Commission staff working document - Annex to the 2008 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 2008 {COM(2009) 372} {SEC(2009) 1002}
Date: 2009-07-15
Institutions: European Commission
Subjects: EU Member State, EU statistics, European Commission, activity report, agricultural production, application of EU law, cooperation policy, fraud, fraud against the EU, management of resources

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.7.2009 
SEC(2009) 1003 final 

COMMISSION STAFF WORKING DOCUMENT 

Annex to the 2008 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 2008 

{COM(2009) 372} 
{SEC(2009) 1002} 

EN 

   EN 

 
 
 
  
 
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

The situation in 2008.................................................................................................... 6 

Introduction .................................................................................................................. 6 

Key Facts...................................................................................................................... 9 

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

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

1.2.3.  European Fishery Fund .............................................................................................. 10 

1.2.4.  Structural Measures.................................................................................................... 10 

1.2.5.  Pre-accession Funds ................................................................................................... 10 

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 ......................................... 14 

2.2. 

Reporting discipline ................................................................................................... 14 

2.2.1.  Year of discovery versus year reported...................................................................... 15 

2.3. 

General trends ............................................................................................................ 15 

2.3.1.  Method of detection ................................................................................................... 16 

2.3.2.  Types of irregularity and fraud .................................................................................. 17 

2.3.3.  Data main sectors TOR .............................................................................................. 18 

2.4. 

Specific analysis......................................................................................................... 18 

2.4.1.  TOR and cigarettes..................................................................................................... 18 

2.4.2.  Classification of irregularities and fraud by Member States...................................... 18 

2.5. 

Recovery .................................................................................................................... 18 

2.5.1.  Corrections to established amounts............................................................................ 19 

2.5.2.  Recovery rates............................................................................................................ 19 

2.5.2.1.  Recovery rate (RR) .................................................................................................... 19 

2.5.2.2.  Historical recovery rate (HRR) .................................................................................. 20 

EN 

   EN 

 
 
 
2.5.3.  Recovery indicators.................................................................................................... 21 

2.5.3.1.  Recovery rates in case of fraud .................................................................................. 21 

2.5.3.2.  Recovery rates in case of MA communications......................................................... 22 

2.5.3.3.  Recovery rates by method of detection...................................................................... 23 

2.5.3.4.  Recovery rates by category of amount....................................................................... 23 

2.5.3.5.  Recovery rates by origin ............................................................................................ 24 

2.5.4.  Write-down and write-off of established amounts..................................................... 24 

2.5.4.1.  Written down when recovery is unlikely ................................................................... 24 

2.5.4.2.  Written off when the debt is deemed irrecoverable ................................................... 24 

2.5.4.3.  Estimation of the recovery of established amounts.................................................... 25 

2.5.5. 

Impact on the budget.................................................................................................. 25 

2.6. 

Conclusions ................................................................................................................ 27 

3. 

AGRICULTURAL EXPENDITURE (Annexes 11-12) ............................................ 29 

3.1. 

Reporting discipline ................................................................................................... 30 

3.1.1.  Timely reporting (Art. 3(1) Reg. 1848/2006) ............................................................ 32 

3.1.2.  Budget year, budget line and product affected (Art. 3(1) (a) Reg. 1848/2006)......... 32 

3.1.3.  The moment at which the irregularity was committed (Art. 3(1) (i) Reg. 1848/2006)

.................................................................................................................................... 33 

3.1.4.  Practices employed and classification (Art. 3 (1) (e) (f) Reg. 1848/2006) ................ 33 

3.1.5.  Legal/natural persons identification (Art. 3 (1) (l) Reg. 1848/2006)......................... 34 

3.1.6.  Financial impact (Art. 3 (1) (n) Reg. 1848/2006) ...................................................... 35 

3.2. 

General Trends ........................................................................................................... 36 

3.2.1.  Amounts affected ....................................................................................................... 36 

3.2.2. 

Impact on the budget.................................................................................................. 38 

3.2.3.  Method of detection ................................................................................................... 40 

3.2.4.  Types of irregularity................................................................................................... 44 

3.3. 

Specific Analysis........................................................................................................ 48 

3.3.1.  Analysis of support measures..................................................................................... 48 

3.3.2. 

Irregularity versus suspected fraud ............................................................................ 52 

3.4. 

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

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

EN 

   EN 

 
 
3.4.2.  Sanctions .................................................................................................................... 56 

3.5. 

Conclusions ................................................................................................................ 58 

4. 

5. 

5.1. 

5.2. 

European Fishery Fund .............................................................................................. 61 

Structural measures (Annexes 13-17) ........................................................................ 62 

Reporting Discipline .................................................................................................. 62 

General Trends ........................................................................................................... 65 

5.2.1.  Overall trends ............................................................................................................. 65 

5.2.1.1.  Trends related to the Funds ........................................................................................ 66 

5.2.1.2.  Trends related to Member States................................................................................ 67 

5.2.2.  Amounts involved ...................................................................................................... 68 

5.2.2.1.  The four Structural Funds .......................................................................................... 70 

5.2.2.2.  The Cohesion Fund .................................................................................................... 72 

5.2.3. 

Impact on budget........................................................................................................ 72 

5.2.4.  Detection methods...................................................................................................... 73 

5.2.5.  Types of irregularity................................................................................................... 74 

5.2.6.  Suspected frauds......................................................................................................... 75 

5.3. 

Specific analysis – Irregularities related to the programming period 2000-2006...... 78 

5.3.1. 

Irregularities affecting the different funds ................................................................. 80 

5.3.2. 

Irregularities by Objective.......................................................................................... 81 

5.3.3.  Suspected frauds......................................................................................................... 83 

5.3.4. 

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

5.4. 

5.5. 

6. 

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

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

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

6.1. 

Reporting discipline ................................................................................................... 90 

6.1.1.  Timely reporting......................................................................................................... 90 

6.1.2.  Time gaps ................................................................................................................... 91 

6.1.3.  Classification of irregularity ...................................................................................... 91 

6.1.4.  Summary .................................................................................................................... 92 

6.2. 

General Trends ........................................................................................................... 93 

EN 

   EN 

 
 
6.2.1.  Overall trend............................................................................................................... 93 

6.2.2.  Trend related to Member States and Candidate countries ......................................... 94 

6.2.3.  Amounts involved ...................................................................................................... 95 

6.2.4. 

Impact on the budget.................................................................................................. 97 

6.2.5.  Method of detection ................................................................................................... 98 

6.2.6.  Types of irregularities .............................................................................................. 100 

6.3. 

Specific analysis....................................................................................................... 101 

6.3.1. 

Irregularities affecting different funds ..................................................................... 101 

6.3.2. 

Irregularity vs suspected fraud ................................................................................. 103 

6.3.3.  Recovery .................................................................................................................. 106 

6.4. 

Conclusions .............................................................................................................. 108 

7. 

7.1. 

7.2. 

Direct Expenditure – Centralised direct Management ............................................. 110 

Methodology and scope ........................................................................................... 110 

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

7.2.1.  Financial amounts involved ..................................................................................... 111 

7.2.2.  Financial amounts involved by geographical area and Member State..................... 113 

7.2.3.  Method of detection ................................................................................................. 116 

7.2.4.  Types of irregularity................................................................................................. 117 

7.3. 

Specific analysis....................................................................................................... 120 

7.3.1. 

Irregularity versus Suspected Fraud......................................................................... 120 

7.3.2.  Time delay................................................................................................................ 120 

7.4. 

7.5. 

Recovery .................................................................................................................. 121 

Conclusions .............................................................................................................. 122 

EN 

   EN 

 
 
1. 

THE SITUATION IN 2008 

1.1. 

Introduction 

According  to  article  274  of  the  Treaty  on  the  European  Community,  the  European 
Commission  shall  implement  the  budget.  Council  Regulation  (EC,  Euratom)  No 
1605/20021  of  25  June  2002  on  the  Financial  Regulation  (FR)  applicable  to  the 
general  budget  of  the  European  Communities  indicates  that  the  Commission 
implements the budget: 

•  on  a  centralised  basis:  implementation  tasks  are  performed  either  directly  by  its 
departments  or  indirectly  by  executive  agencies  created  by  the  Commission, 
bodies set up by the Communities - provided that this is compatible with the tasks 
set out in the basic act - and, subject to certain conditions, national public-sector 
bodies or bodies governed by private law with a public-service mission; 

•  on  a  shared  or  decentralised  basis:  implementation  tasks  are  delegated  to  the 
Member  States 
(decentralised 
management);  the  Commission  applies  clearance-of-accounts  procedures  or 
financial correction mechanisms enabling it to assume final responsibility for the 
implementation of the budget; 

(shared  management)  or 

third  countries 

•  by  joint  management  with  international  organisations:  certain  implementation 

tasks are entrusted to international organisations. 

Community  legislation  provides  for  the  protection  of  the  Community’s  financial 
interests in all areas of activity2. The FR sets the principles and rules for the correct 
implementation of the budget. 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. 

1 
2 

Official Journal L 248 of 16.09.2002 
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. 

EN 

6 

   EN 

 
 
                                                 
Regulation  No.  1848/20063  specifies  the  requirement  for  the  agriculture  sector, 
Regulations  Nos.  1681/944  and  1831/945,  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  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 period6. The rules on reporting irregularities to the Commission have 
been  retained,  but  the  communication  procedure  is  now  part  of  the  implementing 
Regulations7 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 regulations (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.  

3 

4 

5 
6 

7 

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. 
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.  

EN 

7 

   EN 

 
                                                 
The  distinction  between  irregularities  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 
fraud.  The  Commission's  statistical  assessment  of  and  ability  to  respond  to, 
irregularities are 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. 
the 
Consequently,  a  significant  proportion  of  communications  received  by 
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”9 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.  

The present document is divided in two parts.  

8 

9 

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: 
a) 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.” 
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. 

EN 

8 

   EN 

 
                                                 
 
 
 
 
 
 
 
 
The  first  is  dedicated  to  the  analysis  of  irregularities  reported  in  the  area  of  the 
Traditional  Own  Resources  (Revenues).  The  implementation  mode  for  this  part  of 
the budget is that described under letter b. – shared management. 

The  second  is  composed  of  5  chapters  dedicated,  respectively,  to  Agricultural 
expenditure, European Fishery Fund, Structural measures (for these three sectors the 
management  mode  is  that  indicated  under  letter  b.  –  shared  management),  Pre-
accession  Assistance  (the  implementation  mode  for  this  sector  is  indicated  under 
letter b. – decentralised management) and Direct expenditure (whose implementation 
mode is that described under letter a.). 

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,  1831/94  and  1828/2006  for  structural  measures  and  Regulation  No. 
1150/2000 for own resources.  

In general,  the number of irregularities notified for the year 2008 has decreased by 
2%. 

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/decreased by 23.6%. 

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

1.2.1.  Traditional Own Resources 

In 2008, the number of cases of irregularities communicated by the Member States 
decreased  from  6,097  to  5,344.  Consistently,  the  amount  of  TOR  decreased  from 
EUR 401 million to EUR 351 million. 

Of  all  the  cases  registered  in  2008  20%  (1,073  out  of  5,344  registered  cases)  are 
categorised as frauds. 

1.2.2.  Agriculture 

Member States reported 1,133 new irregularities compared with 1,548 in 2007. The 
total  amount  affected  in  2008  was  about  EUR  102.3  million,  as  against 
approximately EUR 155 million in 2007. 

EN 

9 

   EN 

 
Irregularities  notified  in  this  sector  represent  0.21%  of  the  agricultural  budget  (see 
annexes 11 and 12). 

1.2.3.  European Fishery Fund 

No  irregularities  have  yet  been  reported  concerning  the  European  Fishery  Fund  on 
the basis of Commission Regulation (EC) No 498/2007. 

1.2.4. 

Structural Measures 

In  2008  Member  States  reported  3,960  irregularities  under  Regulation  (EC)  No 
1681/94 which covers the four Structural Funds and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). The total amount affected by irregularities in 2008 
was almost EUR 585 million, EUR 528.6 million of which was from the Structural 
Funds and EUR 56.3 million from the Cohesion Fund. Irregularities reported in this 
sector  were  equivalent  to  1.25%  of  the  budget  allocated  to  structural  measures  in 
2008. 

In  2007,  Member  States  reported  3,858  irregularities  under  Regulation  (EC)  No 
1681/94 which covers the four Structural Funds and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). 9 irregularities were reported under Regulation No 
1828/2006,  which  covers  the  programming  period  2007-2013.  The  total  amount 
affected by irregularities in 2008 was about EUR 585.2 million, EUR 528.9 million 
of  which  was  from  the  Structural  Funds  and  EUR  56.3  million  from  the  Cohesion 
Fund. Irregularities reported in this sector were equivalent to 1.25% of the resource 
allocations for 2008. 

For the first time irregularities related to the programming period 2007-2013 (whose 
reporting  is  disciplined  by  Regulation  (EC)  No  1828/2006)  were  reported  to  the 
Commission. 

1.2.5.  Pre-accession Funds 

In  2008  the  Commission/OLAF  received  2,133  reports  on  pre-accession  funds 
(PHARE, SAPARD, ISPA, Transition Facility (TF), CARDS, Turkish pre-accession 
instrument  (PA))  from  the  Member  states  and  Candidate  countries.  The  received 
information  consists  of  523  new  cases  detected  by  the  national  authorities  in  2008 
and  1,610  follow-up  reports  on  the  previously  reported  cases.  The  number  of  new 
cases  received  on  pre-accession  assistance  is  the  highest  since  the  reporting 
obligation started to be fulfilled by the reporting countries. 

The  total  amount  affected  by  irregularities  in  2008  was  EUR  60,782,354  where 
PHARE  accounts  for  EUR  26,731,257  (183  cases),  SAPARD  –  EUR  29,046,300 
(213 cases), ISPA – EUR 4,055,042 (99 cases), TF – EUR 545,822 (4 cases), PA – 
EUR 314,763 (18 cases), CARDS – EUR 89,170 (6 cases). 

EN 

10 

   EN 

 
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’)10 under the 
best possible conditions. In conformity with Regulation (EC, Euratom) 1150/200011 
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  that  have  been  recovered  and  debts  that  are  guaranteed  and  not 
under appeal are to be made available via the A-account. However, where TOR have 
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  any  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  Authorising  Officer  responsible  for  executing  the  EU  budget,  the 
Commission (DG Budget as delegated Authorising 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  of  Member  States’  follow-up  of  recovery  in  individual 
cases which have a significant financial impact and involve Mutual Assistance. This 
particular  task  is  performed  in  close  co-operation  with  the  European  Anti-Fraud 

10 
11 

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

EN 

11 

   EN 

 
                                                 
Office (OLAF) where OLAF has issued the Mutual Assistance message in question 
and/or has an operational interest in the case concerned. 

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

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

take  all  requisite  measures 

that  amounts 
Member  States  must 
corresponding to the entitlements established are made available to the Commission. 
This  requirement  is  in  Article  17(1)  of  Regulation  1150/2000.  Article  17  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 €50 000 the write-off must be reported to the Commission. For amounts 
under  €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  1150/200012  introduced  the  five-year 
timeframe  within  which  a  Member  State  has  to  provide  the  Commission  with 
information on amounts of established entitlements of TOR deemed irrecoverable. In 
2008 the already expected marked increase in requests by Member States to write off 
established  TOR  amounts  deemed  irrecoverable  indeed  occurred.  Compared  with 
2007  the  number  went  up  from  100  to  589  requests.  This  effect  will  probably 
continue  in  2009.  The  increase  primarily  consisted  of  old  cases  not  yet  reported  to 
the  Commission,  but  meeting  the  five-year  deadline  triggering  application  of  the 
write-off procedure.  

A new IT application called WOMIS13 will be introduced in 2009 to support Member 
States and DG Budget in managing write-off requests. 

In 2008 589 write-off requests amounting to €188 760 951.04 were communicated to 
the  Commission  by  13  Member  States.  In  total,  465  requests  were  processed  in 
200814 with the following result15:  

12 
13 

Regulation No 2028/2004, amending Regulation No 1150/2000. 
WOMIS: Write-Off Management and Information System.  

EN 

12 

   EN 

 
                                                 
14 

15 

Origin  of  the  cases:  1  case  from  Austria,  1  from  Belgium,  1  from  the  Czech  Republic,  341  from 
Germany, 13 from Denmark, 18 from Spain, 1 from Finland, 1 from Ireland, 66 from Italy, 108 from 
the Netherlands, 2 from Portugal, 4 from Sweden and 32 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 

13 

   EN 

 
                                                                                                                                                         
TABLE OR 1 

Commission position 

cases  % cases 

€ 

% amount 

UNSUITABLE EXEMPTION REQUEST 

WRITE-OFF ACCEPTED 

ADDITIONAL INFORMATION REQUIRED 

WRITE-OFF REFUSED 

TOTAL 

2

132

299

32

465

0.43%

41,339.05 

0.05%

28.39% 17,338,091.14 

13.63%

64.3% 92,320,654.22 

72.61%

6.88% 17,434,228.42 

13.71%

100% 127,134,312.83 

100%

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  step  up  the  regularity,  efficiency  and  effectiveness  of  their 
recovery activity, since any lack of diligence leading to failure to recover results in 
individual Member States having to foot the bill. During 2008 over €14 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 is not established because of an administrative error by a Member State 
the Commission applies the principle of financial liability16. As a result up to 2008 
over €70 million was paid by Member States, aside from interest on late payment 17.  

Altogether the cases of financial liability dealt with by DG Budget up until the end of 
2008 total nearly €260 million. The main objectiv e 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  system18,  cases  of  fraud  and 
irregularity where the TOR amount exceeds €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 for obtaining data for global analyses of fraud and 
irregularities, and presents valuable information to the Budgetary Authority. 

16 

17 
18 

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; 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 

14 

   EN 

 
                                                 
Because  all  TOR  amounts  exceeding  €10 000  in  the  B-account  represent  an 
irregularity  (fraud  included)  by  definition  the  match  between  the  two  from  the 
standpoint  of  the  B-account  should  be  100%19.  This  match  is  checked  during  the 
regular inspections in the Member States; however, no significant shortcomings have 
been found in recent years. 

OWNRES is not a reliable source of data on fraud alone, isolated from irregularity. 
This is because (until a court judgment is obtained) the distinction between fraud and 
irregularity  is  usually  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. 

2.2.1.  Year of discovery 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  2007  in  last  year’s  report  was  5 321  cases 
whereas the number of cases now shown for 2007 is 6 097 cases20. This continuing 
development is inherent to the system. 

2.3. 

General trends  

The number of cases communicated to OWNRES for 2008 is currently 12.5% lower 
in comparison with 2007 (from 6 097 to 5 344), and the amount of TOR involved is 
21.  The  trend  for  the 
likewise  12.5%  smaller  (from  €401  million  to  €351  million
)
number  of  belatedly  discharged  Community  Transit  operations  to  decrease 
continued22,  and  the  amount  involved  decreased  as  well.  In  the  case  of  Transit 
practice  shows  that  up  to  90%  of  the  initially  established  debts  are  ultimately 
cancelled, because of proof of regular discharge after all. 

While  the  number  of  communications  from  the  ten  new  Member  States  showed 
continued  growth  since  their  accession  in  2004  until  2007,  in  2008  this  growth 
stopped. 2008 shows 3% less cases when compared with 2007 whereas when 2007 
was  compared  with  2006,  it  showed  growth  of  16%.  If  the  comparisons  are  made 
using the amounts of TOR, the rates are -8% and 28% respectively.  

19 

20 

21 
22 

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.  
The  information  generated  by  OWNRES  used  to  produce  the  figures  in  this  chapter  was  all  obtained 
from queries made on 6 March 2009. 
See Annex 1 (table) and Annex 2 (chart). 
In 2005 the number of cases of belatedly discharged Transit was 2 374, being 38.3% of the total number 
of  cases  registered  and  28%  of  the  total  amount  initially  established.  In  2006  there  were  1 478  cases 
(24.5% of cases and 19.5% of the total amount) and in 2007 there were 1 390 cases (22.8% of cases and 
16.7% of the amount). In 2008 the figures are respectively 1 048, 19.6% and 14.7%. 

EN 

15 

   EN 

 
                                                 
The OWNRES database now contains 51 412 cases in total (1989-2008), showing an 
increase  of  nearly  14%  during  200823.  Significant  changes  in  the  number  of 
registrations in 2008 compared with 2007 can be seen for Romania (+ 103%), Malta 
(- 70%), Sweden (+ 63%), Greece (- 44%) and Slovakia (- 43%). Significant changes 
in amounts can be seen in Estonia (+ 221%), Sweden (+ 173%), the Czech Republic 
(+ 119%), Romania (+ 90%), the Netherlands (+ 82%) and Austria (- 86%)24.  

2.3.1.  Method of detection 

A  variety  of  detection  methods  can  reveal  irregularity  or  fraud.  Judging  from  the 
2008  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 47% of the cases discovered whereas primary national inspections cover 30%.  

It is clear that the shift which could already be seen in previous years from primary 
to  post-clearance  inspections  continued  in  2008.  It  marks  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%  in  2008 
compared to 7% in 2007. Since the final results of such inspections take more time 
than  regular  inspections,  a  (slight)  increase  in  the  percentage  for  2008  may  be 
expected in future registrations. 

CHART OR 1: Methods of detection 2006-2008 

Method of detection 2006-2008

S
E
S
A
C
F
O
R
E
B
M
U
N

3000

2500

2000

1500

1000

500

0

A udit o f the
acco unts

Co mmunity
inspectio ns

Inspectio n by
anti-fraud
services

Inspectio n visit Natio nal po st-

clearance
inspectio ns

P rimary
natio nal
inspectio ns

Tax audit

Vo luntary
admissio n

METHOD OF DETECTION

 2006

 2007

 2008

23 

24 

This  percentage  will  gradually  decrease  since  the  cumulative  number  of  existing  cases  in  OWNRES 
will  exceed  the  number  of  new  cases  added  every  new  reporting  year  (last  year  this  percentage  was 
16%). 
Significant  changes  in  amounts  involved  generally  relate  to  one  or  a  few  (very)  big  cases,  e.g. 
Netherlands: 1 case of €15 million;  Romania: 1 case of €2.8 milli on; Czech Republic: 1 case of €1.8 
million. 

EN 

16 

   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 (67% of cases25). False declarations (misdescription, incorrect value, origin 
and preferential arrangements) and formal shortcomings (failure to fulfil obligations 
or commitments) are the mechanisms most frequently mentioned, but also smuggling 
is highly placed. 

The  goods  (defined  by  the  first  two  numbers  of  the  CN  code26)  most  affected  by 
fraud and irregularities in 2008, as in previous years, are TVs/monitors etc. (CN 85) 
and tobacco products (CN 24). Clothing (CN 61-62) increased  in  importance when 
compared  to  2007  as  did  machines  (CN  84),  plastics  (CN  39)  and  meat  (CN  02), 
whereas (parts of) cars and motors (CN 87) remained relatively stable and vegetables 
(specifically  garlic)  (CN  07)  went  down27.  Footwear  (CN  64),  first  placed  in  2007, 
has completely disappeared out of the top 25 in 200828. The variety of goods in the 
top 25 (defined by the first two numbers of the CN code) is stable at 14 to 15 types 
since 2006. 

CHART OR 229: Fraud and irregularities breakdown by goods in 2008 in MEUR 

Fraud and Irregularities breakdown by goods in 2008 in Mio. €

Other 42 (12%)

Plastics 11 (3%)

 TV's, (computer) 
monitors etc. 114 (32%) 

Vegetables 14 (4%)

Animals and products 
thereof 14 (4%)

Metals 15 (4%)

Vehicles etc. 18 (5%)

Chemical products 23 (6%)

Textile 54 (15%)

Food/Drinks/Tobacco 47 
(13%)

25 

26 
27 
28 
29 

See  Annex  3.  In  2005  there  was  a  decrease  in  importance  of  the  customs  procedure  release  for  free 
circulation (53% of cases) which was linked to an improvement in registering those cases. 
Combined nomenclature or CN — nomenclature of the Common Customs Tariff. 
See Annexes 4 and 5. 
In 2007 MA 2007/015 was communicated signalling risks with textiles and shoes from China. 
The product description in the chart is a generic description of the goods involved. See Annexes 4 and 5 
for detailed analyses.  

EN 

17 

   EN 

 
 
                                                 
Analysis of the origin of goods subject to fraud and irregularity30 reveals that, just as 
in 2007, goods originating from China, Japan, the US, South Korea, Bangladesh and 
Brazil remain very much affected. The number of cases in the origin category non-
specified  decreased,  as  in  previous  years,  in  parallel  with  the  decrease  in  Transit 
cases. 

2.3.3.  Data main sectors TOR 

See Annexes 1-10. 

2.4. 

Specific analysis  

2.4.1.  TOR and cigarettes 

In  2008  there  were  255  cases  registered  of  seized  and  confiscated  cigarettes  (CN 
code  24  02  20  90)  involving  estimated31  TOR  of  over  €22  million.  In  2007  the 
number  of  registered  cases  concerning  seized  and  confiscated  goods  was  188, 
totalling over €16 million. The growth of the  number of cases is related to the EUR-
15, of which the UK shows the most significant increase, from 42 cases in 2007 up to 
100 cases in 2008. This is primarily caused by improvements in registration. 

2.4.2.  Classification of irregularities and fraud by Member States 

OWNRES  cases  concern  customs  operations  involving  irregularity  or  fraud.  Of  all 
the cases registered in 2008 20% (1 073 out of 5 344 registered cases) are categorised 
as  frauds,  which  is  a  slightly  smaller  proportion  than  in  2007  (1 404  out  of  6 097 
registered  cases)32.  However,  differences  between  Member  States  in  the  proportion 
so  categorised  are  relatively  large.  For  instance,  in  2008  the  United  Kingdom 
categorised 93 out of 1 023 cases as fraud (equivalent to 9.09%) whereas Greece so 
categorised  100%  (32  out  of  32  cases  communicated),  Latvia  0.00%  (0  out  of  40 
cases) and France 39.55% (123 out of 311 cases notified). For 2007 the figures were 
for  the  UK  9.70%  (104  out  of  1 072),  for  Greece  100%  (57  out  of  57),  for  Latvia 
0.00%  (0  out  of  25  cases)  and  for  France  46.79%  (153  out  of  327).  These  figures 
demonstrate that the categorisation of irregularity and fraud in OWNRES is not fully 
reliable. 

2.5. 

Recovery 

Member States have to recover established amounts including those they register in 
OWNRES.  In  OWNRES  cases  are  registered  as  open  or  as  closed.  A  case  is 
registered as closed when all (legal) procedures have come to an end and the debt is 
paid  or  further  recovery  measures  by  the  Member  States’  authorities  are  deemed 

30 
31 

32 

See Annex 6. 
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. 
See Annex 10. 

EN 

18 

   EN 

 
                                                 
exhausted.  Also  cases  of  smuggled  and  seized  goods  (usually  cigarettes)  are 
registered as closed33.  

A case is registered as open when recovery measures are still ongoing. This means 
that  either  legal  procedures  (administrative  and  judicial  appeal)  are  still  ongoing, 
which may lead to a correction of the established amount, or to success or failure to 
obtain payment of the debt, whether or not after coercive recovery.  

2.5.1.  Corrections to established amounts 

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. 

Amounts  established  may  change  because  of  additional  information  or  judicial 
procedures when, for instance, revision shows that there was no customs debt after 
all or the value or origin of the goods is different than initially thought.  

OWNRES  shows  —  for  all  closed  cases  —  that  approximately  50%  of  the  initial 
establishment  amount  is  corrected  (cancelled).  For  closed  cases  related  to 
Community Transit this may reach up to 90%. As a consequence, Belgium and the 
Netherlands  show  more  corrections  than  average,  because  establishments  related  to 
Community  Transit  likewise  occur  more.  This  is  due  to  the  ports  of  Antwerp  and 
Rotterdam.  

2.5.2.  Recovery rates  

Differences  in  recovery  results  arise  from  factors  such  as  the  type  of  fraud  or 
irregularity  or  the  type  of  debtor  involved.  The  debt  may  also  be  deemed 
irrecoverable  because  of  the  debtor’s  financial  problems.  There  are  different 
definitions expressing the results of recovery of a debt.  

2.5.2.1.  Recovery rate (RR)  

In  previous  reports  the  term  Recovery  Rate  (RR)  was  used.  It  expressed  —  for  all 
cases  (open  and  closed)  in  OWNRES  —  the  percentage  that  is  recovered  by 
obtaining payment. The formula for the RR is: 

RR = 

      Recovered amount because of payments obtained (all cases) 
------------------------------------------------------------------------------------          x 100% 
Established amount (all cases) minus processed corrections (all cases) 

The  outcome  is  a  snapshot  of  the  average  recovery  situation  at  the  moment  of  the 
query.  The  established  amount  minus  processed  corrections  can  change,  because 
further  corrections  (cancellations)  are  still  possible34.  As  a  result,  when  the 

33 

34 

Cases involving seized and confiscated goods are registered as closed, even though OWNRES indicates 
that an amount is still to be recovered. This method of registration has been agreed for this particular 
situation.  
In paragraph 2.5.1. it is explained that OWNRES shows that corrections may be significant. 

EN 

19 

   EN 

 
                                                 
denominator  decreases  in  value,  the  percentage  of  the  RR  goes  up,  even  without 
having  more  actual  payments.  Because  recovery  is  ongoing,  the  RR  is  constantly 
changing (payments are obtained, new establishments are made and corrections are 
taken into account). The RR for all years (1989-2008) is 42.8%35.  

The  overall  RR  for  2007  recorded  in  last  year’s  report  was  39.9%  although  it  has 
since climbed to 49.7%. At present the RR for 2008 is 37.5%36, which is an average 
starting  position, although less  good than last year’s 40%. Over the last decade the 
RR has varied between 40% and 55% (see OR: Chart 3). 

The 10 Member States which acceded in 2004 are now carrying out post-clearance 
controls,  audits  and  inspections  covering  longer  periods  after  their  accession.  For 
establishments following these controls recovery is generally more problematic. As a 
result the rates of the EUR-15 and EUR-10 are now growing closer to each other.  

The RR for Romania and Bulgaria is high when corrected for cases of smuggled and 
seized cigarettes. Currently it is significantly above the average rate of the EUR-27. 
This  is  primarily  the  result  of  recovery  in  one  big  case  by  Romania.  It  may  be 
expected that in time the RR for the EUR-2 will also grow towards the average of the 
other Member States. 

CHART OR 3: Recovery rates 1996-2008 

Recovery Rates 1996-2008

80.00%

70.00%

60.00%

50.00%

% 

40.00%

30.00%

20.00%

10.00%

EUR-15 

EUR-10
EUR-2

0.00%

1996 1997 1998 1999  2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year

* For 2001 the average RR is only 28%, because of the impact of Italy’s RR, which 
is 2.2 % on an established amount of €93 million. 

2.5.2.2.  Historical recovery rate (HRR) 

The RR mentioned in paragraph 2.5.2.1. does not reflect the percentage of the actual 
debt  for  which  payment  is  obtained  by  the  Member  States.  For  that,  the  rate  of 

35 

36 

This calculation is based on 51 412 cases, an established amount of €4 billion  (after already processed 
corrections) and a recovered amount of €1.7 billion. 
See Annex 7. 

EN 

20 

   EN 

 
                                                 
recovery  of  the  actual  amount  to  be  paid  after  all  corrections  (revisions  because  of 
appeal procedures, requests for repayments or remissions, etc.) should be taken into 
account (hereafter: HRR — historical recovery rate).  

To  determine  the  HRR,  only  closed  cases37  should  be  analysed,  since  for  those  the 
Member States have brought all their recovery efforts to an end. The formula for the 
HRR is: 

      Recovered amount because of payments obtained (closed cases) 

HRR =  --------------------------------------------------------------------------------------------  x 100% 
Established amount (closed cases) minus processed corrections (closed cases) 

The HRR is around 80% according to OWNRES38. In other words, of every €10 000 
of  duties  operators  really  and  ultimately  have  to  pay  for  OWNRES  cases, 
approximately  €8 000  is  collected.  The  amou nt  not  collected  relates  to  either 
amounts written off or amounts involved in seized and confiscated goods. 

2.5.3.  Recovery indicators 

Success  in  recovery  depends  on  many  factors.  OWNRES  provides  categories  of 
information  that  may  be  useful  as  indicators  to  forecast  such  success  by  means  of 
extrapolation,  since  the  recovery  rate  by  (combination  of)  indicator(s)  appears 
relatively constant over time.  

Useful  recovery  indicators  in  OWNRES  are  fraud,  type  of  customs  procedure,  the 
presence of an MA communication, method of detection  and origin of  the product. 
Combinations of these indicators improve the accuracy of the prognosis further. Of 
course  the  final  outcome  of  an  individual  case  will  always  depend  on  its  unique 
particulars. 

2.5.3.1.  Recovery rates in case of fraud 

OWNRES shows that the amount of TOR due in fraud cases decreased in 2008. As 
part  of  the  overall  amount  of  irregularities  and  fraud  cases  registered  the  share  of 
fraud  was  €75  million  compared  to  €131  million  in  2007 39.  This  amount  includes 
duties involved in cases of seized and confiscated cigarettes.  

The  RR  for  fraud  provides  insight  into  the  immediate  effect  of  fraud  on  today’s 
recovery. The amount recovered in fraud cases was €19 million in 2008, which gives 
a fraud RR of 25.9%. For 2007 the total has reached €35 million, which gives an RR 
of  26.6%.  The  result  for  2008  is  good  compared  with  the  previous  years.  For 

37 

38 

39 

Closed cases, excluding cases of seized and confiscated goods (usually cigarettes) which are registered 
in  OWNRES  as  closed  cases  with  an  amount  to  be  recovered,  but  for  which  amount  no  recovery  is 
required. This HRR rate should express the recovery result in complex and easy cases. Established and 
closed  cases  from  2006  onwards  are  excluded,  because  these  are  predominantly  easy  (complex  cases 
generally cannot be closed within 3 years). 
This  calculation  is  based  on  24  748  cases  (approximately  50%  of  all  OWNRES  cases  currently 
registered),  an  established  amount  of  €1.3  billion  (after  correctio ns)  and  a  recovered  amount  of  €1 
billion. 
See Annex 10. For the delay in registration see the paragraph on reporting discipline. 

EN 

21 

   EN 

 
                                                 
instance,  2006  currently  shows  an  RR  for  fraud  cases  of  22.8%.  As  mentioned 
before,  the  recovery  rates  change  as  time  passes  (paragraph  2.5.2.1.).  The  RR  in 
fraud cases is clearly much lower than that for irregularities since the RR in 2008 for 
those  cases  is  40.7%.  The  RR  for  all  years  (1989-2008)  for  fraud  and  irregularity 
combined is 42.8%.  

Also  in  the  long  term,  the  HRR  indicates  an  equally  strong  relation,  showing  that 
recovery in fraud cases is generally much less successful than in cases of irregularity 
(see  table  below).  Classification  of  a  case  as  fraud  is  thus  a  strong  indicator  for 
forecasting short- and long-term recovery results. 

TABLE OR 2: Historical Recovery Rate 1989-2005 

HRR 1989 – 2005 

Fraud 

Irregularity 

Total  

43% 

89% 

82% 

2.5.3.2.  Recovery rates in case of MA communications 

Establishments  following  an  MA  communication  display  higher  recovery  rates. 
OWNRES shows that the HRR is over 90% for cases with an MA reference, whereas 
for establishments without such reference the output is just over 80%. Based on these 
figures it may be concluded that Member States are more alerted in the case of such 
communications than in normal situations. 

EN 

22 

   EN 

 
 
TABLE OR 3: Historical Recovery Rate for MA communications 

HRR 1989 – 2005 

No MA reference 

With MA reference 

Total  

81.5% 

92.5% 

82.2% 

2.5.3.3.  Recovery rates by method of detection 

The  relation  between  the  recovery  rates  and  the  methods  of  detection  may  be 
considered  significant  when  there  is  a  voluntary  admission  /  correction  by  the 
importer,  or  when  the  case  is  discovered  during  primary  national  inspections.  In 
those  circumstances  the  HRR  is  over  95%  respectively  85.2%.  When  the 
establishment is the result of inspections (e.g. by anti-fraud services) the HRR drops 
to  79.7%  thus  only  being  slightly  lower  than  in  the  case  of  regular  post-clearance 
audits  (80.8%).  Also  when  the  method  of  detection  is  combined  with  the  types  of 
cases discovered (fraud or irregularity), the ratios do not change significantly. 

CHART OR 4: Recovery Rate by method of detection 

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

Inspections (eg by anti-
f raud services)

Post clearance audits

Primary national
inspections

Voluntary admission

Total

HRR BY METHOD OF DETECTION
1989-2005

2.5.3.4.  Recovery rates by category of amount 

The  RR  is  strongly  influenced  by  the  amounts  involved,  whereas  for  the  HRR  this 
relationship  is  no  longer  significant.  The  figures  for  the  last  five  years  show  that 
bigger  amounts  result  in  a  lower  RR.  For  amounts  below  €50 000  the  RR  is  up  to 
75%,  for  amounts  up  to  €500 000  the  RR  of  50%  to  60%  is  normal,  whereas  for 
higher amounts the RR falls back to only 30%.  

TABLE OR 4: Recovery Rate by category of amount 

RR BY AMOUNT - CATEGORY 

Amount (€) 

2004 

2005 

2006 

2007 

2008 

 0 - 50 000 

73.54% 

73.94% 

74.26% 

74.94% 

61.44% 

50 001 - 500 000 

55.26% 

56.59% 

53.45% 

59.80% 

47.24% 

EN 

23 

   EN 

 
 
 
> 500 000 

30.22% 

24.80% 

21.88% 

30.52% 

15.86% 

Total 

48.18% 

46.34% 

44.41% 

49.67% 

37.55% 

2.5.3.5.  Recovery rates by origin 

Concerning the origin countries most frequently mentioned (see paragraph 2.3.2.) the 
RR  indicates  more  success  in  the  case  of  imports  from  the  US  or  Japan  than  for 
China  or  Bangladesh,  irrespective  of  whether  the  case  is  registered  as  fraud  or 
irregularity40. This relationship is not equally strong or constant for other countries. 
For  the  RR  changing  patterns  of  irregularity  influence  the  outcome  strongly, 
especially  since  open  cases  with  ongoing  judicial  procedures  and  recovery  are  also 
included. For the HRR the difference in origin no longer appears to be significant.  

2.5.4.  Write-down and write-off of established amounts  

Member  States  inform  the  Commission  about  the  recovery  of  established 
entitlements  on  the  basis  of  two  different  legal  obligations:  under  Article  6(4)  of 
Regulation  1150/200041  the  Member  States  annually  communicate  amounts  for 
which  recovery  is  unlikely,  whereas  on  the  basis  of  Article  17(2)  of  Regulation 
1150/2000 they communicate certain cases where the debt is deemed irrecoverable. 

2.5.4.1.  Written down when recovery is unlikely 

Annually Member States communicate amounts in the separate account (B-account) 
for  which  recovery  has  become  unlikely.  This  estimation  is  used  for  accounting 
purposes. The Member States communicate — on average — that recovery of around 
60%  to  65%  of  the  established  amount  is  unlikely  and  may  need  to  be  written 
down42.  

2.5.4.2.  Written off when the debt is deemed irrecoverable 

When part of the debt over €50 000, after all  recovery measures are exhausted, is still 
unpaid, the Member State has to communicate their decision to write the amount off 
to the Commission. The Commission will then assess the recovery efforts and decide 
whether the Member State involved has acted diligently and taken all the necessary 
measures  or  should  be  considered  responsible  for  the  loss  and  compensate  the 
Community budget43.  

40 
41 

42 

43 

See Annex 6.1. 
Article  6(4)  of  Regulation  1150/2000  of  22  May  2000  as  amended  by  Regulation  2028/2004  of  16 
November 2004. 
Annual  Accounts  of  the  European  Communities.  Financial  Year  2007.  Consolidated  Financial 
Statements  and  Consolidated  Reports  on  Implementation  of  the  Budget  (OJ  C  287,10.11.2008,  p.  1). 
The percentage is based on the average of the years 2006-2008, also using the provisional figures for 
2008. 
In paragraph 2.1.2. the procedure for managing Member States’ requests for write-off is explained in 
detail. 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. 

EN 

24 

   EN 

 
                                                 
The  figures  in  OWNRES  showing  written-off  amounts  are  not  reliable  yet.  This  is 
mainly  due  to  the  awaited  catch-up  effect  for  cases  before  200444  and  the  related 
differences in Member States’ method of registration. Currently OWNRES indicates 
for cases from 1989 until 2006 that around 20% is written off45. For the EUR-15 the 
figures vary between 0% and 8%, which can be explained by the fact that the five-
year  period  has  not  yet  elapsed  and  recovery  of  outstanding  debts  is  generally  still 
ongoing.  

TABLE OR 5: Average write-off rate for closed cases 

AVERAGE WRITE-OFF RATE – CLOSED CASES - 1989-2006 (excluding smuggled/seized goods) 

Initially 
established € 

Correction € 

Established after 
correction € 

Recovery 
rate % 

Written-off 
amount € 

Write-off 
rate % 

3 199 840 405 

-/- 1 578 796 920 

1 621 043 485 

334 090 575 

79% 

21% 

2.5.4.3.  Estimation of the recovery of established amounts 

Comparing  the  annual  communication  by  Member  States  mentioned  in  paragraph 
2.5.4.1. with the figures in paragraphs 2.5.2. and 2.5.4.1., it appears that the annual 
estimation of amounts unlikely to be recovered in the separate account (60% to 65%) 
matches relatively closely the data in OWNRES. For the latter the amount unlikely to 
be recovered may be defined as the sum of the average amount corrected (50%) plus 
the percentage written off (around 20% of the amount after corrections46). Thus, of a 
random  establishment  registered  in  OWNRES  around  40%  is  recovered,  in  other 
words,  of  every  €10 000  of  duties  initia lly  established  approximately  €4 000  is 
actually paid. 

2.5.5. 

Impact on the budget 

The amounts that were registered in OWNRES for 2008 have a financial impact of 
€351  million.  Over  the  last  decade  the  value  of  amounts  has  ranged  from  €200 
million up  to  €401  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 significant47.  

CHART OR 5: Financial impact TOR1998-2008 

44 
45 

46 

47 

The five-year deadline for sending in such cases — introduced in 2004 — expires in 2009 
The period 1989-2006 is selected because write-offs for very recent establishments are not common and 
thus not a representative reference. 
This figure has to be corrected by the backlog of old write-off cases which still have to be processed by 
Member States. 
E.g. for the year 2007 the maximum impact was initially €541 million. Corrections of over €140 million 
changed it to €401 million at present; 

EN 

25 

   EN 

 
 
 
 
 
                                                 
Financial Impact TOR 1998-2008

600

500

400

Million

Euro   

300

200

100

0

Total Member States

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

EN 

26 

   EN 

 
 
2.6. 

Conclusions  

In its capacity as Authorising Officer, the Commission (DG Budget is the delegated 
Authorising  Officer)  monitors  the  establishment  and  recovery  of  TOR  by  Member 
States  in  various  ways.  The  monitoring  is  carried  out  in  partnership  with  different 
Commission departments, including the European Anti-Fraud Office (OLAF) where 
OLAF has issued an associated Mutual Assistance message and/or has an operational 
interest in the case concerned.  

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  cannot  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 have been 
held financially liable for over €43 million  in 2008 and have made available over €15 
million.  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.  In  2007  Member  States  were  requested  to 
address  the  shortcomings  in  the  registration  in  OWNRES  of  cases  where  no  debt 
needed  to  be  established  (usually  smuggled  cigarettes),  resulting  in  visible 
improvements in 2008. 

Regarding the reliability of information in OWNRES, making a distinction between 
irregularity  and  fraud  or  analysing  fraud  separately  is  risky  and  the  outcome  is  not 
very useful. Only court decisions make it certain whether a case is one of irregularity 
or  fraud,  whereas  within  OWNRES  this  distinction  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  this  out  clearly.  OWNRES  can  only  be 
used for global analysis and monitoring.  

The goods involved in irregularities and frauds demanding Member States’ attention 
are very diverse, notably TVs and monitors, clothing and of course tobacco. TVs and 
monitors keep their relevance in 2008, being once again (one of the most) important 
goods  involved  in  registered  cases  of  irregularity  (or  fraud),  just  like  in  previous 
years, whereas vegetables, especially garlic, went down in importance and footwear 
even disappeared.  

The  origin  of  the  goods  concerned  is  likewise  varied,  although  some  countries 
remain continuously at the top of the rankings (such as China, the US, Japan). When 
irregularity  or  fraud  is  discovered  by  a  Member  State  it  is  mostly  in  the  customs 

EN 

27 

   EN 

 
procedure of release for free circulation (false declarations, formal shortcomings or 
simply smuggling), as in previous years. 

The amounts of TOR at stake in irregularity and fraud are, according to OWNRES, 
up to €351 million in 2008. Of the amounts initially established, approximately 50% 
is later cancelled and in the case of establishments related to Community Transit up 
to 90% of the  established amount may  be cancelled later. And payment is required 
only  for  the  part  which  is  not  cancelled.  The  initial  recovery  figures  for  2008  are 
comparable to those of previous years. 

Analysis  shows  that  certain  particulars  of  a  case  may  be  used  as  indicators  for 
forecasts  of  recovery.  Cases  related  to  fraud  decrease  the  chance  of  successful 
recovery,  whereas  for  instance  cases  related  to  MA  communications  may  arrive  at 
better results.  

Member States are currently communicating an increased number of write-off cases, 
because of a change in legislation intended to clear the backlog of old cases dating 
back  to  before  2004.  Based  on  the  data  available  so  far,  it  may  be  estimated  that 
around 10% of the established amounts, equivalent to 20% of the final debts after all 
corrections, remain unpaid. 

In  conclusion,  it  appears  that  of  the  amounts  initially  established  around  40%  is 
actually  recovered,  10%  is  written  off  and  50%  is  cancelled.  After  further 
harmonising the methods of registration and the processing of the backlogs in write-
offs, further fine-tuning of this percentage may be expected.  

The Commission encourages Member States to continue their activities in the field of 
recovery and providing statistical information. The Budgetary Authority is entitled to 
have  available  the  best  possible  information  when  monitoring  TOR  and  recovery 
issues. 

EN 

28 

   EN 

 
PART II - EXPENDITURE 

3. 

AGRICULTURAL EXPENDITURE (ANNEXES 11-12) 

Introduction of a new reporting system 

In 2008, a new irregularity reporting system was introduced: Pre-IMS Module 1848. 
The abbreviation IMS stands for Irregularity Management System. Module 1848 is a 
web  based  application  which  implies  that  it  can  be  accessed  via  internet.  Member 
States however, still need to use AFIS (Anti Fraud Information System) to get access 
to Pre-IMS Module 1848. AFIS is a secured network provided by the Commission. 
Access via internet is foreseen for summer 2009. Pre-IMS Module 1848 will then be 
renamed into IMS Module 1848. The reporting module itself will not change. 

Germany  is  already  using  IMS  Module  1848  to  submit  irregularities.  Users  in 
Germany get access to Module 1848 via a secured internet connection. It is a pilot 
which  offers  the  possibility  to  test  all  features  of  the  web  based  application.  The 
results of the pilot will be used to improve and fine tune IMS Module 1848 before it 
will  be  officially  released  for  all  users  in  all  Member  States.  A  pilot  is  an  effort 
demanding  activity  for  all  involved  parties  but  especially  for  the  Member  State 
involved. Germany offered great support during 2008. 

In  June  2008,  trainers  of  all  Member  States  (EU-27)  attended  a  2-day-training  in 
OLAF  to  get acquainted  and familiar with the new reporting module. The Member 
States'  trainers  will  train  the users  in  the  Member  States.  A  maximum  of  4  trainers 
per Member State attended the training. 

Module 1848 was officially launched on 7 November 2008.  

The  introduction  of  a  new  reporting  system  leads  always  to  some  starting-up 
problems. This counts for the users in the Member States as well as the developers 
and users on the side of the Commission. The year 2008 should therefore, be seen as 
a transition year: users needed to get familiar with Module 1848.  

All Member States started to use, directly or indirectly48, the new reporting module 
and  tried  to  report  as  complete  and  detailed  as  possible.  All  Member  States  had  a 
critical but above all positive approach towards the  new reporting  system. Member 
States  were  cooperative  and  provided  the  developers  and  managers  of  the  new 
reporting system with the necessary feedback to improve the reporting system. This 
willingness  to  cooperate  has  to  be  kept  in  mind  when  reading  the  paragraph  on 
reporting discipline and compliance. 

48 

Not  all  Member  States  have  access  to  AFIS/CCN-gateway  and  used  MS  Access  version  of  Pre-IMS 
Module 1848. These Member States wait for the introduction of IMS; 

EN 

29 

   EN 

 
                                                 
General introduction 

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 2008. The budget year 2008 runs from 16 October 2007 – 15 October 2008. 

It  should  be  noted  that  not  all  irregularities  have  to  be  reported.  Under  Reg. 
1848/2006,  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. Reg. 1848/2006 replaced Reg. 595/91. 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  reports  of 
years  before  2007.  The  number  of  reported  irregularities  in  2008  is  approximately 
one-third (1/3) of the number of reported irregularities before 2007. The descriptive 
analysis  of this report therefore, cannot be right away compared with the results of 
previous years.  

The expectation is that the number of reported irregularities will decrease even more 
in  the  coming  years.  A  rather  large  amount  of  subsidies  (per  beneficiary  and  per 
support  measure)  is  below  EUR  10,000  therefore,  irregularities  for  these  cases  will 
never exceed the threshold of EUR 10,000.  

Member  States  reported  1,142  new  irregularities  under  Reg.  1848/2006  compared 
with 1,577 irregularities in 2007. During 2008, Member States reclassified 9 of these 
irregularities as non-irregularities. The total number of new irregularities is therefore 
1,13349.  The  total  amount  affected  in  2008  was  about  EUR  102  million,  as  against 
approximately EUR 155 million in 2007. 

Irregularities notified in this sector represent 0.21% of the agricultural budget. Annex 
11 provides an overview of the financial impact for the period 2000 - 2008.  

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

Cyprus and Romania did not report any irregularity in 2008.  

3.1. 

Reporting discipline 

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, 
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  and  can  be  summarised  with  the 
typical  questions  that  are  used  in  every  (fraud)  investigation:  who,  what,  when, 
where, why and how. 

49 

Member States reported in 2006 still 3,249 cases; 

EN 

30 

   EN 

 
                                                 
The main purpose of forwarding information is to enable the Commission to perform 
risk  analyses  (see  art.  10  Reg.  1848/200650).  For  that  purpose,  OLAF  needs  to 
receive reliable, consistent and complete data and as early as possible (timely!).  

Table  AG1  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 of Art. 3(1) of Reg. 1848/2006. The third 
column from the right hand side shows the compliance rate per Member State for the 
budget  year  2008.  The  second  column  from  the  right  hand  side  contains  the  2007 
compliance rates to make it possible to make a comparison between 2008 and 2007. 

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

Table AG1: compliance per Member State year 2008 

timely
reporting

MS 

personal
data
(who)
l

measure
affected
(what)
a

table AG1
COMPLIANCE
budget year 2008
practices
committed employed

date

(when)
i

(how)
e, f

financial
impact
(why)
n

compliance

2008

2007

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

120%
110%
100%
100%
100%
95%
91%
80%
89%
97%
95%
100%
71%
100%
73%
83%
70%
96%
70%
92%
5%
20%
0%
17%
96%
75%
55%
86%
Art. 3 (1) a - p Reg. 1848/2006

100%
100%
100%
100%
100%
100%
99%
100%
85%
100%
100%
100%
100%
94%
100%
100%
100%
82%
100%
98%
100%
100%
2%
3%
98%
85%

100%
100%
100%
100%
97%
100%
100%
97%
100%
69%
100%
67%
98%
95%
93%
25%
68%
70%
100%
100%
100%
78%
93%
100%
24%
93%

100%
100%
100%
100%
91%
100%
93%
97%
100%
100%
100%
100%
100%
95%
100%
100%
97%
90%
100%
100%
100%
100%
99%
100%
100%
97%

100%
100%
100%
100%
100%
100%
99%
95%
93%
100%
95%
100%
98%
84%
87%
100%
84%
94%
100%
87%
100%
89%
86%
92%
67%
93%

100%
100%
100%
95%
100%
99%
98%
94%
100%
100%
100%
100%
95%
99%
100%
100%
100%
87%
100%
100%
100%
100%
99%
100%
100%
99%

100%
100%
100%
98%
97%
97%
96%
96%
96%
95%
94%
94%
94%
92%
92%
87%
86%
86%
84%
84%
83%
81%
79%
78%
74%
92%

97%

85%

96%
64%
83%
72%
90%
74%
49%
81%
88%

90%
77%
85%
81%
63%
73%
85%
83%

85%
39%
67%
83%
78%

MS 

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

key elements for (performing) risk analysis

download 19 March 2009 / updated 6 May 2009 (HU-correction)

A first conclusion is that the overall reporting discipline improved. This is thanks to a 
positive attitude of all Member States and the introduction of a new reporting system. 

50 

Art. 10 Reg. 1848/2006: Without prejudice to Article 11, the Commission may use any information of a 
general  or  operational  nature  communicated  by  Member  States  in  accordance  with  this  Regulation  to 
perform risk analyses, using information technology support, and may, on the basis of the information 
obtained, produce reports and develop systems serving to identify risks more effectively. 

EN 

31 

   EN 

 
 
                                                 
15  Member  States  have  a  compliance  rate  above  90%.  7  Member  States  have  a 
compliance  rate  between  80%  and  90%  as  3  Member  States  has  a  compliance  rate 
below 80%.. 

Germany  and  Finland  could  improve  their  compliance  rate  by  reporting  personal 
data. The non-reporting of personal data led to a relatively low compliance rate. 

Slovakia is the Member State with the lowest compliance rate: 74%. Slovakia could 
improve  its  compliance  rate  by  reporting  more  timely  and  by  indicating  in  more 
detail the support measure affected by the irregularity. 

The compliance improved strongly in comparison with 2007. It went up from 78% to 
92%.  Member  States  that  made  a  big  step  forward  are  Spain  (+47%),  Germany 
(+40%),  Ireland  (+34%),  Portugal  (+25%)  and  the  Netherlands  (+23%).  Some 
Member  States  had  a  small  setback  and  need  to  pay  some  extra  attention  to  their 
compliance.  

Overall compliance rate is 92% (2007: 78%). 

3.1.1.  Timely reporting (Art. 3(1) Reg. 1848/2006) 

2008 was a transition year: Module 1848 replaced Module 595. The reporting format 
changed  completely  therefore  cases  reported  via  Module  595  needed  to  be 
transferred  into  "1848-format".  This  took  place  in  the  period  April  2008  –  October 
2008. During that period, Member States could not submit communications via the 
electronic  reporting  system.  The  latter  had  to  be  taken  into  account  when  the 
compliance  rate  for  timely  reporting  was  determined.  Normally,  Member  States 
would have forwarded in 2008 cases discovered in 2008 and late 2007. To determine 
the  level  of  compliance,  all  cases  discovered  (PACA)51  in  2007  and  2008  were 
considered as being reported on time. Cases discovered before 2007 were considered 
as reported too late.  

Member State reported 133 cases (11.7%) too late. Austria especially is late with the 
reporting of cases. 12 cases (60%) were already discovered in 2002. Sweden had also 
difficulties to report timely, only 20% of its cases were reported timely52.  

Member  States  did  not  indicate  a  date  of  discovery  in  28  cases  (2.5%).  The  latter 
concerns mainly cases reported by Hungary (33.3%) and Italy (10%).  

The EU-27 compliance rate is 86% (2007: 87%).  

3.1.2.  Budget year, budget line and product affected (Art. 3(1) (a) Reg. 1848/2006) 

Member  States  are  obliged  to  report  the  common  market  organizations  (CMO) 
affected and the sectors and products concerned.  

51 

52 

Member States indicate in field 4.5. "Date of discovery (PACA)" of Module 1848 the so called PACA 
(Premier  Acte  de  Constat  Administratif).  The  PACA  is  the  first  written  assessment  of  a  competent 
authority, either administrative or judicial, concluding on the basis of actual facts that an irregularity has 
been committed, without prejudice to the possibility that this conclusion may subsequently have to be 
adjusted  or  withdrawn  as  a  result  of  developments  in  the  course  of  the  administrative  or  judicial 
procedure; 
Sweden  informed  the  Commission  that  the  non-timely  reporting  was  caused  by  a  backlog.  New 
recruited staff took care of the backlog; 

EN 

32 

   EN 

 
                                                 
Expenditure  is  based  on  the  appropriations  for  a  given  year.  As  far  as  the  EAGF53 
and  EAFRD54  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  correct  support  measure  (budget 
line) affected by the irregularity can be identified.  

Each support measure is based on a budget line therefore it should be no problem to 
indicate the appropriate budget year and budget line. All paying agencies can provide 
the reporting authorities with the necessary information.  

A large number (12) of Member States comply fully (100%) with the obligation to 
indicate  the  common  market  organisations  affected,  the  sectors  and  products 
concerned. 6 Member States have a compliance rate higher than 90%. For all other 7 
Member  States55,  attention  needs  to  be  paid  to  indicating  the  budget  year  and  the 
measure affected.  

Member States reported 61 cases (5.4%) in which the expenditure took place before 
2000.  It  concerns  mainly  cases  from  Austria,  Greece  and  Italy  with  19,  11 
respectively 15 cases56. 

Member States with a low compliance rate are Lithuania (25%) and Slovakia (24%).  

The EU-27 compliance rate is 93% (2007: 86%). 

3.1.3.  The moment at which the irregularity was committed (Art. 3(1) (i) Reg. 1848/2006) 

Member  States  are  obliged  to  indicate  the  period  during  which  or  the  moment  at 
which the irregularity was committed. Member States indicated in 97% of the cases 
the  date  at  or  period  during  which  the  irregularity  was  committed.  A  large  number 
(18) of Member States fully complied with this obligation. All other Member States 
have a compliance rate higher than 90%.  

The EU-27 compliance rate is 97% (2007: 86%). 

3.1.4.  Practices employed and classification (Art. 3 (1) (e) (f) Reg. 1848/2006) 

The practices employed (modus operandi) 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, clustered by topic as for instance "request for aid" and "accounts".  

Member States indicated in 99.7% of the cases the type of irregularity by code.  

Slovenia  and  Finland  reported  code  1999  (“other  irregularities”)  in  a  rather  high 
percentage of cases: 100% respectively 63%. The added value of code 1999 ("other 
irregularities") is rather low therefore it should only be used in case it is impossible 

53 
54 
55 
56 

EAGF = European Agricultural Guarantee Fund; 
EAFRD = European Agricultural Fund for Rural Development; 
Bulgaria, Estonia, Greece, Hungary, Lithuania, the Netherlands and Slovakia; 
Art.  32(5)  Reg.  1290/2005:  If  recovery  has  not  taken  place  within  four  years  of  the  primary 
administrative  or  judicial  finding  or  within  eight  years  where  recovery  action  is  taken  in  the  national 
courts,  50  %  of  the  financial  consequences  of  non-recovery  shall  be  borne  by  the  Member  State 
concerned and 50 % by the Community budget. 

EN 

33 

   EN 

 
                                                 
to use a code of one of the clusters. Member States should use for these cases also 
the text field to explain how the irregularity was committed. Unfortunately, that was 
not the case for a large number of these cases. 

As  already  mentioned,  Module  1848  offers  the  possibility  to  use  written  text  to 
describe more precisely the practices employed (modus operandi). The added value 
of describing the modus operandi in words is rather high. It provides a more in-depth 
insight. 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. More 
and  more  Member  States  make  use  of  this  facility  and  describe  in  more  detail  the 
practises employed in committing the irregularity. 

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 93% of 
the reported cases, of which 7% (78 cases) were classified as "suspicion of fraud" or 
"established fraud"57.  

22 Member States classified all cases. Germany and Spain did not classify cases in 
respectively 36% (40 cases) and 16% (38 cases) of their cases. The Netherlands did 
not classify 2 cases (7%). 

The EU-27 compliance rate is 93% (2007: 74%). 

3.1.5.  Legal/natural persons identification (Art. 3 (1) (l) Reg. 1848/2006) 

Member  States  are  also  required  to  give  detailed  information  on  the  identity  of  the 
natural and legal persons involved.  

The added value of personal data for performing risk analyses is high. Irregularities 
and  frauds  are  committed  by  persons  and  not  by  products,  support  measures  or 
budget lines, therefore, it is necessary to know the person behind the irregularity. 

Finland and Germany indicated in respectively 88% and 41% of their cases that no 
personal data could be forwarded. Finland indicated that the forwarding of personal 
data had no added value for the fight against fraud5859 as Germany indicated that due 
to  data-protection-reasons  no  personal  data  could  be  revealed60.  Germany  provided 
personal data in 2% of its cases.  

The EU-27 compliance rate is 85% (2007: 68%). 

57 

58 

59 

60 

Fraud  level  rate  is  based  solely  on  the  classification  by  Member  States.  Cases  that  have  not  been 
classified have not been taken into account. The average level of (suspected or established) fraud cases 
(7%) is calculated on the basis of the number of classified cases. 
Explanation  for  non-disclosure  of  personal  data:  tiedosta  ei  ole  hyötyä  sääntöjenvastaisuuden 
ehkäisyssä; 
Finland informed the Commission on 22 April 2009 that due to national (data protection) legislation no 
personal data can be submitted. Finland however, does report personal data for "structural funds"-cases 
(see table SF1: compliance rate of 100%); 
Explanation  for  non-disclosure  of  personal  data:  wird  aus  datenschutzrechtlichen  Gründen  nicht 
mitgeteilt; 

EN 

34 

   EN 

 
                                                 
3.1.6.  Financial impact (Art. 3 (1) (n) Reg. 1848/2006) 

Member  States  reported  1,133  cases.  The  amount  affected  by  irregularities  was 
indicated in 1,118 cases, which is 99%. Only in a small number of cases, the amounts 
affected by irregularities could not (yet) be indicated.  

Member  States  do  not  always  indicate  the  total  amount  of  expenditure  on  the 
operation at issue and, where appropriate, the distribution of its co-financing between 
Community,  national,  private and other  contributions although a clear obligation to 
report this information can be found in art. 3(1) m Reg. 1848/2006. This obligation 
will be taken into account in next years report. 

The EU-27 compliance rate is 99% (2007: 96%). 

EN 

35 

   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 2008 and to give an overall view for the period 1971 - 2008.  

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

3.2.1.  Amounts affected 

Table AG2 provides an overview per Member State of the irregularities reported and 
the amounts affected by these irregularities in the budget year 2008. 

Table AG2: Irregularities reported in the budget year 2008 

MS

reported

cases
no irregularity
(IRQ 0)

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

21
31
2
0
24
111
10
13
43
245
8
129
6
22
211
24
1
13
1
30
46
121
0
11
1
11
7
1,142

Table AG2
irregularities reported and amounts affected
budget year 2008

amounts in €

irregularity

total
expenditure

amount affected
by irregularity

20
31
2
0
22
111
10
13
39
245
8
129
6
22
211
24
1
13
1
30
46
120
0
10
1
11
7
1,133

341,716
3,965,698
144,336
0
784,573
13,071,488
463,671
408,189
4,010,046
34,405,603
983,842
179,078,475
255,826
416,234
109,105,752
1,815,034
13,375
208,144
37,814
5,932,786
1,554,599
10,213,256
0
693,386
38,808
1,636,361
445,234
370,024,245

311,608
1,605,690
119,470
0
764,680
3,816,771
445,241
278,131
4,010,046
14,924,635
983,842
11,763,441
747,522
397,497
53,969,740
803,754
13,375
208,144
37,814
1,183,639
1,126,137
3,629,928
0
214,065
38,808
639,613
225,775
102,259,365

1
0
0
0
2
0
0
0
4
0
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
9

detected
before payment
26,548
11,373
119,470
0
0
1,129,128
246,595
0
0
695,410
863,259
352,165
0
0
43,795
680,201
0
0
0
150,692
778,272
26,203
0
35,321
0
0
0
5,158,432

detected
after payment

MS

285,060
1,605,137
0
0
780,024
2,699,404
198,646
278,131
4,010,046
14,229,225
120,583
11,411,276
747,522
397,497
53,990,037
123,553
13,375
208,144

AT
BE
BG
CY
CZ
DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
37,814 MT
NL
PL
PT
RO
SE
SI
SK
UK
total

1,032,947
347,863
3,603,725
0
178,744
38,808
0
225,775
96,563,335

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

download 19 March 2009 / updated 6 May 2009 (HU-correction)

Member States reported initially 1,142 cases. During 2008, 9 cases were reclassified 
as “non-irregularity” (IRQ0). These non-irregularity-cases are not taken into account 
for the analysis. 

The total number of irregularities reported in the budget year 2008 was 1,133. These 
1,133 cases amount to approximately EUR 102 million.  

Member  States  reported  18  cases  with  an  amount  affected  below  the  reporting 
threshold  of  EUR  10,000.  It  concerns  mainly  cases  reported  by  France,  United 
Kingdom, Italy and Lithuania. Cases below the threshold of EUR 10,000 should only 
be reported if there is a specific reason to report these cases, as for instance fraud or a 
clear link with other cases. For all these cases counts that no specific reasons were 
given why these cases were reported.  

Member States did not indicate an amount affected by the irregularity in 15 cases. 

EN 

36 

   EN 

 
 
Member States which reported the highest number of cases in 2008 were Spain, Italy, 
Portugal and Germany with 245, 211, 120 and 111 cases respectively. 

In monetary terms, Italy reported the highest amounts affected by irregularities, more 
than  EUR  54  million,  followed  by  Spain  which  reported  a  total  amount  of 
approximately  EUR  15  million.  Italy  reported  1  case  for  the  sector  "fruits  and 
vegetables" in which the total amount affected was approximately EUR 25 million. 

The  number  of  reported  cases  decreased  in  2008  by  approximately  28%  compared 
with  2007.  The  decrease  can  be  partly  explained  by  the  coming  into  force  of  Reg. 
1848/2006  and  the  introduction  of  the  new  threshold  of  EUR  10,000.  In  2007,  the 
decrease was more than 50%61.  

In  2008,  the  amounts  affected  by  reported  irregularities  decreased  with  34%  to 
approximately  €102  million.  It  should  howev er,  be  taken  into  account  that  the 
amount affected by irregularities is still higher than in the period 2004 – 2006.  

Chart AG1 reflects these trends (see also annex 11).  

Chart AG1: Irregularities communicated by Member States (1971-2008) 

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

8
0
0
2

cases

amounts in €

amounts in € -/- peak

The “amounts in EUR” line shows three peaks, one in 1994, a second one in 2000 
and a third one in 2008. These peaks are the result of three Italian cases in 1994, two 
Italian  cases  in  2000  and  1  Italian  case  in  2008.  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),  the  move  towards  direct  aid  and  payments  decoupled  from 
production  and  the  introduction  in  2007  of  a  threshold  of  EUR  10,000  to  report 
irregularities.  

Annex 12 gives an overview for each Member State. 

61 

The  number  of  reported  cases  for  the  years  2006,  2007  and  2008  was  respectively  3,249,  1,577  and 
1,133. 

EN 

37 

   EN 

 
 
 
 
                                                 
3.2.2. 

Impact on the budget 
The total expenditure  is approximately  EUR  48.6 billion62. Table AG3  provides  an 
overview of the total expenditure in 2008 per budget chapter.  

Table AG3: Expenditure and irregularities per budget chapter 

Table AG3
EXPENDITURE AND IRREGULARITIES PER BUDGET CHAPTER
budget year 2008

budget 
chapter

description

Sugar

Fruit and vegetables

Sheepmeat and goatmeat

Products of the wine-growing sector

Beef and veal
Pigmeat, eggs and poultry, bee-keeping and other animal products

050208
050405 Rural development (EAGF) (2000 to 2006)
050404 Rural development (EAGF) (2004-2006) transitional instrument new MS
050401 Rural development (EAFRD) (2007 to 2013)
050209
050206 Olive oil
050205
050212 Milk and milk products
050201 Cereals
050213
050215
050211 Other plant products/measures
050301 Decoupled direct aids
050302 Other direct aid
050214
050203 Non-Annex 1 products
Food programmes
050204
Promotion
050210
Sugar restructuring fund
050216
Additional amounts of aid
050303
Textile plants
050207
Audit - Control of agricultural expenditure
050701
Superlevy from milk producers - Assigned revenue
670300
EAGF irregularities - Assigned revenue
670200
670100 Clearance of EAGF accounts - Assigned revenue
680100
050202 Rice
050402 Completion of the EAGGF Guidance Section, completion of Leader
050702
680200
combi
blank
total

Audit - Settlement of disputes
revenue
combination of different support measues
no information provided by Member States

Temporary restructuring amounts -  Assigned revenue

total amount
irregularity

in €
39,760,133
18,413,647
991,110
257,735
12,715,832
5,182,753
4,082,708
3,758,382
3,708,306
2,893,569
2,086,940
1,309,853
1,206,684
905,356
536,467
407,264
286,547
65,223

irregularity
in % of
expenditure

3.474%
0.302%
0.218%
-2.314%
1.161%
11.480%
0.826%
2.555%
7.571%
6.160%
0.806%
0.349%
0.004%
0.016%

0.345%
0.088%
0.132%

total amount
expenditure
in €

1,144,640,280
6,094,061,034
454,286,155
-11,139,905
1,095,054,040
45,144,030
494,476,319
147,095,719
48,982,356
46,975,754
258,766,474
375,132,868
31,419,056,452
5,631,638,059

118,115,879
323,924,980
49,411,561
1,285,984,432
532,953,260
20,912,415
13,376,669
-44,853,191
-114,874,340
-198,483,323
-602,030,989

48,628,606,986

1,079,798
2,611,057
102,259,365

0.210%

download 19 March 2009

amount irregularity updated 6 May 2009 (HU-correction)

source "total amount of expenditure": CATS-database (31 March 2009)

The  highest  expenditure  concerned  budget  chapter  050301:  decoupled  direct  aids. 
Decoupled  direct  aids  (chapter  050301)  were  introduced  in  2006.  The  total 
expenditure was about EUR 31.4 billion, which is 65% of the total expenditure in the 
agricultural  sector.  Member  States  reported  for  a  total  amount  affected  by 
irregularities  of  approximately  EUR  1.2  million.  It  concerns  65  cases.  France 
received  the  highest  sum  of  approximately  EUR  5.7  billion,  followed  by  Germany 
that  received  approximately  EUR  5.3  billion.  France  reported  in  2008  no 
irregularities concerning “decoupled direct aids”. Germany reported 17 cases with a 
total  amount  affected  of  approximately  EUR  0.3  million.  The  low  number  of 
irregularities for decoupled direct aids (chapter 050301) can be partly explained  by 
the fact that the expenditure per beneficiary and per support measure does not exceed 
the threshold of EUR 10,000 in a large number of cases. For these cases count that 
irregularity reports will never be submitted. 

The highest amount affected by irregularities were reported for the budget chapters 
concerning  "fruit  and  vegetables” (050208), “rural development (EAGF)"  (050405) 

62 

Expenditure figures are based on CATS-database (download : 31 March 2009 (table 106)) 

EN 

38 

   EN 

 
 
                                                 
and "products of the wine-growing sector (050209) with a total amount affected of 
EUR 39.8 million, EUR 18.4 respectively EUR 12.7 million. 

In percentage of the total expenditure per budget chapter, the highest amounts were 
reported for the budget chapter concerning “olive oil” (050206) with 11.5%. 

Table  AG4  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.  

Table AG4: Expenditure and irregularities per Member State 

Table AG4
EXPENDITURE AND IRREGULARITIES PER MS
budget year 2008
irregularities
in % of
total amount
affected

in % of 
MS'
expenditure

total
amount
affected

expenditure

in % of
total
expenditure

20.0%
13.0%
12.9%
11.5%
7.3%
5.5%
5.0%
3.7%
2.3%
2.3%
2.1%
2.0%
1.9%
1.9%
1.6%
1.6%
1.4%
1.0%
0.7%
0.6%
0.5%
0.4%
0.4%
0.2%
0.1%
0.1%
0.0%
100.0%

11,763,441
3,816,771
14,924,635
53,969,740
225,775
4,010,046
1,126,137
397,497
445,241
311,608
1,183,639
3,629,928
214,065
747,522
983,842
1,605,690
764,680

639,613
803,754
119,470
208,144
38,808
278,131

11.5%
3.7%
14.6%
52.8%
0.2%
3.9%
1.1%
0.4%
0.4%
0.3%
1.2%
3.5%
0.2%
0.7%
1.0%
1.6%
0.7%

0.6%
0.8%
0.1%
0.2%
0.0%
0.3%

13,375
37,814
102,259,365

0.0%
0.0%
100.0%

0.12%
0.06%
0.24%
0.96%
0.01%
0.15%
0.05%
0.02%
0.04%
0.03%
0.11%
0.37%
0.02%
0.08%
0.12%
0.21%
0.11%

0.19%
0.26%
0.05%
0.11%
0.02%
0.31%

0.03%
0.76%
0.21%

irregularities

total
cases

in % of
total cases
reported

MS

129
111
245
211
7
39
46
22
10
20
30
120
10
6
8
31
22

11
24
2
13
1
13

1
1
1,133

11.4% FR
9.8% DE
21.6% ES
IT
18.6%
0.6% UK
3.4% EL
4.1% PL
IE
1.9%
0.9% DK
1.8% AT
2.6% NL
10.6% PT
0.9% SE
0.5% HU
0.7%
FI
2.7% BE
1.9% CZ
RO
1.0% SK
LT
2.1%
0.2% BG
1.1% LV
0.1%
SI
1.1% EE
CY
0.1% LU
0.1% MT
100.0% total

MS

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

total

9,715,529,160
6,344,224,320
6,261,663,422
5,603,988,857
3,565,614,301
2,687,254,393
2,414,751,681
1,786,625,512
1,123,719,453
1,114,613,971
1,035,364,976
974,366,033
941,831,232
900,016,606
787,088,826
756,952,211
688,544,920
474,789,773
332,392,068
313,730,455
231,447,678
197,702,985
182,119,725
89,853,642
55,603,003
43,844,738
4,973,044
48,628,606,986

download 19 March 2009

source "total amount of expenditure": CATS-database (31 March 2009)

total amount affected by irregularities updated on 6 May 2009 (HU-correction)

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 Malta received the lowest amount (EUR 0.5 billion). 

Together  France,  Germany,  Spain,  Italy,  the  United  Kingdom,  Greece  and  Poland 
receive  more  than  75%  of  the  total  agricultural  budget.  These  7  Member  States 
receive approximately EUR 36.6 billion (total expenditure: EUR 48.6 billion).  

In  2008,  France  received  approximately  EUR  9.7  billion,  which  is  approximately 
20% of the total agricultural budget. The reported French cases were responsible for 
11,5% of the amounts affected by irregularities, which is rather low in comparison to 
the  expenditure.  The  same  counts  for  the  number  of  reported  irregularities.  France 
was only responsible for 11.4% of the total number of reported cases.  

The rather low percentage of cases reported could be the result of good management 
and control, but could also indicate underreporting.  

EN 

39 

   EN 

 
 
Some  Member  States  report  (far)  more  irregularities  than  others.  Portugal  for 
instance,  reports  approximately  the  same  number  of  cases  as  France,  120  cases 
respectively 129 cases. France however, receives 10 times as much as Portugal from 
the agricultural-budget. France received EUR 9.715 billion as Portugal received EUR 
0.974 billion. 

Also of interest is the level of reported irregularities as a percentage of agricultural-
expenditure per Member State. Italy has the highest percentage with 0.96%, followed 
by  Malta  and  Portugal  with  0.76%,  and  0.37%  respectively.  Rather  low  are  the 
percentages of United Kingdom, Slovenia, Ireland and Sweden with 0.01%, 0.02%, 
0.02% respectively 0.02%. Annex 12 gives an overview of these percentages.  

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 

Controls by national authorities63 

Under  the  common  agricultural  policy,  according  to  the  principle  of  shared 
management, the Member States are responsible for paying the agricultural subsidies 
to  the  final  beneficiaries  through  paying  agencies64,  accredited  by  the  competent 
authorities of the Member States. They are responsible in particular for checking the 
admissibility of claims and compliance with EU rules before payment. 

For  each  aid  scheme,  the  relevant  sector  regulations  lay  down  detailed  rules  on 
checks  to  be  carried  out  by  the  paying  agencies  or  by  delegated  bodies  operating 
under their supervision. 

All aid applications are subject to administrative checks before any payment is made. 
On-the-spot checks are carried out on a sample basis which normally ranges between 
5% and 100%, depending on the risk in the sector concerned. 

The  most  important  control  system  is  the  Integrated  Administration  and  Control 
System  (IACS).  It  covers  all  direct  payments  to  farmers.  IACS  includes  a 
computerised database, an identification system for farmers, for agricultural parcels 
and for animals in case of payments linked to animals, and a system for identification 
and registration of payment entitlements and aid applications. For aid schemes which 
do  not  fall  under  the  IACS  such  as  storage  of  products  or  export  refunds, 
complementary checks must be carried out after the payment to the beneficiary has 
been made. 

At the end of each financial year, the certification body draws up a certificate stating 
whether  it  has  gained  reasonable  assurance  that  the  accounts  transmitted  to  the 
Commission are true, complete and accurate and that the internal control procedures 
have operated satisfactorily. 

63 
64 

Text provided by DG AGRI 
Regulation (EC) No 1290/2005 (OJ L 209, 11.8.2005) 

EN 

40 

   EN 

 
                                                 
Member  States  must  send  to  the  Commission  the  annual  accounts  of  each  paying 
agency,  accompanied  by  a  statement  of  assurance  signed  by  the  paying  agency's 
director.  The  statement  of  assurance  may  be  qualified  by  reservations,  which  must 
quantify  their  financial  impact.  In  that  case,  it  must  include  a  remedial  action  plan 
and a precise timetable for its implementation. The statement  of assurance must  be 
based  on  an  effective  supervision  of  the  management  and  control  system  in  place 
throughout the year. 

Member States with more than one paying agency must also draw up at the end of 
the  financial  year  an  annual  summary  report  (synthesis)  covering  the  statements  of 
assurance and certificates issued by the certification bodies. Coming on the top of the 
statements of assurance and certification, this is designed to strengthen the chain of 
responsibility between the Member States and the Commission. 

Controls by the Commission65 

The  Commission  verifies,  firstly,  the  completeness,  accuracy  and  veracity  of  the 
paying agencies’ accounts (clearance of accounts) and, secondly, mostly by means of 
on-the-spot  audits,  whether  the  expenditure  has  been  effected  by  Member  States  in 
conformity  with  the  Community  rules.  Where  this  is  not  the  case,  it  excludes  the 
expenditure concerned from Community financing (financial corrections). This latter 
mechanism,  called  "conformity  clearance",  has  over  the  years  proven  to  be  a  very 
effective means of protecting the Community's financial interest. 

Conformity clearance shields the Community budget from expenditure which should 
not  be  charged  to  it.  It  is  not  a  mechanism  by  which  irregular  payments  to  final 
beneficiaries  are  recovered,  something  which,  according  to  the  principle  of  shared 
management,  is  the  sole  responsibility  of  the  Member  States.  Its  purpose  is  to 
examine  the  management  and  control  systems  implemented  by  the  Member  States 
and to recover from national authorities any expenditure which is not in conformity 
with Community law. Financial corrections are determined on the basis of the nature 
and gravity of the infringement and the financial damage caused to the Community. 
The amount is calculated on the basis of the loss actually caused or on the basis of an 
extrapolation. Where this is not possible, flat-rates are used which take account of the 
severity of the deficiencies in order to reflect the financial risk for the Community. In 
the calendar year 2008 the Commission excluded approximately EUR 1,022 million 
from  Community  financing  under  the  EAGF  and  the  EAFRD66  on  grounds  of  its 
non-compliance with Community rules. 

Where  individual  irregular  payments  are  or  can  be  identified  as  a  result  of  the 
conformity clearance procedures, Member States are required to follow them up by 
recovery  actions  against  the  final  beneficiaries.  However,  even  where  this  is  not 
possible  because  the  financial  correction  relates  exclusively  to  deficiencies  in  the 
Member State's management and control system, the correction remains an important 
means  of  improving  the  functioning  of  that  system  and  thus  of  preventing  or 
detecting  and  recovering  irregular  payments  to  final  beneficiaries.  The  conformity 

65 
66 

Text provided by DG AGRI 
Decisions 2008/321/EC (OJ L 109, 19.4.2008), 2008/582/EC (OJ L 186, 15.7.2008, with corrigendum OJ 
L 194, 23.7.2008) and 2008/960/EC (OJ L 340, 19.12.2008). 

EN 

41 

   EN 

 
                                                 
clearance thereby contributes to the legality and regularity of transactions at the level 
of the final beneficiaries. 

Irregularity reports 

Member  States  are  not  only  required  to  follow  irregular  payments  up  by  recovery 
actions but are also obliged to submit irregularity reports. In these reports, Member 
States are required to indicate the manner in which the irregularity was discovered. 
Member  States  provide  detailed  information  on  the  reason  why  an  audit,  check  or 
scrutiny was performed and how it was performed.  

Table AG5 gives an overview why a control was performed as table AG6 gives an 
overview how the control was performed. 

In  the  European  Union,  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  2008,  approximately  87.5%  of 
agricultural expenditure under EAGF was processed through IACS.  

Member  States  indicated  that  in  56  cases  (2007:  54  cases)  the  irregularity  was 
discovered  thanks  to  a  check  or  audit  performed  on  basis  of  IACS.  This  is 
approximately 5% of the total number of reported irregularities (1,133).  

In  54  cases,  Member  States  did  not  indicate  the  reason  why  an  audit,  check  or 
scrutiny  was  performed,  which  is  also  approximately  5%  of  the  total  amount  of 
reported irregularities (1,133).  

Member States are also under an obligation to perform certain controls on the basis 
of  Council  Regulation  (EEC)  No  485/200867  and  Council  Regulation  (EEC)  No 
386/90.  

Council  Regulation  (EEC)  No  485/2008  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 173 cases the irregularity was discovered thanks to 
an audit performed on basis of Reg. 485/2008. This is approximately 15% of the total 
number of reported irregularities (1,133). 

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  8  cases  (2007:  9  cases)  the 
irregularity was discovered thanks to a check performed on basis of Reg. 386/1990. 
This is less than 1% of the total number of reported irregularities (1,133). 

Table AG5: Reasons for performing an audit, control, scrutiny 

67 

Reg. 485/2008 repealed Reg. 4045/1989 

EN 

42 

   EN 

 
                                                 
Table AG5
DETECTION OF THE IRREGULARITY
budget year 2008

reason for performing a control, audit, scrutiny etc.

alone*)

administrative enquiry
other occasions (described in field 5.8.)
scrutiny on basis of Reg. 485/2008 (replaced 4045/1989)
routine
judicial enquiry
random check
comparison of data
scrutiny on basis of Reg. 3508/1992 & 1782/2003 (IACS)
risk analysis
information and/or request from EU-body
tip from informant, whistleblower, etc.
chance
review of conditions
spontaneous confession
control on basis of Reg. 386/1990
complaint
probability checks
release of guarantee
refusal to accept controls
existing doubts
payment of balance
information published in the media
suspicious conduct
statistical analysis
no information provided by Member States
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 19 March 2009 / updated 6 May 2009 (HU-correction)

219
147
145
103
79
83
10
49
31
7
13
12
10
8
8
2
1
5
2
2
1
1
1
0
55
994

shared**)
36
80
28
16
9
1
68
7
7
12
4
0
2
2
0
3
4
0
0
0
1
0
0
1
0
281

total

in %

255
227
173
119
88
84
78
56
38
19
17
12
12
10
8
5
5
5
2
2
2
1
1
1
55
1275

23%
20%
15%
11%
8%
7%
7%
5%
3%
2%
2%
1%
1%
1%
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
5%

Administrative enquiry was in 255 cases (23%), the reason for performing a control, 
audit or scrutiny.  

In  227  cases  (20%)  Member  States  indicated  "other  occasions".  Unfortunately, 
Member States only described in 27 cases what the other occasion was.  

In 88 cases (2007: 175 cases), the reason to perform a control was based on a judicial 
enquiry.  This  is  approximately  8%  of  the  total  amount  of  reported  irregularities 
(1,133).  Member  States  classified  4  of  these  cases  (2007:  15  cases)  as  suspected 
fraud (IRQ3).  

Table AG5 provided an overview of the reason why a control was performed. On the 
next page provides table AG6 an overview how an audit or check was performed.  

Approximately  60%  of  the  irregularities  were  detected  via  controls  of  documents 
(24%), ex post controls (20%) and controls on the premises of the company (15%). 

Member  States  did  not  provide  any  information  on  the  type  of  control,  audit  or 
scrutiny  in  157  cases,  which  is  14%  of  the  total  amount  of  reported  irregularities 
(1,133).  In  more  than  8%  of  the  cases,  Member  States  indicated  "other  methods 
(described  in  field  5.8)".  Unfortunately,  in  a  large  number  of  cases  there  was  no 
description  in  field  5.8.  This  means  that  in  more  than  20%  of  the  cases  no  clear 
description is given of the type and/or method of control.  

Table AG6: type/method of control 

EN 

43 

   EN 

 
 
Table AG6
DETECTION OF THE IRREGULARITY
budget year 2008

type of control, audit, scrutiny etc.

alone*)

control of documents
ex post control
control on the premises of the company
control of accounts
other methods (described in field 5.8.)
analysis of samples
on the spot control of achievement of project or action
face vet / documentary check
initial enquiry
other Customs controls, checks, audits, scrutinies etc.
preventive check
control of production
control of products
physical check of goods
control of product in intervention
other controls, checks etc. concerning production or products
control of movement
teledetection
border control
no information provided by Member States
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

214
202
117
93
96
51
54
33
21
4
4
2
2
2
2
1
0
0
0
157
1,055

shared**)
63
19
55
24
0
6
0
3
1
6
0
1
1
0
0
0
1
0
0
0
180

total

in %

277
221
172
117
96
57
54
36
22
10
4
3
3
2
2
1
1
0
0
157
1,235

24%
20%
15%
10%
8%
5%
5%
3%
2%
1%
0%
0%
0%
0%
0%
0%
0%
0%
0%
14%

download 19 March 2009 /  updated 6 May 2009 (HU-correction)
As in 2007, 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.  

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 almost 100%, 
as the compliance rate on the practices adopted (modus operandi) is 86%.  

Module  1848  introduced  9  main  groups  of  types  of  irregularity  (see  table  AG7)68. 
Each main group contains specific types of irregularities and a code "other" for each 
group. The latter makes it possible to link the (type of) irregularity to a specific main 
group.  In  case  it  is  not  possible  to  link  an  irregularity  to  a  main  group,  the  code 
"other other" can be used (code 1900). A text field offers the possibility to describe 
more in detail the practices adopted (modus operandi). 

Table AG7 gives an overview of the types of irregularity most frequently reported by 
Member States. The types of irregularity are clustered by main group.  

Table AG7: Irregularities and frequency of used types of irregularities 

68 

Recommendations of the European Court of Auditors have led to revised pick lists; 

EN 

44 

   EN 

 
                                                 
Table AG7
TYPE OF IRREGULARITY PER GROUP
budget year 2008

cases

description

number *)

in %

amount in € *)

in %

group
1100
1200
1300
1400
1500
1600
1700
1800
1900

request for aid
beneficiary
accounts and records
documentary proof
product, species and/or land
(non-)action
customs - movement of goods
bankruptcy / bribes / corruption
other
no information provided by Member States

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

201
47
12
199
247
449
16
2
70
3
1,246

18%
4%
1%
18%
22%
40%
1%
0%
6%
0%

12,366,987
2,424,332
602,939
9,511,437
14,169,356
63,553,947
1,151,304
644,253
4,457,054
491,696
109,373,306

12%
2%
1%
9%
14%
62%
1%
1%
4%
0%

*) an irregularity report can contain sometimes more than 1 type of irregularity therefore total amounts can be higher than the real number 
of cases and real total amount affected by irregularities

download 19 March 2009 / updated 6 May 2009 (HU-correction)

Only  in  3  cases  (<1%),  no  type  of  irregularity  was  indicated.  It  concerns  2  cases 
reported by Hungary and 1 case reported by Greece. 

In 70 cases, Member States indicated "other irregularities, to be specified". Finland 
indicated  "other  irregularities,  to  be  specified"  in  more  than  60%  of  its  cases.  In 
2007, Finland reported also in more than 60% of its cases "other irregularities". The 
added  value  of  the  indication  "other  irregularities,  to  be  specified"  is  rather  low. 
Finland should pay some attention to this reporting obligation. 

Group 1100 request for aid 

In 18% of the reported irregularities it concerned cases in which the irregularity was 
already  committed  during  the  request  phase.  As  example,  can  be  mentioned  an 
“incorrect or incomplete request for aid”. These cases could normally be discovered 
before payment.  

Member  States  indicated  in  all  cases  (100%)  if  an  irregularity  took  place  before 
payment  or  after  payment.  Discovered  before  payment  means  that  no  payment  has 
been  made,  therefore,  no  recovery  action  has  to  be  undertaken.  Discovered  after 
payment  means  that  the  beneficiary  received  the  subsidy  and  that  the  unduly  paid 
amount needs to be recovered. 

The overall rate of irregularities detected before payment is approximately 10%, e.g. 
116 cases out of 1,133.  

Table  AG8  focuses  on  the  group  "request  for  aid".  The  table  shows  per  type  of 
irregularity  if  the  case  was  discovered  before  or  after  payment.  Especially  for  the 
group "request for aid" counts that the irregularity can be discovered before payment. 

The  table  shows  that  only  in  23  cases  out  of  201  cases  (=23+178),  the  irregularity 
was discovered before payment. This is 11.4%.  

The most frequent type of irregularity was “product, species, project and/or activity 
not  eligible  for  aid”.  Member  States  indicated  this  type  of  irregularity  in  82  cases. 
Only  in  7  cases,  the  irregularity  was  discovered  before  payment.  In  75  cases, 
recovery actions needed to be started. 

Table AG8: Irregularities concerning the request for aid 

EN 

45 

   EN 

 
 
 
Table AG8
TYPE OF IRREGULARITY - REQUEST FOR AID
budget year 2008

description

incorrect or incomplete request for aid
false or falsified request for aid
product, species, project and/or activity not eligible for aid
incompatible cumulation of aid
several requests for the same product, species, project and/or activity
other irregularities concerning the request for aid

code
1100
1101
1102
1103
1104
1199
total *)
Art. 3(1)e Reg. 1848/2006

before payment
cases amounts in €

after payment

cases amounts in €

10
2
7

4
23

232,593
27,204
193,629

126,425
579,851

25
10
75
2
2
64
178

840,593
637,048
4,471,922
84,015
43,238
5,698,946
11,775,762

*) an irregularity report can sometimes contain more than 1 type of irregularity, therefore, total amounts can be higher than the real number of cases and 
real total amount affected by irregularities

download 19 March 2009 / updated 6 May 2009 (HU-correction)

In  35  cases,  Member  States  described  the  type  of  irregularity  as  “incorrect  or 
incomplete  request  for  aid”.  Despite  the  incorrect  or  incomplete  request  for  aid, 
Member States granted in more than 70% of these cases the subsidy.  

Denmark, Germany, Spain and Italy indicated in respectively 3, 1, 1 and 7 cases that 
the  applied  modus  operandi  was  “false  or  falsified  request  for  aid”.  Germany 
classified  its  2  cases  as  "established  fraud  (IRQ5)  as  Spain  classified  its  case  as 
"suspicion of fraud". All other 9 cases were classified as irregularity (IRQ2).  

Group 1400 documentary proof 

Table AG7 showed that in 199 cases (18%) the irregularity concerned documentary 
proof.  The  largest  amount  (95  cases)  concerns  "documents  missing  and/or  not 
provided". This type of irregularity can normally be considered as an error or mistake 
which  can  be  repaired.  Almost  all  of  these  cases  are  classified  as  "irregularity" 
(IRQ2).  Only  for  2  cases  count  that  Member  States  classified  the  irregularity  as 
"suspicion  of  fraud"  (IRQ3).  In  these  2  cases,  more  than  1  type  of  irregularity  was 
indicated.  

Member  States  indicated  in  12  cases,  with  a  total  amount  affected  of  EUR  1.4 
million  that  it  concerned  "documents  false  and/or  falsified".  7  of  these  cases  were 
classified as "suspicion of fraud" (IRQ3) as 4 cases were classified as "irregularity" 
(IRQ2). 1 case was not classified.  

Group 1500 product, species and/or land 

In  almost  22%  of  the  cases,  representing  14%  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 "over-declaration of 
land"  and  "declaration  of  fictitious 
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.  

land".  Especially 

in 

Member  States  did  not  always  use  the  correct  code  to  describe  the  type  of 
irregularity. The type "inexact quantity" was used in a rather large number of cases to 
report  an  overdeclaration  of  land  for  which  the  description  "overdeclaration  and/or 
declaration  of  fictitious  product,  species  and/or  land"  can  be  used.  Member  States 
probably still have to get used to the new reporting system.  

EN 

46 

   EN 

 
 
Member  States  reported  in  63  cases  "incorrect  classification  (incl.  incorrect  tariff 
heading)". These cases concern mainly the export of pig- and poultry meat. Member 
States  classified  61  of  these  cases  as  "irregularity"  (IRQ2).  2  cases  were  not 
classified.  

In  23  cases,  Member  States  classified  the  cases  as  "suspicion  of  fraud"  (IRQ3).  It 
concerned in 21 cases "overdeclaration and/or declaration of fictitious land". 

Group 1600 (non-) action 

In  almost  40%  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.  For  most  cases  counts,  that  the  beneficiary  did  not  make  the 
deadline to implement, complete or finalise the action.  

Table AG9: Type of irregularity – (non) action 

Table AG9
TYPE OF IRREGULARITY - (NON-)ACTION
budget year 2008

description

action not implemented
action not completed
operation prohibited during the measure
failure to respect deadlines
irregular termination, sale or reduction
absence of identification, marking, etc.
refusal of control, audit, scrutiny etc.
control, audit, scrutiny etc. not carried out in accordance with regulations, rules, plan etc.
infringement of rules concerned with public procurement
infringements with regard to the cofinancing system
other actions not carried out in accordance with regulations, rules, contract conditions, etc.

code
1600
1601
1602
1603
1604
1605
1606
1607
1608
1609
1610
total *)
Art. 3(1)e Reg. 1848/2006
download 19 March 2009 / updated 6 May 2009 (HU-correction)

number
37
30
30
48
23
0
3
3
0
3
274
451

cases

amount in €

1,265,776
1,938,278
1,173,291
5,928,640
1,225,013
0
37,364
487,776
0
42,141
51,455,668
63,553,947

In a rather high number of cases (274), Member States indicated "other actions not 
carried out in accordance with regulations, rules, contract conditions, etc." The total 
amount affected is EUR 51.5 million. It concerns in 113 cases the rural development 
sector.  The  total  amount  affected  is  EUR  4.3  million.  Member  States  reported  32 
cases for the fruits and vegetables sector and 23 cases for the wine growing sector. 
The amounts affected for these 2 sectors are respectively EUR 33.2 million and EUR 
8 million. 

Member States classified 35 as fraud (IRQ3 or IRQ5) and 375 as irregularity (IRQ2). 
41 cases were not classified. Germany and Spain were responsible for the reporting 
of  the  non-classified  cases.  The  applied  modus  operandi  in  26  of  the  fraud  cases 
(72%) can be summarized as "operation prohibited during the measure".  

EN 

47 

   EN 

 
 
3.3. 

Specific Analysis 

Member  States  inform  the  Commission  of  the  common  market  organisations 
affected,  the  sectors  and  products  concerned  by  irregularities.  The  new  reporting 
Module  1848  offers  Member  States  the  possibility  to  use  the  official  DG  AGRI 
nomenclature to indicate the budget lines affected by the irregularities. 

3.3.1.  Analysis of support measures 

Table  AG10  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 
and modus operandi. 

Table AG 10: Irregularities per main category of support measure 

Table AG10
IRREGULARITIES PER BUDGET CHAPTER
BUDGET YEAR 2008

Fruits and vegetables
Rural development (EAFRD) (2007 to 2013)
Rural development (EAGF) (2004-2006) transitional instrument new MS
Rural development (EAGF) (2000 to 2006)
Products of the wine-growing sector

Cereals
Beef and veal
Pigmeat, eggs and poultry, bee-keeping and other animal products
Direct aids of a horizontal nature

description

Sugar

group
050208
050401
050404
050405
050209
050206 Olive oil
050205
050212 Milk and milk products
050201
050213
050215
050301
050211 Other plant products/measures
050302 Other direct aids
050203
050214
050204
050303
050210
blank
art. 3 (1) a, n Reg. 1848/2006

Refunds on non-Annex 1 products
Sheepmeat and goatmeat
Food programmes
Additional amounts of aid
Promotion and information measures
no information provided by Member States

cases

amounts in €

average
amounts in €

in % of

total

92
12
64
361
138
38
34
59
39
56
63
65
28
36
12
18
3
2
2
57

39,760,133
257,735
1,357,842
18,413,647
12,715,832
5,225,808
4,391,995
3,992,477
3,838,617
3,176,032
2,138,052
1,585,977
1,309,853
1,215,330
643,543
631,915
329,602
67,036
65,223
2,611,057

432,175
21,478
21,216
51,007
92,144
137,521
129,176
67,669
98,426
56,715
33,937
24,400
46,780
33,759
53,629
35,106
109,867
33,518
32,611
45,808

38.9%
0.3%
1.3%
18.0%
12.4%
5.1%
4.3%
3.9%
3.8%
3.1%
2.1%
1.6%
1.3%
1.2%
0.6%
0.6%
0.3%
0.1%
0.1%
2.6%

download 19 March 2009 / updated 6 May 2009 (HU-correction)

As in 2007, the sector “fruits and vegetables” (group 050208) scores high. Member 
States reported 92 cases involving approximately EUR 39.8 million, which is almost 
39% of the total amount affected by irregularities. Italy reported 1 case in which the 
total amount affected was approximately EUR 25 million. 

The  highest  number  of  irregularities  reported  related  to  “rural  development”.  The 
budget chapters 050401, 050404 and 050405 have been taken together to determine 
the  impact  of  irregularities  for  the  sector  "rural  development".  Member  States 
reported  a  total  of  437  cases  involving  rural  development  measures  (group  0504). 
These cases alone amount to approximately EUR 20 million, which is almost 20% of 
the total amount affected by irregularities. The vast majority of these cases concern 
the programming period 2000-2006. 

Member  States  reported  also  for  the  wine  sector  (group  050209)  a  rather  high 
number of irregularities and amounts affected by the irregularities: 138 cases and an 
amount affected by irregularities of approximately EUR 12.7 million, which is more 
than 12% of the total amount affected by irregularities.  

More than 70% of the total amounts affected by irregularities concern the sectors: 
•  fruits and vegetables 

40% 

EN 

48 

   EN 

 
 
•  rural development 
•  wine 

12% 

20% 

Fruit and vegetables (group 050208) 

Table  AG11  shows  the  measures  which  were  hit  by  irregularities,  indicating  the 
number of cases, the total amounts and the average amount per irregularity.  

Table AG 11: Fruit and vegetables: measures affected by irregularities 

Table AG11
FRUITS AND VEGETABLES
BUDGET YEAR 2008

description

cases

amounts in €

average

Compensation to encourage processing of citrus fruits
Compensation and buying-in - lemons
Production aid for processed tomato products
Operational funds for producer organisations
Compensation aid - bananas
Production aid for fruit-based products
Aid to producer groups for preliminary recognition
Export refunds - fresh fruits & vegetables
Special measures for nuts
total
art. 3 (1) a, n Reg. 1848/2006

download 19 March 2009

22
5
12
38
6
4
3
1
1
92

27,634,043
5,672,234
3,061,956
2,347,184
532,747
337,804
89,700
52,678
31,787
39,760,133

1,256,093
1,134,447
255,163
61,768
88,791
84,451
29,900
52,678
31,787
432,175

Member States reported a total of 92 cases affecting measures to support the fruit and 
vegetables  sector.  These  cases  alone  add  up  to  approximately  EUR  39.8  million, 
which is approximately 39% of the total amount affected by irregularities.  

France  and  Italy  reported  3  cases  in  which  the  total  amount  affected  by  the 
irregularity was more than EUR 1 million per case. Italy reported 2 cases of which 1 
case  had  a  total  amount  affected  of  more  than  EUR  25  million  and  concerned  the 
support measure "compensation to encourage processing of citrus fruits". 

In recent  years,  Member States have consistently reported a relatively high amount 
affected by irregularities for the measure "compensation to encourage processing of 
citrus fruits". In 2008, Member States reported fewer irregularities concerning citrus 
fruits. The amounts increased but mainly due to 1 Italian case of more than EUR 25 
million. The 22 cases were reported by two (2) Member States. Italy reported 2 cases 
with  a  total  amount  affected  of  EUR  25.3  million  as  Spain  reported  the  other  20 
cases with a total amount affected of EUR 2.3 million. All cases were classified as 
"irregularity" (IRQ2).  

Member  States  reported  5  cases  for  the  measure  “compensation  and  buying-in 
lemons". The total amount affected is rather high: EUR 5.7 million. In 2 cases, the 
total amount affected was higher than EUR 2 million. It concerned 1 case reported by 
France  and  1  case  reported  by  Italy.  Greece  indicated  in  1  case  that  it  concerned 
"suspicion of fraud".  

Cases  in  which  the  measure  "production  aid  for  processed  tomato  products"  was 
affected  by  irregularities  were  reported  by  Spain,  Hungary  and  Italy  with 
respectively  1  case,  1  case  and  10  cases.  All  cases  were  classified  as  irregularity 
(IRQ2)  although  in  4  cases  the  practices  adopted  was  described  as  "fictitious 
processing". 

EN 

49 

   EN 

 
 
Member  States  classified  in  89  cases  (97%)  the  irregularities  as  irregularity  or  as 
(suspected) fraud.  

The reported level of (suspected or established) fraud is 3.5%.  

Rural development (group 0504) 

Member  States  reported  a  total  of  437  cases  affecting  rural  development  measures. 
425  cases  concerned  EAGF69  as  12  cases  concerned  EAFRD.  These  cases  alone 
amount to approximately EUR 20 million, which is approximately 19.6% of the total 
amount affected by irregularities (see table AG10).  

Table  AG12  shows  the  measures  that  were  mostly  affected  by  irregularities, 
indicating  the  number  of  cases,  the  total  amounts  and  average  amount  per 
irregularity.  

Table AG 12: Rural development: measures affected by irregularities 

Table AG12
RURAL DEVELOPMENT
BUDGET YEAR 2008

description

cases

amounts in €

average

agrienvironment
forestry
transitional instrument for the new Member States
promoting the adaptation and the development of rural areas
improving the processing and marketing of agricultural products
setting-up of young farmers
reimbursement not related to irregularities
investments in agricultural holdings
EAFRD - rural development
early retirement scheme
less favoured areas
other - not specified
total
art. 3 (1) a, n Reg. 1848/2006

download 19 March 2009

100
79
64
51
45
31
16
14
12
11
4
10
437

2,460,358
4,554,850
1,357,842
2,919,646
5,012,609
341,232
390,289
1,981,495
257,735
327,853
142,781
282,534
20,029,224

24,604
57,656
21,216
57,248
111,391
11,007
24,393
141,535
21,478
29,805
35,695
28,253
45,833

The  largest  number  of  irregularities  related  to  “agrienvironment".  Member  States 
reported 100 cases in which the support measure "agrienvironment" was affected by 
irregularities. The average amounts affected per case are rather low.  

The  highest  amount  affected  by  irregularities  is  reported  for  the  support  measure 
“improving  the  processing  and  marketing  of  agricultural  products".  Member  States 
reported 45 cases with a total amount affected of more than EUR 5 million. Member 
States  classified  96%  of  the  cases.  All  these  cases  were  classified  as  "irregularity" 
(IRQ2).  Spain  did  not  classify  2  cases.  Most  frequently  type  of  irregularity  is 
"product, species, project and/or activity not eligible for aid" and occurred already in 
the  request  phase.  France  described  in  1  case  the  practices  adopted  as  "documents 
false and/or falsified". This case was also classified as "irregularity" (IRQ2). 

As  in  2007,  the  support  measure  "forestry"  has  a  rather  high  amount  affected  by 
irregularities.  Member  States  reported  79  cases  with  a  total  amount  affected  of 
approximately  EUR  4.5  million.  Most  frequently  occurring  type  of  irregularity  is 
"failure to respect deadlines". In almost 29% of the reported cases, beneficiaries are 

69 

EAGF – rural development concerns the programming period 2000-2006 and the transitional instrument 
for new Member States (see table AG10); 

EN 

50 

   EN 

 
 
                                                 
not  able  to  make  the  deadlines.  It  concerns  in  all  cases  Spanish  beneficiaries. 
Member States classified more than 91% (72) of the forestry cases as "irregularity" 
or "suspicion of fraud". Spain did not classify 6 cases as Germany did not classify 1 
case. Spain classified 2 cases as "suspicion of fraud". The practices adopted for these 
2 cases can be summarized as "false and/or falsified request for aid" and "operation 
prohibited during the measure". 

The support measure "promoting the adaptation and the development of rural areas" 
has  also  a  rather  high  total  amount  affected  by  irregularities.  The  total  amount 
affected is approximately EUR 2.9 million. The total number of reported cases is 51. 
Most  frequently  applied  modus  operandi  is  "over  declaration"  and/or  "fictitious 
declaration" of land. Member States classified 3 cases as "suspicion of fraud" (IRQ3) 
as all other cases were classified as "irregularity" (IRQ2). 

Member  States  reported  14  cases  for  the  support  measure  "investments  in 
agricultural  holdings".  The  total  amount  affected  was  rather  high:  EUR  2  million. 
The latter was caused by 1 Italian case in which the total amount affected was more 
than  EUR  1.5  million.  Member  States  classified  10  of  these  cases  as  "irregularity" 
(IRQ2),  1  case  as  "suspicion  of  fraud"  (IRQ3)  and  1  case  as  "established  fraud" 
(IRQ5). 2 cases were not classified. It concerns Spanish cases. The modus operandi 
in  the  "suspicion  of  fraud"  case  concerns  "false  and/or  falsified  documents".  The 
"established  fraud"  case  concerned  actions  that  were  not  carried  out  in  accordance 
with the regulations and conditions under which the subsidy was granted. 

The reported level of (suspected or established) fraud is 8.5%.  

Wine (group 050209) 

Member  States  reported  a  total  of  138  cases  affecting  wine  measures.  These  cases 
amount  to  approximately  EUR  12.7  million.  It  concerns  cases  reported  by  Spain, 
Portugal,  Italy,  Greece  and 
France  with  respectively  58, 
44,  20,  11  and  5  cases.  Table 
AG13  shows  the  measures 
that  were  mostly  affected  by 
the 
irregularities, 
number  of  cases,  the  total 
amounts  and  average  amount 
per irregularity.  

permanent abandonment premiums
restructuring and conversion of vine yards
distillation
storage
aid for the use of must
export refund
total
art. 3 (1) a, n Reg. 1848/2006

7,245,007 7,245,007
3,048,474
26,508
166,611
1,999,327
57,856
289,282
20,455
81,818
51,924
51,924
92,144
12,715,832

Table AG13
WINE
BUDGET YEAR 2008

cases
1
115
12
5
4
1
138

indicating 

download 19 March 2009

amounts in €

description

average

Italy reported 1 case in which the total amount affected by the irregularity was more 
than  EUR  7.2  million.  It  concerned  the  support  measure  "permanent  abandonment 
premiums  for  areas  under  vines.  The  case  was  classified  as  "irregularity"  (IRQ2). 
The amounts affected for all other cases vary between EUR 0 and EUR 0.8 million. 

The  highest  number  of  cases  were  reported  for  the  support  measure  "restructuring 
and conversion of vineyards". Member States reported 115 cases with a total amount 
affected of more than EUR 3 million. Member States classified 102 cases out of 115 
as  "irregularity"  or  "suspicion  of  fraud".  Spain  classified  25  cases  as  "suspicion  of 
fraud"  (IRQ3).  All  other  cases  were  classified  as  "irregularity"  (77)  or  were  not 
classified (13). The modus operandi of the fraud cases can be described as "operation 
prohibited  during  the  measure".  Unfortunately,  Member  States  did  not  describe  in 
more detail the applied modus operandi. 

EN 

51 

   EN 

 
Member  States  reported  12  cases  for  the  support  measure  "distillation".  The  total 
amount  affected  is  approximately  EUR  2  million.  The  applied  modus  operandi 
differs  per  case  which  makes  it  difficult  to  indicate  a  modus  operandi  that  is 
occurring more frequently. None of these cases was classified as "suspicion of fraud" 
(IRQ3) or "established fraud" (IRQ5).  

The reported level of (suspected or established) fraud is 18.1%.  

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) 
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 = suspicion of fraud  
•  IRQ 5 = established fraud 

Reg.  1848/2006  introduced  the  obligation  to  identify  fraud  cases.  Member  States 
comply rather well with this obligation; the overall compliance rate is 93%. Germany 
and Spain should pay some extra attention to this obligation. The Netherlands did not 
classify 2 of  its cases  (7%). Table AG14  gives an overview of the classification of 
irregularities by Member States and by OLAF.  

Table AG 14: Classification of irregularities by Member States 

Table AG14
CLASSIFICATION OF THE IRREGULARITY
budget year 2008

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

IRQ2

IRQ3

IRQ5

blank

20
31
2

22
111
10
13
39
245
8
129
6
22
211
24
1
13
1
30
46
120

10
1
11
7
1,133

20
26

22
67
10
12
38
180
8
125
6
22
209
24
1
13
1
27
17
118

10
1
11
7
975

5
2

3

1
1
27

4

1

1
29
2

1

1

40

38

2

76

2

80

compliance
100%
100%
100%

100%
64%
100%
100%
100%
84%
100%
100%
100%
100%
100%
100%
100%
100%
100%
93%
100%
100%

100%
100%
100%
100%
93%

fraud in %

2008

by OLAF

2007

0%
16%
100%

0%
6%
0%
8%
3%
13%
0%
3%
0%
0%
1%
0%
0%
0%
0%
4%
63%
2%

0%
0%
0%
0%
7%

0%
16%
100%

0%
5%
30%
8%
5%
13%
0%
6%
0%
0%
7%
0%
0%
0%
100%
3%
63%
2%

0%
0%
0%
14%
9%

0%
0%

0%
0%

0%
0%
5%

0%
3%
8%
0%
6%
0%

64%

22%
90%
2%

0%
0%
0%
12%
10%

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 19 March 2009 / updated 6 May 2009 (HU-correction)

Classification of irregularities by Member States 

EN 

52 

   EN 

 
 
Fraud as a percentage of the total number of reported cases involved in irregularities 
is about 7%. The term fraud includes “suspicion of fraud” (IRQ3) and “established 
fraud”  (IRQ5).  The  non-irregularities  (IRQ0)  have  not  been  taken  into  account  for 
the  analysis.  As  mentioned  earlier,  Module  1848  was  introduced  in  2008  which 
implies that Member States needed to get used to the new reporting system, therefore 
the figures shown in the table should be treated with caution. 

Fraud as a percentage of the total amount of reported cases affected by irregularities 
is about 4%. 

Classification of irregularities by OLAF 

In  the  period  2000  –  2007  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 2008-irregularities by applying the same method as 
used  for  the  period  2000  -  2007,  the  irregularities  to  be  classified  as  “suspected 
frauds”  would  be  9%  of  the  total  number  of  reported  irregularities  and  10%  of  the 
total amount affected by 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,  sanctions  imposed  (administrative  or  penal)  and 
additional comments made by Member States.  

The higher fraud rate can be explained by the reclassification of cases from Member 
States  that  did  not  classify  any  cases  as  "suspicion  of  fraud".  The  latter  concerns 
mainly  cases  reported  by  Denmark  and  the  United  Kingdom.  Some  of  the  Danish, 
French, Italian and United Kingdom cases would be reclassified from “irregularity” 
(IRQ2)  into  “suspicion  of  fraud”  (IRQ3),  based  on  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  request  for  aid”,  "false  and/or  falsified 
documents",  "fictitious  use  or  processing"  or  "refusal  of  inspection".  OLAF  would 
classify  these  cases  as  “suspicion  of  fraud”  (IRQ3).  The  Maltese  case  was  also 
reclassified in to "suspicion of fraud" now a penal sanction was imposed.  

The classification of the non-classified German and Spanish cases did not lead to an 
increase  of  the  fraud  percentage.  Germany  did  not  classify  40  cases.  OLAF  would 
classify only 1 of these cases as "suspicion of fraud" (IRQ3). For Spain counts that 
all non-classified cases would be classified as "irregularity" (IRQ2). 

As  said,  table  AG14  and  the  OLAF-rate  should  be  treated  with  caution.  Member 
States  still  need  to  improve  their  reporting  due  to  the  introduction  of  the  new 
reporting system. 

Estimated level of fraud 

On  the  basis  of  the  irregularities  reported  in  the  period  2000-2008  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. 

One  early  conclusion  is  that,  as  a  percentage  of  the  total  number  of  reported 
irregularities, “suspected fraud” is approximately 10% in the period 2000–2008. The 

EN 

53 

   EN 

 
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 3% and 45% during the period 2000–2008. 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.  The  amounts 
affected  of  one  single  fraud  case  can  already  give  a  complete  different  and  often  a 
distorted picture. 

Chart AG 2: Irregularities and “suspected fraud” 

60%

50%

40%

30%

20%

10%

0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

cases calculated by OLAF
amounts calculated by OLAF

cases calculated by MS
amounts calculated by MS

It should be reiterated that the obligation to indicate “fraud” was introduced by Reg. 
1848/2006, which came into force on 1 January 2007. The figures therefore, should 
be interpreted cautiously. 
Recovery and sanctions70 

3.4. 

3.4.1.  Recovery 

Article  32  of  Council  Regulation  (EC)  No  1290/2005  provides  for  an  automatic 
clearance  mechanism  for  unsuccessful  recoveries  of  unduly  paid  amounts.  If  a 
Member  State  fails  to  recover  an  unduly  paid  amount  from  the  beneficiary  within 
four  years  of  the  primary  administrative  or  judicial  finding  (or,  in  the  case  of 
proceedings  before  national  courts,  within  eight  years),  50%  of  the  non-recovered 
amount  is  charged  to  the  budget  of  the  Member  State  concerned  within  the 
framework  of  the  annual  financial  clearance  of  the  EAGF  and  EAFRD  accounts. 
Even after the application of this mechanism,  Member  States are  obliged  to pursue 
their recovery procedures and to credit 50% of the amounts effectively recovered to 
the  Community  budget.  If  they  fail  to  do  so  with  the  necessary  diligence,  the 

70 

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 

 
 
                                                 
Commission  may  decide  to  charge  the  entire  outstanding  amounts  to  the  Member 
State concerned. 

As of financial year 2008, where the undue payments are the result of administrative 
errors committed by the national authorities, the entire amount involved is deducted 
from the annual accounts of the paying agencies concerned and, thus, excluded from 
Community financing. 

For  EAGF,  this  mechanism  was  applied  for  the  second  time  by  the  financial 
clearance  decision  for  the  financial  year  200771  which  cleared  all  pending  non-
recovered cases dating from 2003 or 1999 (cases which were four or eight years old 
respectively)  by  charging  €131.4  million  to 
the  Member  States.  For  those  paying 
agencies  for  which  the  2007  accounts  were  disjoined  from  the  financial  clearance 
decision,  a  further  €0.05  million  was  charged  by  a  subsequent  decision72,  and  a 
further €6.2 million still remains to be charged. 

Table AG15 provides an overview of the recovery, the irrecoverable declared cases 
and the outstanding amounts at the end of 2008.  

Regarding the financial year 2008, the Member States recovered €108 million , €32.2 
million was declared irrecoverable and the outstanding amount still to be recovered 
from the beneficiaries at the end of that financial year was €1 246 million for EAGF. 
The financial consequences of non recovery for cases dating from 2004 or 2000 were 
determined according to the "50-50 rule" mentioned above by charging €31.4 million 
to the Member States in the financial clearance decision for the financial year 2008 
adopted  by  the  Commission  on  29  April  200973.  A  further  €0.8  million  will  be 
charged by subsequent decisions. Due to this "50-50" clearance mechanism that was 
applied  in  the  last  years  by  charging  some  of  the  non-recovered  amounts  to  the 
Member  States  the  outstanding  amount  towards  the  EU  budget  was  reduced  to 
around €900 million. 

Regarding  the  EAFRD  and  the  Transitional  rural  development  instrument  the 
clearance  mechanism  set  out  above  did  not  apply  yet.  For  these  funds  the  amount 
outstanding at the end of the financial year 2008 was €7.9 million. €17.2 million was 
recovered  and  €0.2  million  was  declared  ir recoverable  during  the  financial  year 
2008.

71 
72 
73 

Decision 2008/396/EC (OJ L 139, 29.5.2008) 
Decision 2009/87/EC (OJ L 31, 3.2.2009) 
Decision 2009/367/EC, (OJ L 111, 5.5.2009) 

EN 

55 

   EN 

 
                                                 
Table AG15: financial information on recovery (EAGF, EAFRD, TRDI) 

Table AG15
Financial information on recovery cases
Tables 1-4 of Annex III of Regulation (EC) No 885/2006
Financial year 2008

recovered
during FY 2008

declared irrecoverable
during FY2008

at the end of FY 2008

in % of total

outstanding

5,811,335
5,052,848
0
33,677
886,067
15,811,493
3,673,520
829,704
1,276,545
25,581,930
929,786
19,173,737
2,909,026
4,310,922
11,858,824
632,473
83,610
1,451,180
48,390
4,684,273
4,678,701
8,791,585
0
2,033,769
1,862,283
104,416
2,550,844
125,060,937

400,234
2,202
0
0
0
899,459
37,704
34,599
56,056
25,070,499
0
3,919,214
0
62,967
876,018
33
1,948
26,227
6,570
60,073
466
365,679
0
21,858
3,636
141,697
424,970
32,412,108

5,037,038
60,042,515
0
0
220,386
58,125,985
11,330,845
304,072
50,239,133
177,283,110
737,319
146,586,954
1,613,141
10,149,974
622,054,576
1,053,585
69,900
557,504
39,737
19,924,025
2,298,822
51,569,720
0
1,218,498
888,093
1,972,812
30,902,485
1,254,220,230

0.40%
4.79%
0.00%
0.00%
0.02%
4.63%
0.90%
0.02%
4.01%
14.13%
0.06%
11.69%
0.13%
0.81%
49.60%
0.08%
0.01%
0.04%
0.00%
1.59%
0.18%
4.11%
0.00%
0.10%
0.07%
0.16%
2.46%
100.00%

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

data provided by DG AGRI on 31 March 2009

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.  

Module 1848 offers the possibility to report more in detail if sanctions are imposed 
and, if positive, which kind of sanctions are imposed. As already indicated, Module 
1848  was  introduced  in  2008  therefore  Member  States  still  need  to  get  used  to  the 
new  way  of  reporting.  The  figures  concerning  sanctions  therefore  need  to  be  read 
with the necessary caution.  

In 2008, Member States reported 1,133 cases. In 220 cases, Member States indicated 
that for: 
•  14 cases a decision still needed to be taken (pending); 
•  49 cases no sanctions would be imposed; 
•  33  cases  a  sanction  would  be  imposed  but  the  sanction  itself  still  needs  to  be 

determined; 

EN 

56 

   EN 

 
 
 
•  121 cases an administrative sanction had been imposed; 
•  3 cases a penal sanction had been imposed. 
In all other 913 cases (81%), no information was received from Member States. 

Member States indicated in 188 cases the type of sanctions imposed. Member States 
indicated that in 130 cases a "community administrative sanction" was imposed. In 
11 cases, penal sanctions were imposed. It concerns 2 cases in which imprisonment 
less than 1 year was imposed and 9 cases in which a financial sanction was imposed.  

The  total  amount  of  penalties  imposed  is  1.4%  of  the  total  amount  affected  by 
irregularities reported. The percentage is rather low despite the fact that Austria and 
Poland  reported  a  relatively  high  percentage  of  financial  penalties,  28.4% 
respectively 38.4%. All other Member States reported a zero or a rather low amount 
of penalties imposed.  

Member  States  report  only  in  a  very  limited  number  of  cases  the  sanctions  applied 
and  penalties  imposed,  therefore,  these  figures  should  be  read  with  the  necessary 
caution.  

EN 

57 

   EN 

 
3.5. 

Conclusions 

Introduction 

•  a new reporting system was introduced in 2008: Module 1848; 

•  successful IMS-pilot Germany thanks to the efforts of all involved parties; 

Reporting discipline: 

•  reporting discipline of Member States improved in 2008 (78% (cid:214) 92%); 
•  all Member States used the electronic 1848-format74 to submit irregularities; 

•  timely reporting should be improved by Austria, Sweden and Slovakia; 

•  reporting of personal data is an attention point for Germany and Finland; 

•  budget  lines  (DG  AGRI  nomenclature)  need  to  be  indicated  in  full  detail, 

especially by Lithuania and Slovakia; 

•  practices employed should be described in more detail by Slovakia; 

•  date  on  which  the  irregularity  was  committed  should  be  better  indicated, 

especially by Hungary; 

•  the compliance rate per key-element for performing risk analysis: 

– 

– 

– 

– 

– 

– 

timely reporting: 86% (2007: 87%) 

personal data: 85% (2007: 68%) 

measure affected: 93% (2007: 86%) 

date irregularity committed: 97% (2007: 86%) 

practices employed: 93% (2007: 47%) 

financial impact: 99% (2007: 96%) 

•  the EU-27 compliance rate is 92% (2007: 78%) 

General trends: 

•  total expenditure in 2008 was about € 48.6 billion; 

•  Member States reported 1,133 new irregularities in 2008; 

•  total amount affected by irregularities was about EUR 102 million; 

•  introduction of a threshold of € 10,000 has  led to a decrease of more than 65% of 

the total number of cases reported in 2008 compared to 2006; 

•  the  number  of  cases  and  the  amounts  affected  are  not  equally  spread  over  all 

Member States: 

74 

Pre-IMS Module 1848, IMS Module 1848, access database 1848 or excel format 1848 

EN 

58 

   EN 

 
                                                 
– 

– 

Belgium, Spain, Italy and Portugal reported a relatively high amount of 
irregularities  and/or  a  relatively  high  total  amount  affected  by 
irregularities; 

Germany,  France,  Ireland  and  United  Kingdom  reported  a  relatively 
low  amount  of  irregularities  and/or  a  relatively  low  total  amount 
affected by irregularities; 

•  18% of the irregularities concern the request for aid; 

•  Most frequently occurring type of irregularity (40%) concerned the action or non-

action of a beneficiary; 

•  10% of the irregularities were detected before payment; 

Specific analysis: 

•  the three main categories most affected by irregularities are: 

– 

– 

– 

fruit and vegetables: 92 cases involving EUR 40 million 

rural development: 437 cases involving EUR 20 million 

wine sector: 138 cases involving EUR 12 million; 

•  the budget lines most affected by irregularities are: 

– 

– 

fruit  and  vegetables:  compensation  to  encourage  processing  of  citrus 
fruits 

rural development:  

• 

• 

improving the processing and marketing of agricultural products 

investments in agricultural holdings 

– 

wine: restructuring and conversion of vine yards 

Irregularity vs suspected fraud: 

•  “suspected  fraud”  and  “established  fraud”  cases,  as  a  percentage  of  the  total 
number of irregularities reported, vary between 7% (classification by MS) and 9% 
(classification by OLAF). 

Recovery75: 

•  €  125  million  was  recovered  during  2008  by  the  Member  States  from 

beneficiaries; 

•  € 32 million was declared "i rrecoverable" during 2008; 

•  € 1,254 million is outstanding at  the end of 2008 at the level of the beneficiaries; 

75 

Information is based on the financial information transmitted by the Member States to DG AGRI in the 
context of Annex III of Reg. 885/2006 

EN 

59 

   EN 

 
                                                 
Penalties: 

•  188 cases (17%) in which sanctions were imposed; 

•  11 penal sanctions were imposed, including 2 cases of imprisonment; 

•  Austria and Poland reported more financial penalties than other Member States.  

EN 

60 

   EN 

 
4. 

EUROPEAN FISHERY FUND 

Commission Regulation (EC) No 498/2007 of 26 March 200776 lays down detailed 
rules  for  the  implementation  of  Council  Regulation  (EC)  No  1198/2006  which 
establishes  the  European  Fisheries  Fund  (EFF)  and  defines  the  framework  for 
Community support for the sustainable development of the fisheries sector, fisheries 
areas and inland fishing. 

Chapter  VIII  of  Regulation  (EC)  498/2007  contains  the  relevant  provisions  for  the 
reporting of irregularities to the Commission, establishing a set of rules that are very 
similar to those foreseen for the Structural Funds. 

During 2008, no irregularities have been reported by the Member States concerning 
this Fund. 

76 

OJ L120, 10.05.2007. 

EN 

61 

   EN 

 
                                                 
5. 

STRUCTURAL MEASURES (ANNEXES 13-17) 

In  2007,  Member  States  reported  3,858  irregularities  under  Regulation  (EC)  No 
1681/94 which covers the four Structural Funds77 and 140 under Regulation (EC) No 
1831/94 (on the Cohesion Fund). 9 irregularities were reported under Regulation No 
1828/2006, which covers the programming period 2007-201378.  

The  total  amount  affected  by  irregularities  in  2008  was  about  EUR  585.2  million, 
EUR  528.9  million  of  which  was  from  the  Structural  Funds  and  EUR  56.3  million 
from  the  Cohesion  Fund.  Irregularities  reported  in  this  sector  were  equivalent  to 
1.25% of the resource allocations for 2008. 

Since the information system of irregularities was established, Member States have 
reported  28,627  irregularities,  of  which  27,619  related  to  the  Structural  Funds  and 
1,008 to the Cohesion Fund. 

5.1. 

Reporting Discipline 

In 2008, the Commission received 8,401 communications79 under Regulations (EC) 
Nos 1681/9480, 1831/9481, and 1828/2006 of which 4,331 were updates of cases that 

77 

78 

79 

For the programming period 2000-2006, the four Structural Funds are: 
a)  The European Regional Development Fund (ERDF), supporting primarily productive investment, 

infrastructure and development of SMEs; 

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

systems, vocational training and recruitment aids); 

c)  The  Guidance  Section  of  the  European  Agricultural  Guidance  and  Guarantee  Fund  (EAGGF-
the  adjustment  of  agricultural  structures  and  rural 

Guidance),  supporting  measures  for 
development; 

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

the fisheries sector and the ‘accompanying measures’ of the common fishery policy. 

For the programming period 2007-2013, the Structural Funds are: 
a) the ERDF; 
b) the ESF; 
c) the European Fishery Fund (EFF - see chapter 4). 
Commission Regulations foresee four different types of communications:  
a)  initial  communication:  this  is  the  communication  with  which  a  new  irregularity  is  reported  to  the 
Commission services. The legal basis for these communications is contained in articles 3 of Regulations 
1681/94 and 1831/94; article 28 of Commission Regulation 1828/2006; 
b) update communication: with this type of communication, Member States update, integrate, modify 
the  irregularities  notified  with  the  communication  under  a).  The  legal  basis  for  this  type  of 
communications  is  contained  in  articles  5§1  of  Regulations  1681/94  and  1831/94  and  article  30§1  of 
Regulation 1828/2006; 
c) urgent cases: this type of communication is (very seldom) used by Member States when they want to 
inform,  without  any  delay,  the  Commission  and  other  Member  States  of  new  malpractices  that  they 
have  detected  or  about  irregularities  which  may  affect  other  Member  States.  The  legal  basis  for  this 
communications  are  articles  4  of  Regulations  1681/94  and  1831/94  and  article  29  of  Regulation 
1828/2006; 
d) special report: more than a different type of communication this is a special report that may integrate 
some  of  the  communications  described  under  b).  Where  a  Member  State  considers  that  an  amount 
cannot  be  recovered  or  is  not  expected  to  be  recovered,  it  shall  inform  the  Commission,  in  a  special 
report, of  the amount not recovered  and of  the  facts relevant  to  the  decision on  apportionment  of  the 

EN 

62 

   EN 

 
                                                 
 
 
 
 
 
 
 
had  been  previously  reported.  For  the  first  time,  irregularities  concerning  the  new 
programming  period  2007-2013  were  received  from  Bulgaria,  the  Czech  Republic 
and Slovenia. 

During 2008 the use  of  the  electronic  facility put at disposal of the Member States 
has seen a further increase; as a result, almost 78% of the communications has been 
reported through electronic means as showed in Chart 1. 

Chart SF 1: Reporting of irregularities – used formats 

22.2%

69.2%

8.6%

electronic

electronic file

paper

The increased use of the electronic reporting system led to an improvement in data 
quality  and  in  timeliness  of  reporting.  It  also  reduces  different  understanding  and 
interpretations of the reporting system and, therefore, improves the consistency of the 
information submitted to the Commission. 

Though  not  all  Member  States  have  been  using  the  electronic  facility  provided 
through the AFIS-ECR platform, all of them have been trained for the new reporting 
system  IMS  and  showed  their  willingness  to  use  it  as  soon  as  it  will  become 
operational in the course of 2009. 

In relation to 2007 the situation has been improving under almost all respects. Table 
SF1 shows a summary of the major elements that have been taken into account for 
evaluating the compliance of Member States with the reporting obligations. Member 
States are ranked in decreasing order of overall compliance. The elements that have 
been examined for producing this table are the following: 

(1) 

(2) 

timely reporting: it calculates the percentage of the communications that has 
been transmitted within the foreseen deadlines; 

time  gap: 
communicated within 24 months following detection; 

the  percentage  of 

indicates 

irregularities 

that  has  been 

loss. The legal basis is contained in articles 5§2 of Regulations 1681/94 and 1831/94 and article 30§2 of 
Regulation 1828/2006. 
As amended by Regulation (EC) No 2035/2005. 
As amended by Regulation (EC) No 2168/2005. 

80 
81 

EN 

63 

   EN 

 
 
                                                                                                                                                         
(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

programme  number:  indicates  the  percentage  of  irregularities  for  which  the 
indication  of  the  numbers  identifying  the  programme  interested  by  the 
irregularity is provided; 

practises  adopted:  shows  the  percentage  of  irregularities  for  which  the 
description of the practises adopted has been indicated; 

classification: indicates the percentage of the irregularities for which Member 
States  indicated  whether  they  constituted  an  "administrative  irregularity",  a 
"suspected fraud" or an "established fraud"; 

date established: shows the percentage of the irregularities for which the date 
in which the irregularity has been established has been provided; 

personal data: indicates the percentage of the reported irregularities for which 
the data identifying the legal entities or natural persons have been provided; 

compliance: is calculated as the average of all the values indicated in columns 
from a) to g). 

Table SF1: compliance per Member State year 2008 

MS

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

timely 
reporting

time gap

programme 
number

practises 
employed

classification

date 
established

personal data

compliance

30%
97%
100%
52%
100%
30%
100%
100%
35%
99%
77%
75%
100%
72%
94%
100%
98%
91%
99%
100%
100%
100%
100%
100%
100%

58%
73%
83%
86%
100%
86%
100%
93%
89%
49%
92%
92%
75%
99%
99%
94%
98%
100%
93%
100%
100%
100%
100%
100%
100%

100%
100%
100%
86%
100%
96%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%

99%
100%
100%
92%
100%
100%
100%
100%
100%
99%
100%
100%
96%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%

10%
0%
0%
73%
0%
91%
0%
100%
100%
99%
100%
100%
96%
100%
93%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%

99%
100%
98%
98%
100%
97%
100%
100%
95%
99%
90%
100%
100%
100%
100%
91%
93%
100%
100%
100%
100%
100%
100%
100%
100%

99%
99%
100%
100%
100%
100%
100%
23%
100%
100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%

71%
81%
83%
84%
86%
86%
86%
88%
88%
92%
94%
95%
95%
96%
98%
98%
98%
99%
99%
100%
100%
100%
100%
100%
86%

-
-

-
-

-
-

-
-

-
-

-
-

-
-

-
-

MS

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

total

86%

90%

95%

99%

78%

98%

97%

92% total

The  average  compliance  level  has  increased  from  84%  of  2007  to  92%  of  2008, 
underlying the commitment undertaken by the Commission and  the Member States 
for improving the situation. It also confirms that the increase of use of the electronic 
reporting facilities had a positive effect on the quality of the information submitted. 

Only  two  elements  of  the  communications  of  irregularity  still  present  a  level  of 
compliance which deserves some further attention:  

EN 

64 

   EN 

 
 
(9) 

(10) 

classification:  though  the  compliance  with  this  obligation  is  increasing  in 
relation to 2007 (from 67% to 73%), this remains the weakest element in the 
implementation of the regulation82; 

time  gap:  still  18%  of the irregularities are reported with a time gap greater 
than  2  years  from  the  moment  of  detection.  16%  of  the  irregularities  are 
reported between 12 and 24 months after detection. 

Apart  from  these  two  elements,  the  situation  can  be  considered  satisfactory,  with  a 
compliance rate of 92%. 

5.2. 

General Trends 

5.2.1.  Overall trends 

In 2008 the number of irregularities reported increased by around 6.7% as compared 
to the year before. However, the related irregular amounts decreased of about 27.2%, 
from EUR 804.1 million (including the Cohesion Fund) to EUR 585.2 million. 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  SF2,  since  then 
the number of reported irregularities has been increasing with the only exception of 
2006. 

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

s
e
i
t
i
r
a
l

u
g
e
r
r
I

5,000

4,000

3,000

2,000

1,000

0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Structural Funds

Cohesion Fund

Total

In  2008,  the  number  of  irregularities  kept  on  rising,  up  to  4,007  (including  the 
Cohesion Fund). The number of irregularities reported from the new Member States 
(EU10)  increased  by  52.4%,  while  those  reported  by  the  old  Member  States 
decreased by 1%; Bulgaria reported its first irregularities in 2008. 

82 

With the introduction of the new reporting system, the problem will be entirely solved, as the field will 
become compulsory. 

EN 

65 

   EN 

 
 
                                                 
Among the EU10, with the sole exceptions of Malta (-67%) and Estonia (-12%), the 
increases varied between +25% (Poland) and +386% (Lithuania). 

Among  the  EU15,  the  most  significant  decreases  were  those  of  Luxembourg  (no 
reported irregularities) and Ireland (-85%), while the most significant increases were 
those of Sweden (+97%) and the Netherlands (+75%). 

5.2.1.1.  Trends related to the Funds 

Irregularities  affecting  projects  financed  through  the  ERDF  remain  the  most 
frequently reported, as showed in Chart SF 3. 

Chart SF 3: Distribution of irregularities among the Funds - 2008 

FIFG
1%

CF
3%

EAGGF - Guid.
10%

ESF
30%

ERDF
56%

The  trend  per  Fund  showed  in  Chart  SF  4  confirms  the  overall  increase  of 
irregularities  related  to  the  ERDF  in  the  last  years  with  the  exception  of  the  years 
2003 and 2006. 

Chart SF 4: Overall trend by Fund – 1998-2008 

EN 

66 

   EN 

 
 
Control Obj (All) no irregularity (All)

Count of Affected €

5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0
1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Funds 

CF

EAGGF - Guid.

ESF

FIFG ERDF

Year 

Since  2003,  the  other  three  Structural  Funds  remain  quite  stable.  In  comparison  to 
2007, irregularities referred to the Cohesion Fund and the ERDF increased by 63% 
and  18%  respectively.  Those  related  to  the  ESF,  EAGGF  –  Guidance  and  FIFG 
decreased by 4%, 17%and 17% respectively. 

5.2.1.2.  Trends related to Member States 

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

Taking  into  consideration  how  the  irregularities  are  distributed  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 2008, the highest 
number of irregularities was reported by Italy (802, +24%), Spain (552, -14%), the 
United Kingdom (483, -3%), Portugal (425, -22%), and Poland (337, +25%).  

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, the Netherlands is the 
country  having  reported  the  highest  number  of  irregularities  (208),  followed  by 
Portugal (162), Germany (157), Sweden and Spain (121).  

In  the  European  Regional  Development  Fund  (ERDF)  the  countries  reporting  the 
most  irregularities  are  Italy  (589),  the  United  Kingdom  (348),  Spain  (307)  and 
Poland (197).  

In  the  European  Agriculture  Guarantee  and  Guidance  Fund  –  Guidance  section 
(EAGGF-Guidance),  Italy  reported  the  highest  number  of  irregularities  (102), 
followed by Poland (73), Portugal (61), and Spain (54).  

EN 

67 

   EN 

 
 
In the Financial Instrument for Fishery Guidance (FIFG), irregularities from Greece 
and Italy (12), and the United Kingdom (9) account for more than 67% of the total 
number of reported irregularities affecting this Fund. 

Finally,  concerning  the  Cohesion  Fund,  Spain reported  almost  47%  of  the  received 
irregularities (64) for this fund, followed by Portugal (22) and Hungary (13). Greece, 
which  in  the  previous  years  had  reported  the  greatest  share  of  the  irregularities 
affecting  this  Fund,  comes  in  fourth  place  (12)  Concerning  this  Fund  a  certain 
concern  remains  as  to  the  reliability  of  the  reported  information,  as  the  number  of 
reported irregularities appears too low in relation to the other funds and the allocated 
resources. 

5.2.2.  Amounts involved 

The irregular amounts decreased significantly (-27.2%). It is difficult to explain this 
variation  also  in  relation  to  the  increased  number  of  reported  irregularities.  It  can 
happen,  however,  that  in  certain  years  some  irregularities  involving  great  amounts 
are detected and that can greatly influence the overall situation.  

Chart SF5 shows the trend of the irregular financial amounts since 1998. 

Chart  SF  5:  1998-2008  trend  concerning  irregular  financial  amounts  for  the  Structural 
Funds, the Cohesion Fund and in total 

R
U
E

900,000,000

800,000,000

700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

0

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Structural Funds

Cohesion Fund

Total

The  irregular  financial  amounts  related  to  the  reported  irregularities  increased  by 
165.3% for the EU10 and decreased by 35.1% for the EU15.  

The  possible  explanation  for  the  difference  between  the  EU10  and  EU15  could  be 
that the implementation of the programmes financed under the Cohesion policy only 
started in 2004 for the new Member States and, consequently, they needed some time 
for  a  full  implementation  of  the  system  and  an  improved  compliance  with  the 
reporting obligations. 

EN 

68 

   EN 

 
 
It  seems  also  premature  to  indicate  whether  the  decrease  in  terms  of  irregular 
financial amounts represents an inversion of the general tendency that for the last ten 
years (1998-2007) has seen an upward trend.  

It should also be stressed that, as of 2007, the new programming period 2007-2013 
comes  into  relevance.  The  first  irregularities  related  to  the  new  programmes  have 
been reported in 2008. 

Only a part 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; 
others  are  corrected  at  the  closure  of  the  relevant  programming  period  (for  more 
details see infra paragraph 5.3.3). 

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. 

As far as amounts per country are concerned, Spain has reported the highest irregular 
amounts  (EUR  165.5  million;  -22%  in  relation  to  2007),  followed  by  the  United 
Kingdom  (EUR  123.3  million;  -24%),  Italy  (EUR  75  million;  -52%)  and  Poland 
(EUR 35.6 million; +91%). This "ranking" follows the same pattern as last year, with 
the exception of Poland.  

Table SF2 summarises the number of irregularities and related amounts reported by 
each Member State. 

The  huge  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, while 
the  reason  for  a  lower  number  in  another  could  be  also  related  to  a  restrictive 
interpretation of the reporting obligation. 

Table SF2: Number of cases and amounts affected by irregularities per Member State83  

83 

Number of irregularities and related irregular financial amounts may vary in relation to those published 
in the Statistical Annex to the 2007 Report. This is the result of updates received in 2008, which may 
have altered the implicated financial amounts or specified that, at the end of the relevant procedures, it 
was decided that a previously reported case did not constitute an irregularity. 

EN 

69 

   EN 

 
                                                 
MS 

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

N° of irregularities
2008
N

Variation
%

2007
N

2007
EUR

Irregular amounts (in EUR)

28
28
0
1
36
398
8
33
88
643
41
140
37
33
646
7
8
9
3
150
269
542
74
4
30
500
3,756

37
35
4
4
82
372
7
30
108
552
28
98
52
5
802
34
0
27
1
262
336
425
146
13
64
483
4,007

#DIV/0!

32%
25%

300%
128%

4,693,512
1,509,381
0
1,924
4,843,686
-7% 39,981,097
174,560
-13%
-9%
1,301,384
23% 94,431,569
-14% 211,547,204
2,482,502
-32%
6,179,164
-30%
3,319,853
41%
-85%
8,720,548
24% 156,459,194
439,974
386%
248,458
-100%
1,915,523
200%
-67%
138,032
75% 26,553,667
25% 18,631,502
-22% 52,386,787
3,399,715
97%
128,793
225%
2,251,790
113%
-3% 162,362,258
7% 804,102,077

2008
EUR
2,862,186
1,543,157
804,317
172,298
14,016,754
20,985,235
678,343
2,182,511
24,692,137
165,579,427
1,813,410
4,998,359
4,698,975
14,801,190
74,918,714
11,528,487
0
944,019
410,761
28,722,509
35,558,898
35,124,176
3,718,729
430,933
10,742,355
123,321,443
585,249,322

Variation
%

-39%
2%

#DIV/0!

8855%
189%
-48%
289%
68%
-74%
-22%
-27%
-19%
42%
70%
-52%
2520%
-100%
-51%
198%
8%
91%
-33%
9%
235%
377%
-24%
-27%

5.2.2.1.  The four Structural Funds 

As not all Member States benefit of the resources coming from the Cohesion Fund, 
Table SF3 presents the same information as in Table SF2, but limiting it to the four 
Structural Funds. 

EN 

70 

   EN 

 
 
Table SF3: Number of cases and amounts affected by irregularities per Member State limited 
to the four Structural Funds 

N° of irregularities

Irregular amounts (in EUR)

MS 

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

2007
N

2008
N

28
28
0
1
34
398
8
31
63
609
41
140
34
32
646
4
8
8
3
150
261
538
74
4
27
500
3,670

37
35

2007
EUR

Variation
%
32% 4,693,512
25% 1,509,381
0
4 #DIV/0!
1,924
300%
4
135% 4,843,686
80
-7% 39,981,097
372
-13%
7
174,560
-10% 1,234,469
28
52% 27,172,119
96
-20% 178,961,878
488
-32% 2,482,502
28
-30% 6,179,164
98
15% 2,688,597
39
-94% 2,082,358
2
24% 156,459,194
802
110,823
26
248,458
175% 1,869,769
-67%
138,032
75% 26,553,667
26% 18,040,864
-25% 51,521,352
97% 3,399,715
225%
128,793
130% 1,524,686
-3% 162,362,258
5% 694,362,858

550%
0 -100%

22
1
262
329
403
146
13
62
483
3,867

2008
EUR
2,862,186
1,543,157
804,317
172,298
13,928,544
20,985,235
678,343
2,052,897
19,754,366
140,751,472
1,813,410
4,998,359
3,298,037
5,303,050
74,918,714
3,247,919
0
857,740
410,761
28,722,509
35,344,144
29,468,297
3,718,729
430,933
9,533,552
123,321,443
528,920,411

Variation
%

-39%
2%

#DIV/0!

8855%
188%
-48%
289%
66%
-27%
-21%
-27%
-19%
23%
155%
-52%
2831%
-100%
-54%
198%
8%
96%
-43%
9%
235%
525%
-24%
-24%

The  overall  picture  varies  only  partly  in  relation  to  Table  SF2,  with  Spain  still 
reporting the highest irregular financial amounts (140 MEUR, -21% in relation to the 
year  2007),  followed  by  the  United  Kingdom  (123  MEUR,  -24%%),  Italy  (75 
MEUR, -52%) and Poland (35 MEUR, +96%). 

Concerning the ERDF, Spain, the United Kingdom and Italy are the countries which 
reported the highest irregular financial amounts, followed by Portugal. 

In  the  ESF,  the  United  Kingdom  and  the  Netherlands  are  followed  by  Italy  and 
Portugal like in 2007. The first of the EU10 is Poland. 

In the EAGGF section Guidance, the highest irregular financial amounts have been 
reported by Italy, Portugal and Spain. Poland is the Member State of the EU10 group 
with the highest reported irregular amounts. 

In  the  FIFG,  Italy  is  the  country  having  reported  the  highest  amounts,  followed  by 
Greece. 

The  details  of  the  irregular  financial  amounts  reported  by  each  Member  State  by 
Fund are showed in Annex 15, Part 2. 

EN 

71 

   EN 

 
 
5.2.2.2.  The Cohesion Fund 

For  the  Cohesion  Fund,  Spain  is  the  Member  State  having  reported  the  highest 
irregular amounts (almost 25 MEUR), though with a significant decrease in relation 
to  2007  (-24%);  it  is  followed  by  Ireland  (9.5  MEUR;  +43%)  and  Lithuania  (8.2 
MEUR; +2,416%). Table SF4 shows the details for this Fund by Member State. 

Table  SF4:  Number  of  cases  and  amounts  affected  by  irregularities  per  Member  State  – 
Cohesion Fund  

MS 

CZ
EE
EL
ES
HU
IE
LT
LV
PL
PT
SK
TOTAL

N° of irregularities

Irregular amounts (in EUR)

2007
N

2008
N

Variation
%

2007
EUR

2
2
25
34
3
1
3
1
8
4
3
86

2
2
12
64
13
3
8
5
7
22
2
140

0%
0%

0
66,915
-52% 67,259,450
88% 32,585,326
631,256
333%
6,638,190
200%
329,151
167%
45,754
400%
590,638
-13%
865,435
450%
-33%
727,104
63% 109,739,219

2008
EUR

88,210
129,614
4,937,771
24,827,955
1,400,938
9,498,140
8,280,568
86,279
214,754
5,655,879
1,208,803
56,328,911

Variation
%
#DIV/0!

94%
-93%
-24%
122%
43%
2416%
89%
-64%
554%
66%
-49%

Values  related  to  the  Cohesion  Fund  still  appear  to  be  unreliable  to  allow  a 
convincing analysis of the related trends. 

Further  information  concerning  the  irregularities  related  to  the  Cohesion  Fund  by 
Member State is showed in Annexes 14 and 17. 

5.2.3. 

Impact on budget 

Since  2002,  the  impact  of  reported  irregularities  on  the  Structural  measures  budget 
has been oscillating between 1.9% (in 2002) and 1.25% (in 2008), as showed in chart 
SF6. 

Chart SF 6: Impact of irregularities on SF budget84 

84 

Figures may vary in relation to those published in the Statistical Annex to the 2007 Report. This is the 
result  of  updates  received  in  2008,  which  may  have  altered  the  implicated  financial  amounts  or 
specified that, at the end of the relevant procedures, it was decided that a previously reported case did 
not constitute an irregularity. 

EN 

72 

   EN 

 
 
                                                 
2.00%

1.80%

1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

IMPACT ON BUDGET

0.28

0.38

0.38

0.71

1.89

1.44

1.73

1.56

1.69

1.77

1.25

In particular, in the period between 2003 and 2007, the impact on the budget of the 
reported irregularities has remained rather stable.  

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. 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  5.3  below). 
Furthermore,  the  budget  for  the  year  2008,  on  which  the  impact  of  irregularities 
reported  by  the  Member  States  has  been  calculated,  is  indicating  the  resources 
allocated to the second year of the programming period 2007-2013, while only a very 
limited number of the reported irregularities are 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 irregularities by programming period. Paragraph 5.3 will 
deal with these specific issues. 

5.2.4.  Detection methods 

Table  SF5  shows  the  most  frequent  detection  methods  and  the  related  detected 
amounts. 

Table SF5: detection methods 

EN 

73 

   EN 

 
 
Code

Description

206 Control of documents
101 National administrative or financial control
999 Other facts

161

Additional control on request by the 
Commission
On the spot control of achievement of project 
or action

230
209 Control on the premises of the company
208 Documentary check
199 Other controls
307 Routine
320 Ex post control

Frequency

Detected 
amounts

N

EUR

992 101,897,516
596
98,899,271
480 154,813,939

Average 
detected 
amounts
EUR
102,719
165,938
322,529

352

16,060,958

45,628

265
238
159
154
144
133

21,824,978
21,772,159
13,228,962
24,751,604
26,045,849
9,556,766

82,358
91,480
83,201
160,725
180,874
71,855

The  amounts  indicated  are  indicative  insofar  as  several  detection  methods  may  be 
reported in connection with a single irregularity and therefore be double counted in 
the table. 

The main two types of controls emerging from the table are documentary checks and 
on-the-spot controls. 

Particularly  significant  is  the  high  number  of  detections  that  followed  “Additional 
control  on  request  of  the  Commission”.  This  “source”  of  detection  is  observed 
exclusively in Italy (341 cases) and the Czech Republic. 

It should also be emphasised the excessive use of generic codes such as "Other facts" 
and  “Other  controls”.  The  lack  of  further  information  on  these  methods  is 
particularly  regrettable,  as  these  "categories"  presents  high  average  detected 
amounts. 

Contrary  to  previous  years,  documentary  checks  present  a  higher  average  detected 
amount than on-the-spot controls. 

The highest average detected amounts, however, are not displayed in Table SF5, as 
they refer to “methods of detection” that have been reported less frequently, namely: 
“control by police” (EUR 524,565 as average detection on 15 occurrences); “initial 
enquiry”  (EUR  468,628  in  average  on  37  occurrences);  and  “Community  control” 
(with an average of EUR 335,239 on 20 occurrences). 

5.2.5.  Types of irregularity 

Differences  remain  among  Member  States  as  to  the  types  of  irregularities  reported 
and, for a great part, 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”.  

EN 

74 

   EN 

 
 
Falsifications  of  documents  were  detected  in  Italy,  Poland,  Germany,  the  United 
Kingdom, Portugal, Latvia, Lithuania, Greece, Estonia, France and Cyprus. 

Table SF6 shows the most frequent types of irregularities together with the amounts 
involved and the indicative average amount85:  

Table SF6: Most frequent types of irregularities reported by Member States 

Code

Description

325 Not eligible expenditure
614 Infringement of rules concerned with public procurement
999 Other irregularities
210 Missing or incomplete supporting documents
201 Missing or incomplete documents
612 Failure to respect other regulations / contract provisions
812 Action not carried out in accordance with rules
601 Failure to respect deadlines
811 Action not completed
741 Failure to fulfill commitments entered into

Frequency

N

1186
534
510
356
341
215
175
123
107
107

Irregular 
amounts

EUR

208,040,494
169,461,168
54,499,725
51,077,689
32,564,153
34,221,421
34,673,676
12,834,889
8,094,489
8,919,288

Average 
irregular 
amounts
EUR

175,414
317,343
106,862
143,477
95,496
159,169
198,135
104,349
75,649
83,358

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 “not eligible expenditure” is the 
most reported typology. In the second place, “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. 

5.2.6. 

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. 

85 

Both the irregular amounts and the average irregular amounts are to be considered only as indicative, in 
consideration  of  the  fact  that  more  than  one  typology  of  irregularity  may  be  reported  in  the  same 
communication of irregularity. This may lead to double or triple counting of the same communication 
in the column frequency and irregular amounts. 

EN 

75 

   EN 

 
 
                                                 
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  “qualify”  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  fraudulent  only  after  a 
sentence is issued by a competent court.  

As  already  indicated  in  Table  SF1,  Member  States  classified  78%  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  67%  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;  another  could  provide  the  classification  only  for  10%  of  the 
reported irregularities. For more details, see supra par. 5.1). 

About  8.3%  of  the  2,916  irregularities  for  which  qualification  has  been  provided, 
were qualified as “suspected frauds”. This result is lower than last years’ estimations.  

Furthermore,  by  applying  the  same  analytical  techniques  of  the  previous  years86  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  SF7.  In  fact,  the  results  differ  in  only  1.47%  of  the  cases. 
However, all these differences are related to cases that according to the analysis by 
the Commission should have been classified as cases of suspected frauds. 

Table  SF7:  Comparison  between  Commission  and  Member  State  classification  of 
irregularities 

Classification

Different

Same

Total

suspected fraud
irregularity
Total

43

43

243
2,630
2,873

Diffrence as % 
of total

286
2,630
2,916

15.03%
0.00%
1.47%  

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 Commission87. 

86 

87 

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. 
The descriptions provided by the Member States of the modus operandi linked to these communications 
of  irregularity  show  that  falsified  documents,  declarations  of  certificates  were  used.  Under  these 
circumstances, the Commission believes that those communications of irregularities should have been 
classified as “suspicion of fraud”. 

EN 

76 

   EN 

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

two  approaches  (the  Member  States’  and 

the 

Chart  SF788  presents  the  trend  of  the  percentage  of  suspected  frauds  on  the  total 
reported  irregularities  in  the  last  eight  years  calculated  according  to  Commission’s 
estimations and Member States' classifications. 

Table SF 8 shows the values represented on the chart. 

Chart SF 7: Level of “suspected frauds” on total reported irregularities from 2000 to 2008 

25.00%

20.00%

l
a
t
o
t

n
o
%

15.00%

10.00%

5.00%

0.00%

2001

2002

2003

2004

2005

2006

2007

2008

Year

Cases classified by COMM.

Amounts linked to cases class. COMM

Cases classified by MS

Amounts linked to cases class. MS

Table SF 8: Level of "suspected frauds" on total reported irregularities from 2000 to 2008 

                                     Year
Classification
Cases classified by EC
Cases classified by MS
Amounts linked to cases class. EC
Amounts linked to cases class. MS

2001

2002

2003

2004

2005

2006

2007

2008

4.9% 2.2%
4.9% 2.2%
5.3% 3.5%
5.3% 3.5%

6.9% 10.3% 10.0%
6.9% 10.3% 10.0%
9.3% 17.2% 20.1%
9.3% 17.2% 20.1%

14.1%
13.7%
22.2%
21.1%

7.4%
12.1%
8.3%
15.0%
16.7%
9.8%
23.7% 15.0%  

Chart  SF7  also  witnesses  the  caution  undertaken  by  the  Commission  to  provide  a 
classification  of  the  irregularities  compatible  with  that  provided  by  the  Member 
States. 

The percentage of suspicions of fraud on the total reported irregularities, according to 
Commission's estimations was about 7.4%. As percentage of the irregular amounts, 
this  share  raises  to  9.8%.  According  to  Member  States'  classifications,  these 
percentages are, respectively 8.3% and 15%. 

88 

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

EN 

77 

   EN 

 
 
 
 
                                                 
The different results between the two analyses depend almost exclusively on the fact 
that the analysis by the Commission makes use of the entire data set of irregularities, 
while that based on the classification by the  Member States  uses  a smaller  data set 
(due  to  not  complete  compliance  with  the  reporting  obligations  as  explained  under 
paragraph 5.1). 

The  analysis  of  the  Commission  highlights  a  decreasing  tendency  of  the  reported 
suspicion  of  frauds  and  related  amounts  (expressed  as  percentage  of  the  total 
reported irregularities and irregular amounts) from 2006 to 2008. It is premature to 
conclude  about  a  diminution  of  fraud  in  the  sector,  as  results  may  be  easily 
influenced  by  the  detection  of  cases  of  suspicion  of  fraud  with  bigger  or  smaller 
amounts involved, but it is worth monitoring it in the coming years. 

On  the  basis  of  this  estimation,  in  2008,  reported  “suspected  frauds’  affect  about 
0.11% of the annual budget for the Cohesion Policy. 

However, this does not mean that this amount 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 ongoing. 
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 impacts on the EU budget for 0.07%. 

5.3. 

Specific analysis – Irregularities related to the programming period 2000-2006 

The specific analysis focuses on the programming period 2000-2006; the data set is 
composed of all the irregularities related to it reported until the fourth quarter 2008. 
In  order  to  improve  the  comparability  among  the  different  Member  States,  the 
irregularities referred to the Cohesion Fund are not included. 

Chart  SF8 shows  the trend of reported irregularities (both in terms of numbers and 
financial amounts involved) referred to the programming period 2000-2006 as from 
the year 2000. 

Chart  SF8:  1998-2008  trend  concerning  number  of  reported  irregularities  and  irregular 
amounts – Programming Period 2000-2006 

EN 

78 

   EN 

 
4000

3500

3000

2500

2000

1500

1000

500

0

700,000,000

600,000,000

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

N° of irregularities

Irregular financial amounts

Irregularities related to this 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. 

Table SF 9 shows the data displayed on Chart SF 8 and also includes the amounts of 
annual payments from the Commission to the Member States indicating the related 
irregularity rate. 

The irregularity rate is calculated by dividing the irregular financial amounts by the 
payments. 

Table SF 9: number of reported irregularities, irregular amounts, payments and irregularity 
rate – Programming Period 2000-2006 

N° of 
irregularities

Year

N

Irregular 
financial 
amounts
in €

Payments

Irregularity 
rate

in €

%

2000
2001
2002
2003
2004
2005
2006
2007
2008

5,896,617,764
14,637,640,421
19,012,125,217
22,614,405,912
27,843,965,869
29,492,375,271
29,006,976,704
31,253,098,906
23,777,411,214
2,304,326,399 203,534,617,279

2,555,203
17,380,656
97,224,524
269,104,738
352,331,283
394,036,559
655,384,790
516,308,646

28
215
872
1,784
2,736
2,601
3,547
3,791
15,574

0.00%
0.02%
0.09%
0.43%
0.97%
1.19%
1.36%
2.10%
2.17%
1.13%  

TOTAL

The  irregularity  rate  is  continuously  increasing  and  it  is  expected  to  increase  even 
more in the coming years when the payments for the programming period 2000-2006 
will be over but irregularities will keep on been reported. 

EN 

79 

   EN 

 
 
Chart  SF9  puts  in  comparison  the  trend  related  to  the  programming  period  2000-
2006 with that of the previous round in terms of numbers of reported irregularities, in 
order to show that even after the year of closure of the period 1994-1999 (Year 9), 
irregularities keep on being communicated. 

Chart  SF  9:  1998-2006  trend  concerning  number  of  reported  irregularities  and  irregular 
amounts – Programming Period 2000-2006 

4500

4000

3500

3000

2500

2000

1500

1000

500

0

Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10 Y11 Y12 Y13 Y14 Y15

PP1994-1999

PP2000-2006

The  chart  clearly  shows  that  the  number  of  irregularities  related  to  the  current 
programming period reported in the first 8 years from 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. 

5.3.1. 

Irregularities affecting the different funds 

Table  SF10  summarises,  in  relation  to  each  of  the  Structural  Funds,  the  number  of 
irregularities,  the  related  irregular  financial  amounts,  the  payments  and  the 
irregularity  rate  calculated  as  the  ratio  between  irregular  financial  amounts  and 
payments.  Please  note  that  the  irregularity  rate  results  slightly  lower  in  Table  SF9 
than in Table SF8 as also payments from 2009 are included. 

Table SF10: Irregularities, payments and irregular rate by Fund  

N° of 
irregularities

N

Irregular 
financial 
amounts
in €

Payments

% of total 
payments

Irregularity 
rate

in €

%

%

7,821
5,723
1,783
247
15,574

1,650,637,971
489,173,068
142,012,561
22,502,800

118,209,399,770
62,361,452,725
20,933,544,318
3,534,788,108
2,304,326,399 205,039,184,921

57.65%
30.41%
10.21%
1.72%
100.00%

FUNDS
ERDF
ESF
EAGGF - Guid.
FIFG
TOTAL

1.40%
0.78%
0.68%
0.64%
1.12%  

   EN 

EN 

80 

 
 
Charts  SF10  and  SF11  show  the  distribution  of  the  15,495  irregularities  and  the 
related irregular financial amounts among the different Funds. 

Chart SF10 (left): Distribution of irregularities by Fund  

Chart SF 11 (right): Distribution of irregular financial amounts by Fund 

EAGGF - Guid.
11%

FIFG
2%

EAGGF - Guid.
6%

FIFG
1%

ESF
21%

ESF
37%

ERDF
50%

ERDF
72%

While in terms of number of reported irregularities the ERDF seems slightly under-
represented  in  comparison  with  its  share  of  the  payments  (58%),  the  irregularities 
financial  amounts  related  to  Regional  Development  Fund  have  a  higher  relative 
weight that is greatly exceeding its share of the payments (72% of the total irregular 
amounts against 58% of the total payments). This difference may be justified by the 
fact  that  the  ERDF  finances  projects  of  a  higher  value  and  therefore  irregularities 
tend also to have a greater amount. 

It is interesting to note that in Table SF 9, the other three funds have an ‘Irregularity 
rate’  that  is  very  similar  (between  0.64%  and  0.  78%),  while  that  of  the  ERDF  is 
almost double than that of the ESF. 

5.3.2. 

Irregularities by Objective  

The Cohesion policy 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 objective89.  

Table  SF11  summarises,  in  relation  to  each  of  the  Objective,  the  number  of 
irregularities,  the  related  irregular  financial  amounts,  the  payments  and  the 

89 

Three general objectives are foreseen for the programming period 2000-2006: 
a)  Objective 1: promote the development and structural adjustment of regions whose development is 

lagging behind; 

b)  Objective  2:  supporting  the  economic  and  social  conversion  of  areas  experiencing  structural 

difficulties; 

c)  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 

81 

   EN 

 
 
 
                                                 
irregularity  rate  calculated  as  the  ratio  between  irregular  financial  amounts  and 
payments. Please note that the irregularity rate results slightly lower in Table SF10 
than in Table SF8 as also payments from 2009 are included. 

Table SF11: Irregularities, payments and irregular rate by Objective 

OBJECTIVES
Objective 1
Objective 2
Objective 3
Interreg
Equal
Urban
Fisheries out Obj.1
Leader+
Innovative actions
Not indicated
TOTAL

N° of 
irregularities

N

Irregular 
financial 
amounts
in €

Payments

% of total 
payments

Irregularity 
rate

in €

%

%

9,637
2,486
2,556
362
168
84
91
151
26
13
15,574

1,635,632,923
386,877,753
207,304,061
48,027,039
10,583,590
6,143,461
4,341,821
4,007,210
735,174
673,367

148,048,550,689
22,175,231,947
23,564,856,681
4,924,646,802
2,802,619,938
663,482,240
925,275,673
1,934,533,899
N/A
N/A
2,304,326,399 205,039,197,869

72.21%
10.82%
11.49%
2.40%
1.37%
0.32%
0.45%
0.94%
N/A
N/A
100.00%

1.10%
1.74%
0.88%
0.98%
0.38%
0.93%
0.47%
0.21%
N/A
N/A
1.12%  

Charts SF12 and SF13 show how the irregularities related to the programming period 
2000-2006 were distributed among the different objectives. 

EN 

82 

   EN 

 
Chart SF 12 (left): distribution of irregularities (number) by objective 

Chart SF 13 (right): distribution of financial irregular amounts by objective 

1
%

0
%

%
1

%
1

1
%
%
2

16%

16%

62%

17%

9%

0%

2%

72%

Objective 1

Interreg

Fisheries out Obj.1

Objective 2

Equal

Leader+

Objective 3

Urban

Innovative actions

Objective 1

Interreg

Fisheries out Obj.1

Objective 2

Equal

Leader+

Objective 3

Urban

Innovative actions

The distribution of the irregularities is to a certain extent in line with the allocation of 
the financial resources among the different objectives, with an over representation of 
irregularities  related  to  objective  2  programmes  and  an  under  representation  of 
irregularities affecting objective 3 programmes. 

Furthermore,  the  irregularity  rate  for  the  Objective  2  programmes  is  the  highest 
(1.74%  of  the  payments).  The  irregularity  rate  for  the  Objective  1  programmes  is 
almost  equal  to  the  overall  irregularity  rate  (1.10%  against  1.12%),  while  that  for 
Objective 3 programmes, Fisheries out of Objective 1 regions, the Equal community 
initiative, and Leader+ are lower or significantly lower (respectively 0.88%, 0.47%, 
0.38% and 0.20%). 

These  elements  may  imply  some  under-reporting  in  relation  to  programmes  / 
initiatives  presenting  a  very  low  irregularity  rate.  The  interpretation  of  the 
irregularity  rate  of  Objective  2  programmes  is  more  difficult  as  it  may  indicate  a 
greater  effectiveness  of  the  control  systems  of  these  programmes  in  detecting  the 
irregularities  or  denote  some  problematic  aspects  in  the  implementation  of  these 
programmes. Information currently available does not allow solving this dilemma. 

5.3.3. 

Suspected frauds 

On  the  basis  of  the  method  used  for  classifying  the  reported  irregularities  as 
illustrated  in  paragraph  4.2.6,  it  is  possible  to  give  an  attempt  of  identifying  the 
impact on the programming period 200-2006 of the suspicion of fraud calculated on 
the basis of the irregularities reported until the 4th quarter 2008. 

Table  SF12  shows  an  overview  of  the  amounts  related  to  suspicion  of  frauds 
indicated by Objective or Community Initiative (on the rows) and Fund (Columns). 
These  financial  irregular  amounts  have  been  then  divided  by  the  corresponding 
overall payments to obtain a “fraud rate” per objective and fund. The overall result is 
a fraud rate of 0.19% on the total payments. 

EN 

83 

   EN 

 
 
Table SF12: Fraud rate by Objective and Fund 

EUR

EUR

EUR

EUR

EUR

FUND

1,721,666

ESF
EUR

Payments
EUR

FIFG
EUR
2,379,813

58,966,377
668,295
33,347,889

EAGGF - Guid.
EUR
30,320,842

ERDF
EUR
237,693,651
13,700,075

OBJECTIVE
Objective 1
Objective 2
Objective 3
Interreg
Equal
Urban
Fisheries out Obj.1
Leader+
95,404,992
TOTAL
Payments (EUR)
62,361,452,725
Fraud rate (%)
0.15%
Among  the  Objectives,  programmes  referred  to  the  Objective  1  regions  present  a 
higher rate (0.22%) than the others. Objective 2 programmes present a very low rate 
(0.06%). Only the Leader+ initiative shows a lower rate (0.02%). 

148,048,550,689
22,175,231,947
23,564,856,681
4,924,646,802
2,802,619,938
663,482,240
925,275,673
1,934,533,899
205,039,197,869

3,441,019
20,933,544,318 3,534,788,108
0.10%

TOTAL
EUR
329,360,683
14,368,370
33,347,889
1,721,666
2,422,431
222,840
1,061,206
355,985
382,861,070
205,039,184,921
0.19%

253,338,232
118,209,399,770
0.21%

355,985
30,676,827

2,422,431

1,061,206

EUR
%

222,840

0.15%

EUR

EUR

EUR

EUR

Fraud rate
%

0.22%
0.06%
0.14%
0.03%
0.09%
0.03%
0.11%
0.02%
0.19%

Among  the  Funds,  the  ERDF  presents  a  rate  of  0.21%,  with  ESF  and  EAGGF  – 
Guidance on the same level (0.15%) and the FIFG just lower (0.10%). 

5.3.4. 

Irregularities detected before payment 

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’ 
capabilities to prevent irregularities. 

Table SF12 shows the total number of irregularities reported by each Member State 
on  the  whole  programming  period  2000-2006  (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). 

EN 

84 

   EN 

 
Table SF 13: irregularities detected before payments per Member States - 2006 

A

B

C=B/A

D

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

Reported 
irregularities
N

Irregularities 
detected before 
payment
N

detected before 
payment on total
%

220
123
5
138
3,184
72
81
530
2,081
211
531
180
55
2,389
49
17
43
6
700
771
1,698
680
20
97
1,693
15,574

7
13
1
25
119
14
15
3
8
61
32
108
1
294
26

10

559
424
6
445
1
10
119
2,301

3.18%
10.57%
20.00%
18.12%
3.74%
19.44%
18.52%
0.57%
0.38%
28.91%
6.03%
60.00%
1.82%
12.31%
53.06%
0.00%
23.26%
0.00%
79.86%
54.99%
0.35%
65.44%
5.00%
10.31%
7.03%
14.77%

E
related to 
irregularities 
detected 
before 
EUR

Reported 
irregular amounts
EUR
25,120,138
7,095,377
174,222
25,412,375
306,393,525
3,611,554
4,822,674
221,118,650
474,336,026
9,688,513
21,915,505
12,998,773
9,052,241

721,630
229,697
273
10,306,978
23,854,795
557,370
428,598
244,540
2,224,042
1,710,772
571,970
8,371,901
5,515
419,599,478 148,055,552
1,104,986

1,466,302

3,934,905
572,506
4,358,129
933,543
84,880,049
110,507,373
141,020,124
16,778,012
3,069,791
11,616,842
385,316,075

64,288,422
30,270,361
187,618
9,714,484
7,033
1,188,085
20,927,186
2,304,326,399 326,438,110

F=E/D
before 
payment 
on total 
reported
%
2.87%
3.24%
0.16%
40.56%
7.79%
15.43%
8.89%
0.11%
0.47%
17.66%
2.61%
64.41%
0.06%
35.28%
28.08%
0.00%
33.65%
0.00%
75.74%
27.39%
0.13%
57.90%
0.23%
10.23%
5.43%
14.17%

Looking at column F, very high rates of detection before payment emerge especially 
in some of the EU10 (namely Hungary, the Czech Republic, Latvia, Lithuania, and 
Poland) and, among the EU15, in Sweden, the Netherlands and Italy. 

Some  caution  is  needed  on  these  data,  because  some  Member  States  may  have  not 
reported the irregularities they detected before payment. 

5.4. 

Recovery 

In 2008, Member States communicated, pursuant to Regulation No. 1681/94, 3,858 
irregularities were reported for a total financial amount of EUR 528,019,117.  

The situation as regards recovery in 2008 (see Annex 16) is as follows:  

–  Member States recovered EUR 109,902,839; 

– 

– 

the sum to be recovered was EUR 329,174,994;  

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 16,805,607. 

These  figures  indicate  that  62%  of  the  reported  irregular  amounts  are  to  be 
recovered.  In  2007  these  amounts  represented  67%  of  the  total  reported  irregular 

EN 

85 

   EN 

 
 
 
amounts.  Member  States  are  showing  an  increased  capability  of  reacting  to 
irregularities by recovering or securing the Community’s financial interests in a more 
effective  manner.  It should  be,  however, be kept in mind that recovery procedures, 
especially  in  cases  of  suspicions  of  fraud,  may  take  a  few  years  before  they  are 
completed. 

Pursuant  to  Regulation  No.  1828/2006,  9  irregularities  were  reported  for  a  total 
financial amount of EUR 901,294; of which EUR 12,864 remain to be recovered. 

Pursuant to Regulation No.1831/94, Member States reported 140 irregularities for a 
total amount of EUR 56,328,911 (see annex 17), of which EUR 19,768,042 remain 
to  be  recovered.  The  amounts  to  be  recovered  are  declining  in  relation  to  previous 
years. 

5.5. 

Conclusions 

Introduction 

•  Member States reported 4,007 irregularities in 2008; 

•  The total financial amount affected in 2008 was EUR 585.2 million. 

Reporting discipline 

•  The number of irregularities reported through the Electronic modules AFIS/ECR 
has  been  increasing  and  represent  now  almost  80%  of  the  total;  the  overall 
compliance of Member States has increased accordingly; 

•  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  90%  of  the 

irregularities; 

•  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  73%  of  the  irregularities,  increasing  in 
comparison with 2007; 

•  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  6.7%  in 

relation to 2007; 

•  The irregular financial amounts related to those irregularities decreased by 27.2%; 

EN 

86 

   EN 

 
•  The  impact  of  irregularities  on  the  total  Structural  actions  budget  decreased  in 

relation to the previous year (down to 1.25%); 

•  Italy,  Spain,  the  United  Kingdom,  Portugal  and  Poland  are  the  countries  that 

reported the highest number of irregularities in 2008; 

•  Spain,  the  United  Kingdom,  Italy  and  Poland  are  the  countries  that  reported  the 

highest amounts; 

•  High irregular financial amounts reported do not necessary imply that in country 
occur  more  frauds  and  irregularities  than  in  the  other.  The  reason  could  be  a 
higher number of controls; 

•  The  most  frequent  method  for  detecting  irregularities  is  the  ‘control  of 
documents’, while ‘control by police’ proved the method with the highest average 
irregular amounts detected;  

•  ‘Not eligible expenditure’ is the most frequently reported type of irregularity. The 

other typologies reported are in line with previous years; 

•  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.  

•  In  2008  “suspected  frauds”,  as  a  percentage  of  the  total  number  of  reported 
irregularities,  represent  around  7.4%.  This  share  increases  to  9.8%  on  the  total 
irregular amounts. 

Specific analysis 

•  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 balance among the budget 
allocated and the irregularities reported; 

•  Objective  2  programmes  present  the  highest  irregularity  rate,  while  Objective  1 

programmes have the highest fraud rate; 

•  High  rates  of  detection  before  payment  emerge  especially  in  some  of  the  EU10 
(namely Hungary, the Czech Republic, Latvia, Lithuania, and Poland) and, among 
EU15, in Sweden, the Netherlands and Italy. 

Recovery 

•  In  2008, the irregular financial amounts decreased and  so did  the  amounts to be 

recovered; 

•  62%  of  the  irregular  amounts  reported  under  regulation  1681/94  are  to  be 
recovered, while they represented 67% of the total reported irregular amounts in 
2007. Member States are showing a better capability of reacting to the detection 

EN 

87 

   EN 

 
of  irregularities  by  recovering  or  securing  the  European  financial  resources  in  a 
more effective manner; 

•  The amounts to be recovered are declining for the Cohesion Fund. 

EN 

88 

   EN 

 
6. 

PRE-ACCESSION FUNDS (ANNEXES 18-21) 

Descriptive  statistical  analysis  presented  hereinafter  relates  to  the  enlargement 
context and deals with different groups of beneficiary countries benefitting from pre-
accession assistance and varied periods of allocations.  

Agenda  200090  strengthened  the  pre-accession  strategy  by  setting  up  two  financial 
mechanisms:  a  pre-accession  structural  instrument  (ISPA)  to  support  improved 
transport  and  environmental  protection 
infrastructures  and  a  pre-accession 
agricultural  instrument  (SAPARD)  to  facilitate  the  long-term  adjustment  of 
agriculture  and  the  rural  areas  of  the  applicant  countries.  ISPA91  and  SAPARD92 
complement  the  actions  of  the  PHARE93  programme,  which  has  been  the  EU  aid 
programme for the current EU-12 since 1990. 

The 10 Member States that joined the EU in 2004 received a Transition Facility in 
2004-2006. Bulgaria and Romania received a Transition Facility in 2007.  

Croatia received PHARE and ISPA (2005-2006), SAPARD (2006), CARDS (2001-
2004) and is the only country reporting CARDS94 irregularities since 200695. Turkey 
received  pre-accession  assistance  via  similar  but  separate  instruments,  budget  lines 
and procedures. 

Since  1  January  2007  EU  pre-accession  assistance  has  been  channeled  through  a 
single  Instrument  for  Pre-accession  Assistance  (IPA)96  designed  to  deliver  support 
for candidate and potential candidate countries. The preliminary allocation for IPA in 
the period 2007-2013 is EUR 11.5 billion (in 2008 – EUR 1.4 billion). 

General overview 

In  2008  the  Commission/OLAF  received  2,133  reports  on  pre-accession  funds 
(PHARE, SAPARD, ISPA, Transition Facility (TF), CARDS, Turkish pre-accession 
instrument  (PA))  from  the  Member  states  and  Candidate  countries.  The  received 
information  consists  of  523  new  cases  detected  by  the  national  authorities  in  2008 
and  1,610  follow-up  reports  on  the  previously  reported  cases.  The  number  of  new 
cases  received  on  pre-accession  assistance  is  the  highest  since  the  reporting 
obligation started to be fulfilled by the reporting countries. 

90 

91 

92 
93 

94 

95 

96 

On 26  March 1999,  at  the  Berlin  European  Council,  the Heads  of  Government  or States  concluded a 
political agreement on Agenda 2000. 
ISPA  programme  dealt  with  large-scale  environment  and  transport  investment  support  in  candidate 
countries. 
SAPARD programme has supported agricultural and rural development in candidate countries. 
PHARE programme applied to candidate countries, principally involving institution building measures 
(and  associated  investment)  as  well  as  measures  designed  to  promote  economic  and  social  cohesion, 
including cross–border co–operation.  
Community  Assistance  for  Reconstruction, Development and  Stabilisation  applied  to Western  Balkan 
countries  
Commission  Decision  PE/2006/148  of  07/02/2006  conferring  management  of  aid  provided  under 
PHARE and CARDS to an Implementing Agency in Croatia 
Council Regulation (EC) No 1085/2006 

EN 

89 

   EN 

 
                                                 
The  total  amount  affected  by  irregularities  in  2008  was  EUR  60,782,354  where 
PHARE  accounts  for  EUR  26,731,257  (183  cases),  SAPARD  –  EUR  29,046,300 
(213 cases), ISPA – EUR 4,055,042 (99 cases), TF – EUR 545,822 (4 cases), PA – 
EUR 314,763 (18 cases), CARDS – EUR 89,170 (6 cases). 

6.1. 

Reporting discipline 

The  obligation  to  report  irregularities  in  the  area  of  pre-accession  assistance  is 
established  in  the  Financing  Agreements/Memoranda  signed  between  the  acceding 
countries,  Candidate  countries  and  the  European  Community  and  is  in  accordance 
with the provisions of Commission Regulation (EC) 1681/199497. This obligation is 
yet  enhanced  by  Commission  decision  granting  conferral  of  management  on 
extended decentralised basis (EDIS). 

Pre-accession  assistance  related  irregularities  are  reported  using  a  standard  paper 
template.  The  submitted  information  is  processed  and  registered  in  the  data  base 
managed by OLAF.  

In  general,  the  quality  of  provided  information  is  getting  better  and  reporting 
countries  are  cooperative.  However,  insufficient  or  obscure  reported  information 
remains to be a challenge. 

Inconsistencies and even contradictions in different sections of the same report still 
occur.  In  absolute  numbers  Romania  has  the  highest  number  of  notifications 
containing one or more content mistakes (44), followed by Bulgaria (32). In relative 
terms  Slovenian  notifications  are  the  least  reliable.  These  estimations  are  heavily 
influenced  by  the  number  of  communications  sent  by  the  respective  countries. 
Currently Romania and Bulgaria are the countries from which the highest numbers of 
notifications are received; therefore the number of mistakes is yet acceptable. More 
efforts  could  be  put  into  the  initial  quality  checks  on  a  national  level  to  avoid  the 
inconsistencies. 

Most common mistakes are incorrect or incomplete financial aspects of the reports, 
types  of 
missing  practices  employed 
irregularities.  The  incorrect  numbering  remains  to  be  a  technical  obstacle  in 
cooperation with MSs’ authorities on follow up related issues. Bulgaria has achieved 
significant improvements on that issue while Romania needs to pay more attention. 

irregularities,  missing 

in  committing 

6.1.1.  Timely reporting 

Late  reporting  of  irregularities  poses  problems  for  OLAF  when  working  with 
analysis  of  the  reported  information.  In  2008  4  countries  out  of  14  missed  the 
reporting  deadline98  for  at  least  one  of  the  pre-accession  funds.  Some  special  cases 
are worth to be mentioned. Hungary failed to report on time throughout the year but 
improvements occurred in the last quarter. Slovakia was very late to report first and 

97 
98 

As amended by Regulation (EC) No 2035/2005 
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. 

EN 

90 

   EN 

 
                                                 
second  quarters  and  several  reminders  were  sent.  Bulgaria  missed  the  reporting 
deadline  for  SAPARD  in  4th  quarter,  so  17  new  cases  and  last  updates  of  previous 
reports could not be included in this analysis. Turkey does not follow the reporting 
schedule and experiences very big delays. 

Table PA 1: Timely reporting 

Reported 
too late

Reported 
on time

Total

103
20
46
34

385
1
364
21

488
21
410
55  

BG
HU
PL
SK

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.  

6.1.2.  Time gaps 

In  accordance  with  the  Regulation  1681/94  there  are  some  compulsory  dates  to  be 
filled  in  (date  of  first  information,  the  period  of  irregularity,  date  when  the 
irregularity was established). The calculations in Table PA 3 estimating compliance 
are  based  on  the  dates  presented  in  the  first  notifications  sent  in  2008.  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.  

The average time span for relevant authorities to detect an irregularity is 24 months. 
However, for Poland and Estonia it took 3 years, for Romania and Malta – 2 years. 
This time period also signals the end of the project cycle. 

It  takes  almost  4  months  on  average  to  report  the  detected  irregularities99.  Turkey, 
Slovakia,  Slovenia,  Hungary,  and  Czech  Republic  were  late  to  submit  the 
information on the detection to the Commission. 

6.1.3.  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 2 provides a rate of compliance with respect to classification of 
irregularity. 

99 

A maximum period of 5 months (3 months + 2 months) to report a detected irregularity is established 
by the Commission regulation 1681/1994. 

EN 

91 

   EN 

 
                                                 
Table PA 2: Compliance in 2008 - classification of irregularities  

Classification of cases by reporting countries

Blank

Suspected 
fraud

Irregularity Total

% 
Compliance

2
1
1
5
72
3
5
16
45
1
1
152

2
29

2
10

1

44

5
15
109
9
8
11
164
2
1
1

325

5
18
140
11
9
18
246
5
6
17
46
1
1
523

100.00%
100.00%
98.57%
90.91%
88.89%
72.22%
70.73%
40.00%
16.67%
5.88%
2.17%
0.00%
0.00%
70.94%

Country
EE
HR
BG
HU
SK
TR
RO
LV
LT
CZ
PL
MT
SI
Total

Estonia  and  Croatia  fully  complied.  Malta  and  Slovenia  did  not  classify  any  of  the 
reported irregularities in 2008, but they reported very few. On average 71% of cases 
were classified. There is a visible increase in compliance with reference to 2008 so 
reporting countries are putting more efforts in fulfilling the necessary obligations.  

6.1.4. 

Summary  

Table PA 3 makes a summary of different aspects of compliance rate, namely dates 
required by the legislation, data on natural and legal persons involved, classification 
of cases, reporting deadlines. 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.  

The  summary  reveals  that  countries  reporting  few  cases  like  Slovenia,  Malta  and 
Estonia get lower positions in the list because the mistakes get high weighting. They 
become  'victims  of  statistics'  and  should  not  be  over  judged.  Slovakia  experienced 
difficulties in reporting due to internal institutional changes.  

Summary compliance of 91.6% has improved in comparison to 2007 (82.4%). Even 
so, it manifests some limitations with reference to further analysis carried out in the 
report. Low compliance with the reporting obligation might imply some weaknesses 
in the administrative set up of the reporting mechanism.  

Table PA 3: Compliance per reporting country 2008 

EN 

92 

   EN 

 
 
Dates 
compliance

Personal 
data 
compliance 

100.00%
86.43%
88.62%
40.00%
100.00%
100.00%
77.78%
100.00%
100.00%
11.11%
81.82%
58.82%
100.00%
85.28%

100.00%
100.00%
99.19%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
94.44%
90.91%
100.00%
0.00%
99.04%

Country
HR
BG
RO
EE
LV
LT
SK
MT
PL
TR
HU
CZ
SI
Total

Classification 
of cases

Timely 
reporting
100.00% 100.00%
98.57% 78.89%
70.73% 100.00%
100.00% 100.00%
40.00% 100.00%
16.67% 100.00%
88.89% 38.18%
0.00% 100.00%
2.17% 88.78%
72.22% 100.00%
4.76%
90.91%
5.88% 100.00%
0.00% 100.00%
70,94% 90.48%

Summary 
compliance

100.00%
90.97%
89.63%
85.00%
85.00%
79.17%
76.21%
75.00%
72.74%
69.44%
67.10%
66.18%
50.00%
91.60%  

6.2. 

General Trends 

The  intention  of  this  descriptive  analysis  is  to  provide  an  overview  of  the  reported 
irregularities in 2008 and to compare the reporting trends observed during the period 
2002-2007.  

One  should  take  into  account  that  Member  States  and  Candidate  Countries  must 
report to the Commission cases exceeding the established thresholds. Reports below 
the threshold are included in the overall analysis (see Annex 19). Since the reporting 
countries decided to report such cases to the Commission it is possible that irregular 
amounts  are  only  indicative  and  will  be  specified.  Therefore,  they  are  likely  to  get 
higher by means of the coming follow up reports. 

6.2.1.  Overall trend 

The  number  of  cases  reported  (first  communications)  in  2008  increased  by  58%, 
while the number of follow-up reports increased by 25% in comparison to 2007.  

2008  was  the  year  when  the  new  cases  reported  to  OLAF  reached  the  peak.  This 
could  be  explained  by  the  fact  that  more  countries  benefitting  from  pre-accession 
assistance started active reporting of irregularities. Previously only 'nil reports' were 
received.  Moreover,  a  wider  variety  of  pre-accession  instruments  is  covered  due  to 
different programming periods and phases of enlargement process. 

The  high  number  of  updates  illustrates  that  beneficiary  countries  are  actively 
proceeding  with  administrative  or  judicial  measures  concerning  the  cases  detected 
previously.  However,  the  high  number  of  updates  is  not  characteristic  to  all  the 
reporting  countries.  Some  EU-10  countries  are  clearly  phasing  out.  They  are 
finalising  pre-accession  funded  projects  and  the  last  remaining  procedures.  EU-2 
reports  very  high  numbers  of  updates  as  they  are  still  in  the  middle  of  the  project 
cycle.  Turkey,  however,  sent  vey  few  follow-up  reports  and  such  a  situation  raises 
concerns. 

EN 

93 

   EN 

 
Chart PA 1: Irregularities communicated by reporting countries (2002-2007) 

70,000,000

60,000,000

50,000,000

40,000,000

30,000,000

20,000,000

10,000,000

523

600

500

60,782,354

400

300

200

100

0

398

335

31,856,328

341

227

16,770,995

17,987,118

104

10,373,942

6

6,122

5,320,607

0

2002

2003

2004

2005

2006

2007

2008

Amounts

Cases

6.2.2.  Trend related to Member States and Candidate countries 

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  2008  EU-10 
account for 19%, Bulgaria and Romania – 73%, Croatia and Turkey – 7% of the total 
number  of  cases.  Talking  about  the  total  irregular  amount  reported  EU-10  make 
11%, Bulgaria and Romania - 83%, Croatia and Turkey – 6%. 

This grouping is well reflected providing a breakdown in Chart PA 2: 

Chart PA 2: Reporting trend EU-10 and EU-2 

Irregular amounts 2008

No of cases 2008

10.70%

6.17%

6.88%

19.31%

83.13%

73.80%

EU-2 EU-10 HR,TR

EU-2

EU-10 HR, TR

EN 

94 

   EN 

 
 
 
6.2.3.  Amounts involved 

For  the  purposes  of  this  report  the  term  eligible  amount  stands  for  the  amount 
committed  to  be  paid  when  the  contract  is  concluded  under  the  condition  that  the 
expenditure incurred is justified and eligible.  

With regard to the amounts involved in the irregularities reported to the Commission, 
the total irregular amounts went up while total eligible amount went down in 2008. 

In  2008  the  eligible  amount  decreased  by  43%  in  comparison  to  2007.  This  was 
caused  by  figures  on  ISPA  expenditure;  however,  there  are  certain  doubts  if  these 
figures were reported correctly both in 2007 and 2008. 

EU-10  does  not  report  ISPA  irregularities  any  longer  due  to  the  transfer  of 
expenditure  into  the  Cohesion  Fund.  Consequently,  mainly  Bulgaria  and  Romania 
sent communications for ISPA in 2008 (see Annex 18) and the first ISPA case was 
received from Croatia.  

There  is  still  a  striking  difference  between  both  the  number  of  cases  and  irregular 
amounts reported by Bulgaria and Romania. The number of ISPA cases reported by 
Bulgarian authorities has increased five times combined with three time increase in 
the irregular amounts. A sharp increase was observed during 4th quarter 2008 when 
the number of new cases reported (15) is 36% higher than the total number of ISPA 
cases (11) reported since 2004 by Bulgaria. This is a direct outcome of Commission 
audits.  As  for  Romania  the  number  of  cases  remained  on  the  same  level  but  the 
irregular amount decreased by 40%. Clearly, there is a difference in the approach to 
irregularity reporting between those two countries.  

Irregular  amount  reported  in  2008  went  up  by  90%  and  reached  roughly  EUR  61 
million  for  all  funds  in  total.  The  irregular  amounts  went  up  sharply  for  PHARE 
(74%) and SAPARD (180%); for PA and CARDS a small increase is seen; for ISPA, 
on the contrary, the irregular amount decreased by 31%.  

EN 

95 

   EN 

 
Chart PA 3: Irregular amounts by fund 

35000000

30000000

25000000

20000000

15000000

10000000

5000000

0

2002

2003

2004

2005

2006

2007

2008

CARDS

ISPA

PHARE

PA

SAPARD

TF

The chart has to be interpreted with some caution. The number of reporting countries 
is  growing;  therefore  the  affected  amounts  are  gradually  increasing.  What  is  more, 
pre-accession  assistance  funded  projects  run  over  several  years  while  the  affected 
amounts are calculated with reference to the reporting year. So the closing years are 
becoming peak years. 

To  be  more  precise,  however,  it  is  worth  looking  at  the  breakdown  by  groups  of 
reporting  countries.  Since  the  greater  part  of  the  data  set  analysed  originates  from 
Romania and Bulgaria (see Chart PA 2), the trends are influenced by their reporting 
patterns.  

The total  irregular amount reported  by EU-10 in  2008 rose by  8%.  The  percentage 
went  down  for  PHARE  (76%)  and  increased  significantly  for  SAPARD  (167%). 
There are several reasons behind it. For EU-10 many projects which did not get into 
the audit samples before, are being checked only when the final payment claims are 
submitted. SAPARD irregularities in 2008 were mostly detected by ex-post controls 
after the final payments had been made. 

The situation for EU-2 has changed significantly. The total irregular amount reported 
increased by 152%; PHARE increase makes 135% and SAPARD – 173%. Enhanced 
Community controls in Bulgaria triggered higher detection of irregularities and it is 
well  seen  in  the  statistics.  Big  irregular  amounts  manifest  that  procurement 
rules/procedures were infringed, eligibility rules not followed, a number of projects 
failed  to  be  implemented  or  contract  conditions  were  not  fulfilled,  therefore,  the 
whole value of the contract becomes irregular.  

Furthermore,  it  is  very  important  to  differentiate  between  cases  with  potential 
financial impact detected before the payments and real financial impact resulting in 
recoveries (see 6.3.3). 

EN 

96 

   EN 

 
 
The  major  part  of  irregular  cases  is  not  fraudulent  and  corrective  measures  are 
undertaken (see 6.3.2). 

The highest number of cases in 2008 was reported by Romania, Bulgaria, and Poland 
(respectively 246, 140, and 46). The pattern, however, is different with reference to 
the  irregular  amounts.  Bulgaria,  Romania,  Croatia,  and  Lithuania  reported  the 
highest  irregular  amounts.  Annex  18  presents  all  the  figures  in  detail  per  each 
reporting country. 

6.2.4. 

Impact on the budget 

Estimation of the impact on the budget is based on the information provided in the 
irregularity  reports  and  is  totally  linked  to  countries’  approach  to  reporting  and 
cooperation with the Commission. 

While estimating the impact of pre-accession assistance irregularities on the budget 
one  needs  to  take  into  account  different  groups  of  beneficiary  countries  benefitting 
from pre-accession assistance and varied periods of allocations. 

After the accession of EU-10 in 2004 no new expenditure was committed (except for 
SAPARD  where  some  commitments  were  made  up  at  the  end  of  2004).  PHARE, 
ISPA, SAPARD, the Turkish pre-accession instrument, and CARDS projects will be 
gradually completed by around 2010. 

As an extension of financial assistance provided under PHARE before the accession, 
Transition  Facility  was  employed  in  2004-2006.  2006  was  the  final  programming 
year  for  the  Transition  Facility,  although  contracting  continued  until  2008  and 
payment of funds until 2009. In 2007 EUR 78 million were allocated to Bulgaria and 
Romania under TF.  

With  regard  to  SAPARD,  for  Romania  and  Bulgaria  automatic  period  of 
decommitment has been extended till December 2009 so contracting continues. 

2007  was  the  first  year  of  commitments  under  IPA  focusing  on  Candidate  and 
Potential Candidate countries for the programming period 2007- 2013. 

Chart PA 4: Share of irregular amount in eligible amount of reported cases 

EN 

97 

   EN 

 
100.00%

97.91%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

83.49%

74.13%

67.77% 67.34%

51.78% 51.51%

32.17%

24.33%

15.79%

6.43%5.00%

5.39%

2.08%

LT HU LV

EE PL

BG CZ SK HR

SI

TR MT RO 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 reached 5.4% in 
2008  while  in  2006  it  was  1.9%.  Although  the  figure  has  increased,  Chart  PA  4 
illustrates  that  the  share  of  irregular  amount  in  relation  to  the  total  value  of 
expenditure is relatively very little.  

In  comparison  to  the  overall  tendency,  the  share  for  Romania  is  very  low  and  it 
highly  influences  the  total  figure.  Lithuania,  Hungary,  Latvia,  Estonia,  and  Poland 
report cases with rather high irregular share, which sometimes equals the total value 
of the project. 

The impact of irregularities reported in 2008 on budgetary allocations for the same 
year  is  4.4%  (EUR  61  million  on  EUR  1.4  billion  of  allocations).  However,  this 
figure  should  be  taken  with  great  caution  as  the  programming  periods  and  also 
beneficiary  countries  are  different.  Since  2007  pre-accession  assistance  allocations 
are given to Candidate and Potential candidate countries in the Balkans100. 

It  would  be  more  precise  to  calculate  the  impact  of  irregularities  on  the  whole 
programming period and the 'real' beneficiaries. Thus the result is 0.76% (EUR 143 
million total irregular amount reported so far on the overall budget of roughly EUR 
19 billion). 

6.2.5.  Method of detection 

Reporting countries are required to indicate the manner in which the irregularity was 
discovered. In 2008 reporting countries put more efforts in categorizing methods of 
detection used on the basis of the pick list provided by OLAF. However, in a number 
of  cases  the  codes  were  attributed  by  OLAF  on  the  basis  of  the  descriptions 
(frequently rather vague) presented in the reports. 

100 

Croatia, Turkey, Bosnia-Herzegovina, Serbia (and Kosovo), and Montenegro. 

EN 

98 

   EN 

 
 
                                                 
Table PA 4 presents an overview of methods of detection which helped to trace most 
cases, the highest irregular amounts, and the highest average detected amounts. Most 
of  the  irregularities  and  the  highest  irregular  amounts  in  2008  were  detected  by 
means  of  ‘Control  of  documents’.  The  same  method  took  the  lead  in  2007.  This 
method  actually  reflects  one  of  the  key  responsibilities  of  the  national  authorities 
implementing  EU  funds  under  decentralised  and  shared  management  modes. 
Besides,  this  method  is  of  a  rather  general  nature  and  can  be  used  throughout  the 
project cycle. 

On the spot controls appeared to be very effective and the same tendency is observed 
in the course of several years. National administrative or financial controls trigger the 
third highest number of detections. 

Some new tendencies are spotted in 2008, namely the role of 'Community controls. 
Moreover,  the  highest  average  amounts  were  detected  while  carrying  out  controls 
under  the  request  of  the  Commission.  It  needs  to  be  mentioned  that  most  of  such 
cases  were  reported  by  Bulgaria  in  relation  to  the  specific  situation  on  the 
management of EU funds there in 2008. 

Information  received  from  whistleblowers101  proved  to  be  useful  and  instigated  the 
detection of high value cases (second highest average). 

Several  cases  in  the  data  set  do  not  provide  relevant  information  on  the  method  of 
detection employed and state 'other'.  

In  general,  the  most  frequent  methods  of  detection  imply  both  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 4: Method of detection in 2008 by number of cases and irregular amounts detected 

Method of detection

Control of documents
On the spot control of achievement of project or action
National administrative or financial control
Community controls
Control by national anti-fraud service
Spontaneous confession
Whistle blower
Ex post control
Additional control on request by the Commission
Not indicated
Other facts
Control on the premises of the company

No of 
cases

Detected 
EC amount 
irregular

Average 
detected 
amount

186 18,216,024
8,681,197
5,992,717
1,387,344
3,913,554
1,503,879
6,508,646
670,611
3,838,789
216,496
1,845,899
102,145

79
75
25
24
21
18
13
10
9
8
7

97,936
109,889
79,903
55,494
163,065
71,613
361,591
51,585
383,879
24,055
230,737
14,592  

101 

The term 'whistleblower' in this context is used in a broader sense than defined by the EU legislation 
and also involves anonymous sources. 

EN 

99 

   EN 

 
                                                 
6.2.6.  Types of irregularities 

Reporting countries are obliged to indicate the practices employed in committing the 
irregularity  (modus  operandi)102.  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. 

Most  common  type  of  irregularity  by  the  number  of  received  cases  in  2008  was 
‘Failure  to  respect  other  regulations/contract  conditions'  followed  by  'Non  –eligible 
expenditure' (which was the most frequent modus operandi in 2007) and ‘Failure to 
fulfil  commitments  entered  into’.  This  is  yet  another  indication  that  a  number  of 
projects failed to be implemented. 

'Falsified supporting documents' in 2008 got into top five of the most frequent modus 
operandi  and  pertain  to  the  highest  irregular  amount  and  also  average  irregular 
amount.  This  type  of  irregularity  does  not  indicate  that  frauds  have  already  been 
established  and  only  refers  to  the  element  that  raised  suspicion  of  the  competent 
national authorities. Therefore, all these cases are classified as 'suspected fraud' and 
are  analysed  in  detail  in  6.3.2.  They  were  reported  by  Turkey,  Slovenia,  Croatia, 
Poland,  Czech  Republic  and  Bulgaria.  Bulgarian  cases  involving  allegations  of 
falsified supporting documents account for 72% of the total cases bearing this type of 
infringement.  'Failure  to  respect  deadlines'  again  signals  problems  in  the  project 
implementation with second highest average irregular amount. 

For SAPARD the most frequent modus operandi reported in terms of the number of 
cases  is  'Failure  to  fulfil  commitments  entered  into’,  and  in  terms  of  the  amounts 
detected - 'Falsified supporting documents. 

For  PHARE  the  most  frequent  modus  operandi  reported  in  terms  of  the  number  of 
cases  is  'Unjustified  expenditure'  and  in  terms  of  the  amounts  -  ‘Failure  to  respect 
deadlines'. 

'Falsified  supporting  documents'  occur  in  9  PHARE  cases  and  25  SAPARD  cases 
reported to OLAF. 

102 

Article 3 of Commission Regulation (EC)1681/94 

EN 

100 

   EN 

 
                                                 
Table PA 5: Types of irregularities by number of cases and irregular amounts 

Type of irregularity
FAILURE TO RESPECT OTHER REGULATIONS/CONTRACT CONDITIONS
NON-ELIGIBLE EXPENDITURE
FAILURE TO FULFIL COMMITMENTS ENTERED INTO
UNJUSTIFIED EXPENDITURE
FALSIFIED SUPPORTING DOCUMENTS
ACTION NOT CARRIED OUT IN ACCORDANCE WITH RULES
INFRINGEMENT OF RULES CONCERNED WITH PUBLIC PROCUREMENT
ACTION NOT IMPLEMENTED
FAILURE TO RESPECT DEADLINES
OTHER CASES OF IRREGULAR DOCUMENTS
OTHER IRREGULARITIES (TO BE SPECIFIED)
INCORRECT ACCOUNTS
MISSING OR INCOMPLETE DOCUMENTS
MISSING OR INCOMPLETE SUPPORTING DOCUMENTS
ACTION NOT COMPLETED

6.3. 

Specific analysis 

6.3.1. 

Irregularities affecting different funds 

No of 
cases

EC amount 
irregular

Average irregular 
amount

82
79
69
50
36
30
29
24
24
16
13
12
11
9
7

9,055,905
3,062,000
2,240,539
4,608,780
12,095,015
3,631,566
2,312,610
2,285,114
5,945,892
1,555,020
2,585,598
348,343
476,061
1,185,176
928,793

110,438
38,759
32,472
92,176
335,973
121,052
79,745
95,213
247,746
97,189
198,892
29,029
43,278
131,686
132,685  

The  total  number  of  cases  reported  augmented  in  comparison  to  2007  (by  58%). 
Reporting  tendencies  noticed  during  the  previous  years  did  not  alter  and  most 
irregularities were communicated for PHARE and SAPARD funded projects. Those 
two funds made 76% of the irregularities reported. 

As  demonstrated  by  Chart  PA  5  the  highest  number  of  cases  reported  in  2008 
concerned  SAPARD  and  made  almost  half  of  the  total  cases  reported  in  numbers. 
The  biggest  share  of  irregular  amount  was  also  reported  for  SAPARD  (47%  of  the 
total).  

Chart PA 5: Distribution of communications per fund in 2008 

No of cases

EC amounts affected

1% 3%

1%

19%

1%

1%

0%

7%

41%

47%

44%

35%

CARDS ISPA PHARE SAPARD TF PA

CARDS

ISPA PHARE SAPARD TF PA

2008 is the year when such a wide variety of pre-accession assistance programmes 
was reported. The first 4 cases were reported for Transition Facility. Croatia began 
reporting  irregularities  on  CARDS.  Turkey  started  to  report  more  on  Turkish 
Instrument  for  pre-accession.  Previously  numbers  were  so  low  that  they  were  not 
analysed separately. 

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 

EN 

101 

   EN 

 
 
value  but  the  irregular  amounts  reported  are  relatively  little  (no  reporting  threshold 
was established). A number of ISPA cases reported in 2008 do not have any financial 
impact indicated even thought the legislation requires providing indicative figures103. 

In total, 366 projects were approved for ISPA, of which 201 were in the environment 
sector,  78  in  the  transport  sector  and  87  concerned  technical  assistance.  The  ISPA 
budget (in 2006 prices), before amendments and excluding technical assistance was 
7,708 million euro104. 

In  general,  ISPA  projects  experienced  delays,  addenda,  and  retendering  due  to 
various  infringements  of  procedures.  Peculiarities  of  ISPA  programming  might 
imply  that  irregularities  occurring  during  tendering  procedures  have  not  been 
reported especially related to the conflict of interest. Financial corrections applied on 
a national level before claiming the funds from the Commission were not considered 
as irregularities.  

Situation  for  SAPARD  is  different  because  the  amounts  reported  as  irregular 
frequently coincide with the total value of the project and full recovery is imposed. 
Most of SAPARD cases were detected after the payments had been made. This could 
be related to the fact that SAPARD for EU-8 was closed in 2007, but 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. 

For Romania and Bulgaria automatic period of decommitment has been extended till 
December  2009  so  contracting  continues.  These  two  countries  are  reporting  the 
highest number of SAPARD irregularities (RO - 100, BG - 56105). More irregularities 
are likely to be detected in the contracts concluded before 2008. In 2008 Commission 
suspended payments for 3 major SAPARD measures in Bulgaria. 

As  for  PHARE  the  situation  in  relation  to  2007  changed  and  in  2008  the  share  of 
irregular amount reported increased. There is a direct link between these figures and 
the situation in Bulgaria as in 2008 44% of total PHARE cases and 57% of affected 
amount were reported by Bulgaria. Romania, respectively, accounts for 36% of cases 
and 34% of affected amount. 

After the accession financial assistance in 2004-2006 was provided under Transition 
Facility. First TF cases were reported by Bulgaria, Lithuania, Latvia, and Slovenia. 

103 
104 

105 

Commission Regulation (EC) No 1681 Article 3, Par 1 (m) 
European  Court  of  Auditors.  Special  Report  No  12/2008  concerning  the  Instrument  for  Structural 
Policies for Pre-accession (ISPA), 2000-2006 
17 SAPARD cases are not included in this report because they were reported well after the deadline. 

EN 

102 

   EN 

 
                                                 
Chart PA 6: Distribution of cases by number 

250

200

150

100

50

0

207

164

165

151

213

183

99

150

90

87

25

26

1

6

2

6

18

4

133

68

26

34

52

18

6

2002

2003

2004

2005

2006

2007

2008

CARDS

ISPA

PHARE

SAPARD

TF

PA

Chart PA 6 presents the fluctuation of the number of cases throughout a period of 7 
years. The lowest numbers of cases, with the exception of smaller scale programmes 
like CARDS, TF, PA, continue to be detected in ISPA with an increasing tendency 
since  2007.  For  PHARE  and  SAPARD  the  numbers  were  sharply  growing  since 
2007. The trend is still dominated by PHARE and SAPARD. For 2008 a sharp rise 
by  103%  is  observed  in  the  number  of  PHARE  cases,  an  increase  of  42%  in 
SAPARD  cases,  and  a  lower  increase  of  14%  in  ISPA  cases.  The  greater  part  of 
ISPA cases were reported by Romania. 

6.3.2. 

Irregularity vs suspected fraud 

In general, reporting countries do not classify some 30% of the reported irregularities 
although compliance has improved in comparison to 2007.  

In 2008 cases classified as suspected fraud made up 9.85% (51) of irregularities and 
21.7% 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 is 8.5% (44). 

One can notice in Chart PA 7 that the share of suspected fraud has changed for 2007. 
This is caused by follow up reports and reclassification of some cases after the new 
circumstances had been discovered. 

Meanwhile, it is important to note that the analysed cases are just 'suspected frauds'. 
They  are  under  investigation  by  relevant  national  authorities.  The  final  precise 
figures can only be presented on 'established frauds' when the court rulings are made. 

EN 

103 

   EN 

 
 
Chart PA 7: Share of suspected fraud in reported cases 

25.56%

21.70%

16.90%

12.92%

15.96%

15.84%

9.34%

11.28%

9.71%

8.42%

9.81%

9.85%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

2003

2004

2005

2006

2007

2008

% amounts

% cases

7 countries out of 14 reporting countries reported suspected fraud cases in 2008. As 
illustrated by Chart PA 8, the highest number of suspected fraud cases was reported 
by  Bulgaria,  Romania,  Turkey,  and  Poland.  The  highest  amounts  affected  by 
suspected  fraud  are  reported  by  Bulgaria  in  SAPARD  programme,  followed  by 
Romanian  and  Croatian  SAPARD.  So  this  result  shows  that  SAPARD  is  the 
programme most affected by suspected fraud. High amounts indicate that larger scale 
projects were reported as allegedly fraudulent. 

EN 

104 

   EN 

 
 
Chart PA 8: Suspected fraud cases by country and fund in 2008 

Distribution of fraud cases across the funds is not adequate. There is one suspected 
fraud  case  in  ISPA  (from  2008).  For  SAPARD  31  suspected  fraud  cases  were 
reported in 2008 and 103 for all the years. For PHARE 14 reported in 2008 and 112 
in total. 

6.9%  of  cases  reported  in  2008  had  an  element  of  fraud  i.e.  falsified  supporting 
documents.  In  PHARE  they  make  4.9%,  in  SAPARD  11.7%  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  rather  than  criminal  offence.  An  in  depth  analysis  is 
necessary of a case basis. 

In 2008 suspected fraud value in relation to the eligible value of the reported projects 
made  a  share  of  1.2%.  The  total  irregular  amount  of  all  the  reported  projects  in 
relation to the total eligible amount is 5.4%. The percentage of the sum of suspected 
fraud in the total allocated amount for period 2002-2007 is respectively even lower – 
0.14%. The figure, however, is much higher in comparison to 2007 report data. This 
outcome is explained by the fact that 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,  a  high  number  of  new  cases  were 
detected in 2008. 

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. The real 

EN 

105 

   EN 

 
 
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). 

6.3.3.  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.  

Chart PA 9: Detection after payment 

% detection after payment

71.38%

61.70%

54.15%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

46.04%

45.02%

17.21%

2003

2004

2005

2006

2007

2008

Chart  PA  9  reveals  the  tendency  that  the  greater  of  the  reported  irregularities  were 
detected after the 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  2008  could  be 
explained  by  Croatian  and  Turkish  cases  detected  before  payment  during  the 
contracting period. Some cases were also reported with indicative financial impact, 
therefore the result is likely to change. 

In 2008 the amounts reported to be recovered increased by 107%. 

Table  PA  6  demonstrates  the  recovery  situation  per  country.  The  table  provides  an 
overview for 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. 
Estonia has the highest recovery rate, followed by Poland. 

The  highest  amount  to  be  recovered  in  2008  comes  from  SAPARD  (EUR  16.5 
million) just like in 2007. The amount to be recovered for PHARE is second highest 
– EUR 10.8 million. ISPA amount to be recovered is yet lower - EUR 1.6 million.  

EN 

106 

   EN 

 
 
Romania reports the highest amounts to be recovered (EUR 7.5 million for PHARE 
and SAPARD each). Bulgaria reported EUR 2.7 million to be recovered in PHARE 
and EUR 5.9 million in SAPARD. 

In general, the recovery rate got worse in comparison to 2007 (42.9%) and reached 
only 36.2% in 2008. 

Table PA 6: Recovery by reporting country 

Country
BG
CZ
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
TR
 Total

EC amount to be 
recovered

EC amount 
recovered

Recovery rate

13,777,568
1,280,939
922,875
472,020
1,514,045
855,574
906,322
233,460
1,540,929
25,569,349
58,159
3,361,501
579,679
51,072,419

1,718,087
776,055
2,652,860
28,274
1,412,840
437,622
53,229
33,955
1,992,548
18,347,929
0
1,476,274
0
28,929,672

11.09%
37.73%
74.19%
5.65%
48.27%
33.84%
5.55%
12.70%
56.39%
41.78%
0.00%
30.52%
0.00%
36.16%  

The  overview  in  Table  PA  7  points  out  delays  in  the  recovery  process.  There  are 
some  amounts  to  be  recovered  detected  in  2003  where  the  risk  of  losses  is  high. 
Actually, the rate for 2003 increased only by 3.5%. The highest recovery rate is for 
cases  dated  2004.  It  might  be  influenced  by  a  special  procedure  required  by 
SAPARD Multiannual Financing Agreement. The situation with respect to 2006 and 
2007 has improved but still more efforts need to be taken to speed up the recoveries. 
Reporting countries should undertake recovery measures soon after the detection of 
irregularities and inform the Commission about the deductions made. The figure for 
2008 is very low. 

Table PA 7: Recovery rate by reporting year 

Year

EC amount 
recovered

EC amount to be 
recovered

Recovery rate

2002
2003
2004
2005
2006
2007
2008

Total

6,122
599,981
3,648,603
4,589,800
5,392,572
11,155,595
3,536,999
28,929,672

0
315,782
1,127,745
2,960,149
5,705,526
11,583,732
29,379,485
51,072,419

100.00%
65.52%
76.39%
60.79%
48.59%
49.06%
10.75%
36.16%  

EN 

107 

   EN 

 
6.4. 

Conclusions 

•  Member  States  and  Candidate  Countries  reported  523  new  irregularities  in  2008 
where the total financial amount affected was around EUR 61 million. 2008 is the 
peak  year  as  both  the  number  of  new  cases  and  the  amounts  affected  are  the 
highest so far received. 

Reporting discipline 

•  The  quality  of  provided  information  is  getting  better  and  reporting  countries  are 

cooperative. 

•  The  classification  of  irregularities  is  an  element  of  reporting  which  visibly 
increased compliance yet more efforts could be invested for further improvement. 
In 2008 the compliance rate was 70.9%. 

•  The rate of summary compliance with the reporting obligation has reached 91.6%. 

General trends 

•  The number of cases reported in 2008 increased by 58% and the amount affected 

augmented by 90%.  

•  Irregularities  are  not  distributed  equally  among  the  reporting  countries.  Three 
groups  of  reporting  countries  can  be  distinguished,  namely  2004  accession 
Member States, 2007 accession Member States, and Candidate countries – Croatia 
and  Turkey.  In  2008  EU-10  account  for  19%,  Bulgaria  and  Romania  –  73%, 
Croatia and Turkey – 7% of the total number of cases. 

•  The total irregular amount reported by EU-10 rose by 8% and the one for EU-2 

increased by 152%. 

•  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  highest  number  of  cases  in  2008  was  reported  by  Romania,  Bulgaria,  and 
Poland  (respectively  246,  140,  and  46).  The  pattern,  however,  is  different  with 
reference  to  the  irregular  amounts.  Bulgaria,  Romania,  Croatia,  and  Lithuania 
reported the highest irregular amounts. 

•  Most of the irregularities and the highest irregular amounts in 2008 were detected 
by means of ‘Control of documents’. The same method took the lead in 2007. The 
increasing role of 'Community controls' is observed in 2008. The highest average 
amounts  were  detected  while  carrying  out  controls  following  the  request  of  the 
Commission.  

•  Most common type of irregularity by the number  of cases received in 2008 was 
‘Failure  to  respect  other  regulations/contract  conditions'  followed  by  'Non  –
eligible expenditure' (most frequent modus operandi in 2007) and ‘Failure to fulfil 
commitments entered into’. 

EN 

108 

   EN 

 
Specific trends 

•  The  highest  number  of  cases  reported  in  2008  concerned  SAPARD  and  made 
almost half of the total cases reported in numbers. The biggest share of irregular 
amount was also reported for SAPARD (47% of the total).  

•  2008 is the year when a wide variety of pre-accession assistance programmes was 
reported  i.e.  the  first  cases  on  Transition  Facility,  CARDS,  and  more  cases  for 
Turkish Instrument for pre-accession. 

•  There  is  a  direct  link  between  rising  SAPARD  and  PHARE  figures  and  the 
specific situation in Bulgaria with regard to the management of EU funds. In 2008 
44%  of  total  PHARE  cases  and  57%  of  affected  amount  were  reported  by 
Bulgaria. Romania, respectively, accounts for 36% of cases and 34% of affected 
amount. 

•  In  2008  cases  classified  as  suspected  fraud  made  up  9.6%  of  irregularities  and 

21.7% of irregular amount. 

•  Distribution  of fraud cases across the funds is not equal. There is one  suspected 
fraud  case  in  ISPA  (from  2008).  For  SAPARD  31  suspected  fraud  cases  were 
reported  in  2008  (103  for  all  the  years).  For  PHARE  14  suspected  fraud  cases 
were reported in 2008 (112 in total). 

•  The highest number of suspected fraud cases was reported by Bulgaria, Romania, 
Turkey, and Poland. The highest amounts affected by suspected fraud are reported 
by  Bulgaria  in  SAPARD  programme,  followed  by  Romanian  and  Croatian 
SAPARD.  

•  In  2008  suspected  fraud  value  in  relation  to  the  eligible  value  of  the  reported 
projects  made  a  share  of  1.17%.  The  total  irregular  amount  of  all  the  reported 
projects in relation to the total eligible amount is 5.4%. 

•  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. 

Recovery 

•  The highest amount to be recovered in 2008 is reported under SAPARD. 

•  Romania reported the highest amounts to be recovered. 

•  Estonia has the highest recovery rate. 

•  The  recovery  rate  got  worse  in  comparison  to  2007  (42.9%)  and  reached  only 

36.2% in 2008. 

EN 

109 

   EN 

 
7. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT  

7.1.  Methodology and scope 

This chapter contains a descriptive analysis of the data on recovery orders issued by 
Commission  services  in  relation  to  expenditures  managed  under  ‘centralised  direct 
management’106,  which  is  one  of  the  four  implementation  modes  the  Commission 
can  use  to  implement  the  budget.  This  chapter  is  based  on  data  retrieved  from  the 
ABAC system, which is a transversal, transactional information system allowing for 
the  execution  and  monitoring  of  all  budgetary  and  accounting  operations  by  the 
Commission. The system was developed by the Commission to facilitate compliance 
with the requirements of the Financial Regulation and its implementing rules. 

One  of  the  functionalities  of  the  ABAC  system  is  the  ‘Recovery  Context’,  which 
gathers detailed information on recovery  orders issued by the Commission services 
and  registered  in  ABAC.  The  information  introduced  into  the  recovery  context 
relates, amongst others, to the qualification of the recovery order: financial officers 
have to indicate for each recovery order whether it relates to an error, an irregularity 
or  a  suspected  fraud  that  has  been  identified  in  the  implementation  of  a  grant 
agreement  or  contract.  In  case  the  recovery  order  is  qualified  as  'suspected  fraud', 
OLAF  has  to  be  notified.  For  each  recovery  order,  information  is  given  on  the 
method  of  detection  as  well  as  the  type  of  irregularity  or  suspected  fraud  that 
constitutes the basis for the recovery. 

The recovery context is a relatively new functionality within ABAC. The collection 
of  data  from  the  Commission  services  only  started  recently  and  the  current  data 
available  in  ABAC  refer  to  recovery  orders  issued  since  2008.  This  first  exercise 
revealed  a  number  of  practical  problems,  which  are  related 
to  different 
interpretations  throughout  the  Commission  of  definitions  used  in  ABAC;  the 
omission  of  certain  information  in  the  'Recovery  Context'  and  the  link  of  the 
information with other data in ABAC.  

A few methodological constraints in relation to the usage of the recovery data should 
be  mentioned  as  well.  Irregularities  detected  at  an  early  stage  of  the  contract 
implementation lead to a reduction of the interim or final payments. In these cases, 
there is no need to issue a recovery order and the irregularity is not recorded in the 
recovery context. This leads to an underreporting of irregularities. On the other hand, 
an irregularity involving only a small amount could generate a recovery order that is 
substantially higher if it is combined with e.g. the recovery of payments that were not 
used. In the latter case, an overreporting might occur. 

Nevertheless,  analyses  on  basic  financial  information  could  be  made  and  it  is 
expected  that  the  type  and  scope  of  the  analyses  for  the  next  exercises  can  be 
the 
extended  after 
improvement of IT tools.  

implementation  of  further  detailed  guidelines  and 

the 

106 

In  accordance  with  Article  53a  of  the  Council  Regulation  (EC,  Euratom)  No  1605/2002  (‘Financial 
Regulation’)  and  Commission  Regulation  (EC,  Euratom)  No  2342/2002  (‘Implementing  Rules’),  see 
also chapter XX. 

EN 

110 

   EN 

 
                                                 
For the financial analyses in this chapter, the following data were used from ABAC: 

•  The number and corresponding financial amounts of recovery orders, which were 
registered after validation by the authorising officer, including information on the 
place of residence of the contract partner of the Commission and the budget line 
concerned; the method of detection; the type of irregularity identified and the time 
span between the approval of a budget commitment, the notification of a recovery 
order and the return payment of the undue funds to the Commission; 

•  The amount of a commitment to which a recovery order is linked and for which a 
payment has been made to a beneficiary. In most cases, the commitment is higher 
than the amount to be recovered. 

In the remainder of this chapter, the term recovery refers to the recovery order and 
the  financial  amount  involved,  whereas  the  term  qualification  refers  to  the 
qualification of the recovery order: irregularity or suspected fraud. 

7.2. 

General analysis 

In 2008, the Commission services registered 932 recovery orders in ABAC that were 
qualified  as  irregularities  or  suspected  fraud.  The  committed  budget  for  these  932 
recoveries  was  EUR  580  million,  of  which  EUR  34.7  million  was  identified  as 
irregular107. 

7.2.1.  Financial amounts involved 

The financial impact of the 932 recoveries registered in 2008 was EUR 34.7 million, 
which  includes  an  amount  of  EUR  3.2  million  for  the  19  recoveries  qualified  as 
suspected  fraud  and  notified  to  OLAF.  Table  DE1  gives  an  overview  of  the 
aggregated  financial  commitments  by  policy  domain  as  well  as  the  number  and 
financial  amounts  of  recoveries,  by  qualification  and  policy  domain.  The 
classification  into  policy  domain  is  provided  for  ‘internal  policies’  and  ‘external 
actions’  (table  DE1).  Table  DE2  gives  a  more  detailed  classification  of  the  policy 
area  to  which  the  recovery  orders  relate.  The  recovery  orders  have  been  issued  for 
commitments  that  relate  to  several  budget  exercises,  some  even  dating  back  to  the 
1990s,  during  which  different  budget  headings  were  used.  The  budget  structure  of 
2008  was  used  for  tables  DE1  and  DE2.  In  cases  where  the  budget  title  of  a 
commitment  from  an  earlier  budget  exercise  does  no  longer  exist,  the  most 
resembling budget title from the 2008 budget was used. The column ‘commitments’ 
contains  the  addition  of  all  the  commitments  made  during  previous  budget 
exercises108 for which a recovery order was issued in 2008. The last column indicates 
the addition of the amounts to be recovered (including suspected fraud) as percentage 
of the aggregated commitments. 

107 

108 

The financial impact of a case of suspected fraud can only be determined following the conclusion of an 
OLAF  investigation.  It  is  only  at  the  end  of  judicial  proceedings  (‘res  judicata’)  that  a  case  can  be 
qualified as fraud and that the actual amount of fraud can be established.  
Information on the number of commitments that were not subject to a recovery order is not available as 
the recovery orders are related to commitments made under several budget exercises. 

EN 

111 

   EN 

 
                                                 
Table DE 1:  Commitments and Recoveries (number and amounts) by policy domain.  

Commitments 

Recoveries 

(€ 1,000) 

% 

Average € 
1,000 

N 

% 

€ 1 000 

% 

Av. 
€ 1,000 

453,904 

78.3 

555 

833

89.4 

27,913

80.5 

33.5 

126,134 

21.7 

1,274 

99

10.6 

6,762

19.5 

Total 

580,038 

100.0 

622 

932

100.0 

34,675

100.0 

Area 

Internal 
policies 
External 
actions 

Recoveries 
as % of 
commitme
nts  

6.1%

5.4%

6.0%

68.3 

37.2 

The  table  shows  that  the  irregular  amounts  only  represent  6%  of  the  commitments 
for  which  recovery  orders  were  issued.  More  recovery  orders  were  issued  for 
commitments  made  under  the  internal  policies  domain  than  the  external  assistance 
actions,  but  the  relative  share  for  external  actions  for  both  the  number  and  the 
amounts to be recovered is substantially higher. 

Table DE2 further specifies the recoveries by budget title. It should be observed that 
there  is  not  always  a  direct  link  between  the  budget  title  or  budget  line  and  the 
Directorate  General  dealing  with  its  implementation,  as  several  DGs  can  share  the 
appropriations  on  a  budget  line.  The  information  in  this  table  do  not  refer  to  the 
number of irregularities or suspected fraud per Directorate General.  

Table DE 2:  Recoveries (number and amounts) by qualification and budget title 

EN 

112 

   EN 

 
 
 
Budget Title 

Economic  and financial affairs 
Enterpris e 
Employment and social affairs 
Agriculture and rural development 
Energy and transport 
Environment 
Research 
Information society and media 
Fis heries and maritime affairs 
Regional policy 
Taxation and c ustoms union 
Education and culture 
Communication 
Health and consumer protec tion 
Area of freedom, s ecurity and justice 
External relations  
Development  and  relations  with  African, 
Caribbean and Pacific (ACP) States 

Enlargement 

Humanitarian aid 

Commission's administration 

Statistics  

Total 

Commit-
ments  
1 000 € 

0 
9,017 
3,768 
3,878 
21,046 
10,959 
213,120 
31,641 
1,682 
4,528 
9,695 
36,046 
664 
22,670 
3,079 
24,567 

50,712 

2,819 

48,036 

73,310 

8,801 

Recoveries 

Irregularity 

Sus pected Fraud 

Number 

% 

€1 000 

% 

Number 

€ 1 000 

1 
27 
14 
16 
82 
25 
187 
202 
3 
7 
2 
204 
5 
7 
35 
27 

5 

5 

50 

1 

8 

0.1 
3.0 
1.5 
1.8 
9.0 
2.7 
20.5 
22.1 
0.3 
0.8 
0.2 
22.3 
0.5 
0.8 
3.8 
3.0 

0.5 

0.5 

5.5 

0.1 

0.9 

2 
314 
132 
795 
3,005 
2,312 
7,253 
3,184 
540 
996 
1 
2,917 
341 
3,389 
845 
1,643 

579 

191 

1,884 

1 

1,123 

0.0 
1.0 
0.4 
2.5 
9.6 
7.4 
23.1 
10.1 
1.7 
3.2 
0.0 
9.3 
1.1 
10.8 
2.7 
5.2 

1.8 

0.6 

6.0 

0.0 

3.6 

1 

5 
1 

9 

2 

1 

102 

601 
60 

2,270 

68 

127 

580,038 

913 

100 

31,447 

100 

19 

3,228 

7.2.2.  Financial amounts involved by geographical area and Member State 

Table  DE3  summarizes  the  recoveries  per  geographical  area,  where  the  beneficiary 
of  the  Community  funding  resided.  The  column  'average'  indicates  the  average 
amount (in EUR 1,000) per recovery. 

Table DE 3:  Recoveries (number and amounts) by region of residence and qualification 

Recoveries 

Contractor 
place of 
residence 

Commit-
ments  
1 000 € 

ACP109 
Africa 
Asia & Pacific 
EFTA 
EU 
Latin America 
NEP & PA110 
Not indicated 

11,223
2,566
70,322
2,855
539,086
3,228
8,978
20,554

N 

12 
2 
22 
21 
799 
10 
30 
17 

% 

1.3 
0.2 
2.4 
2.3 
87.5 
1.1 
3.3 
1.9 

Irregularity 

€ 1 000 

897 
38 
724 
437 
26,045 
177 
2,071 
1,059 

% 

2.9 
0.1 
2.3 
1.4 
82.8 
0.6 
6.6 
3.4 

Suspected Fraud 

Avera
ge 

N 

€ 1 000 

% 

Avera
ge 

75
19
33
21
33
18
69
62

1 

4 

4 

7 
3 

1,723 

53.4 

1,723

408 

12.6 

102

571 

17.7 

143

241 
286 

7.5 
8.9 

34
95

109 
110 

ACP: Africa, Caribbean and Pacific countries; 
Countries benefiting from the European Neighbourhood Policies and the Pre-Accession Assistance  

EN 

113 

   EN 

 
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
                                                 
Total 

658,812

913 

100 

31,447 

100 

34

19 

3,229 

100 

170

Most  of  the  entities  concerned  have  their  residence  in  the  European  Union:  803 
recovery  orders  (86.2%  of  932)  were  issued  for  an  amount  of  EUR  26.6  million 
(76.8%  of  EUR  34.7  million).  129  recovery  orders  (13.8%)  were  issued  to  entities 
residing outside the EU, for a total amount of EUR 8.1 million (23.2%). In the latter 
category, more than 30% of the amount of recoveries related to entities residing in 
ACP countries (EUR 2.6 million), followed by countries eligible for assistance under 
the neighbourhood policies and pre-accession assistance (EUR 2.3 million). 

The  highest  number  of  recovery  orders  for  suspected  fraud  (7  cases)  concerned 
countries  benefiting  from  neighbourhood  and  pre-accession  assistance,  of  which  5 
(worth up to EUR 127,000) were registered in Georgia. The highest recovery order 
was issued to a contractor in South Africa, which accounted for 53.4% of recovery 
orders issued to entities located outside the European Union. 

Table DE4 gives an overview of the recoveries per Member State of residence of the 
entities  in  the  European  Union  and  the  qualification  of  the  recovery.  This  table 
details  the  findings  for  the  European  Union  reported  in  table  DE3.  The  'average' 
column is the average amount, in EUR 1,000, per recovery. 

EN 

114 

   EN 

 
 
Table DE 4:  Recoveries (number and amounts) by Member State and qualification 

Recoveries 

Contractor 
place of origin 

Commit-
ments 
€ 1 000 

AT 
BE 
BU 
CY 
CZ 
DE 
DK 
EE 
EL 
ES 
FI 
FR 
HU 
IR 
IT 
LT 
LU 
LV  
MT 
NL 
PL 
PT 
RO 
SK 
SL 
SV 

UK  

6,770 
83,654 
37 
213 
1,450 
70,137 
4,029 
915 
12,991 
67,606 
9,949 
47,148 
1,907 
1,207 
67,600 
289 
384 
9,759 
207 
38,245 
7,801 
22,103 
143 
10,143 
4,959 
27,194 

42,247 

N 

23 
67 
6 
4 
7 
55 
18 
9 
44 
66 
23 
95 
12 
10 
70 
18 
8 
8 
2 
63 
27 
29 
4 
25 
12 
26 

68 

% 

2.9
8.4
0.8
0.5
0.9
6.9
2.3
1.1
5.5
8.3
2.9
11.9
1.5
1.3
8.8
2.3
1.0
1.0
0.3
7.9
3.8
3.6
0.5
3.1
1.5
3.3

8.5

Irregularity 

€ 1 000 

1,115 
717 
39 
43 
204 
2,699 
1,729 
52 
1,835 
3,706 
254 
2,905 
117 
241 
2,622 
187 
90 
194 
21 
3,271 
288 
590 
126 
212 
115 
568 

2,106 

% 

4.3
2.8
0.1
0.2
0.8
10.4
6.6
0.2
7.0
14.2
1.0
11.2
0.4
0.9
10.1
0.7
0.3
0.7
0.1
12.6
1.1
2.3
0.5
0.8
0.4
2.2

8.1

Total EU 

539,086 

799 

100.0

26,045 

100.0

Suspected Fraud 

Average 

N 

€ 1 000 

48.5 
10.7 
6.5 
10.8 
29.1 
49.1 
96.1 
5.8 
41.7 
56.2 
11.0 
30.6 
9.8 
24.1 
37.5 
10.4 
11.3 
24.3 
10.5 
51.9 
10.7 
20.3 
31.5 
8.5 
9.6 
21.8 

31.0 

32.6 

1 
2 

102
458

1 

4 

11

571

Most  of  the  recoveries  were  made  concerning  beneficiaries  residing  in  5  Member 
States: France (11.9%), Italy (8.8%), the United Kingdom (8.5%), Spain (8.3%) and 
Belgium (8.4%). Entities residing in the Member States of the EU account for almost 
75%  of  the  amount  of  the  recoveries.  Entities  from  whom  the  highest  aggregated 
amounts  have  to  be  recovered  are  residing  in  Spain  (15.6%,  EUR  4.2  million),  the 
Netherlands (12.3%, EUR 3.3 million), France (10.9%, EUR 2.9 million), Germany 
(10.1%, EUR 2.7 million) and Italy (9.9%, EUR 2.6 million) were above the average. 
These five Member States account for almost 60% of the amounts of recoveries. The 
high  rates  of  Belgium  can  be  explained  by  the  fact  that  most  of  the  European 
Institutions  have  their  seats  in  this  Member  State:  this  leads  to  the  conclusion  of  a 
relative higher number of contracts and grant agreements with entities residing in this 
country.  

Recovery orders involving cases of suspected fraud from entities based in one of the 
Member States made up only 17.7% of the amounts of recoveries, but this figure is 

EN 

115 

   EN 

 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
strongly determined by two cases from Spain, which account for more than 80% of 
the suspected fraud amounts. 

7.2.3.  Method of detection 

For each recovery order, the Commission service that issued the order has to indicate 
how  the  irregularity  or  suspected  fraud  was  detected.  Six  different  categories  have 
been  pre-defined,  two  of  which  fall  under  the  direct  responsibility  of  the  European 
Commission: On-the-spot checks and the verification of documents by desk officers 
and financial officers responsible for the implementation of the commitment. Table 
DE5 gives a breakdown of the recoveries by method of detection. 

Table DE 5:  Recoveries (number and amounts) by method of detection  

Method of detection 

Community control / Check on the spot 
Community control / Desk check documents 
European Court of Auditors 
Independent control (supervising engineers, auditors) 
OLAF 
Other 

Total 

 N 

210
501
3
175
16
27

932

% 

 € 1 000 

% 

Average 

22.5
53.8
0.3
18.8
1.7
2.9

100

7,740 
15,183 
85 
5,683 
1,357 
4,627 

34,675 

22.3 
43.8 
0.2 
16.4 
3.9 
13.3 

100 

36.9
30.3
28.3
32.5
84.8
171.4

37.2

Most of the irregularities or suspected fraud for which a recovery order was issued, 
were  detected  on  the  basis  of  Community  controls:  711  recoveries  (76.3%) 
accounting  for  EUR  22.9  million  (66.1%).  Within  the  ‘Community  controls’  desk 
controls generated were more than two times recoveries than ‘on-the-spot controls’. 
It  is  interesting  to  note  that  the  relatively  modest  share  of  recoveries  issued  on  the 
basis of OLAF activities or detected by ‘Others’ (4.6%) account for an amount to be 
recovered  of  17.2%.  The  average  amount  for  recoveries  is  EUR  37,200  but  two 
methods  of  detection  (OLAF  and  Other)  have  a  substantial  higher  average.  There 
was  more  than  one  method  of  detection  in  8  cases.  Table  DE6  gives  a  further 
breakdown  of  the  recoveries  by  method  of  detection  and  by  qualification.  The  last 
column is the average amount per recovery.  

Table DE 6:  Recoveries (number and amount) by method of detection and by qualification  

Qualification 

Method of detection 

N 

% 

€ 1 000 

% 

Av. 

Community control / Check on the spot 

Community control / Desk check documents 

Irregularity 

European Court of Auditors 

Independent control (supervising engineers, auditors) 

OLAF 

Other 

 Total of Irregularity 

Suspected 
fraud 

Community control / Desk check documents 

Independent control (supervising engineers, auditors) 

OLAF 

210 

499 

3 

172 

8 

21 

23.0 

54.7 

0.3 

18.8 

0.9 

2.3 

7,740 

14,930 

85 

5,490 

1,057 

2,145 

24.6 

47.5 

0.3 

17.5 

3.4 

6.8 

913 

100.0 

31,447 

100.0 

2 

3 

8 

10.5 

15.8 

42.1 

253 

193 

300 

7.8 

6.0 

9.3 

36.9

29.9

28.3

31.9

132.1

102.1

34.4

126.5

64.3

37.5

EN 

116 

   EN 

 
 
 
Other 

Total of Suspected fraud 

Total 

6 

19 

932 

31.6 

2,482 

76.9 

100.0 

3,229 

100.0 

34,675 

413.7

169.9

37.2

Table DE6 shows the differences between irregularities and suspected fraud when it 
comes  to  their  detection.  ‘Community  desk  checks  of  documents’  was  the  most 
common  method  of  detection  of  recoveries  classified  as  irregularity  for  both  the 
number of recoveries and the associated amounts, though the share of the latter drops 
slightly compared to the other methods of detection. Among the recoveries classified 
as  suspected  fraud,  both  OLAF  and  ‘Other’  were  the  most  frequent  methods  of 
detection by number of cases (respectively 42.1 % and 31.6 %). It was only in a few 
recoveries  that  desk  controls  led  to  a  ‘suspected  fraud  qualification’,  which  could 
imply that the design of these controls could be optimized to enhance the possibility 
of  suspected  fraud  detection.  The  substantial  higher  amount  per  recovery  for  those 
qualified  as  suspected  fraud  compared  to  those  qualified  as  irregularity  must  be 
observed.  

7.2.4.  Types of irregularity 

The  Commission  services  also  had  to  indicate  the  type  of  irregularity  that  was 
detected when the recovery order was issued. The number of categories is relatively 
high  compared  to  e.g.  the  method  of  detection,  and  the  interpretation  of  these 
findings  must  be  done  with  care  as  interpretation  problems  easily  occur  with  the 
identification of the correct type of irregularity. It can not be excluded that the same 
irregularity  is  scored  differently  by  different  financial  officers  or  that  some  of  the 
categories used in this classification have a small overlap.  

Table DE7 presents recoveries by main types of irregularities. 

Table DE 7: Recoveries (number and amount) by type of irregularity 

Type of irregularity 

Number  % 

€ 1 000 

% 

Average 

Action not implemented 

Action not in accordance with the rules 

Advances not correctly reflected 

Beneficiary ineligible 

Calculation error 

Copy documents rather than originals 

Deadline not respected 

Expenditure declared not related to the action 

Expenditure not covered by legal base 

Falsified documents 

Inappropriate accumulation of aid 

Incomplete Documents 

Incorrect rates used in calculating the claim 

Missing Documents 

Not Applicable 

Public procurement procedures not respected 

37

4.0 

2,373 

6.8

211

22.6 

6,449 

18.6

1

3

53

3

42

46

0.1 

0.3 

5.7 

0.3 

4.5 

4.9 

13 

331 

1,423 

149 

762 

1,926 

0.0

1.0

4.1

0.4

2.2

5.6

137

14.7 

4,935 

14.2

7

5

32

96

0.8 

0.5 

3.4 

241 

683 

552 

0.7

2.0

1.6

10.3 

3,904 

11.3

188

20.2 

4,072 

11.7

13

6

1.4 

0.6 

2,184 

167 

6.3

0.5

64

31

13

110

27

50

18

42

36

34

137

17

41

22

168

28

EN 

117 

   EN 

 
 
 
Quality of action inadequate 

Recoverable VAT, interest received not correctly reflected 

Total 

22

30

2.4 

3.2 

3,667 

10.6

844 

2.4

932

100 

34,675 

100

167

28

37

The  most  common  type  of  recoveries  qualified  as  irregularities  is  ‘Action  not  in 
accordance  with  the  rules’  (211  recoveries  or  22.6%)  followed  by  ‘Missing 
Documents’ (188 recoveries or 20.2%). The share of the latter type falls sharply to 
11.7%  if  the  irregular  amounts  are  considered.  The  third  most  common  type  is 
‘Expenditure not covered by legal base’ (137 recoveries or 14.7%). The last type for 
which  the  share  exceeds  10%  is  ‘Incorrect  rates  used  in  calculating  the  claim’  (96 
recoveries  or  11.3  %).  In  316  recoveries,  more  than  one  type  of  irregularity  was 
indicated. The most frequent pair of identified irregularities was ‘Recoverable VAT 
and interest received not correctly reflected’ combined with ‘Incorrect rates used in 
calculating  the  claim’.  This  pair  of  irregularities  occurred  in  30  recoveries.  The 
second  pair  was  ‘Incorrect  rates  used  in  calculating  the  claim’  combined  with 
‘Missing  Documents’,  which  occurred  in  24  recoveries.  The  pair  ’Expenditure  not 
covered by legal base’ combined with ’Incorrect rates used in calculating the claim’ 
occurred in 23 cases. 

Table DE8 presents the most frequently selected pairs of irregularities. Totals are not 
given  in  this  table  because  the  table  is  not  complete:  the  rows  indicate  all  the 
categories,  whereas  the  columns  only  represent  the  most  frequent  categories  of 
irregularities, which led to some, but not all, cells appearing twice in the table. The 
most important findings in this table relate to cells with values of 10 as they could 
hint at a certain irregularity or fraud pattern.  

Table DE 8:  The most frequently indicated pairs of irregularity types 

Type of irregularity 

Incorrect 
rates used 
in 
calculating 
the claim 

Missing 
Documents 

Action not in 
accordance 
with the rules 

Recoverable 
VAT, interest 
received not 
correctly 
reflected 

Action not implemented 

Action not in accordance with the rules 

Action not used for intended purposes 

Beneficiary ineligible 

Calculation error 

Deadline not respected 

Expenditure declared not related to the action 

Expenditure not covered by legal base 

Inappropriate accumulation of aid 

Incomplete Documents 

Quality of action inadequate 

Incorrect rates used in calculating the claim 

Missing Documents 

Recoverable  VAT,  interest  received  not  correctly 
reflected 

Total 

6 

1 

5 

4 

23 

3 

10 

N/A 

24 

30 

106 

1 

21 

1 

4 

11 

7 

7 

1 

11 

24 

N/A 

20 

108 

1 

N/A 

1 

3 

9 

12 

15 

5 

4 

6 

21 

22 

99 

22 

5 

1 

3 

5 

1 

3 

30 

20 

N/A 

90 

EN 

118 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
The  most  common  types  of  recoveries  for  which  more  than  one  irregularity  was 
identified are ‘Missing documents’ in 108 cases, followed by ‘Incorrect rates used in 
calculating the claim’ in 106 recoveries. 

Table  DE9  provides  an  overview  of  the  recoveries  by  type  of  irregularity,  broken 
down  by  qualification  of  the  recovery.  For  recoveries  qualified  as  suspected  fraud, 
only the categories were reported where the cells were not empty. 

Table DE 9:  Recoveries (number and amount) by type of irregularity by qualification 

Qualification 

Type of irregularity 

Number  

% 

€ 1 000 

% 

Avera
ge 

Action not implemented 

36 

3.9 

2,296 

7.3 

Action not in accordance with the rules 

211 

23.1 

6,449 

20.5 

Advances not correctly reflected 

Beneficiary ineligible 

Calculation error 

Copy documents rather than originals 

Deadline not respected 

Expenditure declared not related to the action 

Irregularity 

Expenditure not covered by legal base 

1 

2 

53 

2 

40 

46 

0.1 

0.2 

5.8 

0.2 

4.4 

5.0 

13 

271 

1,423 

22 

697 

1,926 

0.0 

0.9 

4.5 

0.1 

2.2 

6.1 

135 

14.8 

3,201 

10.2 

Inappropriate accumulation of aid 

Incomplete Documents 

Incorrect rates used in calculating the claim 

Missing Documents 

Not Applicable 

Public procurement procedures not respected 

Quality of action inadequate 

Recoverable VAT, interest received not correctly reflected 

4 

32 

96 

187 

11 

5 

22 

30 

0.4 

3.5 

10.5 

20.5 

1.2 

0.5 

2.4 

3.3 

285 

552 

3,904 

4,045 

1,788 

65 

0.9 

1.8 

12.4 

12.9 

5.7 

0.2 

3,667 

11.7 

844 

 Total of Irregularity 

913 

100 

31,447 

Suspected 
fraud 

Action not implemented 

Beneficiary ineligible 

Copy documents rather than originals 

Deadline not respected 

Expenditure not covered by legal base 

Falsified documents 

Inappropriate accumulation of aid 

Missing Documents 

Not Applicable 

Public procurement procedures not respected 

Total of Suspected fraud 

Total  

1 

1 

1 

2 

2 

7 

1 

1 

2 

1 

19 

932 

5.3 

5.3 

5.3 

10.5 

10.5 

36.8 

5.3 

5.3 

10.5 

5.3 

100 

78 

60 

127 

66 

1,734 

241 

398 

27 

396 

102 

3,229 

34,675 

2.7 

100 

2.4 

1.9 

3.9 

2.0 

53.7 

7.5 

12.3 

0.8 

12.3 

3.2 

100 

64

31

13

136

27

11

17

42

24

71

17

41

22

163

13

167

28

34

78

60

127

33

867

34

398

27

198

102

170

37

Among the recoveries qualified as irregularities ‘Action not in accordance with the 
rules’ was the most frequent identified category (211 recoveries or 23.1%). The next 
category was ‘Missing documents (187 recoveries or 20.5%). The four most frequent 
categories account for 68.9% of the recoveries qualified as irregularity, which shows 
a big variety in modus operandi used in irregular transactions. It should be observed 

EN 

119 

   EN 

 
  
 
that  the  share  of  these  categories  is  lower  (56%)  if  the  amounts  involved  in  the 
recovery are taken into account. 

Among  the  recoveries  qualified  as  suspected  fraud,  ‘Falsified  documents’  was  the 
most  frequent  type  of  irregularity  (7  recoveries  or  37%).  However,  the  amounts 
involved  in  the  recovery  show  a  different  pattern:  the  2  cases  where  the  type  of 
irregularity  was  ‘Expenditure  not  covered  by  legal  base’  account  for  54%  of  the 
amounts, whereas the category ‘Falsified documents’ only accounted for 7.5%. 

7.3. 

Specific analysis 

7.3.1. 

Irregularity versus Suspected Fraud 

Only  2  %  of  the  932  issued  recovery  orders  were  qualified  by  the  Commission 
services as suspected fraud, but they account for 9.3% of the amounts involved in the 
recoveries. Table DE10 provides an overview of these findings.  

Table DE 10:  Recoveries (number and amounts) by qualification 

Qualification 
Irregularity  
Suspected fraud 
Total 

N 
913 
19 

% 
98.0 
2.0 
932  100.0 

Commit-
ments  
(€ 1 000) 
546,784
33,254

% 
94.3
5.7
580,038 100.0

Average 
€ 1,000 

598
1,750
622

Irregular 
amount 
(€ 1 000) 

31,447 
3,229 
34,676 

% 
90.7 
9.3 
100.0 

Average  
€ 1,000 

34.4
169.9
37.2

The  average  irregular  amount  per  recovery was  almost  5  times  higher  in  suspected 
fraud  recoveries  than  in  recoveries  qualified  as  irregularity.  The  average  for  all 
recoveries qualified as  irregularity was EUR 34,444 compared to EUR 169,947 for 
recoveries qualified as suspected fraud. It should be noted that the financial impact of 
suspected fraud cases could be revised following OLAF's investigations. 

7.3.2.  Time delay 

The average delay between the commitment and the issuing of a recovery order is 4 
years and 8 months. Taking account of the applicable procedures from the moment 
of  commitment  through  payments,  controls  till  issuing  the  recovery  order,  the 
procedure  is  rather  fast.  For  recovery  orders  in  direct  expenditures  issued  in  2008 
most  commitments  were  made  in  2004  and  2006  (see  graph  DE1).  In  both  years, 
more  than  150  commitments  were  made  for  which  a  recovery  order  was  issued  in 
2008.  Almost  90%  of  recovery  orders  by  number  concerned  commitments  which 
were made between 2000 and 2006. Recovery orders by amounts for the same period 
account for almost 85% of the amounts to be recovered.  

Taking account of the amounts involved and by applying the weighted average of the 
time delay, it can be expected that the average time between the commitment and the 
issuing of a recovery order will increase to 5 years and 6 months. This shows that it 
takes longer to issue a recovery order in cases involving higher amounts, especially 
in the projects in which the total amount of contract has to be recovered. 

The chart below presents the recoveries registered in 2008 by number (blue line) and 
amounts (magenta bars) of commitments by year of the commitment was made (e.g.: 

EN 

120 

   EN 

 
in  2008,  150  recoveries  were  registered  in  ABAC  that  were  made  in  2006.  The 
amount to be recovered is more than EUR 5 million).  

Chart DE 1:  Recoveries (number and amounts) by year of commitment 

6.000.000,00

5.000.000,00

4.000.000,00

3.000.000,00

2.000.000,00

1.000.000,00

0,00

1991

1993

1995

1997

1998

7.4. 

Recovery  

180

160

140

120

100

80

60

40

20

0

Irregular amount

Number

2005

2006

2007

2008

1999

2001

2003
2000
2002
Commitment Year

2004

This  paragraph  describes  the  payments  made  to  the  Commission  further  to  the 
issuing of the recovery orders. Once a recovery order is issued, the beneficiary has to 
pay back the undue payment. For the recovery orders issued in 2008, full or partial 
payment  could  be  reported  in  679  (72%)  cases,  which  represents  an  amount  of 
almost EUR 22 million (65%). 262 recovery orders (28%) were not paid yet, which 
account for almost EUR 13 million (35%).  

Table DE 11:  Recoveries (number and amount) by payment status and qualification. 

Qualification 

Irregularity  

Suspected fraud 

Total 

Recovered111 

To be Recovered 

Number 

Cashed Amount (€ 1 000) 

Number 

Open Amount (€ 1 000) 

665 

14 

679 

21,387 

599 

21,986 

256 

6 

262 

10,349

2,631

12,980

The  recovery  rate  for  all  recoveries  is  63.4%  and  is  higher  for  irregularities  (68%) 
than  for  suspected  fraud  (18.6%).  However  it  is  important  to  note  that  the 

111 

The  totals  in  this  table  exceed  the  total  number  of  recoveries  and  recovered  amounts  as  some  partial 
recoveries fall into both ‘recovered’ and ‘to be recovered’.  

EN 

121 

   EN 

 
€
 
                                                 
Commission  recovered  the  full  amount  of  13  contracts  out  of  19  cases  involving 
suspected fraud. In 6 cases, the full amount still needs to be recovered. Five out of 
these six cases account for 81.9% of the amounts to be recovered in suspected fraud 
cases. 

7.5. 

Conclusions 

This analysis was the first attempt to examine the data from the recovery context of 
ABAC.  As  already  mentioned  in  the  methodology  paragraph  of  the  chapter,  the 
findings should be treated carefully as this is only the first year that a limited set of 
data was available. The findings should not be considered as empirical evidence of 
the  level  of  fraud  and  irregularity.  Taking  account  of  these  constraints  and 
limitations, the following cautious conclusions can be drawn. 

•  Irregular  amounts  only  represent  6%  of  the  commitments  for  which  recovery 

orders were issued; 

•  Almost  90%  of  the  recoveries  relate  to  commitments  made  for  internal  policies, 
but relative share for external actions for both the number and the amounts to be 
recovered is substantially higher; 

•  The  method  of  detection  most  frequently  identified  in  recoveries  qualified  as 
irregularity (both number and amounts) is ‘Community control’, in particular by 
carrying out ‘Desk check of documents’. It was only in a few recoveries that desk 
controls led to a ‘suspected fraud qualification’, which could imply that the design 
of these controls could be optimized to enhance the possibility of suspected fraud 
detection; 

•  The  type  of  irregularity  showed  a  large  variance.  In  recoveries  qualified  as 
irregularity,  ‘Action  not  in  accordance  with  the  rules’  and  ‘Missing  documents’ 
were  the  most  frequent  categories,  whereas  the  type  of  irregularity  most 
frequently  observed  in  recoveries  qualified  as  suspected  fraud  was  ‘Falsified 
documents’’ 

•  The  aggregated  amount  of  recovery  orders  issued  for  commitments  made  in  the 
area of internal policies was four times higher than for commitments made in the 
external  actions  domain.  The  latter  however  seems  to  be  more  exposed  to  the 
occurrence of suspected fraud; 

•  63.4% of the debit notes issued in 2008 was paid. 

EN 

122 

   EN 

 
ANNEXES 

EN 

123 

   EN 

 
ANNEX 1 – NUMBER OF CASES OWNRES AND AMOUNTS – PERIOD 2004-2007 PER MEMBER STATE 

Number of OWNRES cases and amounts for the period 2005-2008 by Member State 

2005 

2006 

2007 

2008 

Member State 

Cases  Amount € 

Cases 

Amount € 

Cases 

Amount € 

Cases 

Amount € 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 

83 
669 
1 317 
64 
501 
34 
349 
55 
22 
298 
0 
1 794 
20 
60 
698 

5 153 940 
9 072 828 
78 287 465 
6 884 838 
48 911 216 
1 992 413 
33 837 541 
8 366 740 
671 846 
31 845 317 
0 
29 912 777 
1 652 095 
3 250 999 
59 105 121 

EUR-15 TOTAL 

5 964 

318 945 136 

CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
SI 
SK 

16 
19 
3 
70 
35 
10 
6 
55 
22 
4 

379 977 
531 275 
165 287 
1 986 224 
1 515 325 
544 854 
882 756 
1 218 001 
618 272 
75 841 

EUR-10 TOTAL 

240 

7 917 812 

BG 
RO 

EUR-2 TOTAL 

0 
0 

0 

0 
0 

0 

75 
428 
1 140 
67 
632 
28 
314 
48 
48 
341 
1 
1 406 
17 
47 
1 057 

5 649 

9 
63 
5 
103 
39 
28 
11 
69 
24 
28 

379 

0 
0 

0 

36 518 807 
22 238 675 
77 337 728 
7 208 999 
18 140 369 
1 764 959 
32 981 593 
2 976 051 
2 482 972 
23 582 174 
0 

30 051 013 
1 635 142 
2 318 935 
112 872 035 
372 109 452 

750 964 
2 290 130 
423 140 
6 265 722 
1 283 365 
2 253 690 
404 949 
8 492 588 
1 579 108 
1 236 418 
24 980 074 

456 726 
3 785 318 
4 242 044 

103 
317 
1218 
44 
438 
21 
311 
32 
43 
310 
1 
870 
25 
70 
1023 
4 826 

14 
64 
17 
64 
57 
25 
3 
142 
26 
12 
424 

19 
75 
94 

5 028 046 
12 670 490 
65 894 342 
3 963 276 
19 019 835 
708 003 
17 548 870 
1 444 289 
1 645 639 
31 320 103 
263 046 
54 597 249 
2 186 424 
6 331 784 
98 362 245 
320 983 641 

787 523 
5 025 048 
1 358 643 
5 852 076 
1 544 550 
944 415 
449 940 
5 609 503 
915 631 
469 810 
22 957 139 

502 373 
7 175 419 
7 677 792 

5 937 611 
12 007 783 
59 113 839 
6 068 078 
32 093 701 
1 464 957 
29 109 870 
11 697 070 
2 864 369 
65 602 399 
49 291 
37 346 132 
780 560 
2 164 111 
65 054 126 

331 353 897 

192 160 
2 302 704 
178 010 
7 805 235 
1 599 918 
1 886 378 
1 226 978 
1 808 507 
950 848 
1 561 967 

19 512 705 

0 
0 

0 

93 
449 
1558 
54 
439 
34 
327 
57 
35 
276 
0 
1145 
23 
43 
1072 
5 605 

11 
50 
12 
69 
41 
40 
10 
159 
27 
21 
440 

15 
37 
52 

124 

% 
Change 
cases 
2007- 
2008 

% 
Change 
amount 
2007-
2008 

10.75% 
-29.40% 
-21.82% 
-18.52% 
-0.23% 
-38.24% 
-4.89% 
-43.86% 
22.86% 
12.32% 
N/A 
-24.02% 
8.70% 
62.79% 
-4.57% 
-13.90% 

27.27% 
28.00% 
41.67% 
-7.25% 
39.02% 
-37.50% 
-70.00% 
-10.69% 
-3.70% 
-42.86% 
-3.64% 

26.67% 
102.70% 
80.77% 

-86.23% 
-43.02% 
-14.80% 
-45.02% 
4.85% 
-59.89% 
-46.79% 
-51.47% 
-33.72% 
32.81% 
N/A 
81.68% 
33.71% 
173.05% 
-12.86% 
-13.74% 

4.87% 
119.42% 
221.09% 
-6.60% 
20.35% 
-58.09% 
11.11% 
-33.95% 
-42.02% 
-62.00% 
-8.10% 

9.99% 
89.56% 
80.99% 

EN 

EN 

 
  
EUR-27 TOTAL 

6 204 

326 862 948 

6 028 

350 866 602 

6 097 

401 331 570 

5 344 

351 618 572 

-12.35% 

-12.39% 

EN 

125 

EN 

 
  
ANNEX 2 – OWNRES CASES PER MEMBER STATE 

OWNRES CASES BY MEMBER STATE

S
E
S
A
C
F
O
R
E
B
M
U
N

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 MT PL SI SK BG RO

MEMBER STATE

2005

2006

2007

2008

EN 

126 

EN 

 
  
 
 
ANNEX 3 – IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 

IMPACT ON CUSTOMS PROCEDURE FREE CIRCULATION 

YEAR  CASES 

IMPACT CASES % 
OF TOTAL 

AMOUNTS 
ESTABLISHED 

IMPACT AMOUNTS 
ESTABLISHED % OF 
TOTAL 

2004 

2005 

2006 

2007 

2008 

2256 

3306 

3860 

3947 

3601 

65.01% 

53.29% 

64.03% 

64.74% 

67.38% 

172 902 304 

263 805 274 

265 767 226 

327 029 733 

271 199 284 

82.20% 

80.71% 

75.75% 

81.49% 

77.13% 

EN 

127 

EN 

 
  
ANNEX 4 – TOP 10 CHAPTER HEADINGS 

TOP 10 CHAPTER HEADINGS 

2006 

2007 

2008 

CN 

PRODUCT 

AMOUNT 
€ 

CASES 

   CN 

PRODUCT 

AMOUNT 
€ 

CASES 

   CN 

PRODUCT 

AMOUNT 
€ 

CASES 

85 

TVs and parts etc. 

63 260 655 

1 048 

   85 

TVs and parts etc. 

86 667 729 

1 062 

   85 

TVs and parts etc. 

90 487 554 

24 

Tobacco/cigarettes 

43 590 444 

514 

   64 

Footwear 

48 323 370 

282 

   24 

Tobacco/cigarettes 

28 701 676 

15  Oils and fats 

22 403 986 

86 

   24 

Tobacco/cigarettes 

29 872 956 

367 

   84  Machines 

23 351 047 

61  Clothing 

19 965 746 

233 

   87 

(Parts of) cars/motors  

22 374 405 

335 

   61  Clothing 

10  Cereals 

15 022 561 

48 

   07 

Edible vegetables 

21 673 533 

91 

   62  Clothing 

22 098 382 

19 638 499 

02  Meat 

14 324 372 

332 

   84  Machines 

18 135 581 

386 

   87 

(Parts of) cars/motors  

15 873 280 

07 

Edible vegetables 

13 883 909 

122 

   61  Clothing 

17 609 486 

381 

   64 

Footwear 

73  Articles of iron & steel 

13 222 296 

130 

   62  Clothing 

15 304 036 

445 

   39 

Plastics 

87 

(Parts of) cars/motors  

11 698 920 

316 

   63  Other textile articles 

10 420 845 

79 

   02  Meat 

10 188 686 

10 179 568 

10 091 686 

17 

Sugar/sugar products 

11 542 566 

88 

   73  Articles of iron & steel 

8 990 712 

184 

   07 

Edible vegetables 

9 772 650 

809 

344 

367 

395 

437 

338 

233 

214 

122 

154 

EN 

128 

EN 

 
  
 
 
ANNEX 5 – GOOD AFFECTED BY FRAUD AND IRREGULARITY – PERIOD 2005-2007 

GOODS AFFECTED BY FRAUD AND IRREGULARITY PERIOD 2006-2008 
2007 

2006 

2008 

TARIFF 
CODES 

24022090 
85254099 
07032000 
15091010 
85393190 
61103099 
02071410 
10062098 
85219000 
73121071 
15091090 
10063000 
17029099 
17019910 
24022000 
08030019 
02023090 
85281294 
36799690 
96131000 
83051000 
85282190 
90013000 
85281220 
15100010 

CASES 

AMOUNTS € 

459
24
85
15
103
29
108
8
151
1
16
1
27
22
2
54
53
77
1
16
5
66
2
15
5

35 662 152 
15 421 737 
13 084 516 
11 258 441 
9 431 755 
8 157 065 
7 346 237 
7 333 377 
6 782 215 
6 376 418 
6 090 434 
5 818 641 
5 550 293 
5 346 516 
5 189 984 
5 119 457 
5 017 135 
4 027 664 
3 679 969 
3 663 965 
2 914 700 
2 713 408 
2 600 076 
2 413 933 
2 295 170 

TARIFF 
CODES 

   64039998 
   85282190 
   07032000 
   24022090 
   85281298 
   87031018 
   64030000 
   85393190 
   63039118 
   84119190 
   02071410 
   85219000 
   61103099 
   24012010 
   24031010 
   62034231 
   96131000 
   61101190 
   20031030 
   04051000 
   85281294 
   85369010 
   64039938 
   85254091 
   48103900 

EN 

TARIFF 
CODES 

   85219000 
   24022090 
   85282190 
   84119100 
   85393190 
   07032000 
   28046900 
   02071410 
   62041100 
   96131000 
   61103099 
   24012010 
   61101190 
   39232100 
   85287220 
   61091000 
   83112000 
   02023090 
   17019999 
   61102099 
   87031018 
   84099100 
   15119019 
   85269120 
   20130001 

CASES 

AMOUNTS € 

95
311
26
18
84
114
6
51
107
18
56
11
12
61
2
47
1
20
2
64
18
4
3
19
2

28 570 466 
24 256 682 
18 632 857 
9 259 219 
7 837 683 
7 681 578 
5 886 029 
5 602 979 
5 056 821 
4 685 240 
4 034 071 
3 794 514 
3 512 930 
3 375 377 
2 902 796 
2 828 342 
2 765 919 
2 479 389 
2 376 061 
2 375 301 
2 352 256 
2 208 179 
2 150 803 
2 118 755 
2 077 722 

CASES 

AMOUNTS € 

39
76
49
261
4
50
6
102
1
7
115
114
86
9
43
21
20
14
44
1
37
2
3
12
1

30 836 774 
23 806 063 
20 224 990 
17 253 111 
13 221 267 
9 796 834 
6 706 330 
6 683 582 
6 468 283 
5 197 247 
4 409 392 
4 107 588 
3 736 346 
3 711 817 
3 710 185 
3 456 608 
3 228 490 
3 157 134 
3 126 633 
3 071 722 
2 585 595 
2 549 674 
2 548 693 
2 484 027 
2 111 908 

129 

EN 

 
  
 
  
  
  
 
ANNEX 6 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 

FRAUD AND IRREGULARITY: BREAKDOWN BY ORIGIN OF GOODS DURING 2006-2008 

2006 

2007 

2008 

COUNTRY 

Amount € 

CASES 

COUNTRY 

Amount € 

CASES 

COUNTRY 

Amount € 

CASES 

90 328 190 

1 516

  China 

169 495 156 

1 718

  China 

133 997 371

1 659 

31 347 676 

297

  US 

44 250 023 

780

  US 

28 921 543 

688

Japan 

26 484 283 

270

Japan 

40 397 999

18 798 783

Thailand 

19 311 907 

66

  South Korea 

16 965 037 

168

  Not specified  

17 764 405

Not specified 

18 218 201 

798

  Brazil 

12 361 567 

267

  Bangladesh 

14 020 461

15 048 789 

354

  Taiwan 

12 291 037 

135

  South Korea 

13 256 416

14 126 527 

47

  Vietnam 

9 154 388 

61

  Brazil 

South Korea 

12 093 869 

151

  Bangladesh 

8 900 154 

183

  Switzerland 

Turkey 

10 644 686 

101

  Not specified  

7 159 143 

684

  Malaysia 

620 

220 

584 

181 

97 

147 

77 

55 

12 656 134

8 509 712

6 963 168

China 

Japan 

US 

Brazil 

Tunisia 

EN 

130 

EN 

 
  
  
  
  
  
 
 
ANNEX 6.1: RECOVERY RATE (RR) BREAKDOWN BY ORIGIN OF GOODS 2006-2008 

RECOVERY RATE (RR) BREAKDOWN BY ORIGIN OF GOODS 2006-2008 

2006 

2007 

2008 

COUNTRY 

Recovered € 

RR 

COUNTRY 

Recovered € 

RR 

COUNTRY 

Recovered € 

RR 

China 

Japan 

US 

42 690 405 

47%   China 

65 851 360 

39%   China 

13 022 284 

42%   US 

34 009 628 

77%   US 

22 863 972 

79%  

Japan 

21 518 197 

81%  

Japan 

39 766 265

20 307 596

16 326 518

30% 

50% 

87% 

Thailand 

1 852 386 

10%   South Korea 

6 972 683 

41%   Not specified  

2 073 402

12% 

Not specified 

5 851 802 

32%   Brazil 

6 717 519 

54%   Bangladesh 

Brazil 

Tunisia 

6 004 188 

40%   Taiwan 

3 828 968 

31%   South Korea 

440 582 

3%   Vietnam 

7 839 416 

86%   Brazil 

South Korea 

10 017 939 

83%   Bangladesh 

4 493 917 

50%   Switzerland 

Turkey 

1 703 544 

16%   Not specified 

4 515 313 

63%   Malaysia 

5 380 711

8 037 874

4 647 418

1 012 284

1 596 236

38% 

61% 

37% 

12% 

23% 

EN 

131 

EN 

 
  
  
  
  
  
ANNEX 7 – RECOVERY RATES OWNRES 

RECOVERY RATES (RR) TRADITIONAL OWN RESOURCES  

MEMBER 
STATE 

AMOUNT € 
2007 

RECOVERED € 
2007 

RR 2007 

AMOUNT € 
IN 2008 

RECOVERED € 
IN 2008 

2007 

RR for 
2007 in 
2008 

AMOUNT € 
2008 

RECOVERED € 
2008 

RR 2008 

2008 

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 

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 € 

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 € 

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% 

36 518 807 € 
22 238 675 € 
456 726 € 
750 964 € 
2 290 130 € 
77 337 728 € 
7 208 999 € 
423 140 € 
18 140 369 € 
1 764 959 € 
32 981 593 € 
2 976 051 € 
6 265 722 € 
2 482 972 € 
23 582 174 € 
1 283 365 € 
0 € 
2 253 690 € 
404 949 € 
30 051 013 € 
8 492 588 € 
1 635 142 € 
3 785 318 € 
2 318 935 € 
1 579 108 € 
1 236 418 € 
112 872 035 € 

1 956 817 € 
5 210 766 € 
253 003 € 
434 503 € 
1 539 161 € 
57 543 376 € 
6 384 112 € 
231 662 € 
13 091 879 € 
798 103 € 
13 046 898 € 
199 214 € 
1 606 699 € 
1 987 124 € 
5 068 369 € 
650 144 € 
0 € 
1 103 122 € 
199 936 € 
21 100 182 € 
2 624 790 € 
291 150 € 
411 598 € 
2 089 519 € 
1 356 182 € 
475 687 € 
59 673 336 € 

5.36%
23.43%
55.39%
57.86%
67.21%
74.41%
88.56%
54.75%
72.17%
45.22%
39.56%
6.69%
25.64%
80.03%
21.49%
50.66%
0.00%
48.95%
49.37%
70.21%
30.91%
17.81%
10.87%
90.11%
85.88%
38.47%
52.87%

5 028 046 € 
12 670 490 € 
502 373 € 
787 523 € 
5 025 048 € 
65 894 342 € 
3 963 276 € 
1 358 643 € 
19 019 835 € 
708 003 € 
17 548 870 € 
1 444 289 € 
5 852 076 € 
1 645 639 € 
31 320 103 € 
1 544 550 € 
263 046 € 
944 415 € 
449 940 € 
54 597 249 € 
5 609 503 € 
2 186 424 € 
7 175 419 € 
6 331 784 € 
915 631 € 
469 810 € 
98 362 245 € 

1 678 042 € 
2 216 020 € 
289 569 € 
134 134 € 
1 292 086 € 
40 753 580 € 
3 295 562 € 
411 651 € 
10 662 361 € 
384 491 € 
11 235 749 € 
387 361 € 
2 988 620 € 
1 544 260 € 
2 812 556 € 
688 732 € 
0 € 
73 706 € 
20 319 € 
8 289 082 € 
1 832 197 € 
328 155 € 
5 516 513 € 
4 501 990 € 
613 472 € 
236 534 € 
29 851 886 € 

33.37% 
17.49% 
57.64% 
17.03% 
25.71% 
61.85% 
83.15% 
30.30% 
56.06% 
54.31% 
64.03% 
26.82% 
51.07% 
93.84% 
8.98% 
44.59% 
N/A 
7.80% 
4.52% 
15.18% 
32.66% 
15.01% 
76.88% 
71.10% 
67.00% 
50.35% 
30.35% 

377 060 694 €

150 489 564 € 

39.91% 

401 331 570 € 

199 327 332 € 

49.67% 351 618 572 € 

132 038 628 € 

37.55% 

EN 

132 

EN 

 
  
ANNEX 8 – SEIZED AND CONFISCATED GOODS 

SEIZED AND CONFISCATED GOODS (cigarettes CN 24022090) 

MEMBER 
STATES 

CASES 

2006 
ESTIMATED OR 
ESTABLISHED 
AMOUNT € 

CASES 

2007 
ESTIMATED OR 
ESTABLISHED 
AMOUNT € 

CASES 

2008 
ESTIMATED OR 
ESTABLISHED 
AMOUNT € 

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 

4 
16 
13 
3 
0 
7 
26 
15 
3 
0 
0 
0 
1 
3 
163 

254 

0 
2 
0 
0 
15 
5 
2 
7 
17 
0 
9 
3 

60 

97 191 € 
876 349 € 
511 777 € 
78 122 € 
0 € 
223 516 € 
1 264 583 € 
3 214 309 € 
216 059 € 
0 € 
0 € 
0 € 
691 200 € 
48 760 € 
10 266 215 € 

17 488 081 € 

0 € 
364 685 € 
0 € 
0 € 
515 938 € 
109 526 € 
490 904 € 
780 914 € 
404 267 € 
0 € 
549 900 € 
397 874 € 

3 614 008 € 

2 
6 
2 
0 
0 
8 
29 
13 
5 
4 
0 
0 
0 
3 
42 

89 954 € 
365 914 € 
171 448 € 
0 € 
0 € 
139 145 € 
1 679 953 € 
2 072 640 € 
803 923 € 
345 467 € 
0 € 
0 € 
0 € 
385 600 € 
4 345 939 € 

114 

10 399 983 € 

0 
1 
0 
1 
6 
0 
4 
2 
34 
19 
6 
1 

74 

0 € 
33 673 € 
0 € 
41 304 € 
193 168 € 
0 € 
693 930 € 
205 013 € 
813 987 € 
3 219 905 € 
187 055 € 
144 760 € 

5 532 795 € 

2 
1 
3 
0 
0 
7 
33 
9 
13 
13 
0 
0 
0 
3 
100 

184 

2 
0 
1 
0 
4 
3 
4 
0 
37 
16 
4 
0 

71 

48 255 € 
200 390 € 
231 311 € 
0 € 
0 € 
257 448 € 
2 304 549 € 
971 125 € 
2 540 368 € 
1 694 276 € 
0 € 
0 € 
0 € 
116 014 € 
9 789 560 € 

18 153 296 € 

52 543 € 
0 € 
219 219 € 
0 € 
860 456 € 
78 624 € 
365 572 € 
0 € 
1 193 988 € 
1 134 311 € 
261 035 € 
0 € 

4 165 748 € 

314 

21 102 089 € 

188 

15 932 778 € 

255 

22 319 044 € 

EN 

133 

EN 

 
  
ANNEX 9 – PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 

PERCENTAGE CLASSIFIED AS FRAUD 2006-2008

S
E
S
A
C
D
U
A
R
F
%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

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

2006

2007

2008

EN 

134 

EN 

 
  
 
 
 
ANNEX 10 – AMOUNTS INVOLVED IN FRAUD 
AMOUNTS INVOLVED IN FRAUD PERIOD 2006-2008 

MEMBER 
STATE 

CASES 

2006 

FRAUD 
CASES 

FRAUD IN € 

CASES 

2007 

FRAUD 
CASES 

FRAUD IN € 

CASES 

2008 
FRAUD 
CASES 

FRAUD IN € 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EUR-15 
BG 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
EUR-12 
EUR-27 

75 
428 
1 140 
67 
632 
28 
314 
48 
48 
341 
1 
1 406 
17 
47 
1 057 
5 649 
0 
9 
63 
5 
103 
39 
28 
11 
69 
0 
24 
28 

379 
6 028 

25 
54 
154 
15 
249 
24 
32 
48 
0 
205 
1 
441 
8 
3 
159 
1 418 
0 
3 
5 
0 
59 
3 
1 
11 
19 
0 
11 
8 

120 
1 538 

2 250 974 
3 598 030 
13 737 742 
3 359 960 
21 659 342 
1 267 261 
119 450 
11 697 070 
0 
57 562 427 
49 291 
34 203 951 
276 018 
0 
10 160 937 
159 942 453 
0 
21 855 
91 486 
0 
4 499 751 
414 212 
130 892 
1 226 978 
404 267 
0 
579 346 
477 049 

7 845 836 
167 788 289 

93 
449 
1 558 
54 
439 
34 
327 
57 
35 
276 

1 145 
23 
43 
1 072 
5 605 
15 
11 
50 
12 
69 
41 
40 
10 
159 
37 
27 
21 
492 
6 097 

31 
54 
213 
2 
172 
21 
153 
57 
4 
101 
0 
341 
2 
3 
104 
1 258 
8 
3 
3 
1 
16 
7 
0 
5 
68 
19 
6 
10 

146 
1 404 

34 103 931 
2 286 375 
16 222 344 
213 813 
7 997 274 
1 151 960 
6 294 666 
2 976 051 
134 805 
11 918 739 
0 
23 429 524 
394 483 
0 
9 989 927 
117 113 892 
228 070 
26 456 
649 307 
41 304 
2 511 001 
77 313 
0 
285 766 
5 972 136 
3 219 905 
187 055 
475 316 

13 673 629 
130 787 521 

103 
317 
1 218 
44 
438 
21 
311 
32 
43 
310 
1 
870 
25 
70 
1 023 
4 826 
19 
14 
64 
17 
64 
57 
25 
3 
142 
75 
26 
12 
518 
5 344 

25 
37 
150 
6 
188 
11 
123 
32 
13 
170 
0 
69 
5 
3 
93 
925 
15 
3 
4 
1 
26 
12 
0 
2 
50 
27 
5 
3 

148 
1 073 

1 652 584 
2 371 821 
13 327 586 
670 840 
11 106 390 
323 853 
4 447 123 
1 444 289 
0 
18 037 668 
0 
2 361 909 
1 676 333 
0 
9 401 126 
66 821 522 
447 721 
378 947 
79 553 
100 592 
2 448 405 
428 990 
0 
429 621 
1 948 060 
1 521 782 
277 754 
127 700 

8 189 125 
75 010 647 

EN 

135 

EN 

 
  
  
  
  
 
 
 
 
 
ANNEX 11

AGRICULTURAL SECTOR

update 06/05/2009

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

YEARS 2000 - 2008

(amounts in € 1,000)

Year

Cases

Amounts affected

% of Agricultural 
expenditure

Agricultural 
expenditure

2008
2007
2006
2005
2004
2003
2002
2001
2000

1,198
1,548
3,249
3,193
3,401
3,237
3,285
2,415
2,967

period < 2007: threshold €   4,000
period > 2006: threshold € 10,000

102,259
154,993
86,825
102,112
82,064
169,724
198,079
140,685
474,562

0.21
0.33
0.17
0.21
0.19
0.39
0.46
0.34
1.17

EAGF & EAFRD

48,628,607
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

4,000

3,500

3,000

s
e
s
a
c

f
o
°
N

2,500

2,000

1,500

1,000

500

0

Agricultural expenditure

Cases

2000

2001

2002

2003

2004
year

2005

2006

2007

2008

EN 

*) The concept "irregularity" includes fraud. The qualification as fraud, meaning criminal behaviour, can only be 
made following a penal procedure.

136 

   EN 

 
 
 
 
ANNEX 12

AGRICULTURAL SECTOR

update 06/05/2009

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

2008
(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

20
31
2

22
111
10
13
39
245
8
129
6
22
211
24
1
13
1
30
46
120

10
1
11
7
1,133

312
1,606
119

765
3,817
445
278
4,010
14,925
984
11,763
748
397
53,970
804
13
208
38
1,184
1,126
3,630

214
39
640
226
102,259

0.03
0.21
0.05

0.11
0.06
0.04
0.31
0.15
0.24
0.12
0.12
0.08
0.02
0.96
0.26
0.03
0.11
0.76
0.11
0.05
0.37

0.02
0.02
0.19
0.01
0.21

EN 

137 

 
 
ANNEX 13 

STRUCTURAL MEASURES (INCLUDE THE COHESION FUND) 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 1998-2008** 

YEAR

N° OF 
IRREGULARITIES

FINANCIAL AMOUNTS 
(in EUR)

TOTAL BUDGET 
(in MEUR)

IMPACT ON 
BUDGET

2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998

4,007
3,756
3,047
3,417
3,123
2,323
4,607
1,337
1,109
611
347

585,249,322
804,102,077
647,773,952
581,214,090
617,099,163
444,278,642
579,010,650
210,329,680
97,160,006
117,563,229
79,102,463

46,889
45,327
38,430
37,192
35,665
30,764
30,556
29,823
25,556
30,654
28,366

900,000,000

800,000,000

700,000,000

600,000,000

R
U
E

500,000,000

400,000,000

300,000,000

200,000,000

100,000,000

0

1.25%
1.77%
1.69%
1.56%
1.73%
1.44%
1.89%
0.71%
0.38%
0.38%
0.28%  

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

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Year

N° OF IRREGULARITIES

FINANCIAL AMOUNTS (in EUR)

*The concept of irregularity includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 

** Data have been updated in relation to those published in the 2007 report in order to take 
into account the updates sent by Member States during the reporting year 2008. 

EN 

138 

 
 
 
 
ANNEX 14 

COHESION FUND 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 1998-2008 

250,000,000

200,000,000

R
U
E

150,000,000

100,000,000

50,000,000

0

350

300

250

200

150

100

50

0

s
e
i
t
i
r
a
l

u
g
e
r
r
i

f
o
°
N

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Year

N° of irregularities

Financial amounts (in EUR)

YEAR

N° OF IRREGULARITIES

FINANCIAL AMOUNTS (in 
EUR)

2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998

140
86
219
208
291
48
4
3
2
3
0

56,328,911
109,739,219
178,487,134
133,653,731
194,285,278
132,914,324
9,627,540
2,534,032
36,278
914,311
0  

*The concept of irregularity includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 

EN 

139 

 
 
 
 
ANNEX 15 

PART 1 

STRUCTURAL FUNDS 

REGULATIONS NN. 1681/94 AND 1828/2006 

a) ARTICLE 3/28 COMMUNICATIONS BY MEMBER STATE - 2008 

MEMBER STATE

ERDF

ESF

EAGGF - Guid.

FIFG

TOTAL

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

36
14
3

48
196
4
6
50
310
14
55
20
2
591
13
12
1
56
205
178
24
13
49
352
2,252

1
19
1
4
30
160
3
17
19
121
12
39
2

100
4
7

208
63
162
121

23
113
1,229

2

2
20

5
18
56
2
4
20

102
10
4

76
61

1
15
398

37
35
4
4
80
379
7
30
99
493
28
98
42
2
805
27
24
1
264
345
403
146
13
73
489
3,928  

3

2
12
6

12

1

1
2
1

9
49

b) NUMBER OF IRREGULARITIES REPORTED BY MEMBER STATE - 2008 

EN 

140 

 
MEMBER STATE

ERDF

ESF

EAGGF - Guid.

FIFG

TOTAL

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

36
14
3

48
192
4
5
47
307
14
55
17
2
589
12
10
1
54
197
178
24
13
38
348
2,208

1
19
1
4
30
157
3
16
19
121
12
39
2

99
4
7

208
58
162
121

23
112
1,218

2

2
20

5
18
54
2
4
20

102
10
4

73
61

1
14
392

37
35
4
4
80
372
7
28
96
488
28
98
39
2
802
26
22
1
262
329
403
146
13
62
483
3,867  

3

2
12
6

12

1

1
2
1

9
49

EN 

141 

 
ANNEX 15 

PART 2 

STRUCTURAL FUNDS 

IRREGULARITIES REPORTED BY MEMBER STATES - 2008 

REGULATIONS NN. 1681/94 AND 1828/2006 

FINANCIAL AMOUNTS INVOLVED IN IRREGULARITIES 

ESF

EAGGF - Guid.

MEMBER STATE

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

ERDF
2,840,773
529,644
791,453

12,699,849
12,886,220
56,646
961,051
16,545,398
128,313,388
570,056
3,543,349
938,500
5,303,050
41,446,086
1,619,414
279,058
410,761
3,838,536
23,776,954
14,347,085
587,225
430,933
8,836,492
83,029,790

21,413
687,661
12,864
172,298
1,092,802
6,810,586
621,697
501,796
466,802
6,948,077
1,184,312
1,414,551
956,500

17,415,210
151,033
127,764

24,883,973
7,946,431
8,870,530
3,109,930

625,131
38,932,750
364,581,711 122,954,111

325,852

135,893
1,176,796

498,010
1,428,581
4,965,428
59,042
40,459
1,403,037

12,327,054
1,477,472
442,848

3,311,170
5,851,333

71,929
899,412
34,414,316

FIFG

111,633

92,040
1,313,585

TOTAL
2,862,186
1,543,157
804,317
172,298
13,928,544
20,985,235
678,343
2,052,897
19,754,366
524,579 140,751,472
1,813,410
4,998,359
3,298,037
5,303,050
74,918,714
3,247,919
857,740
410,761
28,722,509
35,344,144
29,468,297
3,718,729
430,933
9,533,552
459,491 123,321,443
6,970,274 528,920,411  

309,589
399,349
21,574

3,730,364

8,070

EN 

142 

 
ANNEX 16 
STRUCTURAL FUNDS 
IRREGULARITIES REPORTED BY MEMBER STATES  
UNDER REGULATIONS NN. 1681/94 AND 1828/2006 
SITUATION OF RECOVERY  

PART 1 – 2008 

a) AMOUNTS RECOVERED BY MEMBER STATES 

MEMBER STATE

ERDF

ESF

EAGGF - Guid.

FIFG

TOTAL

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

1,465,226
86,928
0

249,816
5,524,778
0
0
827,765
51,729,498
314,285
1,065,976
186,312
0
1,297,064
105,094
54,624
0
682,363
1,856,197
6,096,352
39,767
43,669
629,615
10,727,995
82,983,324

21,413
687,661
0
172,025
232,205
2,019,629
5,399
304,058
330,122
1,507,037
65,126
113,533
106,488

689,641
27,516
10,520

106,158
5,390,143
2,269,379
1,016,510

57,756

121,122
360,001

0
704,902
1,397,696
0
0
348

1,291,985
0
0

98,445
333,478

55,200
7,012,081
22,141,844

0
26,375
4,392,108

0
0
0

12,920

1,486,639
832,345
0
172,025
603,143
7,917,328
5,399
304,058
1,862,789
54,634,231
379,411
1,179,509
293,148
0
3,640,210
132,610
65,144
0
788,521
7,344,785
8,699,209
1,056,277
43,669
684,815
11,123
17,777,574
385,563 109,902,839  

361,520

0
0
0

0

b) AMOUNTS TO BE RECOVERED BY MEMBER STATES 

MEMBER STATE

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

ERDF
1,110,073
258,161
0

11,469,043
6,779,749
34,430
921,240
15,504,391
74,646,627
224,207
1,613,719
257,406
0
30,777,897
1,134,909
156,558
410,761
595,266
7,144,500
8,100,054
0
84,050
6,909,246
66,746,261
234,878,548

ESF

0
0
12,864
0
450,925
4,071,055
616,298
197,738
109,649
5,441,040
8,182
720,640
680,556

12,820,865
38,333
117,244

400,780
908,195
5,491,203
643,568

275,571
26,686,517
59,691,223

EAGGF - Guid.

FIFG

82,703

134,048

0
699,812

2,539,986
1,912
45,973
529,094

284,337
79,288
722,317 1,313,585
524,579

TOTAL
1,110,073
392,209
12,864
0
11,919,968
11,633,319
650,728
1,482,603
17,649,942
83,152,232
234,301
2,380,332
1,467,056
0
52,242,430
1,197,096
724,720
410,761
996,046
9,413,154
18,495,509
665,142
84,050
7,256,746
404,263
94,623,952
18,668,449 4,957,013 318,195,233  

0
399,349
21,574

1,360,459
4,504,903

6,520,066 2,123,602

71,929
786,911

23,854
442,848

8,070

NB:  The  sum  of  amounts  recovered  and  amounts  to  be  recovered  does  not  equal  the  amounts  affected  by 
irregularity indicated in PART 2 of Annex 15. The difference between those values is constituted by amounts 
that have been suspended before payment. 

EN 

143 

 
ANNEX 16 

STRUCTURAL FUNDS 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATIONS NN. 1681/94 AND 1828/2006 

SITUATION OF RECOVERY 

PART 2 – AMOUNTS TO BE RECOVERED 

MEMBER STATE

AMOUNTS AWAITING 
RECOVER Y

AMOUNTS IN JUSTICE*

AMOUNTS DECLARED 
IRRECOVERABLE**

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

12,880,004
15,526,195
12,864
1,282
12,848,346
579,276,579
9,651,599
1,919,496
45,369,687
242,277,079
3,244,949
11,482,731
2,016,384
1,184,401
409,218,510
1,197,096
52,932
2,673,629
516,492
13,777,195
12,231,729
98,182,937
2,323,252
1,296,899
7,556,675
256,768,099
1,743,487,041

356,060
827,278
0
0
865,185
68,203,492
110,975
0
5,125,953
7,699,602
889,145
670,637
1,242,372
552,660
330,936,858
0
0
709,750
0
3,289,333
1,030,885
14,940,631
11,053
36,043
4,070,529
422,682
441,991,123

4,392,276
12,399,648
0
0
0
119,905,882
4,451,300
7,669
524,344
374,005
593,422
2,511,737
0
78,070
102,563
0
0
0
0
559,940
0
15,371,723
515,209
0
0
19,380,574
181,168,362  

* 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 

144 

 
 
ANNEX 17 

COHESION FUND 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 

MEMBER STATE

N° OF 
IRREGULARITIES

FINANCIAL AMOUNTS 
(in EUR)

AMOUNTS AWAITING 
RECOVERY (in EUR)

CZ
EE
EL
ES
HU
IE
LT
LV
PL
PT
SK
TOTAL

2
2
12
64
13
3
8
5
7
22
2
140

88,210
129,614
4,937,771
24,827,955
1,400,938
9,498,140
8,280,568
86,279
214,754
5,655,879
1,208,803
56,328,911

0
0
326,398
14,442,900
1,033,292
0
47,056
86,279
65,550
2,602,188
1,164,379
19,768,042

EN 

145 

 
Annex 18 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2008 

Country No of cases
BG
CZ
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
TR
Total

140
17
5
18
11
6
5
1
46
246
1
9
18
523

2008 all programmes

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

55.746.357
901.458
431.751
14.111.055
998.674
2.587.730
879.753
3.350.556
1.046.826
1.040.726.211
380.000
2.470.509
4.897.518
1.128.528.398

28.863.495
464.327
292.599
3.433.811
833.807
2.533.680
652.138
167.528
704.975
21.666.478
60.000
794.753
314.763
60.782.354

8.989.139
409.173
292.599
472.020
774.862
365.705
652.138
167.528
525.403
16.259.867
0
252.270
218.781
29.379.485

Country No of cases
BG
CZ
HR
LV
MT
PL
RO
SK
Total

81
17
7
1
1
3
67
6
183

2008 PHARE

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

32.167.940
901.458
2.069.912
298.068
3.350.556
77.804
38.649.525
1.674.813
79.190.076

15.401.494
464.327
1.044.981
120.514
167.528
77.804
9.393.954
60.655
26.731.257

2.697.696
409.173
0
120.514
167.528
0
7.476.651
10
10.871.572

Country No of cases
BG
EE
HR
HU
LT
LV
PL
RO
SK
Total

39
5
4
11
5
3
43
100
3
213

2008 SAPARD

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

14.494.378
431.751
1.222.218
998.674
2.381.595
491.937
969.022
36.503.894
795.696
58.289.165

12.731.869
292.599
932.569
833.807
2.327.545
491.937
627.171
10.074.705
734.098
29.046.300

5.955.109
292.599
447.368
774.862
365.705
491.937
525.403
7.451.312
252.260
16.556.555

146 

EN 

 
€
 
€
 
€
 
Country No of cases
BG
HR
RO
Total

19
1
79
99

2008 ISPA

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

8.844.039
9.113.943
965.572.792
983.530.774

490.132
1.367.091
2.197.819
4.055.042

336.334
0
1.331.904
1.668.238

Country No of cases
BG
LT
LV
SI
Total

1
1
1
1
4

2008 Transition Facility

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

240.000
206.135
89.748
380.000
915.883

240.000
206.135
39.687
60.000
545.822

0
0
39.687
0
39.687

Country No of cases
HR
Total

6
6

2008 CARDS

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

1.704.982
1.704.982

89.170
89.170

24.652
24.652

Country No of cases
TR
Total

18
18

2008 Pre-accession assistance to Turkey

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

4.897.518
4.897.518

314.763
314.763

218.781
218.781

EN 

147 

 
€
 
€
 
€
 
€
 
Annex 19 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2008 

BELOW REPORTING THRESHOLD 

Country No of cases
BG
CZ
HR
PL
RO
SK
TR
Total

15
4
1
3
1
1
3
28

All programmes

EC amount eligible

EC amount 
irregular

EC amount to be 
recovered

1.893.540
171.226
538.049
74.236
34.856
64.039
571.934
3.347.880

64.359
21.513
4.000
10.930
5.033
2.441
28.751
137.027

35.220
21.513
0
10.930
0
0
14.744
82.407

Country No of cases
BG
CZ
RO
TR
Total

7
4
1
3
15

PHARE

EC amount eligible

EC amount 
irregular

EC amount to be 
recovered

117.948
171.226
34.856
571.934
895.964

51.276
21.513
5.033
28.751
106.573

32.775
21.513
0
14.744
69.032

Country No of cases
BG
PL
SK
Total

8
3
1
12

SAPARD

EC amount eligible

EC amount 
irregular

EC amount to be 
recovered

1.775.592
74.236
64.039
1.913.867

13.083
10.930
2.441
26.454

2.445
10.930
0
13.375

EN 

148 

 
€
 
€
 
€
 
Annex 20 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED – 2002-2008 

Country No of cases EC amount eligible
BG
280
CY
5
CZ
52
EE
41
HR
23
HU
108
LT
46
LV
38
MT
8
PL
304
RO
858
SI
38
SK
108
TR
25
1934
Total

87.635.494
5.624.616
23.944.948
28.364.624
17.310.012
16.399.538
105.581.247
3.316.018
4.913.491
790.760.846
3.835.735.658
4.052.982
48.879.273
6.298.426
4.978.817.172

All Funds
EC amount 
irregular

EC amount to be 
recovered

44.861.716
23.807
2.690.539
6.445.889
4.533.811
6.512.981
3.427.833
986.154
267.416
4.740.872
57.952.810
1.554.244
8.400.312
699.083
143.097.467

13.777.568
0
1.280.939
922.875
472.020
1.514.045
855.574
906.322
233.460
1.540.929
25.569.349
58.159
3.361.501
579.679
51.072.419

Country No of cases EC amount eligible
BG
134
CY
5
CZ
33
EE
17
HR
9
HU
45
LT
20
LV
19
MT
8
PL
111
RO
251
SI
6
SK
93
751
Total

47.056.603
5.624.616
2.961.980
11.069.315
5.044.912
12.560.823
912.091
1.157.589
4.913.491
353.062.660
318.049.590
2.115.972
19.321.942
783.851.583

PHARE
EC amount 
irregular

EC amount to be 
recovered

21.167.615
23.807
1.009.352
3.027.925
2.144.981
4.126.778
576.489
214.082
267.416
2.401.654
26.786.995
189.006
6.385.563
68.321.663

3.301.301
0
596.834
149.211
0
652.714
407.563
161.925
233.460
339.088
12.213.972
36.079
2.019.954
20.112.101

EN 

149 

 
€
 
€
 
Country No of cases EC amount eligible
BG
119
CZ
18
EE
20
HR
4
HU
63
LT
18
LV
18
PL
172
RO
382
SI
31
SK
14
859
Total

26.236.022
1.022.764
4.071.817
1.222.218
3.838.715
7.614.441
2.068.681
11.141.452
186.677.407
1.557.010
2.408.131
247.858.658

SAPARD
EC amount 
irregular

EC amount to be 
recovered

18.158.494
838.713
3.247.187
932.569
2.386.203
2.642.877
732.385
2.269.475
20.549.037
1.305.238
1.965.695
55.027.872

10.139.933
684.105
604.350
447.368
861.331
447.534
704.710
1.196.385
9.632.458
22.080
1.292.493
26.032.747

Country No of cases EC amount eligible
BG
26
CZ
1
EE
4
HR
2
LT
7
PL
21
225
RO
SK
1
287
Total

14.102.869
19.960.204
13.223.492
9.113.943
96.848.580
426.556.734
3.331.008.661
27.149.200
3.937.963.683

ISPA

EC amount 
irregular

EC amount to be 
recovered

5.295.607
842.474
170.777
1.367.091
2.332
69.743
10.616.778
49.054
18.413.856

336.334
0
169.314
0
476
5.456
3.722.919
49.054
4.283.553

EN 

150 

 
€
 
€
 
ANNEX 21 

IRREGULARITIES COMMUNICATED BY MEMBER STATES AND CANDIDATE COUNTRIES 

ISPA

PHARE

SAPARD

Year

No of 
cases

EC amount 
eligible

EC amount 
irregular

EC 
amount 
to be 
recovere
d

No of 
cases

EC amount 
eligible

EC amount 
irregular

EC amount 
to be 
recovered

No of 
cases

EC amount 
eligible

EC amount 
irregular

EC amount to 
be recovered

2002
2003
2004
2005
2006
2007
2008

Total

6
113.406
18
281.347.575
26
279.027.957
25
165.424.740
26
340.625.981
87 1.887.893.251
99
983.530.774
287 3.937.963.683

0
6.122
0
893.147
223.824
251.987
476
6.160.535
1.145.646
244
5.901.377 2.390.771
4.055.042 1.668.238
18.413.856 4.283.553

52 320.163.309
68
13.029.114
151
65.515.872
207 249.496.407
90
56.456.805
183
79.190.076
751 783.851.583

630.939
4.138.964
7.784.063
13.656.756
15.379.685
26.731.257
68.321.663

292.379
730.688
2.483.164
4.512.194
1.222.105
10.871.572
20.112.101

34
133
165
164
150
213
859

5.941.751
50.515.590
53.103.936
43.527.679
36.480.538
58.289.165
247.858.658

3.796.521
5.982.992
2.826.397
3.036.900
10.338.762
29.046.300
55.027.872

23.403
173.234
476.509
1.045.272
7.757.774
16.556.555
26.032.747

EN 

151 

EN 

 
  
€
 
IRREGULARITIES REPORTED BY MEMBER STATES IN 2008 – AGRICULTURE, STRUCTURAL AND COHESION FUNDS, OWN RESOURCES 

AGRICULTURE

STRUCTURAL FUNDS

COHESION FUND

OWN RESOURCES

ALL SECTORS

ANNEX 22 

CASES

TOTAL AMOUNTS

CASES

TOTAL AMOUNTS

CASES

TOT AL  AMOUNTS

CASES

TOT AL AMOUNTS

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

CASES

20
31
2

22
111
10
13
39
245
8
129
6
22
211
24
1
13
1
30
46
120

TOT AL AMOUNTS
311,608
1,605,690
119,470

764,680
3,816,771
445,241
278,131
4,010,046
14,924,635
983,842
11,763,441
747,522
397,497
53,969,740
803,754
13,375
208,144
37,814
1,183,639
1,126,137
3,629,928

37
35
4
4
80
372
7
28
96
488
28
98
39
2
802
26

22
1
262
329
404

2,862,186
1,543,157
804,317
172,298
13,928,544
20,985,235
678,343
2,052,897
19,754,366
140,751,472
1,813,410
4,998,359
3,298,037
5,303,050
74,918,714
3,247,919

857,740
410,761
28,722,509
35,344,144
29,468,297

2

2
12
64

13
3

8

5

7
22

88,210

129,614
4,937,771
24,827,955

1,400,938
9,498,140

8,280,568

86,279

214,754
5,655,879

10
1
11
7
1,133

214,065
38,808
639,613
225,775
102,259,366

146
13
62
483
3,868

3,718,729
430,933
9,533,552
123,321,443
528,920,411

2

1,208,803

140

56,328,911

103
317
19
14
64
1,218
44
17
438
21
311
32
64
43
310
57
1
25
3
870
142
25
75
70
26
12
1,023
5,344

5,028,046
12,670,490
502,373
787,523
5,025,048
65,894,342
3,963,276
1,358,643
19,019,835
708,003
17,548,870
1,444,289
5,852,076
1,645,639
31,320,103
1,544,550
263,046
944,415
449,940
54,597,249
5,609,503
2,186,424
7,175,419
6,331,784
915,631
469,810
98,362,245
351,618,572

160
383
25
18
168
1,701
61
60
585
818
347
259
122
70
1,323
115
2
65
5
1,162
524
571
75
226
40
87
1,513

8,201,840
15,819,337
1,426,160
959,821
19,806,482
90,696,348
5,086,860
3,819,285
47,722,018
181,212,065
20,346,122
18,206,089
11,298,573
16,844,326
160,208,557
13,876,791
276,421
2,096,578
898,515
84,503,397
42,294,538
40,940,528
7,175,419
10,264,578
1,385,372
11,851,778
221,909,463
10,485 1,039,127,260

EN 

152 

EN