 

   EN 

 
 
  
 
 
  
  
  
  
                                                 
Non-eligible expenditures had a similarly high share among suspected fraud cases as 
among irregular amount; representing 81% of cases occurring in 110 notifications of 
suspected  fraud.  Documents  falsification  was  identified  on  11  occasions  and 
corruption was suspected in 7 cases. By irregular amount the three indicated modus 
operandi  represent  94%  of  case  by  irregular  amount,  but  their  distribution  is  much 
more balanced if compared by number of reports. Document falsification made up to 
41% of irregular amount, followed by non-eligible expenditure 30% and Corruption 
23%76. 

Non-eligible expenditure remains the most frequently identified type of irregularity, 
followed by missing or incomplete documents in those cases qualified as Irregularity 
and by falsified documents in those cases qualified as suspected fraud. 

6.2.3.  Amounts involved 

The  presumed  financial  impact  of  the  irregularities  was  about  EUR  33  million  of 
which suspected fraud amounted to EUR 18.1 million as notified in 136 cases. The 
amounts notified in the sector of external actions amounted to EUR 19.1 million and 
in  the  area  of  internal  policies  to  EUR  13.7  million.  The  financial  impact  of 
suspected  fraud  cases  identified  in  2007  amounted  to  0.17%  of  the  total  value  of 
contracts managed on a centralised direct basis by the Commission.  

Table DE 5: Irregularities by budget heading 

BUDGET 
HEADING 

ELIGIBLE 
AMOUNT77 

IRREGULARITY 

SUSPECTED FRAUD 

CONTRACTS 

€ 

CONTRACTS 

€ 

IRREGULAR AMOUNT 

External 
action 

Internal 
policies 

173,551,989.81 

158 

5,076,279.25

53 

14,065,045.08

127,290,795.12 

117 

9,786,028.92

83 

4,051,069.81

TOTAL 

300,842,784.93 

275 

14,862,308.17 

136 

18,116,114.89 

76 

77 

For  the  purposes  of  this  analysis  a  broad  definition of  corruption  (including  conflicts of  interests  and 
favouritism) has been used. 
It should be noted that in the column referred to “Eligible amount”, Eurostat reported paid amounts and 
not eligible amounts. 

EN 

114 

   EN 

 
 
                                                 
Table DE 6: Irregularities/suspected fraud by budget title78 

IRREGULAR AMOUNT 

IRREGULARITY 

SUSPECTED FRAUD 

CONTRACTS 

€ 

CONTRACTS 

€ 

1,602,084.66 

1 

224,997.46 

BUDGET TITLE 
Agriculture 
development 

and 

Communication 

rural 

Development and ACP 
Economic  and 
affairs 

financial 

Education and culture 
Employment  and  social 
affairs 

Energy and transport 

Enlargement 

Enterprise 

Environment 
External relations82 
Fisheries 
affairs 
Health 
protection 

and 

and  maritime 

consumer 

Humanitarian aid 
Information  society  and 
media 

Regional policy 

Research 
Statistics83 
Trade 

TOTAL 

ELIGIBLE 
AMOUNT7980 

18,911,010.30 

1,251,198.05 

275,000.00 

617,587.00 

73,606,808.10 

7,831,077.03 

10,123,268.65 

11,364,225.60 

881,871.88 

514,313.09 

56,326,161.21 

4,477,862.00 

266,167.16 

50,450.77 

835,473.05 

568,428.60 

7,251,774.44 
103,505.00 

300,842,784.93 

14 

2 

3 

3 

32 

21 

9 

4 

7 

3 

7 

4 

46,402.43 

190,000.00 

129,488.00 

914,719.23 

1,114,781.99 

792,338.11 

75,038.41 

281,810.68 

187,700.41 

3,512,937.90 

324,931.35 

2 

5 

1 

11 
681 
21 

2 

31 

1 

4 

4 

47 

240,028.00 

451,915.69 

740,226.00 

281,423.00 

187,118.49 

12,648,048.08 

200.00 

676,771.00 

11,822.69 

81,132.77 

346,368.99 

2,226,062.72 

105,586,603.00 

144 

1,298,302.94 

1 

706,260.00 

20 
1 

275 

3,670,014.09 
15,497.97 

14,862,308.17 

136 

18,116,114.89 

Amounts involved by country  

This  section  looks  at  the  country  in  which  the  economic  operator  concerned  in  the 
cases of irregularly/fraud are established.  

78 

79 

80 
81 

82 
83 

It  should  be  noted  that  there  is  not  necessarily  a  correlation  between  the  budgetline  title  and  the 
Directorate General (DG) in charge of the corresponding European policy, as in some cases more than 
one service implement a given budget line. Therefore, the figures in the table do not refer to the number 
of irregularity/fraud cases and amounts involved per DG. 
Eligible  amount  refers  to  the  total  amount  of  the  contracts  (concerned  by  an  irregularity/suspected 
fraud) allocated to a beneficiary. 
See footnote n. 76 
The  six  contracts  involved  in  cases  of  suspected  frauds  are,  in  fact,  related  to  a  single  contractor, 
benefiting from six contracts. 
Development Aid – all funds except EDF 
Figures  provided  by  Eurostat  may  give  a  distorted  image  of  reality.  They  tend  to  over-represent  the 
importance  of  cases  of  suspected  frauds  and,  doing  so,  of  irregularities  in  general  in  the  domain  of 
statistics. In reality, ex-post controls carried out in 2006 were concentrated on a particular beneficiary 
already  visited  before  and  that  had  already  raisen  a  suspicion  of  fraud  and  the  transfer  of  the  file  to 
OLAF. On the basis of this situation, the same beneficiary was visited a second time, in order to enlarge 
the  controlled  population.  Likewise,  on  a  hundred  of  contracts  controlled  in  2006  (corresponding  to 
about ten controls), 65 contracts concerned this beneficiary who made the object of ad hoc controls and 
not  of  a  “routine”  control.  Being  this  a  targeted  control,  its  results  could  induce  a  distorted  and  not 
favourable perception of reality. 

EN 

115 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                                 
The vast majority (95%) of beneficiaries concerned are based within the EU. Outside 
the  EU,  only  14  cases  of  irregularities  were  detected,  although  this  accounted  for 
over 50% of the total irregular amounts amounting to EUR 18.2 million. Over half of 
the irregularities by amount related to non-EU beneficiaries were in countries eligible 
for assistance under the Neighbourhood Policies which account for EUR 5.1 million, 
followed closely by ACP countries (EUR 4.2 million). 

Table DE 7: Irregularities by beneficiary region of origin 

CONTRACTOR 
PLACE OF ORIGIN 
BY REGION84 

ELIGIBLE 
AMOUNT85 

IRREGULAR AMOUNT 

IRREGULARITY 

SUSPECTED FRAUD 

CONTRACTS

€ 

CONTRACTS 

€ 

225,291,697.95 

262 

11,175,815.71 

122 

8,260,233.34 

13,085,318.30 

16,498,538.65 

1,374,855.00 

41,498,871.18 

7 

1 

1 

2 

2 

93,554.56 

80,000.00 

567,550.00 

2,945,387.90 

0.00 

3 

1 

2 

8 

4,191,123.56 

379,755.00 

213,484.90 

5,137,187.04 

Latin America 

3,010,756.85 

EU 

EFTA 

ACP 

Asia 

NEP 

TOTAL 

300,842,784.93 

275 

14,862,308.17 

136 

18,198,861.89 

Whilst  reported  irregularities  are  largely  evenly  spread  among  the  Member  States, 
there  were  above  average  reports  involving  Portugal  (21%),  Italy  (17%)  and  the 
United  Kingdom  (14%).  There  is  a  greater  discrepancy  when  looking  at  cases  of 
suspected fraud; where beneficiaries based in Portugal account for 59% of all cases. 
It should be noted however that the Portuguese contracts concerned relate to only one 
beneficiary  who  is  suspected  of  fraudulent  activity  in  multiple  contacts.  A  similar 
situation can be observed regarding Italy, where one beneficiary accounted for nearly 
half of all contracts concerned. 

However by irregular amount beneficiaries from the EU represent close to 60% of all 
irregularities and suspected  frauds, accounting for EUR 19.4 million. Again, whilst 
irregularities  are  largely  evenly  spread  among  the  Member  States,  higher  than 
average irregular amounts were detected relating to Spain (22% or EUR 4.3 million), 
Portugal (17% or EUR 3.3 million), Italy (13% or EUR 3.3 million), Germany (12% 
or  EUR  2.3  million),  and  the  United  Kingdom  (9%  or  EUR  2.8  million).  Together 
beneficiaries  from  these  five  Member  States  represent  73%  of  all  irregularities  by 
amount. These observations are  largely mirrored when looking  at amounts affected 
in cases of suspected fraud.  

84 

85 

EU  –  European  Union,  EFTA  –  European  Free  Trade  Association,  ACP  –  Africa,  Caribbean  and 
Pacific; NEP – European Neighbourhood Policy. 
See footnote 76. 

EN 

116 

   EN 

 
  
  
                                                 
Table DE 8: Irregularities by Member State of origin of beneficiary 

CONTRACTOR 
PLACE OF ORIGIN 

ELIGIBLE 
AMOUNT86 

IRREGULAR AMOUNT 

IRREGULARITY 

SUSPECTED FRAUD 

CONTRACTS

€ 

CONTRACTS 

€ 

AT 
BE 
CY 
CZ 
DE 
DK 
EE 
EL 
ES 
FI 
FR 
HU 
IE 
IT 
NL 
PL 
PT 
SE 

UK 

2,445,268.40 
74,768,382.02 
675,940.10 
880,505.00 
15,702,486.26 
12,595,485.07 
658,391.60 
3,792,045.30 
14,269,589.93 
3,717,171.50 
20,704,514.89 
65,127.99 
4,712,268.00 
33,869,329.85 
2,147,006.44 
240,908.10 
7,789,217.47 
2,278,153.05 

23,919,950.98 

2 
23 
1 
4 
27 
8 
3 
4 
30 
9 
30 
1 
11 
32 
7 
3 
10 
8 

48 

91,622.37 
226,440.64 
273,482.85 
83,437.23 
2,172,455.01 
66,022.11 
51,310.99 
144,627.84 
2,100,569.02 
194,840.18 
1,355,695.42 
61,960.68 
660,905.17 
1,768,234.44 
165,701.36 
46,171.92 
199,090.05 
324,016.56 

1,189,231.87 

EU TOTAL 

225,231,741.95 

261 

11,175,815.71 

6.3. 

Specific analysis 

Irregularity versus Suspected fraud 

2 
3 
1 

2 

2 

2 

33 

1 
72 

4 

122 

844,654.56 
215,028.00 
273,482.85 

165,970.00 

2,226,358.54 

120,133.39 

676,971.00 

10,736.00 
3,117,479.76 

609,419.24 

8,260,233.34 

Of the total of 411 contracts identified, 33% had been qualified by the Commission 
services  as  suspected  fraud.  The  share  of  suspected  fraud  cases  increases  to  55%, 
when comparing the irregular amounts. In fact, the average irregular amount per case 
was  2.4  times  higher  in  suspected  fraud  cases  than  in  cases  of  irregularity  and 
amounted to an average of EUR 133,207 per case, compared to EUR 54,045 for all 
cases.  It  should  be  noted  that  it  is  possible  that  the  financial  impact  of  suspected 
fraud cases could be revised during the course of OLAF's investigations. 

Table DE 9: Irregularity and Suspected fraud cases 

NUMBER OF 
COMMUNICATIONS 

ELIGIBLE 
AMOUNT87 

IRREGULAR 
AMOUNT 

Irregularity 

Suspected Fraud 

TOTAL 

275 
136 

411 

223,902,497.35
76,940,287.58 

14,862,308.17 
18,116,114.89 

300,842,784.93

32,978,423.06 

IRREGULAR 
SHARE IN 
ELIGIBLE 

6.64% 
23.55% 

10.96% 

86 
87 

See footnote 76. 
See footnote 76. 

EN 

117 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
                                                 
It is clear that the ratio between cases of suspected fraud and irregularity within this 
data set is relatively high. This can be largely explained by two factors, firstly that as 
this results are based on irregularities which resulted in recovery order or forecast of 
recovery  it  has  excluded  these  irregular  amounts  which  have  been  recovered  via 
expense documents by offsetting subsequent payments; secondly it is likely that the 
irregular  amounts  related  to  cases  of  suspected  fraud  will  be  amended  during  the 
course  of  OLAF’s  investigations,  indeed  some  allegations  may  prove  to  be 
unfounded  and  subsequently  reclassified  as  either  an  irregularity,  error  or  correct 
payment. 

6.4. 

Recovery 

In those cases detected in 2007 full or partial recovery has already been reported in 
226 cases. Commission Services have recovered EUR 3.7 million. In 184 cases the 
full  irregular  amount  has  been  recovered,  in  223  cases  the  amount  to  be  recovered 
has yet to be determined as they are currently subject to an OLAF investigation. In 
204  cases  there  is  an  outstanding  amount  to  be  recovered,  corresponding  to  EUR 
10.7 million. 

Table DE 10: Amount Recovered and to be Recovered 

RECOVERED 

TO BE RECOVERED 

NO OF 
CONTRACTS 

Irregularity 

Suspected Fraud 

TOTAL 

170 

56 

226 

AMOUNT 

3,070,394.81 

678,435.49 

3,748,830.30 

NO OF 
CONTRACTS 

123 

81 

204 

AMOUNT 

6,732,399.10 

3,977,885.90 

10,710,285.00 

The recovery rate for all notifications is 26% and is higher in the cases identified as 
irregularities (31%) than in cases qualified as suspected fraud (15%). 

6.5. 

Conclusions  

Given  that  this  exercise  was  a  first  attempt  to  integrate  the  areas  of  the  budget 
managed  by  the  Commission  into  this  report  and  the  limited  scope  of  the  analysis, 
these initial findings, as with other areas of the report, should be treated with extreme 
caution and not as empirical evidence of the level of fraud and irregularity.  

It is likely that a number of irregularities detected during 2007 were excluded from 
the data provided by Commission Services as they fell outside the tight criteria set in 
terms of management mode and linkage to recovery actions.  

Concerning  cases  of  suspected  fraud  the  accuracy  of  the  amounts  affected  is 
questionable  as  a  final  qualification  of  irregular  or  fraud  can  only  be  established 
following  the  OLAF  investigation  and,  in  sensu  stricto  only  once  a  final  judicial 
decision has been pronounced.  

For  the  next  reporting  year  more  comprehensive  data  will  be  made  available  as  a 
result of the changes made to the Commission’s reporting system.  

EN 

118 

   EN 

 
  
 
ANNEXES 

EN 

119 

   EN 

 
ANNEX 1 – NUMBER OF CASES OWNRES AND AMOUNTS – PERIOD 2004-2007 PER MEMBER STATE 

Number of cases OWNRES and amounts period 2004-2007 per Member State 

Member 

2004 

2005 

2006 

2007 

 % Change 
cases  

 % Change 
amount 

State 

Cases  Amount € 

Cases  Amount € 

Cases  Amount € 

Cases  Amount € 

2006 - 2007 

2006 - 2007 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EUR-15 
TOTAL 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
SI 
SK 
EUR-10 
TOTAL 
BG 
RO 
EUR-2 TOTAL 
EUR-27 
TOTAL 

74 
805 
506 
80 
267 
29 
277 
50 
10 
218 
0 
596 
15 
68 
325 

7.605.154 
17.639.660 
29.346.355 
6.979.600 
18.666.974 
1.597.791 
20.863.377 
4.099.877 
401.444 
25.867.816 
0 
41.072.383 
630.533 
6.021.599 
27.705.224 

83 
662 
1.181 
64 
501 
34 
349 
54 
22 
296 
0 
1.789 
20 
60 
698 

5.168.629 
9.118.723 
72.204.696 
6.884.838 
48.911.216 
1.992.413 
34.950.733 
8.063.290 
671.846 
30.384.553 
0 
29.837.391 
1.652.095 
3.265.267 
59.395.121 

75 
415 
997 
64 
625 
28 
314 
46 
47 
346 
1 
1.409 
17 
47 
895 

6.316.745 
11.763.052 
55.797.373 
5.142.048 
30.362.995 
1.464.957 
33.304.670 
11.457.617 
2.820.593 
70.888.871 
49.291 
38.902.390 
818.261 
2.164.111 
61.715.364 

91 
395 
998 
54 
403 
34 
321 
53 
35 
275 
0 
1.052 
23 
42 
1.069 

5.500.312 
22.307.864 
54.472.872 
7.256.158 
12.925.302 
1.714.218 
33.315.774 
2.744.851 
2.482.972 
31.048.300 
0 
57.072.423 
393.960 
2.398.254 
115.284.887 

3.320 

208.497.787 

5.813 

312.500.811 

5.326 

332.968.338 

4.845 

348.918.147 

2 
4 
3 
29 
8 
7 
2 
17 
7 
3 

82 

0 
0 
0 

54.136 
481.813 
54.900 
1.692.522 
205.209 
252.392 
125.735 
652.034 
586.361 
318.119 

16 
19 
3 
70 
35 
9 
6 
55 
22 
4 

380.408 
526.638 
165.287 
1.932.201 
1.515.325 
526.732 
882.756 
1.211.436 
618.272 
68.348 

4.423.221 

239 

7.827.403 

0 
0 
0 

0 
0 
0 

0 
0 
0 

9 
63 
5 
103 
39 
28 
11 
69 
24 
28 

379 

0 
0 
0 

193.532 
2.237.307 
178.010 
7.867.072 
1.599.918 
1.886.170 
1.226.978 
1.807.599 
950.848 
1.561.967 

19.509.401 

0 
0 
0 

11 
39 
12 
67 
40 
40 
10 
158 
27 
20 

424 

15 
37 
52 

750.402 
1.424.688 
455.754 
6.027.841 
1.286.472 
2.254.487 
404.949 
8.569.400 
1.589.490 
1.070.723 

23.834.206 

471.173 
3.837.168 
4.308.341 

21,33% 
-4,82% 
0,10% 
-15,63% 
-35,52% 
21,43% 
2,23% 
15,22% 
-25,53% 
-20,52% 
N/A 
-25,34% 
35,29% 
-10,64% 
19,44% 

-9,03% 

22,22% 
-38,10% 
140,00% 
-34,95% 
2,56% 
42,86% 
-9,09% 
128,99% 
12,50% 
-28,57% 

11,87% 

N/A 
N/A 
N/A 

-12,92% 
89,64% 
-2,37% 
41,11% 
-57,43% 
17,01% 
0,03% 
-76,04% 
-11,97% 
-56,20% 
N/A 
46,71% 
-51,85% 
10,82% 
86,80% 

4,79% 

287,74% 
-36,32% 
156,03% 
-23,38% 
-19,59% 
19,53% 
-67,00% 
374,08% 
67,17% 
-31,45% 

22,17% 

N/A 
N/A 
N/A 

3.402 

212.921.008 

6.052 

320.328.214 

5.705 

352.477.739 

5.321 

377.060.694 

-6,73% 

6,97% 

EN 

120 

EN 

 
  
ANNEX 2 – OWNRES CASES PER MEMBER STATE 

NUMBER OF CASES 

OWNRES CASES PER MEMBER STATE

2.000

1.800

1.600

1.400

1.200

1.000

800

600

400

200

0

AT

BE

DE

DK

ES

FI

FR

GR

IE

IT

LU

NL

PT

SE

UK

CY

CZ

EE

HU

LT

LV

M T

PL

SI

SK

BL

RO

MEMBER STATE

2004

2005

2006

2007

EN 

121 

EN 

 
  
ANNEX 3 – IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 

IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 

YEAR  CASES 

IMPACT CASES % 
OF TOTAL 

AMOUNTS 
ESTABLISHED 

IMPACT AMOUNTS 
ESTABLISHED % OF 
TOTAL 

2003 

2004 

2005 

2006 

2007 

2168 

2223 

3216 

3601 

3428 

66,38% 

65,34% 

53,14% 

63,12% 

64,42% 

211.026.810 

176.236.140 

259.434.116 

262.000.678 

290.654.592 

78,89%

82,77%

80,99%

74,33%

77,08%

EN 

122 

EN 

 
  
ANNEX 4 – TOP 10 CHAPTER HEADINGS 

TOP 10 CHAPTER HEADINGS 

2005 

2006 

2007 

CN 

PRODUCT 

AMOUNT 
€ 

CASES 

   CN 

PRODUCT 

AMOUNT 
€ 

CASES 

   CN 

PRODUCT 

AMOUNT 
€ 

CASES 

85 

24 

TVs and monitors etc. 

65.241.373 

1.102 

   85 

TVs and monitors etc. 

65.276.360 

1031 

   85 

TVs and monitors etc. 

93.490.696  

932 

Tobacco / cigarettes 

29.805.629 

380 

   24 

Tobacco / cigarettes 

39.768.154 

327 

   24 

Tobacco / cigarettes 

28.107.416  

337 

61 

Clothing 

25.517.843 

378 

   15  Oils and fats 

22.925.458 

85 

   07 

Edible vegetables 

22.111.479  

88 

17 

Sugar / sugar-products 

23.450.987 

70 

   61 

Clothing 

20.032.799 

224 

   87 

(Parts of) cars / motors 

22.057.814  

296 

84  Machines 

18.347.223 

446 

   10 

Cereals 

15.016.504 

48 

   84  Machines 

19.499.287  

348 

87 

(Parts of) cars / motors 

16.414.124 

262 

   02  Meat 

14.769.586 

327 

   64 

Footwear 

17.934.315  

260 

62 

Clothing 

13.816.231 

687 

   87 

(Parts of) cars / motors 

13.208.052 

303 

   61 

Clothing 

16.830.881  

336 

07 

Edible vegetables 

13.302.629 

123 

   73  Articles of iron and steel 

12.934.065 

125 

   62 

Clothing 

15.372.188  

377 

03 

Fish etc. 

8.533.337 

164 

   84  Machines 

12.773.323 

383 

   20 

Preparations of vegetables 

13.215.632  

73  Articles of iron and steel 

7.784.044 

139 

   07 

Edible vegetables 

12.692.785 

118 

   63  Other textile articles 

9.980.149  

85 

69 

EN 

123 

EN 

 
  
 
 
ANNEX 5 – GOOD AFFECTED BY FRAUD AND IRREGULARITY – PERIOD 2005-2007 

GOODS AFFECTED BY FRAUD AND IRREGULARITY PERIOD 2005-2007 
2007 
2006 
2005 

TARIFF 
CODES 
24022090 
17019910 
07032000 
85282190 
84089071 
85281252 
85219000 
61101130 
61103099 
85281294 
62021100 
85393190 
03061380 
83051000 
61102099 
85254099 
24022000 
21069098 
87032319 
02072710 
74261200 
73121086 
84821090 
08030019 
76011000 

CASES

AMOUNTS 
€ 

291 
48 
99 
97 
3 
13 
133 
46 
47 
33 
5 
87 
49 
10 
65 
25 
7 
57 
14 
44 
1 
1 
10 
35 
14 

21.662.136 
21.621.784 
12.737.519 
12.585.283 
8.827.262 
8.266.042 
7.009.142 
6.069.265 
5.286.291 
5.152.674 
4.926.722 
4.624.195 
4.283.024 
3.676.416 
3.635.415 
3.510.702 
3.468.348 
3.326.372 
3.262.751 
2.709.319 
2.227.132 
2.157.282 
2.146.241 
2.111.777 
2.106.650 

TARIFF 
CODES 
   24022090 
   85254099 
   07032000 
   15091010 
   85393190 
   61103099 
   10062098 
   85219000 
   73121071 
   15091090 
   10063000 
   17029099 
   96131000 
   17019910 
   24022000 
   02023090 
   02072710 
   08030019 
   02071410 
   85281294 
   36799690 
   84149000 
   85282190 
   85281220 
   90013000 

EN 

TARIFF 
CODES 
   85282190 
   07032000 
   24022090 
   85281298 
   85281294 
   87031018 
   64030000 
   63039118 
   44121310 
   84119190 
   20059081 
   85393190 
   24012010 
   24031010 
   61103099 
   62034231 
   32159080 
   85219000 
   04051000 
   61101190 
   20031030 
   96131000 
   84733010 
   85369010 
   64039938 

CASES

AMOUNTS 
€ 

69 
48 
237 
4 
41 
47 
6 
1 
6 
7 
1 
88 
9 
42 
74 
17 
14 
96 
1 
13 
42 
8 
55 
2 
3 

24.288.573
20.471.185
15.398.049
13.282.138
10.337.447
9.799.781
6.706.330
6.468.283
5.948.919
5.246.096
4.590.327
4.384.171
3.798.535
3.697.450
3.441.751
3.239.738
3.116.692
3.078.920
3.071.722
3.071.468
3.051.009
2.642.807
2.616.431
2.549.674
2.548.693

CASES

AMOUNTS 
€ 

275 
24 
81 
15 
103 
27 
8 
147 
1 
16 
1 
27 
15 
20 
2 
53 
132 
50 
105 
76 
1 
4 
65 
16 
2 

31.869.145 
16.174.767 
11.703.340 
11.258.441 
9.401.239 
8.176.350 
7.333.373 
6.652.975 
6.376.418 
6.090.434 
5.818.641 
5.550.293 
5.529.776 
5.355.341 
5.189.984 
5.017.135 
4.923.363 
4.304.781 
4.285.771 
4.106.123 
3.679.969 
2.773.172 
2.700.782 
2.611.463 
2.600.076 

124 

EN 

 
  
 
 
 
 
ANNEX 6 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 

FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF THE GOODS DURING 2005-2007 

2005 

2006 

2007 

COUNTRY 

CASES 

€ 

COUNTRY 

CASES 

€ 

COUNTRY 

CASES 

€ 

1.299  

133.197.283   China 

1.389 

132.541.927   China 

1.499 

214.148.157 

694  

48.397.838   Thailand 

78 

50.711.140   USA 

299  

40.629.242   USA 

48.341.881   Japan 

652 

293 

Canada 

60  

26.496.963   Japan 

46.029.984   Thailand 

85 

45.055.846 

Not specified  

1.140  

21.059.368   Tunisia 

47 

39.156.655   South Korea 

South Korea 

115  

19.735.416   Brazil 

350 

38.966.283   Taiwan 

162  

14.663.084   Turkey 

81 

26.430.425   Not specified  

76  

12.784.877   Not specified 

141  

12.590.799   South Korea 

794 

151 

22.438.823   Turkey 

18.891.443   Vietnam 

658 

228 

72.269.945 

55.650.876 

160 

128 

668 

72 

49 

25.463.553 

24.051.934 

22.073.986 

20.549.890 

16.406.006 

China 

USA 

Japan 

Jamaica 

Thailand 

Brazil 

India 

82  

11.801.950   Bangladesh 

52 

17.111.836   Bangladesh 

176 

15.674.333 

EN 

125 

EN 

 
  
 
 
 
 
RECOVERY RATES TRADITIONAL OWN RESOURCES (RR) 

2006 

2007 

ANNEX 7 – RECOVERY RATES OWNRES 

MEMBER 
STATES 

AMOUNT € 
2006 

RECOVERED € 
2006 

RR 2006 

AMOUNT € 
IN 2007 

RECOVERED 
€ IN 2007 

6.857.684  
12.387.812  
0  
193.604  
2.287.699  
46.345.172  
6.067.958  
178.010  
27.590.199  
1.464.957  
33.387.673  
442.048  
7.428.526  
2.604.534  
69.882.133  
1.634.868  
49.291  
1.422.325  
574.945  
63.284.120  
2.067.153  
835.319  
0  
2.164.111  
950.848  
1.527.433  
61.250.909  
352.879.331  

2.299.000 
1.537.940 
0 
91.749 
1.430.251 
28.722.922 
4.617.533 
32.457 
13.535.077 
241.489 
11.654.263 
342.322 
753.265 
2.561.438 
1.913.057 
763.832 
49.291 
375.539 
0 
6.215.407 
1.102.239 
255.621 
0 
2.001.858 
304.093 
510.713 
32.057.182 
113.368.538 

33,52% 
12,41% 
N/A 
47,39% 
62,52% 
61,98% 
76,10% 
18,23% 
49,06% 
16,48% 
34,91% 
77,44% 
10,14% 
98,35% 
2,74% 
46,72% 
100,00% 
26,40% 
0,00% 
9,82% 
53,32% 
30,60% 
N/A 
92,50% 
31,98% 
33,44% 
52,34% 
32,13% 

6.316.745 
11.763.052 
0 
193.532 
2.237.307 
55.797.373 
5.142.048 
178.010 
30.362.995 
1.464.957 
33.304.670 
11.457.617 
7.867.072 
2.820.593 
70.888.871 
1.599.918 
49.291 
1.886.170 
1.226.978 
38.902.390 
1.807.599 
818.261 
0 
2.164.111 
950.848 
1.561.967 
61.715.364 
352.477.739 

2.493.559 
3.478.927 
0 
102.412 
1.464.630 
36.130.422 
3.706.014 
156.384 
15.765.145 
268.130 
11.779.383 
789.125 
990.619 
2.604.534 
3.618.267 
1.278.473 
49.291 
407.725 
28.314 
17.275.689 
1.220.406 
255.621 
0 
2.001.858 
310.684 
545.247 
32.520.765 
139.241.624 

RR for 
2006 in 
2007 

39,48%
29,58%
N/A
52,92%
65,46%
64,75%
72,07%
87,85%
51,92%
18,30%
35,37%
6,89%
12,59%
92,34%
5,10%
79,91%
100,00%
21,62%
2,31%
44,41%
67,52%
31,24%
N/A
92,50%
32,67%
34,91%
52,69%
39,50%

AMOUNT € 
2007 

RECOVERED 
€ 2007 

RR 2007 

5.500.312 
22.307.864 
471.173 
750.402 
1.424.688 
54.472.872 
7.256.158 
455.754 
12.925.302 
1.714.218 
33.315.774 
2.744.851 
6.027.841 
2.482.972 
31.048.300 
1.286.472 
0 
2.254.487 
404.949 
57.072.423 
8.569.400 
393.960 
3.837.168 
2.398.254 
1.589.490 
1.070.723 
115.284.887 
377.060.694 

1.600.436 
1.415.487 
236.994 
59.090 
1.080.783 
39.064.385 
6.334.705 
231.635 
9.378.359 
654.884 
11.487.611 
151.948 
1.283.280 
1.987.124 
3.528.907 
408.342 
0 
874.726 
156.232 
8.436.879 
2.430.412 
239.516 
393.829 
1.201.561 
1.299.872 
300.113 
56.252.454 
150.489.564 

29,10% 
6,35% 
50,30% 
7,87% 
75,86% 
71,71% 
87,30% 
50,82% 
72,56% 
38,20% 
34,48% 
5,54% 
21,29% 
80,03% 
11,37% 
31,74% 
N/A 
38,80% 
38,58% 
14,78% 
28,36% 
60,80% 
10,26% 
50,10% 
81,78% 
28,03% 
48,79% 
39,91% 

AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
ES 
FI 
FR 
GR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SI 
SK 
UK 

EUR-27 TOTAL

EN 

126 

EN 

 
  
  
  
  
  
  
ANNEX 8 – SEIZED AND CONFISCATED GOODS 

SEIZED AND CONFISCATED GOODS (cigarettes CN 24022090) 

MEMBER 
STATES 

CASES 

2005 

ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € 

CASES 

2006 

ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € 

CASES 

2007 

ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR € 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EUR-15 TOTAL 
BG 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
EUR-12 TOTAL 
EUR-27 TOTAL 

5 
23 
11 
0 
0 
4 
8 
11 
0 
0 
0 
3 
0 
4 
1 
70 
0 
0 
0 
1 
12 
3 
0 
5 
12 
0 
6 
0 
39 
109 

435.499 
2.021.266 
377.347 
0 
0 
379.152 
1.093.927 
1.219.395 
0 
0 
0 
148.077 
0 
78.515 
248.488 
6.001.666 
0 
0 
0 
140.655 
552.809 
43.336 
0 
435.521 
335.117 
0 
411.201 
0 
1.918.639 
7.920.305 

4 
15 
11 
3 
0 
7 
26 
15 
3 
0 
0 
0 
1 
3 
0 
88 
0 
2 
0 
0 
14 
5 
2 
7 
17 
0 
9 
3 
59 
147 

97.191 
752.736 
442.643 
78.122 
0 
223.516 
1.264.583 
3.214.309 
216.059 
0 
0 
0 
691.200 
48.760 
0 
7.029.119 
0 
364.685 
0 
0 
456.445 
109.526 
490.904 
780.914 
403.059 
0 
549.900 
397.874 
3.553.307 
10.582.426 

2 
5 
0 
0 
0 
9 
28 
12 
5 
4 
0 
0 
0 
3 
41 
109 
0 
1 
0 
1 
6 
0 
4 
2 
33 
19 
6 
1 
73 
182 

89.954 
269.912 
0 
0 
0 
154.145 
1.597.259 
1.692.483 
803.923 
345.497 
0 
0 
0 
385.600 
4.153.116 
9.491.889 
0 
33.673 
0 
41.304 
193.168 
0 
693.930 
205.013 
786.077 
3.243.636 
187.055 
144.760 
5.528.616 
15.020.505 

EN 

127 

EN 

 
  
ANNEX 9 – PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 

PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 
2005-2007

S
E
S
A
C
D
U
A
R
F
%

120,00%

100,00%

80,00%

60,00%

40,00%

20,00%

0,00%

AT

BE DE DK ES

FI

FR GR

IE

IT

LU NL

PT

SE UK BG CY CZ

EE HU

LT

LV MT

PL RO

SI

SK

MEMBER STATE

2005

2006

2007

EN 

128 

EN 

 
  
 
 
 
ANNEX 10 – AMOUNTS INVOLVED IN FRAUD 

AMOUNTS INVOLVED IN FRAUD PER MEMBER STATE PERIOD 2005-2007 

MEMBER STATE 

CASES 

2005 

FRAUD 
CASES 

FRAUD IN € 

CASES 

2006 

FRAUD 
CASES 

FRAUD IN € 

CASES 

2007 

FRAUD 
CASES 

FRAUD IN € 

AT 

BE 

DE 

DK 

ES 

FI 

FR 

GR 

IE 

IT 

LU 

NL 

PT 

SE 

UK 

EUR-15 TOTAL 

BG 

CY 

CZ 

EE 

HU 

LT 

LV 

MT 

PL 

RO 

SI 

SK 

83 

662 

1.181 

64 

501 

34 

349 

54 

22 

296 

0 

1.789 

20 

60 

698 

5.813 

0 

16 

19 

3 

70 

35 

9 

6 

55 

0 

22 
4 

EUR-12 TOTAL 

EUR-27 TOTAL 

239 

6.052 

EN 

40 

60 

171 

6 

272 

12 

16 

51 

0 

135 

0 

382 

10 

4 

6 

4.073.367 

3.307.008 

22.373.635 

2.490.966 

30.578.821 

273.779 

1.399.642 

7.910.055 

0 

15.931.062 

0 

23.970.804 

565.484 

0 

1.329.561 

1.165 

114.204.184 

0 

4 

1 

1 

37 

1 

0 

6 

16 

0 

14 
0 

80 

0 

71.582 

21.097 

140.655 

664.525 

16.287 

0 

882.756 

419.773 

0 

476.207 
0 

2.692.882 

1.245 

116.897.066 

75 

415 

997 

64 

625 

28 

314 

46 

47 

346 

1 

1.409 

17 

47 

895 

5.326 

0 

9 

63 

5 

103 

39 

28 

11 

69 

0 

24 
28 

25 

47 

104 

14 

244 

24 

32 

46 

0 

210 

1 

448 

8 

3 

1 

2.568.695 

3.045.442 

12.118.133 

2.433.934 

20.098.581 

1.267.261 

119.450 

11.457.617 

0 

62.422.053 

49.291 

34.572.089 

280.718 

0 

24.726 

1.207 

150.457.990 

0 

3 

5 

0 

59 

3 

1 

11 

19 

0 

11 
8 

0 

21.855 

80.204 

0 

4.562.332 

414.212 

130.892 

1.226.978 

403.059 

0 

579.346 
477.049 

379 

5.705 

120 

1.327 

7.895.927 

158.353.917 

129 

91 

395 

998 

54 

403 

34 

321 

53 

35 

275 

0 

1.052 

23 

42 

1.069 

4.845 

15 

11 

39 

12 

67 

40 

40 

10 

158 

37 

27 
20 

476 

5.321 

30 

41 

91 

2 

144 

21 

149 

53 

4 

92 

0 

338 

1 

3 

103 

1.072 

8 

3 

2 

1 

16 

7 

0 

5 

67 

19 

6 
9 

3.218.983 

2.049.238 

10.609.832 

213.813 

4.699.076 

1.101.219 

6.567.014 

2.744.851 

134.805 

16.337.234 

0 

35.895.551 

66.670 

0 

9.799.472 

93.437.758 

242.517 

26.483 

222.161 

41.304 

2.556.971 

77.313 

0 

285.766 

5.933.961 

3.243.636 

187.055 
311.511 

143 

1.215 

13.128.678 

106.566.436 

EN 

 
  
  
  
  
  
  
  
ANNEX 11

AGRICULTURAL SECTOR

update 22/05/2008

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

YEARS 2000 - 2007

(amounts in € 1,000)

Year

Cases

Amounts affected

% of Agricultural 
expenditure

Agricultural 
expenditure

2007
2006
2005
2004
2003
2002
2001
2000

4,000

3,500

3,000

s
e
s
a
c

f
o
°
N

2,500

2,000

1,500

1,000

500

0

1,548
3,249
3,193
3,401
3,237
3,285
2,415
2,967

154,993
86,825
102,112
82,064
169,724
198,079
140,685
474,562

0.33
0.17
0.21
0.19
0.39
0.46
0.34
1.17

EAGF & EAFRD

Agricultural expenditure

Cases

2000

2001

2002

2003

2004

2005

2006

2007

year

46,920,972
49,742,890
47,819,509
42,934,711
43,606,858
42,781,898
41,866,940
40,437,400

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.00

B
u
d
g
e
t
a
r
y

i

m
p
a
c
t

EN 

*) The concept "irregularity" includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure.

130 

   EN 

 
 
 
 
ANNEX 12

AGRICULTURAL SECTOR

update 22/05/2008

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

2007
(amounts in € 1,000)

Member 
States

Number of cases 
involved in 
irregularities

Amounts affected by 
irregularities

% of agricultural 
expenditure

AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
RO
SE
SI
SK
UK
TOTAL

27
34
0
6
10
94
20
16
86
335
20
147
12
26
237
10
0
11
0
64
62
190
0
14
9
23
95
1,548

402
13,866
0
83
103
2,855
15,258
84
4,185
23,609
339
32,637
233
490
43,063
232
0
142
0
4,349
1,099
5,570
0
285
233
1,707
4,168
154,993

0.05
1.62
0.00
0.18
0.02
0.05
1.40
0.11
0.15
0.40
0.04
0.34
0.04
0.03
0.82
0.07
0.00
0.09
0.00
0.38
0.05
0.68
0.00
0.03
0.14
0.56
0.10
0.33

EN 

131 

   EN 

 
ANNEX 13 

STRUCTURAL MEASURES (INCLUDING THE COHESION FUND) 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 1998-2006 

Year

N° of irregularities

Financial amounts

Total budget

Impact on budget

(x €1,000)

(x €1,000,000)

2007
2006
2005
2004
2003
2002
2001
2000
1999
1998

5.000

4.500

4.000

3.500

3.000

2.500

2.000

1.500

1.000

500

0

s
e
i
t
i
r
a
l

u
g
e
r
r
i

f
o
°
N

3,832
3,216
3,570
3,339
2,487
4,656
1,194
1,217
698
407

827,654
703,302
600,816
695,611
482,215
614,094
201,549
114,227
120,633
42,838

45,327
38,430
37,192
35,665
30,764
30,556
29,823
25,556
30,654
28,366

1.83%
1.83%
1.62%
1.95%
1.57%
2.01%
0.68%
0.45%
0.39%
0.15%

900.000

800.000

700.000

600.000

500.000

400.000

300.000

200.000

100.000

0

)
€

0
0
0
,
1

n
i
(

s
t
n
u
o
m
a

r
a
l

u
g
e
r
r
I

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

Financial amounts (x €1,000)

N° of irregularities

*The  concept  of  irregularity  includes  fraud.  The  qualification  as  fraud,  meaning 
criminal behaviour, can only be made following a penal procedure. 

EN 

132 

   EN 

 
 
 
 
 
 
 
 
 
 
ANNEX 14 

COHESION FUND 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 1998-2006 

YEAR

N° OF IRREGULARITIES FINANCIAL AMOUNTS (x 1,000 €)

1998
1999
2000
2001
2002
2003
2004
2005
2006
2007

TOTAL

s
e
i
t
i
r
a
l

u
g
e
r
r
i

f
o
°
N

350

300

250

200

150

100

50

0

0
3
2
4
4
48
292
211
224
92
880

0
914
36
2,534
9,628
132,914
192,755
134,265
184,483
110,223
767,752  

250000

200000

150000

100000

50000

0

)
€

0
0
0
,
1

n
i
(

s
t
n
u
o
m
a

r
a
l

u
g
e
r
r
I

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Year

N° of irregularities

Financial amounts (x 1,000€)

*The  concept  of  irregularity  includes  fraud.  The  qualification  as  fraud,  meaning 
criminal behaviour, can only be made following a penal procedure. 

EN 

133 

   EN 

 
 
 
 
 
 
 
 
ANNEX 15 

PART 1 

STRUCTURAL FUNDS 

IRREGULARITIES REPORTED BY MEMBER STATES - 2007 

REGULATION N. 1681/94 

N° OF IRREGULARITIES 

ERDF

ESF

EAGGF

FIFG

TOTAL

21
16

3
228
6
12
34
391
11
56
15
32
307
4

1
1
20
150
263
32
2
21
280
1,906

6
12

32
143
3
14
15
134
24
77
10

208

8

1
122
38
224
44
2
3
170
1,290

39

3
17
70
8
5
10

133
4

6

4
94
47

3
41
484

1

1

2
2
3

18

2

10

1

6
3

11
60

28
28
1
35
412
11
32
66
613
43
140
35
32
658
8
8
8
2
146
282
540
79
4
27
502
3,740  

MEMBER STATE
AT
BE
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
SE
SI
SK
UK
TOTAL

EN 

134 

   EN 

 
ANNEX 15 

PART 2 

STRUCTURAL FUNDS 

IRREGULARITIES REPORTED BY MEMBER STATES - 2007 

REGULATION N. 1681/94 

FINANCIAL AMOUNTS INVOLVED IN IRREGULARITIES 

ERDF

ESF

EAGGF

3,973,989
1,210,452

329,587
354,967

MS 
AT
BE
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
SE
SI
SK
UK
TOTAL

1,451,237
41,427,446
271,986
739,855
16,499,726
162,978,075
902,784
3,060,703
1,272,917
2,082,358
121,849,034
27,137

574,435
10,139
2,855,759
25,920,315
29,019,574
2,293,994
92,127
1,381,428
114,467,369
534,362,839

3,434,609
4,946,112
34,745
333,098
1,739,808
11,048,658
1,036,381
2,852,579
476,835

20,780,619

248,458

22,162
23,770,253
1,753,712
14,688,154
1,265,443
36,666
578,639
24,406,231
114,137,716

FIFG

450,200

3,328

240,125
26,949
82,626

803,933

178,451

2,915,785

101,417
7,344,106
6,471,810
445,852
87,430
951,681

14,356,625
83,686

1,403,182

1,199,656

89,434

550,337
2,578,614
4,454,450

15,334
21,317,642
62,874,424

1,754,315
35,200

988,665
6,056,408

TOTAL

4,753,776
1,565,419
3,328
4,885,846
49,529,468
333,680
1,256,996
25,583,640
181,302,476
2,385,017
6,179,163
2,701,433
2,082,358
158,389,460
110,823
248,458
1,863,525
32,301
27,176,349
30,252,641
49,916,493
3,594,637
128,793
1,975,401
161,179,907
717,431,387  

EN 

135 

   EN 

 
ANNEX 16 

STRUCTURAL FUNDS 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1681/94 

SITUATION OF RECOVERY 

PART 1 – AMOUNTS RECOVERED IN 2007 

ERDF

ESF

EAGGF

FIFG

1,999,106
176,520

125,094
339,236

44
12,549,186
59,725
542,335
13,088,213
31,101,789
203,956
2,159,954
138,008
2,082,358
8,270,726
12,830

0
10,139
63,041
832,040
10,088,845
749,234
74,209
102,511
40,931,541
125,236,310

86,038
1,149,631
0
309,943
224,167
775,393
70,286
2,386,647
0

1,110,827

248,458

22,162
1,219,094
151,263
4,166,258
14,309
0
0
10,555,281
22,954,087

615,651

0
998,284
2,195,201
339,176
87,430
32,147

300,622
0

0

0
40,329
17,364

514
314,822
4,941,540

0

0

0
26,949
1,780

261,879

0

0

0

0
0

43,303
333,911

total

2,124,200
515,756
0
86,082
14,314,468
86,674
854,058
14,310,664
34,334,262
613,418
4,634,031
170,155
2,082,358
9,682,175
12,830
248,458
0
32,301
1,282,135
1,023,632
14,272,467
763,543
74,209
103,025
51,844,947
153,465,848

MS 
AT
BE
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
SE
SI
SK
UK
total

EN 

136 

   EN 

 
ANNEX 16 

STRUCTURAL FUNDS 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1681/94 

SITUATION OF RECOVERY 

PART 2 – AMOUNTS TO BE RECOVERED 

Amounts to be 
recovered before 
2007

Amounts to be 
recovered 2007

Amounts in 
Justice*

11,997,828
14,897,869
0
119,366
558,410,431
9,909,481
314,733
20,479,150
61,275,993
2,237,774
7,381,028
138,708
1,183,869
332,847,956
0
52,932
143,966
0
11,973,220
682,314
39,390,295
1,545,164
1,158,265
102,347
97,011,047
1,173,253,736

2,450,683
837,720
3,328
422,481
19,989,792
247,006
181,901
11,246,693
146,972,065
814,088
1,313,872
414,625
0
101,245,439
0
0
1,863,525
0
3,004,360
14,987,701
28,666,161
733,336
54,584
207,088
82,574,951
418,231,399

555,005
637,859
0
0
68,359,534
110,946
19,608
3,733,119
6,564,042
832,221
268,274
322,867
552,660
362,928,052
0
0
709,750
0
1,221,925
5,661,885
7,373,376
159,225
36,043
0
423,616
460,470,006

Amounts 
declared 
irrecoverable**

4,265,015
12,953,460

101,380,165
8,599,731

328,716
374,005
786,901
1,904,559

32,944
1,197,227

1,023,551

2,055,972
515,590

3,928,932
139,346,769  

MS 

AT
BE
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL
PT
SE
SI
SK
UK
TOTAL

* In justice: awaiting outcome of judicial procedures in national courts. 

**Amounts irrecoverable: awaiting formal decision according to the procedure 
set out in art. 5§2 of Regulation No. 1681/94. 

EN 

137 

   EN 

 
ANNEX 17 

COHESION FUND 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 

MS 

CZ
EE
EL
ES
HU
IE
LT
LV
PL
PT
SK
total

N° OF 
IRREGULARITIES

IRREGULAR 
AMOUNTS

AMOUNTS AWAITING 
RECOVERY

5
2
26
34
3
1
4
1
9
4
3
92

0
66,915
67,259,450
32,624,604
631,256
6,638,190
773,682
45,754
590,638
865,435
726,899
110,222,823

0
32,040
8,955,956
27,968,582
631,256
0
676,728
45,754
269,068
0
719,080
39,298,464

EN 

138 

   EN 

 
ANNEX 18 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2007 

Table 1 

€  

Country  No of Reports  Eligible amount88
BG 
CZ 
EE 
HR 
HU 
LV 
MT 
PL 
RO 
SI 
SK 
TR 

17,416,609 
791,611 
4,380,663 
2,975,000 
2,296,983 
71,821 
415,648 
14,069,397 
1,980,201,603 
58,682 
2,225,008 
1,253,092 

76 
7 
8 
2 
7 
2 
2 
44 
164 
1 
13 
6 

All Funds 2007  

Irregular amount 
10,320,728 
477,435 
440,503 
1,100,000 
2,285,112 
26,500 
91,288 
1,218,020 
14,340,780 
17,295 
1,830,788 
236,504 

 Amount to be recovered 
5,336,730 
389,812 
438,562 
0 
379,696 
26,216 
65,961 
948,096 
5,758,364 
17,295 
644,150 
213,082 

Total 

332 

2,026,156,117 

32,384,953 

14,217,963 

Table 2 

€  

Country  No of Reports 
BG 
CZ 
EE 
HR 
HU 
LV 
MT 
PL 
RO 
SK 
TR 

30 
1 
3 
2 
3 
1 
2 
12 
28 
8 
6 

Eligible amount 
7,600,100 
230,375 
4,226,333 
2,975,000 
1,983,196 
46,548 
415,648 
10,544,714 
27,079,758 
1,355,133 
1,253,092 

PHARE 2007 

Irregular amount 
5,190,959 
86,826 
364,021 
1,100,000 
1,978,587 
1,227 
91,288 
223,650 
5,290,905 
1,223,259 
236,504 

 Amount to be recovered 
518,278 
0 
364,021 
0 
73,171 
943 
65,961 
89,530 
471,200 
143,984 
213,082 

Total 

96 

57,709,897 

15,787,226 

1,940,170 

88 

If the amount was reported in national currency the Commission monthly exchange rate was used. 

EN 

139 

   EN 

 
                                                 
Table 3 

€  

SAPARD 2007 

Country  No of Reports 
BG 
CZ 
EE 
HU 
LV 
PL 
RO 
SI 
SK 

42 
6 
5 
4 
1 
32 
54 
1 
5 

Eligible amount 
9,555,210 
561,236 
154,330 
313,787 
25,273 
3,524,683 
22,396,152 
58,682 
869,875 

Irregular amount 
4,970,288 
390,609 
76,482 
306,525 
25,273 
994,370 
3,401,248 
17,295 
607,529 

 Amount to be recovered 
4,818,452 
389,812 
74,541 
306,525 
25,273 
858,566 
2,734,512 
17,295 
500,166 

Total 

150 

37,459,228 

10,789,619 

9,725,141 

Table 4 

€  

ISPA 2007 

Country  No of Reports 

Eligible amount 

Irregular amount 

 Amount to be recovered 

BG 

RO 

Total 

4 

82 

86 

261,299 

159,481 

1,930,725,693 

5,648,627 

1,930,986,992 

5,808,108 

0 

2,552,652 

2,552,652 

EN 

140 

   EN 

 
ANNEX 19 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2007 BELOW REPORTING 
THRESHOLD 

Table 1 

€  

2007 cases below reporting threshold all funds 

Country 
BG 
CZ 
EE 
LV 
PL 
RO 
SK 
Total 

No of 
Reports 
25 
1 
3 
1 
2 
1 
3 
36 

Table 2 

€  

Country 
BG 
LV 
PL 
RO 
SK 
Total 

No of 
Reports 
16 
1 
2 
1 
2 
22 

Table 3 

€  

Country 
BG 
CZ 
EE 
SK 
Total 

No of 
Reports 
9 
1 
3 
1 
14 

Eligible 
amount 
3,215,329 
164,033 
13,492 
46,548 
18,757 
40,878 
371,309 
3,870,346 

Eligible 
amount 
355,089 
46,548 
18,757 
40,878 
143,998 
605,270 

Eligible 
amount 
2,860,240 
164,033 
13,492 
227,311 
3,265,076 

Irregular 
amount 
92,169 
798 
4,787 
1,227 
6,745 
1,436 
12,180 
119,342 

2007 PHARE  

Irregular 
amount 
85,177 
1,227 
6,745 
1,436 
12,115 
106,700 

2007 SAPARD  

Irregular 
amount 
6,992 
798 
4,787 
65 
12,642 

Amount to be 
recovered 
61,479 
0 
2,846 
943 
6,745 
0 
6,716 
78,729 

Amount to be 
recovered 
57,509 
943 
6,745 
0 
6,716 
71,913 

Amount to be 
recovered 
3,970 
0 
2,846 
0 
6,816 

EN 

141 

   EN 

 
ANNEX 20 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED – ALL YEARS 

Table 1 

€  

Country  No of Reports 
BG 
CY 
CZ 
EE 
HR 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
TR 

140 
5 
35 
36 
2 
97 
40 
33 
7 
258 
609 
37 
99 
7 

Eligible amount 
33,400,452 
5,624,616 
23,083,006 
27,932,873 
2,975,000 
15,614,959 
102,993,517 
2,460,923 
1,562,935 
981,995,407 
2,872,079,000 
3,672,896 
46,252,063 
1,400,908 

All funds for all years 
Irregular amount 
17,662,240 
23,807 
2,229,411 
6,366,218 
1,100,000 
6,072,888 
884,358 
336,041 
99,888 
4,201,205 
31,023,324 
1,463,975 
7,470,532 
384,320 

 Amount to be recovered 
6,978,801 
0 
1,230,998 
886,853 
0 
984,537 
530,484 
258,454 
65,961 
1,496,184 
11,994,889 
52,294 
3,287,345 
360,898 

Total 

1405 

4,121,048,555 

79,318,207 

28,127,698 

Table 2 

€  

Country  No of Reports 
BG 
CY 
CZ 
EE 
HR 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
TR 

53 
5 
16 
17 
2 
45 
20 
18 
7 
108 
182 
6 
86 
7 

PHARE all years 

Eligible amount 
14,556,238 
5,624,616 
2,060,567 
11,069,315 
2,975,000 
12,560,823 
912,091 
859,521 
1,562,935 
352,992,325 
279,334,087 
2,115,949 
17,319,469 
1,400,908 

Irregular amount 
5,519,210 
23,807 
545,061 
3,240,853 
1,100,000 
4,126,778 
566,694 
91,833 
99,888 
2,352,424 
11,968,483 
158,791 
6,018,922 
384,320 

 Amount to be recovered 
749,691 
0 
432,660 
365,701 
0 
652,714 
426,960 
42,354 
65,961 
507,162 
5,688,111 
30,214 
2,027,099 
360,898 

Total 

572 

705,343,843 

36,197,065 

11,349,525 

EN 

142 

   EN 

 
Table 3 

€  

Country  No of Reports 
BG 
CZ 
EE 
HU 
LT 
LV 
PL 
RO 
SI 
SK 

80 
18 
15 
52 
13 
15 
129 
281 
31 
12 

SAPARD all years 

Eligible amount 
13,589,134 
1,024,688 
3,640,066 
3,054,136 
5,232,846 
1,601,402 
11,442,308 
150,335,466 
1,556,948 
1,783,394 

Irregular amount 
7,430,823 
840,290 
2,954,588 
1,946,110 
315,332 
244,208 
1,779,038 
10,624,314 
1,305,184 
1,402,556 

 Amount to be recovered 
6,229,110 
798,337 
351,838 
331,823 
103,048 
216,100 
966,415 
3,752,076 
22,080 
1,211,192 

Total 

646 

193,260,388 

28,842,443 

13,982,020 

Table 4 

€  

Country 
BG 
CZ 
EE 
LT 
PL 
RO 
SK 

Total 

ISPA all years 

No of Reports 
7 
1 
4 
7 
21 
146 
1 

Eligible amount 
5,255,080 
19,997,751 
13,223,492 
96,848,580 
617,560,774 
2,442,409,447 
27,149,200 

Irregular amount 
4,712,207 
844,059 
170,777 
2,332 
69,743 
8,430,527 
49,054 

 Amount to be recovered 
0 
0 
169,314 
476 
22,607 
2,554,702 
49,054 

187 

3,222,444,324 

14,278,699 

2,796,153 

EN 

143 

   EN 

 
ANNEX 21 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES COMMUNICATED BY MEMBER STATES AND CANDIDATE COUNTRIES 

€  

ISPA 

PHARE 

SAPARD 

No of 
Reports

Year 

Eligible 
amount 

Irregular 
amount 

 Amount to 
be recovered

No of 
Reports 

Eligible 
amount 

Irregular 
amount 

 Amount to 
be recovered

No of 
Reports 

Eligible 
amount 

Irregular 
amount 

 Amount to 
be recovered 

2002 

6 

131,861 

14,890 

0 

281,385,122 

894,732 

17,151 

470,031,997 

251,987 

223,824 

0 

52 

68 

0 

0 

0 

320,162,659

632,293 

299,719 

0 

34 

0 

0 

0 

5,963,143 

3,817,914 

23,692 

12,674,275  4,141,466 

982,976 

133 

50,512,707  6,033,190 

260,546 

177,042,030 

6,160,535 

476 

151 

65,252,501  7,488,049 

2,509,571 

165 

54,336,183  3,723,955 

537,931 

362,866,322 

1,148,447 

2,050 

205 

249,544,511 8,148,031 

5,617,089 

164 

44,989,126  4,477,766 

3,434,710 

1,930,986,992  5,808,108 

2,552,652 

96 

57,709,897  15,787,226

1,940,170 

150 

37,459,228  10,789,619 

9,725,141 

2003 

2004 

2005 

2006 

2007 

18 

26 

25 

26 

86 

Total 

187 

3,222,444,324  14,278,699

2,796,153 

572 

705,343,843 36,197,065 11,349,525 

646 

193,260,388 28,842,443  13,982,020 

EN 

144 

EN 

 
  
IRREGULARITIES REPORTED BY MEMBER STATES IN 2007 – AGRICULTURE, STRUCTURAL AND COHESION FUNDS, 
OWN RESOURCES 

AGRICULTURE 

STRUCTURAL FUNDS 

COHESION FUND 

OWN RESOURCES 

TOTAL 

CASES 

TOTAL AMOUNTS 

CASES 

TOTAL AMOUNTS

CASES 

TOTAL AMOUNTS 

CASES 

TOTAL AMOUNTS 

CASES 

TOTAL AMOUNTS 

ANNEX 22 

AT 

BE 

BG 

CY 

CZ 

DE 

DK 

EE 

EL 

ES 

FI 

FR 

HU 

IE 

IT 

LT 

LU 

LV 

MT 

NL 

PL 

PT 

RO 

SE 

SI 

SK 

UK 

EN 

27

34

6

10

94

20

16

86

335

20

147

12

26

237

10

11

64

62

190

14

9

23

95

401,511 

13,866,333 

83,362 

103,168 

2,854,876 

15,257,984 

83,985 

4,185,084 

23,609,346 

338,508 

32,637,233 

233,052 

490,043 

43,063,210 

232,242 

141,835 

4,349,283 

1,099,347 

5,570,368 

284,714 

232,894 

1,707,309 

4,167,640 

28

28

1

35

412

11

32

66

613

43

140

35

32

658

8

8

8

2

146

282

540

79

4

27

502

4,753,776   

1,565,419   

3,328   

4,885,846

49,529,468   

333,680   

1,256,996

25,583,640

181,302,476

2,385,017   

6,179,163   

2,701,433

2,082,358

158,389,460   

110,823

248,458   

1,863,525

32,301   

27,176,349   

30,252,641

49,916,493

3,594,637   

128,793   

1,975,401

161,179,907   

5

2

26

34

3

1

4

1

9

4

3

145 

91

395

15

11

39

998

54

12

53

403

34

321

67

35

275

40

0

40

10

1,052

158

23

37

42

27

20

0

66,915

67,259,450

32,624,604

631,256

6,638,190

773,682

45,754

590,638

865,435

726,899

146

457

15

18

89

10,655,599 

37,739,616 

471,173 

837,091 

6,413,702 

1,504

106,857,216 

85

62

231

1,385

97

608

117

94

22,847,822 

1,863,650 

99,773,025 

250,461,728 

4,437,743 

72,132,170 

9,593,581 

11,693,563 

1,170

232,500,970 

5,500,312

22,307,864

471,173

750,402

1,424,688

54,472,872

7,256,158

455,754

2,744,851

12,925,302

1,714,218

33,315,774

6,027,841

2,482,972

31,048,300

1,286,472

0

2,254,487

404,949

62

8

60

12

57,072,423

1,262

8,569,400

393,960

3,837,168

2,398,254

1,589,490

1,070,723

511

757

37

135

40

73

2,403,219 

248,458 

4,305,601 

437,250 

88,598,055 

40,512,026 

56,746,256 

3,837,168 

6,277,605 

1,951,177 

5,480,332 

1,069

115,284,887

1,666

280,632,434 

EN 

 
  
 
 
  
  
 
 
  
  
  
  
  
  
  
  
  
  
 
 
  
 
 
  
  
 
 
  
  
  
  
  
  
  
TOTAL 

1,548

154,993,326 

3,740

717,431,387

92

110,222,823

5,321

377,060,694

10,701

1,359,708,231 

EN 

146 

EN