Commission report to the European Parliament and to the Council - Protection of the Communities’ financial interests : fight against fraud - Annual report 2008 {SEC(2009) 1002} {SEC(2009) 1003}
Date: 2009-07-15
Institutions: European Commission
Subjects: EU statistics, activity report, financial control, fraud, fraud against the EU, statistics

EN 

EN 

   EN 

 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 15.7.2009 
COM(2009) 372 final 

COMMISSION REPORT TO THE EUROPEAN PARLIAMENT AND TO THE 
COUNCIL 

Protection of the Communities’ financial interests — Fight against fraud — Annual 
Report 2008 

{SEC(2009) 1002} 
{SEC(2009) 1003} 

EN 

   EN 

 
 
  
 
 
TABLE OF CONTENTS 

Executive summary .................................................................................................................... 4 

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

1. 

1.1. 

Results of the fight against fraud: statistics on fraud and other irregularities.............. 7 

Statistics on fraud and other irregularities reported by the Member States and 
Commission departments in 2008................................................................................ 7 

1.1.1.  Traditional own resources ............................................................................................ 9 

1.1.2.  Agricultural expenditure (EAGF and EAFRD) ........................................................... 9 

1.1.3.  Structural measures .................................................................................................... 10 

1.1.4.  Pre-accession funds.................................................................................................... 11 

1.1.5.  Statistics on expenditure directly managed by the Commission................................ 12 

1.2. 

Statistics on OLAF’s activities................................................................................... 13 

2. 

Main legislative measures taken by the European Union in 2008 to protect its 
financial interests ....................................................................................................... 14 

2.1. 

Cross-cutting legislative developments...................................................................... 14 

2.1.1. 

Institutional developments — the reform of the European Anti-Fraud Office (OLAF)
.................................................................................................................................... 14 

2.1.2.  The international dimension of the protection of the Communities’ financial interests 
— cooperation with third countries and international organisations ......................... 14 

2.1.3.  Ratification process for Protection of the Financial Interests (PFI) instruments ....... 16 

2.1.4.  Protection of the euro against counterfeiting ............................................................. 16 

2.2. 

Progress in the customs area ...................................................................................... 17 

2.2.1.  Mutual assistance under the first pillar ...................................................................... 17 

2.2.2.  Efforts to combat the smuggling and counterfeiting of cigarettes ............................. 17 

3. 

3.1. 

3.2. 

3.3. 

3.4. 

4. 

Main administrative measures taken by the Commission in the area of transparency 
and fraud prevention .................................................................................................. 18 

Transparency measures .............................................................................................. 18 

Further efforts to strengthen the management and control systems and progress 
towards a positive Statement of Assurance (DAS) .................................................... 19 

Joint fraud prevention strategy under the structural measures................................... 20 

The Hercule II programme......................................................................................... 20 

Cooperation with the Member States in the fight against fraud and irregularities .... 20 

EN 

2 

   EN 

4.1. 

Institutional and legislative initiatives taken by certain Member States in 2008 to 
protect EU financial interests ..................................................................................... 20 

4.2. 

National authorities designated to cooperate with OLAF in the fight against fraud . 21 

4.2.1.  Central coordinating authority ................................................................................... 22 

4.2.2.  National authorities with responsibilities extended to the field of direct expenditure

.................................................................................................................................... 22 

4.3. 

Reporting of irregularities .......................................................................................... 23 

4.3.1.  Timely reporting of irregularities in the agricultural and the structural actions sectors

.................................................................................................................................... 23 

4.3.2.  Estimating the financial impact of irregularities........................................................ 24 

4.3.3.  Classification of irregularities .................................................................................... 25 

5. 

5.1. 

5.2. 

5.3. 

5.4. 

5.5. 

Recovery .................................................................................................................... 26 

Own Resources........................................................................................................... 26 

Agriculture ................................................................................................................. 27 

Structural Funds ......................................................................................................... 28 

Direct expenditure...................................................................................................... 29 

Recovery following an OLAF case............................................................................ 30 

EN 

3 

   EN 

EXECUTIVE SUMMARY 

The  EU  budget  is  not  an  anonymous  source  of  funding.  It  is  the  shared  effort  and 
commitment of EU Member States and citizens to make their vision become reality, 
from supporting economic and social solidarity to promoting research, technological 
development  and  training,  and  to  supporting  sustainable  development  worldwide. 
Accordingly, the Treaty calls on the Commission and Member  States  to  coordinate 
their action to protect the EU budget and to counter fraud and other illegal activities 
affecting it. Indeed, Member States should be as rigorous in protecting the EU budget 
as they are in controlling expenditure from national budgets.  

Member States are well-placed to  fulfil that role.  National authorities  are in fact in 
charge  of  the  daily  management  and  control  of  the  largest  part  of  the  annual  EU 
budget,  approximately  80%.  The  Commission  has  an  overall  oversight,  standard 
setting  and  compliance  verification  role.  Major  reform  efforts  in  recent  years  have 
enhanced  clarity  about  the  respective  roles  of  the  authorities  involved,  and  through 
greater  vigilance  at  all  levels,  the  sound  financial  management  of  EU  funds  is 
gradually improving across the board. 

This  annual  Report  on  the  Protection  of  the  Communities’  financial  interests  as 
called for by the Treaty is presented by the Commission in close co-operation with 
the  Member  States.  It  provides  detailed  statistics  on  irregularities  reported  and 
suspected cases of fraud as well as information on the quality and speed of exchange 
on irregularities affecting the EU budget. 

The statistics presented must be read and used with great care: a reported irregularity 
is in most cases not a fraud (which is a deliberate act). A reported suspicion of fraud 
is not necessarily a fraud confirmed by a court judgment. All irregularities covered in 
this  report  are  effectively  being  dealt  with  by  Member  States  and/or  Commission. 
Finally,  the  greater  the  control  effort  is,  the  likely  it  is  that  irregularities  will  be 
detected and reported. As such, an increase in the number of irregularities can be a 
first indication that rigorous controls are being implemented.  

Statistics on fraud and other irregularities 

Overall  figures  for  2008  show  that  the  number  of  irregularities  increased  for 
structural  funds  and  cohesion  fund,  for  pre-accession  funds  and  direct  expenditure 
sector  and  decreased  for  agriculture  and  own  resources.  The  overall  number  of 
irregularities for expenditure has increased from 6 047 in 2007 to 6 595 in 2008. 

At the same time, the estimated financial impact of irregularities decreased from 
€1 024 million in 2007 to €783.2 million in 2008. It decreased in all sectors, except 
for  direct  expenditure  sector  and  pre-accession  funds.  For  this  last  area,  both  the 
number of new cases and the amounts affected are the highest so far reported. The 
increase may be the result of enhanced controls at the end of the project cycle, of the 
growing  number  of  reporting  countries,  and  of  a  wide  variety  of  pre-accession 
assistance  programmes  being  indicated  i.e.  the  first  cases  on  Transition  Facility, 
CARDS,  and  more  cases  for  the  Turkish  Instrument  for  pre-accession.  For  the 
traditional own resources area, the number of irregularities was down from 6 097 in 

EN 

4 

   EN 

2007 to 5 344 in 2008, and so was the financial impact from €401 million in 2007 to 
€351 million in 2008.  

The total estimated financial impact of cases of suspected fraud has decreased for 
both  expenditure  and  traditional  own  resources  areas.  It  should  be  made  clear  that 
what is involved here is reported suspicions of fraud and not cases confirmed by the 
courts.  The  real  financial  impact,  after  recovery  and  financial  correction,  can  be 
known only at the end of the legal and administrative proceedings.  

Major  developments  in  the  area  of  the  protection  of  financial  interests-fight 
against fraud  

The  debate  around  the  reform  of  the  European  Anti-fraud  Office  (OLAF)  was  re-
launched;  the  proposal  for  amending  Regulation  (EC)  No  1073/19991  concerning 
investigations  by  OLAF  was  taken  up  actively  in  the  European  Parliament.  This 
reform  should  further  reinforce  the  Office's  independence,  while  providing  strong 
procedural guarantees and ensuring proper oversight of its operations. 

The  Community  has  continued  to  promote  international  cooperation  with  third 
countries  and  international  organisations  in  order  to  combat  fraud  and  other  illegal 
activities. In December 2008, the Commission has presented a proposal for a Council 
regulation  on  the  signing  on  behalf  of  the  Community  of  an  anti-fraud  cooperation 
agreement with the Principality of Liechtenstein. The Community has become a full 
state party to the United Nations Convention against Corruption (UNCAC). OLAF is 
actively  improving,  in  close  cooperation  with  the  Commission  services  concerned, 
the cooperation in fraud prevention and investigation with its operational partners, in 
particular with African and Middle East countries.  

At EU level, the Commission and the Member States are implementing the decision 
to ensure transparency regarding the beneficiaries of EU funds. Though this measure 
is  mainly  intended  to  enhance  democratic  accountability  and  informed  policy 
debates, it also helps dissuading fraud. 

Member  States'  contributions  to  this  report  show  that  they  have  taken  various 
institutional and legislative measures to protect the Communities' financial interests 
such  as:  establishing  new  bodies  to  combat  fraud;  adopting  or  amending  their 
national  legislations  relating  to  the  management  of  EU  funds  to  ensure  better 
transparency of administrative procedures and better financial control; adopting new 
legislation to combat VAT fraud.  

1 

OJ L 136, 31.05.1999. 

EN 

5 

   EN 

                                                 
INTRODUCTION 

This report consists of five parts: 

The first part gives a summary of the statistics on irregularities reported by the 
Member  States  in  those  areas  where  Member  States  implement  the  budget 
(agricultural policy, Structural Actions  and pre-accession funds, i.e.  around 80% of 
the budget) and for the collection of the Community’s own resources. It also gives an 
estimate  of  irregularities  in  the  field  of  expenditure  managed  directly  by  the 
Commission  and  an  overview  of  the  operational  activities  of  the  European  Anti-
Fraud Office (OLAF).  

The second part sets out the main legislative measures taken by the Community 
and the Member States in 2008 to protect the Communities' financial interests. 

The report also lists the administrative measures adopted by the Commission in 
the areas of transparency and fraud prevention.  

Part 4 deals with cooperation with the Member States and gives an overview of the 
powers  and  organisation  of  the  national  authorities  in  the  fight  against  fraud 
and  designated  for  cooperation  with  OLAF.  It  also  analyses  the  reporting 
discipline of irregularities. 

The final part of the report,  for which the same  kinds of reservation apply as  for 
part 1, deals with recoveries made in 2008 in all budget areas. 

The report is accompanied by two Commission working papers2. 

2 

For references, see cover page of the report. 

EN 

6 

   EN 

                                                 
1. 

1.1. 

RESULTS  OF  THE  FIGHT  AGAINST  FRAUD:  STATISTICS  ON  FRAUD  AND  OTHER 
IRREGULARITIES 

Statistics on fraud and other irregularities reported by the Member States and 
Commission departments in 2008 

In the fields where Member States implement the budget and for the collection of the 
Community’s own resources, Community legislation requires the Member States to 
report  suspicions  of  fraud  and  other  detected 
the 
Communities' financial interests.  

irregularities  affecting 

Distinguishing between fraud and other irregularities is important. An irregularity is 
any infringement of a Community provision by an economic operator which has, or 
would have, the effect of prejudicing the Communities’ financial interests.3 Fraud is 
an  irregularity  committed  intentionally  which  constitutes  a  criminal  offence.4  The 
Member States identify whichever irregularities constitute suspected fraud. The real 
financial impact of fraud can be measured only at the end of legal proceedings. 

The  Commission  working  paper  Statistical  evaluation  of  irregularities5  presents  an 
in-depth  analysis  of  the  information  reported  by  the  Member  States  and  includes 
statistics on fraud and other irregularities detected by Commission departments in the 
areas of the budget under centralised direct management. 

3 

4 

5 

EN 

Article 1(2) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection 
of the European Communities’ financial interests (OJ L 312, 23.12.1995). 
Article  1(1)(a)  of  the  Convention  of  26  July  1995  on  the  protection  of  the  financial  interests  of  the 
European Communities (OJ C 316, 27.11.1995). 
For reference, see cover page of the report. 

7 

   EN 

 
                                                 
Table 1: Number of irregularities and amounts — 2008 

Area 

Number of 
irregularities 
reported 

Total estimated 
financial impact of 
irregularities, including 
suspected fraud (€ 
million) 

Estimated financial impact of suspected 
fraud only (€ million)  

Agriculture 
(EAGF and 
EAFRD) 

Structural 
Funds and 
Cohesion 
Fund 

Pre-
accession 
funds 

Direct 
expenditure 

Total 
expenditure 

Own 
resources8 

20076 

2008 

20077 

2008 

2007 

2008 

1 548 

1 133 

155 

102.3 

44.8 (~0.1 % of 
allocations) 

4 (0.01 % of 
allocations) 

3 756 

4 007 

804 

585.2 

141 (~0.31 % of 
allocations) 

57 (~0.11 % of 
allocations) 

332 

523 

32 

61 

5 (~0.38 % of 
allocations) 

13 (~0.9 % of 
allocations) 

411 

932 

33 

34.7 

18.1 (~0.17 % of 
allocations) 

3.2 (~0.03 % of 
allocations) 

6 047 

6 595 

1 024 

783.2 

6 097 

5 344 

401 

351 

208.9 (~0.22 % of 
the expenditure in 
the four areas) 

77.2 (~ 0.07 % of the 
expenditure in the 
four areas) 

130.78 (~0.81 % of 
the total amount of 
own resources9) 

75 (~0.46 % of the 
total amount of own 
resources) 

6 
7 
8 
9 

EN 

The figures have been updated for certain sectors since the 2007 report. 
Idem. 
Customs duties and agricultural levies. 
This percentage is based on an estimate of traditional own resources in the 2008 general budget, and not 
on accounts. 

8 

   EN 

 
 
 
                                                 
1.1.1.  Traditional own resources 

The  number  of  cases  of  irregularities  reported  in  2008  was  12.5 %  down  on  2007 
(5 344 cases in 2008, compared with 6 097 in 2007), while the estimated amount is 
12.5 % lower (from €401 million in 2007 to €351 million in 2008). Suspected fraud 
accounted  for  approximately  20 %  of  cases  of  irregularities  reported,  with  an 
estimated  financial  impact  of  €75  m illion,  equivalent  to  approximately  0.46 %  of 
total  own  resources  in  2008  (compared  with  €130.78 million,  or  around  0.81  %,  in 
2007). It should again be made clear that what is involved here is reported suspicions 
of fraud and not cases confirmed by the courts. The real financial impact can only be 
established at the end of the proceedings. 
The  goods  most  affected  were,  as  in  previous  years,  TVs  and  monitors.  The  most 
frequent irregularities were false declarations (misdescription, incorrect value, origin 
and preferential arrangements) and formal shortcomings (failure to fulfil obligations 
or  commitments).  The  second  product  was  tobacco.  The  Commission  continues  to 
pay  particular  attention  to  these  sectors.  Clothing  increased  in  importance,  as  did 
machines, plastics and meat, whereas (parts of) cars and motors remained relatively 
stable. Vegetables (especially garlic) declined in importance.  

Graph  1:  Number  of  irregularities  reported  and  estimated  financial  impact  — 
traditional own resources — 2004-08 

s
e
s
a
c
f
o
r
e
b
m
u
N

7000

6000

5000

4000

3000

2000

1000

0

450

400

350

300

250

200

150

100

50

0

s
t
n
u
o
m
a
r
a
l
u
g
e
r
r
I

Number of cases of irregularities
and fraud reported  

Irregular amounts, including
suspected fraud (in millions of €)

2004

2005

2006

2007

2008

1.1.2.  Agricultural expenditure (EAGF10 and EAFRD11) 

The  number  of  irregularities  reported  was  down  27 %  (1 133  cases,  compared  with 
1 548  in  2007).  The  amount  involved  (€102.3 million,  or  approximately  0.21  %  of 
total  expenditure  excluding  advance  payments  for  the  agricultural  sector  was  down 
34 %.  Suspected  fraud  accounted  for  around  7 %  of  cases  of  irregularities  reported, 
with an estimated financial impact of €4 million, or 0.01  % of total appropriations, in 
2008 (compared with €44.8 million, or around 0.1  % of total appropriations, in 2007). 
It  should  again  be  made  clear  that  what  is  involved  here  is  reported  suspicions  of 

10 
11 

European Agricultural Guarantee Fund. 
European Agricultural Fund for Rural Development. 

EN 

9 

   EN 

 
 
 
 
                                                 
fraud  and not  cases  confirmed  by  the courts. The real financial impact can only be 
established at the end of the proceedings. 

The  highest  amounts  related  to  fruit  and  vegetables,  rural  development  (2000-2006 
programming  period)  and  the  wine  sector.  These  sectors  together  account  for  more 
than 70 % of the total amount affected by irregularities.  

Graph  2:  Number  of  irregularities  reported  and  estimated  financial  impact  — 
agricultural expenditure — 2004-08 

s
e
s
a
c
f
o
r
e
b
m
u
N

4000

3500

3000

2500

2000

1500

1000

500

0

180

160

140

120

100

80

60

40

20

0

s
t
n
u
o
m
a
r
a
l
u
g
e
r
r
I

Number of cases of irregularities
and fraud reported  

Irregular amounts, including
suspected fraud (in millions of €)

2004

2005

2006

2007

2008

1.1.3. 

Structural measures 

The  number  of  irregularities  reported  concerning  the  Structural  Funds  and  the 
Cohesion  Fund  was  up  6.7 %  (4 007  cases,  compared  with  3 756  in  2007).  Their 
estimated  financial  impact  (€585.2 million,  or  around  1.25  %  of  commitment 
appropriations) was down 27 %. Suspected fraud accounted for approximately 7.4 % 
of cases of irregularities reported, with a financial impact estimated at €57 million, or 
around 0.11 % of total commitment appropriations (compared with €141 million, or 
0.31 %, in 2007). It should again be made clear that what is involved here is reported 
suspicions of fraud and not cases confirmed by the courts. The real financial impact 
can only be established at the end of the proceedings. 
As  in  previous  years,  the  ERDF12  and  the  ESF13  accounted  for  most  irregularities 
(around 88 %). The number of irregularities reported for the guidance section of the 
EAGGF and for the FIFG14 was down by 17 %; the number of irregularities affecting 
the ESF also decreased, by 4 %. The number of irregularities reported for the ERDF 
was up by 18.7 % and for the Cohesion Fund by 63 %.  

12 
13 
14 

European Regional Development Fund. 
European Social Fund. 
Financial Instrument for Fisheries Guidance. 

10 

EN 

   EN 

 
 
 
 
                                                 
Graph  3:  Number  of  irregularities  reported  and  estimated  financial  impact  — 
structural measures — 2004-08 

s
e
s
a
c
f
o
r
e
b
m
u
N

4.500

4.000

3.500

3.000

2.500

2.000

1.500

1.000

500

0

900

800

700

600

500

400

300

200

100

0

s
t
n
u
o
m
a
r
a
l
u
g
e
r
r
I

Number of cases of irregularities
and fraud reported  

Irregular amounts, including
suspected fraud (in millions of €)

2004

2005

2006

2007

2008

1.1.4.  Pre-accession funds  

The number of irregularities reported concerning PHARE, SAPARD and ISPA funds 
–  and  including  as  of  2008  CARDS,  Transition  Facility,  and  the  Pre-accession 
assistance for Turkey – increased by 58 % (523 cases compared with 332 in 2007). 
The presumed financial impact increased from €32 million in  2007 to €61 million in 
2008  (approximately  5.4 %  of  the  total  committed  amount).  Suspected  fraud 
accounted for approximately 21.7 % of the irregular amounts reported in 2008, with a 
financial  impact  estimated  at  €13  million,  or  around  0.94  %  of  the  total  annual 
budget.  It  should  again  be  made  clear  that  what  is  involved  here  is  reported 
suspicions of fraud and not cases confirmed by the courts. The real financial impact 
can only be established at the end of the proceedings. 

EN 

11 

   EN 

 
 
 
 
Graph  4: Number of  irregularities reported and estimated  financial impact —  pre-
accession funds — 2004-08 

s
e
s
a
c

f
o
r
e
b
m
u
N

600

500

400

300

200

100

0

70

60

50

40

30

20

10

0

s
t
n
u
o
m
a
r
a
l
u
g
e
r
r
I

Number of cases of irregularities
and fraud reported  

Irregular amounts, including
suspected fraud (in millions of €)

2004

2005

2006

2007

2008

In  July  2008,  the  Commission  issued  a  Report  on  the  management  of  EU  funds  in 
Bulgaria15.  Following  allegations  of  irregularities,  suspicions  of  fraud  and  possible 
conflicts  of  interest  in  the  award  of  contracts,  the  Commission  (OLAF)  initiated 
investigations  into  the  management  of  EU  funds  by  the  Bulgarian  authorities.  The 
Commission  decided  on  a  temporary  interruption  of  pre-accession  funds  and  on 
freezing  payments  under  various  other  financial  instruments  until  the  necessary 
remedial  action  to  ensure  sound  financial  management  of  EU  funds  had  been 
properly  implemented  by  the  Bulgarian  authorities.  The  Commission  has  provided 
concrete guidance on how to improve the implementation structures and procedures 
for  agencies  managing  EU  funds  in  Bulgaria,  and  OLAF  has  established  close 
cooperation  with  the  Bulgarian  prosecution  services.  In  July  2008,  following  audit 
missions  under  the  SAPARD  programme  in  Romania,  which  revealed  significant 
deficiencies  in  management  and  control  systems,  the  Commission  decided  to 
interrupt  reimbursements  of  SAPARD  expenditure.  Only  when  the  Commission 
concludes,  on  the  strength  of  reports  by  the  competent  national  authorities  and 
confirmed by independent audit bodies, that the remedial action plan formulated by 
the Romanian authorities has been properly implemented will it consider reimbursing 
the expenditure concerned. 

1.1.5. 

Statistics on expenditure directly managed by the Commission 

This  year’s  analysis  of  irregularities  in  this  area  was  based  on  data  held  in  the 
Commission’s  accounting  system  ABAC,  covering  more  detailed  information  on 
recoveries.  However,  as  the  relevant  function  was  added  only  in  2008,  it  has  been 
necessary to limit the scope of the analysis for 2008 to expenditure managed by the 
Commission  on  a  centralised  direct  basis  (see  point  7.1.  of  the  working  paper 
Statistical  evaluation  of  irregularities).  The  data  presented  should  therefore  be 
treated with particular caution and not as empirical evidence of the level of fraud and 
irregularity. 

15 

COM(2008) 496 final. 

EN 

12 

   EN 

 
 
 
 
                                                 
The number of recovery orders relating to cases of irregularities and suspected fraud 
in  this  area  came  to  932,  with  a  presumed  financial  impact  of  €34.7  million,  €3.2 
million  of  which  was  accounted  for  by  19  reported  cases  of  suspected  fraud. 
Irregularities  in  the  sector  of  external  action  accounted  for  €6.8  million  and  in  the 
area of internal policies for €27.9 million. The  estimated financial impact of possible 
fraud  cases  amounts  to  0.03 %  of  the  total  annual  value  of  commitments  directly 
managed by the Commission. 

1.2. 

Statistics on OLAF’s activities 

Once  a  preliminary  evaluation  has  been  made  of  information  received,  it  is  up  to 
OLAF  to  open  one  of  four  types  of  cases:  an  internal  investigation,  an  external 
investigation, a coordination case or a criminal assistance case. The number of cases 
opened  each  year  is  stable  (204  in  2008,  as  against  210  in  2007  and  195  in  2006). 
Since  2004,  the  number  of  investigations  opened  by  OLAF  on  its  own  initiative 
(internal and external investigations) has equalled then exceeded the number opened 
by OLAF to provide assistance and coordination to national authorities (coordination 
cases  and  criminal  assistance  cases).  Since  2005,  OLAF’s  own-initiative 
investigations have accounted for around 75 % of all cases opened. 

The  number  of  active  cases  has  increased  (425  at  the  end  of  2008,  compared  with 
408 at the end of 2007), owing in large measure to efforts by OLAF to deal with the 
backlog of the oldest cases. 

Table  2:  Cases  ongoing  as  at  31  December  2008  by  sector,  and  their  financial 
impact 

Sector 

Cases in active 
investigation 31 
December 2008 

Financial impact from 
investigation (€ million)

Agriculture 

Cigarettes 

Customs 

Direct expenditure 

EU institutions and bodies 

External Aid 

Structural funds 

Total

68 

18 

47 

40 

107 

102 

43 

425 

125 

5 

852 

54 

27 

129 

171 

1361.7 

For more details and a comparison with previous years, see the OLAF report.16 

16 

http://ec.europa.eu/comm/anti_fraud/reports/index_en.html. 

EN 

13 

   EN 

                                                 
2. 

MAIN  LEGISLATIVE  MEASURES  TAKEN  BY  THE  EUROPEAN  UNION  IN  2008  TO 
PROTECT ITS FINANCIAL INTERESTS  

2.1. 

Cross-cutting legislative developments 

In 2008, there were significant developments both in the institutional framework, as 
the debate on the reform of the European Anti-Fraud Office acquired fresh impetus, 
and  in  international  cooperation  by  the  Community  with  third  countries  and 
international  organisations  in  the  fight  against  fraud  and  corruption.  Important 
legislative measures were also taken to ensure better protection of the euro.  

2.1.1. 

Institutional developments — the reform of the European Anti-Fraud Office (OLAF) 

OLAF  was  set  up  in  1999  to  protect  the  financial  interests  of  the  European 
Communities and the reputation of the European institutions.  

In  2008,  the  Commission’s  2006  proposal17  for  amending  Regulation  (EC)  No 
1073/1999  of  the  European  Parliament  and  of  the  Council  of  25  May  1999 
concerning  investigations  by  OLAF  was  taken  up  actively  in  the  European 
Parliament. The legal initiative for better governance and improved effectiveness of 
OLAF’s  activities  passed  first  reading  by  the  European  Parliament  in  November 
2008, with a number of amendments. The parliamentary amendments18 building on 
the  Commission  proposal  and  seeking  an  improved  legal  framework  for  the  Office 
and  for  investigations  and  their  follow-up  (including  cooperation  with  Member 
States’  competent  authorities),  and  better  protection  of  the  fundamental  rights  of 
persons concerned by investigations received the overall support of the Commission, 
with some reservations owing to institutional and legal limits of the current set-up of 
OLAF. Better protection of fundamental rights includes the possibility for a person 
concerned  by  an  investigation  to  introduce  a  complaint  to  an  independent  Review 
Advisor regarding the alleged violation of that person’s procedural rights.  

The reform debate will continue in 2009. Further simplification and consolidation of 
the entire anti-fraud legislation is also under consideration. 

2.1.2.  The international dimension of the protection of the Communities’ financial interests 

— cooperation with third countries and international organisations 

The  Community  promotes  cooperation  with  third  countries  and  international 
organisations  through  international  agreements  and  administrative  arrangements,  in 
order  to  protect  its  financial  interests  and  to  combat  fraud  and  all  other  illegal 
activity.  

Bilateral anti-fraud agreements 

17 
18 

COM (2006)244 final. 
EP Resolution No P6-TA-PROV(2008)0553. 

EN 

14 

   EN 

 
                                                 
In December 2008, the Commission presented a proposal19 for a Council decision on 
the  signing,  on  behalf  of  the  Community,  of  a  cooperation  agreement  between  the 
European Community and its Member States and the Principality of Liechtenstein to 
combat  fraud  and  any  other  illegal  activity  to  the  detriment  of  their  financial 
interests.  Negotiations  have  been  led  by  the  Commission  on  the  strength  of  a 
mandate granted in 2006. The proposal also covers evasion of direct taxation, which 
is  not  a  criminal  offence  in  Liechtenstein.  The  parties  to  the  agreement  would  be 
obliged to provide each other with assistance in cases of fraudulent conduct contrary 
to the legislation on direct taxes, which includes submitting incomplete tax returns. 
In the light of the European Council conclusions of 10 February 2009 and the G20 
Summit Statement of April 200920 negotiations for the agreement have been pursued 
in  accordance  with  the  latest  developments  on  the  protection  of  public  finances, 
banking secrecy and tax cooperation. 

The  negotiations  for  an  agreement  with  Liechtenstein  were  preceded  by  the  anti-
fraud  cooperation  agreement  between  the  European  Community  and  the  Swiss 
Confederation21.  It  contains  provisions  relating  to  administrative  assistance  and  to 
mutual legal assistance in criminal matters for the protection of financial interests; it 
covers  indirect  tax  (VAT  and  excise  duties)  and  customs  offences,  corruption  and 
money laundering. Pending ratification by all Member States, the agreement can be 
applied  provisionally  by  means  of  a  declaration  by  the  contracting  parties  (a 
contracting  party  can  apply  the  agreement  at  any  time  with  any  other  contracting 
party having made the same declaration). In December 2008, a number of Member 
States22  and  Switzerland  made  such  a  declaration  and  the  agreement  will  be 
applicable between them as from 8 April 2009.  

Multilateral anticorruption agreements 

The European Community ratified the United Nations Convention against Corruption 
(UNCAC)23. Within its area of competence, the European Community is therefore a 
full  state  party  to  the  Convention  and  is  the  only  regional  economic  integration 
organisation which has this status.  

The  UNCAC  addresses  primarily  prevention  measures  in  the  public  and  private 
sectors,  such  as  the  establishment  of  anticorruption  bodies,  and  transparency  and 
accountability  in  matters  of  public  finance.  International  cooperation  is  another 
important  aspect.  Parties  are  also  required  to  take  measures  which  will  support  the 
tracing,  freezing,  seizure  and  confiscation  of  the  proceeds  of  corruption.  Effective 
asset recovery is a fundamental principle of the Convention and sends a message to 
corrupt officials that there will be no place to hide their illicit assets. 

Non-legislative acts: Administrative arrangements 

19 
20 
21 
22 

23 

COM (2008)839 final. 
See point 15, paragraph 7 of the G20 Summit Statement. 
OJ L 46, 17.2.2009. 
BG, FI, FR, DE, PL, RO, SE, and UK. For Germany the agreement is applicable from 9 April 2009, for 
Finland from 15 April and for the UK from 20 April 2009. 
Council  Decision  No  2008/801/EC  on  the  conclusion,  on  behalf  of  the  European  Community,  of  the 
United Nations Convention against corruption, OJ L 287 of 29.10.2008. 

EN 

15 

   EN 

                                                 
In  the  field  of  external  aid  OLAF  continued,  in  close  cooperation  with  the 
Commission  services  concerned,  to  foster  the  exchange  of  operational  expertise 
between anti-fraud investigators and services managing and supervising aid funds in 
Africa.  Fund  managers  and  investigators  are  establishing  close  contacts  and,  where 
possible,  administrative  cooperation  arrangements24  are  concluded  with  services  of 
countries recipients of EU funds with a view to improving management and control 
of public funds and optimising the effectiveness of external aid.  

2.1.3.  Ratification process for Protection of the Financial Interests (PFI) instruments 

The  second  Protocol  to  the  Convention  on  the  Protection  of  the  European 
Communities’ Financial Interests25 entered into force on 19 May 2009, following its 
ratification  by  Italy  on  18  February  2009.  The  Convention  and  its  protocols26  were 
ratified  in  2008  by  Poland.  In  February  2008,  the  Commission  published  a  second 
report27 on the implementation by the Member States28 of the above-mentioned legal 
instruments.  Slovenia  amended  its  Criminal  Code  by  including  an  article  on 
incriminating  fraud  against  the  European  Communities,  which  had  previously  not 
been specifically defined as a criminal offence in Slovenian law.  

2.1.4.  Protection of the euro against counterfeiting  

Four Commission proposals29 were adopted in December 2008 by the Council of the 
European Union to strengthen the protection of the euro against counterfeiting. The 
new legislation introduces the obligation for financial institutions to ensure that notes 
and coins are checked for authenticity before putting them back into circulation. At 
the same time, to minimise the risk of confusion between medals/tokens and genuine 
euro  coins,  there  has  been  further  clarification  of  which  designs  may  not  be 
reproduced on medals and tokens. 

At  operational  level,  the  Commission  continued,  in  cooperation  with  the  Member 
States, the European Central Bank and Europol, to manage the Pericles programme 
for  training  and  technical  assistance  to  combat  counterfeiting.  Eleven  actions  were 
launched  under  the  2008  budget,  and  over  90 %  of  the  €1  million  budget  for  2008 

24 

25 
26 

27 
28 

29 

Such arrangements have been already been concluded with Argentina, Djibouti, Morocco, the Republic 
of Congo, Senegal and FIGE (Forum des Inspections Générales d’Etats d’Afrique) and, in 2008, with 
authorities in South Africa.  
OJ C316 of 27.11.1995. 
First  protocol  of  27  September  1996  (OJ  C  313,  23.10.1996).  Protocol  of  29  November  1996  on  the 
interpretation, by way of preliminary rulings, by the CJEC of the Convention (OJ C 151, 20.5.1997). 
Second Protocol of 19 June 1997 (OJ C 221, 19.7.1997). 
COM(2008) 77 final. 
The  PFI  instruments  have  not  been  ratified  by  the  Czech  Republic,  Hungary  and  Malta,  along  with 
Estonia for the ECJ Protocol. 
Regulation  (EC)  No  44/2009  of  18  December  2008  amending  Regulation  (EC)  No  1338/2001  laying 
down measures necessary for the protection of the euro against counterfeiting (OJ L 17, 22.1.2009, p.1); 
Regulation (EC) No 45/2009 of 18 December 2008 amending Regulation (EC) No 1339/2001 extending 
the effects of Regulation (EC) No 1338/2001 laying down measures necessary for the protection of the 
euro  against  counterfeiting  to  those  Member  States  which  have  not  adopted  the  euro  as  their  single 
currency  (OJ  L  17,  22.1.2009,  p.4);  Regulation  (EC)  No  46/2009  of  18  December  2008  amending 
Regulation  (EC)  No  2182/2004  concerning  medals  and  tokens  similar  to  euro  coins  (OJ  L  17, 
22.1.2009,  p.5);  Regulation  (EC)  No  47/2009  of  18  December  2008  amending  Regulation  (EC)  No 
2183/2004  extending  to  the  non-participating  Member  States  the  application  of  Regulation  (EC)  No 
2182/2004 concerning medals and tokens similar to euro coins (OJ L 17, 22.1.2009, p.7). 

EN 

16 

   EN 

                                                 
was  committed.  Most  of  the  projects  subsidised  were  related  to  training  and  staff 
exchange activities,  involving participants  from  most  Member  States  and  a  number 
of  third  countries.  The  objective  was  to  raise  awareness  of  banknote  and  coin 
counterfeiting,  to  provide  technical  training  for  participants  and  to  share  best 
practices.  

The  total  number  of  counterfeit  euro  coins  removed  from  circulation  in  2008  was 
195 900, down from 211 100 the year before (-7 %). This success is the result of joint 
efforts by the European Commission and the Member States’ authorities to remove 
counterfeit coins from circulation and underlines the need for all Member States to 
apply appropriate methods to this end. 

2.2. 

Progress in the customs area  

2.2.1.  Mutual assistance under the first pillar 

Significant progress has been made in the mutual assistance sector with the adoption 
of  Regulation  (EC)  766/200830  on  9  July  2008.  This  legislation  amends  Council 
Regulation (EC) 515/9731 on mutual assistance in customs and agricultural matters. 
The new provisions extend the current exchange of information on suspected frauds 
to  the  systematic  communication  of  pre-defined  commercial  information  and 
establish a Customs Files Identification Database (FIDE), covering investigation files 
and  helping  Member  States  to  coordinate  their  controls  better,  detect  suspicious 
movements of goods and means of transport, and collect information in a ‘European 
Data Directory’. The database was fully operational on 15 September 2008.  

The  Modernised  Customs  Code  (MCC)32  entered  into  force  in  June  2008, 
introducing  a  thorough  reform  of  Community  customs  rules  and  procedures,  and 
making  them  simpler  and  electronic.  The  MCC  will  become  operational  once  its 
implementing provisions are ready and applicable, and no later than June 2013.  

2.2.2.  Efforts to combat the smuggling and counterfeiting of cigarettes 

The illicit trade in contraband and counterfeit cigarettes causes significant losses to 
the EU and national budgets every year.  

To  prevent  and  to  reduce  the  consequences,  in  2008  the  Commission,  which  has 
previously  concluded  two  agreements  with  tobacco  manufacturers  Philip  Morris 
International  and  Japan  Tobacco  International33,  took  an  active  part  in  two 
Intergovernmental Negotiating Body (INB) sessions to negotiate a draft Protocol to 
the  WHO  Framework  Convention  on  Tobacco  Control,  dealing  with  efforts  to 
combat the illicit trade in tobacco products. Negotiations are ongoing with a view to 
agreeing  on  a  standard  creating  universal  obligations  on  tracking  and  tracing,  and 

30 
31 
32 

33 

OJ L 218, 13.8.2008. 
OJ L 82, 22.3.1997. 
Regulation (EC) No 450/2008 of the European Parliament and of the Council of 23 April 2008 laying 
down the Community Customs Code (Modernised Customs Code), OJ L 145, 4.6.2008. 
The two agreements provide for the payment by the tobacco producers of USD 1250 million (PMI) and 
USD  400  million  (JTI)  which  may  be  used  for  combating  the  smuggling  and  counterfeiting  of 
cigarettes. By the end of 2008, PMI had paid USD 650 million (approx. €503.8 million) and JTI USD 
100 million (approx. €77.5 million). 

EN 

17 

   EN 

                                                 
designing  a  specific  framework  for  cooperation  between  customs  and  judicial 
authorities. 

3. 

MAIN  ADMINISTRATIVE  MEASURES  TAKEN  BY  THE  COMMISSION  IN  THE  AREA  OF 
TRANSPARENCY AND FRAUD PREVENTION  

3.1. 

Transparency measures 

As  part  of  the  European  Transparency  Initiative34,  the  Commission  obtained  the 
support of the Council and of the European Parliament in favour of full disclosure of 
the beneficiaries of EU fund. 

The  greater  share  of  EU  funds  (almost  80 %)  are  handled  by  the  national 
administrations, and as such, the responsibility to publish the names of beneficiaries 
rests  with  them.  This  obligation  covers  the  Common  Agricultural  Policy,  the 
Structural Actions, including the Cohesion Fund, and the European Refugee Fund. 

The  European  Commission  also  manages  grants  and  procurement  contracts, 
amounting to some 20 % of the EU budget in areas such as research policy, education 
and  training,  transport  and  energy  networks.  Under  Article  30.3  of  the  revised 
Financial Regulation of 200635, it is obliged to publish the names of the beneficiaries. 
To  comply  with  this  legal  requirement  the  Commission,  in  2008,  set  up  the  new 
central  Financial  Transparency  System 
to  consolidated 
information  which  had  hitherto  been  published  on  the  web  pages  of  each 
Commission department. Its current version covers approximately €10 billion of aid, 
and  the  system  will  be  extended  to  cover  the  Commission’s  own  administrative 
expenditure.  A  specific  search  engine  gives  access  to  data  on  the  beneficiaries  of 
external aid.  

to  facilitate  access 

Commission  Regulation  No  1302/200836  on  the  central  exclusion  database  was 
adopted  on  17  December  2008.  It  establishes  a  central  database  (‘the  exclusion 
database’) as referred to in Article 95 of the Financial Regulation, which contains the 
details  of  candidates  and  tenderers  who  are  in  an  exclusion  situation  described  by 
Articles  93  and  94  of  the  Financial  Regulation  (for  example,  bankrupt  or  guilty  of 
grave  professional  misconduct).  The  information  is  accessible  to  all  entities 
managing EU funds. 

The  revised  Commission  Decision  No  2008/969/EC,  Euratom37  on  the  Early 
Warning  System  (EWS)  for  the  internal  use  of  the  Commission  and  the  executive 
agencies was adopted on 16 December 2008. It establishes the EWS for the general 
budget of the European Union and any other fund managed by the Communities. The 
EWS  is  an  internal  information  tool  to  help  the  Commission  identify  legal  entities 
presenting  financial  or  other  risks,  thus  enabling  the  Commission  to  take  any 
precautionary measures needed. 

34 
35 

36 
37 

COM(2007)127; http://ec.europa.eu/commission_barroso/kallas/work/eu_transparency/index_en.htm. 
Council  Regulation  (EC,  Euratom)  No  1995/2006  of  13  December  2006  amending  Regulation  No 
1605/2002 on the Financial Regulation applicable to the general budget of the European Communities 
(OJ L 390/2006 of 31.12.2006). 
OJ L 344, 20.12.2008. 
OJ L 344, 20.12.2008. 

EN 

18 

   EN 

                                                 
3.2. 

Further efforts to strengthen the management and control systems and progress 
towards a positive Statement of Assurance (DAS) 

The  Commission  Action  Plan  towards  an  Integrated  Internal  Control  Framework38 
was  adopted  in  January  2006  in  line  with  the  Barroso  Commission’s  strategic 
objective  to  obtain  a  positive  Statement  of  Assurance  (DAS)  from  the  European 
Court of Auditors. It reflected the recommendations made by the Court of Auditors 
in  its  Opinion  2/200439  and  provided  for  sixteen  concrete  actions.  The  Action  Plan 
has been fully implemented, and its impact on the ground is beginning to materialise.  

As  part  of  the  Action  Plan,  in  December  2008,  the  Commission  presented  a 
Communication  on  the  tolerable  risk  of  error40.  While  a  zero-tolerance  policy  on 
fraud would remain, adopting a tolerable risk approach means defining the levels to 
which  it  is  reasonable  to  expect  the  Commission  and  its  implementing  partners, 
including  the  Member  States,  to  reduce  errors  while  using  control  resources 
effectively. This is a decision that needs to be taken by the legislative authority, and 
the Communication seeks to re-launch the discussion with the European Parliament 
and the Council on the issue. The Communication defines the tolerable risk concept 
and  provides  illustrative  examples  in  two  key-spending  areas  -  the  ERDF  and  the 
EAFRD  –  and  makes  a  first  estimation  of  the  tolerable  risk  for  these  expenditure 
areas.  At  present,  the  Court  of  Auditors  uses  a  2 %  materiality  level  applied  to  all 
policy areas for assessing the legality and regularity of underlying transactions. The 
Commission’s analysis suggests that the 2 % materiality level currently used by the 
Court of Auditors for the annual DAS may not be an appropriate measure of a cost-
effective control strategy for some policies. This means that the tolerable risk of error 
would need to be analysed and decided separately for each policy area.  

The Court of Auditors’ reports for 2006 and 2007 have shown that the error rate for 
structural  actions  remains  high.  Following  mainly 
the  Court  of  Auditors’ 
recommendations  in  its  2006  Annual  report  and  in  its  Opinion  No  6/200741,  which 
highlighted the weaknesses in the shared management of the Structural Funds in the 
Member States, the Commission launched an Action Plan42 on 19 February 2008 to 
strengthen the Commission’s supervisory role in the shared management of structural 
actions  and  thus  address  the  high  level  of  errors  in  reimbursements  for  structural 
actions and weaknesses in the Member States’ management and control systems.  

The Commission’s focus is on boosting the effectiveness of controls undertaken by 
the Member States and of Commission audits, to ensure that by the time the 2000-
2006  programmes  and  projects  are  closed,  the  residual  risk  of  error  is  as  low  as 
possible. For 2007-2013, the preventive actions will ensure that the Member States’ 
systems  function  effectively  from  the  beginning  of  programme  implementation,  or 
failing this, that any deficiencies are detected as early as possible. In February 2009, 
the Commission presented to the European Parliament, the Council and the European 
Court of Auditors a report43 on the action plan for 2008. 

38 
39 
40 
41 
42 
43 

COM(2006)9 final. 
OJ C 107, 30.4.2004, p.4. 
COM(2008)866 final. 
OJ C 216, 14.9.2007. 
COM(2008)97. 
COM(2009)42. 

EN 

19 

   EN 

                                                 
Concerning  Commission  direct  expenditure,  the  Internal  Audit  Service  of  the 
Commission  (IAS)  conducted  audits  in  the  area  of  procurement,  including  IT 
services  and  grant  schemes.  IAS  reports  noted  certain  improvements  in  the 
Commission’s internal control systems. Details are available in the annual report to 
the discharge authority on the internal audits carried out in 2008. 

3.3. 

Joint fraud prevention strategy under the structural measures 

The Commission established a joint fraud prevention strategy (JFPS) for the ERDF, 
the  ESF  and  the  Cohesion  Fund,  following  an  audit  recommendation  by  IAS.  The 
document sets out fraud prevention actions to achieve the objectives, both in the field 
of  risk  assessment  and  of  fraud  awareness.  The  Commission  has  already 
implemented  some  of  these  actions,  including  a  seminar  in  Brussels  for  managing 
and  paying  authorities  and  a  meeting  of  the  Homologues  Group  (national  and 
community auditors) in Cardiff in October 2008.  

3.4. 

The Hercule II programme 

The  purpose  of  the  Hercule  II  programme  is  to  promote  activities  to  protect  the 
Communities’  financial  interests.  For  the  2007-2013  exercise,  its  budget  has  been 
increased  by  €6  million  a  year  in  order  to  finance  the  purchase  of  equipment  and 
training  activities  to  combat  the  smuggling  of  cigarettes.  This  increase  is  also  the 
result  of  the  extra  monies44  made  available  under  the  anti-contraband  agreements 
with tobacco producers PMI and JTI (see 2.2.2). 

In  2008,  10  research  actions  in  the  legal  field,  9  training  projects  and  25  technical 
 13.8  million  was 
assistance  projects  were  supported,  and  the  allocated  budget  of  €
entirely committed.  

4. 

COOPERATION  WITH  THE  MEMBER  STATES  IN  THE  FIGHT  AGAINST  FRAUD  AND 
IRREGULARITIES 

This chapter – based on the replies of Member States to a questionnaire45 - gives an 
overview  of  the  legislative  and  institutional  developments  in  the  Member  States  in 
2008 and of the national anti-fraud structures designated for cooperation with OLAF 
in relation to on-the-spot checks. It also deals with certain aspects of the reporting of 
irregularities by the Member States. 

4.1. 

Institutional and legislative initiatives taken by certain Member States in 2008 
to protect EU financial interests 

Belgium set up a body, organised on collegiate lines, to combat fraud, including tax 
fraud.  The  United  Kingdom  established  the  National  Fraud  Strategic  Authority 
(NFSA),  a  non-statutory  body  whose  key  priorities  include  stronger  deterrence  of 
fraudsters  through  a  tough,  multi-agency  law  enforcement  and  regulatory  response, 
and building greater public confidence in the response to fraud. 

44 
45 

9.7 % of the funds paid by PMI and JTI have been allocated to the European Community. 
See all answers in the Commission working paper "Implementation of the Article 280 of the Treaty by 
the Member States in 2008".  

EN 

20 

   EN 

                                                 
Several Member States46 have adopted or amended their national legislation relating 
to  management  of  EU  funds  and  public  procurement  procedures,  to  provide  more 
transparency  in  administrative  procedures  and  better  financial  control.  For  2008 
Sweden  will,  for  the  first  time,  supply  national  certification  on  the  management  of 
EU  funds,  ensuring  that  the  internal  control  framework  is  in  place  and  securing 
satisfactory  internal  control  of  EU  funds  managed  in  partnership  with  the 
Commission. 

Malta  adopted  a  National  Anti  Fraud  and  Corruption  Strategy,  aiming  to  create  a 
normative,  institutional  and  operational  framework.  The  Czech  Republic  adopted  a 
National  Strategy  for  the  protection  of  the  EU’s  financial  interests  and  an 
accompanying action plan. 

Some  Member  States47  adopted  legislation  and  rules  to  combat  VAT  fraud  and 
improve  the  coordination  of  operations  by  the  relevant  national  authorities  in  this 
field. 

Greece  adopted  a  law  on  the  prevention  and  suppression  of  money  laundering  and 
terrorist  financing  and  other  provisions.  Similarly,  Cyprus  replaced  all  its  previous 
laws from 1996-2004 by the newly adopted Fight against Money Laundering Act. 

In  the  field  of  irregularities  and  recovery,  a  few  Member  States48  adopted  new 
measures  for  identifying  and  notifying  irregularities,  and  enhanced  procedures  and 
mechanisms for recovering overpayments. 

Latvia  amended  its  Criminal  Law  on  establishing  liability  for  the  dissemination  of 
intentionally false data or information on the state of the Latvian financial system.  

Member  States  have 
legislative  or  administrative 
developments49  taken  in  the  course  of  2008.  These  were  adopted  on  the  Member 
States’ own initiative and not simply to transpose Community legislation. 

reported  several  other 

4.2. 

National  authorities  designated  to  cooperate  with  OLAF  in  the  fight  against 
fraud 

Article 4 of EC Regulation 2185/9650 requires OLAF to prepare and conduct on-the-
spot checks in close cooperation with the competent authorities of the Member State 
concerned.  Therefore,  prior  identification  of  the  competent  national  authority  is 
essential.  

For  the  Common  Agricultural  Policy  and  the  Structural  Funds,  where  shared 
management arrangements (between the Commission and the Member States) are in 
place, having clearly designated competent authorities has made it easier to run on-
the-spot  checks.  For  direct  expenditure,  however,  the  lack  of  clarity  in  the 

46 
47 
48 
49 

50 

BG, LV, LT, LU, HU, PT, SK, SE. 
ES, HU, RO, IT. 
BG, EE, IT, PL, SK, UK. 
See the Commission working paper "Implementation of the Article 280 of the Treaty by the Member 
States in 2008". 
OJ L 292/15.11.1996. 

EN 

21 

   EN 

                                                 
designation  of  competent  authorities  and  lines  of  demarcation  in  Member  States 
gives rise to difficulties in applying Regulation No 2185/96.  

In  its  Resolution  of  19  February  2008  on  the  protection  of  the  Communities’ 
financial interests51, the European Parliament also called for more information on the 
national competent authorities. The resultant information will also serve to improve 
the  implementation  of  Regulation  2185/96  and  to  identify  legislative  gaps  with  a 
view to possible consolidation of the antifraud legislation52.  

4.2.1.  Central coordinating authority 

Most  Member  States53  reported  having  a  central  coordinating  authority  responsible 
for  operational  support  to  OLAF  and  that  OLAF  can  contact  when  conducting  on-
the-spot  checks.  In  some  Member  States54,  the  central  coordinating  authority  is  the 
AFCOS  (Anti-Fraud  Coordination  Service),  while  in  others55  another  national 
authority  has  been  designated.  Some  Member  States56  indicated  that  one  or  more 
coordinating  authorities  may  be  contacted  depending  on  the  type  of  financial 
resources (e.g. funds, customs or tax).  

In  addition,  Member  States57  pointed  out  that  the  powers  and  duties  of  these 
the 
coordinating  authorities  mostly 
Commission  and  putting  OLAF 
the  competent  national 
investigative authority. In some of the Member States58, the designated authority also 
has  various  investigative  powers  (e.g.  interviewing  economic  operators,  accessing 
documents and premises, searching and seizing, accessing information about ongoing 
criminal  or  administrative  investigations,  tracing  people,  telephones  and  mail)  that 
can be used to support OLAF investigations and on-the-spot checks.  

involve  communicating 
into  contact  with 

irregularities 

to 

Finally,  the  Netherlands,  Portugal  and  Slovenia  indicated  that  the  designated 
authority  operates  on  the  basis  of  annual  programming.  Italy,  the  Netherlands, 
Portugal  and  the  United  Kingdom  stated  that  the  authority  is  obliged  to  draw  up  a 
report on the objectives of its monitoring activity. 

4.2.2.  National authorities with responsibilities extended to the field of direct expenditure 

It is also important to clarify whether Member States have a single authority in the 
area of direct expenditure that OLAF can contact for on-the-spot checks. 

Several  Member  States59  (without  an  AFCOS)  reported  that  they  have  a  single 
authority  that  can  be  contacted.  In  most  cases,  it  is  law  enforcement  rather  than  an 
administrative authority, with an established legal basis.  

51 
52 
53 
54 
55 
56 
57 
58 
59 

P6_TA-PROV(2008)0052. 
See point 2.1.1. 
BE, BG, CZ, DK, DE, EE, IT, CY, LV, LT, HU, MT, NL, PL, PT, RO, SI, SK, SE, UK. 
BG, CZ, DK, EE, CY, LV, HU, MT, PL, RO, SI, SK, SE. 
BE, DE, IT, LT, NL, PT, UK. 
BE, IE, IT, NL, AT, UK. 
DK, HU, IT, LT, NL, PT, SI, UK. 
DK, LT, MT, PT, RO, SI, UK. 
BE, DK, EE, IT, LT, LU, PT, SI, SK. 

EN 

22 

   EN 

                                                 
Besides  communicating  irregularities  to  the  Commission  and  putting  OLAF  into 
contact  with  other  competent  investigative  authorities,  the  designated  authority  in 
some Member States60 has various investigative powers of the sort mentioned above 
which  can  be  used  to  support  OLAF  investigations  and  on-the-spot  checks  in  the 
field of direct expenditure. 

4.3. 

Reporting of irregularities  

legislation61  Member  States  are  required 

Under  Community 
the 
Commission of suspected fraud and any other irregularities which are the subject of a 
primary  administrative  or  judicial  finding.  Regarding  expenditure,  this  notification 
concerns  agriculture,  the  structural  actions  and  the  pre-accession  funds,  and,  as 
regards  revenue,  the  Own  Resources  sector.  Member  States  must  inform  the 
Commission of all irregularities involving an amount of over €10  00062.  

to  notify 

The Commission’s analysis and statistical assessment of irregularities depends on the 
accuracy,  completeness,  quality,  and  timeliness  of  Member  States’  notifications.  In 
these areas, the national authorities still vary, though improvements have been made 
thanks to harmonisation of their reporting approaches.  

This  chapter  analyses  Member  State  practices  in  irregularity  reporting,  looking  at 
three  aspects:  the  timely  reporting  of  irregularities,  the  estimation  of  their  financial 
impact, and the classification of irregularities. Member States were asked to provide 
information  for  agriculture,  the  structural  funds  and  the  pre-accession  funds.  These 
areas are therefore indicated where relevant in the text below. 

4.3.1.  Timely  reporting  of  irregularities  in  the  agricultural  and  the  structural  actions 

sectors  

According to the 2007 Report on the protection of financial interests — Fight against 
fraud,  timely  reporting  has  been  improving  in  recent  years,  although  the  time  gap 
between the moment when the irregularity is discovered and the moment when it is 
reported remains significant.  

Community  legislation  requires  Member  States  to  report  all  irregularities  not  later 
than two months after the end of the quarter in which an irregularity has been subject 
of  a  primary  administrative  or  judicial  finding  and/or  new  information  about  a 
reported irregularity becomes known. The gap between the discovery and reporting 
of an irregularity should not be more than five months.  

In 2007, in the agriculture sector, only 33 % of irregularities were reported within the 
deadline,  while  in  2008  the  figure  was  84 %.  The  average  time  between  discovery 
and  reporting  of  an  irregularity  was  1.2  years  in  2007.  In  2008,  due  to  the 
introduction of a new electronic module, the time gap was not monitored.  

60 
61 

62 

DK, LT, PT, RO, SI. 
Commission  Regulation  (EC)  1848/2006  of  14.12.2006  (OJ  L355,  15.12.2006);  Commission 
Regulation  (EC)  No  2035/2005  of  12.12.2005  (OJ  L328  of  15.12.2005),  amending  Regulation  No 
1681/94  of  11.07.1994  (OJ  L178  of  12.7.1994);  Commission  Regulation  (EC)  No  2168/2005  of 
23.12.2005  (OJ  L345  of  28.12.2005)  amending  Regulation  No  1831/94  of  26.07.1994  (OJ  L  191, 
27.7.1994); Commission Regulation (EC) 1828/2006 of 8.12.2006. 
For SAPARD €4000, for ISPA there is no threshold. 

EN 

23 

   EN 

                                                 
In 2007, for structural actions, 75 % of irregularities were reported on time, while in 
2008 the figure was 86 %. In 2007, the gap between detection and reporting was 0.9 
years, and in 2008 1.1.years. 

For both agriculture and the Structural Actions sectors, Member States gave a large 
number of reasons for late reporting.  

The  complexity  of  national  administrative  procedures  was  mentioned  by  several 
Member  States63,  along  with  late  reporting  of  irregularities  by  intermediate  bodies. 
Sometimes reporting is hindered by the structure of the reporting/managing authority 
itself64,  involving  a  considerable  number  of  administrative  layers.  In  other  cases, 
irregularities  are  not  reported  until  the  administrative  authority  has  ascertained  that 
the  circumstances  in  question  represent  an  irregularity  and  recovery  procedures  are 
already  under  way  or  an  administrative  decision  has  been  taken65.  The  Czech 
Republic,  Hungary  and  the  United  Kingdom  (Scotland)  indicated  that  appeal  and 
review  proceedings  may  sometimes  cause  delays  in  the  reporting  procedure,  while 
two other Member States66 noted that the differing interpretations given by national 
authorities to the terms ‘irregularity’ and ‘preliminary notification’ may also result in 
late reporting. 

Inadequate  IT  support67  or  insufficient  training  or  staffing68  were  other  reasons 
given. Delays may also result from not using the AFIS system69. 

To improve their reporting timeliness, most Member States have taken measures to 
tighten national administrative procedures70, including the adoption of internal rules 
or  guidelines.  Other  measures  aim  to  improve  the  work  flow  with  intermediate 
bodies71  (reminders,  ad-hoc  meetings,  exchange  of  information  between  different 
bodies, and direct contact with entities that notify irregularities late). Many Member 
States organise regular training for staff72. 

In  2008,  the  United  Kingdom  (Scotland)  completed  an  eight-month  independent 
review of the appeals process. Hungary produced guidelines for reporting that are in 
line with the AFIS system. Italy drew up initial administrative or judicial documents 
laying down the reporting obligation. Poland produced a list of documents that may 
be considered primary administrative findings.  

4.3.2.  Estimating the financial impact of irregularities 

Sectoral  regulations  governing  irregularity  reporting  to  the  Commission  require 
Member States to evaluate and report the financial impact of irregularities too. 

63 

64 
65 
66 
67 
68 
69 
70 
71 
72 

BE  (Brussels  capital  region  for  the  Structural  Funds  and  Walloon  region  for  agriculture),  CZ,  DK 
(agriculture), DE (agriculture), EE, EL (agriculture), ES, HU, NL, AT, PL (Structural Funds), SK, SE, 
UK (Northern Ireland). 
IE, IT, ES (Structural Funds). 
MT, FI. 
EE, PL. 
PL. 
HU. 
FR. 
DK, EL, ES, HU, MT, PT, SE. 
BE, BG, CZ, FR, MT, NL, AT, SK, UK. 
EE, IE, IT, LT, HU, PL, SE. 

EN 

24 

   EN 

                                                 
This is in many cases difficult to evaluate because so many factors need to be taken 
into  account.  These  can  include  incomplete  information  when  the  evaluation  is 
undertaken,  or  the  absence  of  a  pre-defined  set  of  criteria  to  help  the  evaluator 
establish the financial impact of an irregularity. 

For both the agricultural and Structural Actions sectors, a large number of Member 
States73 have adopted guidelines for evaluating the individual financial impact of an 
irregularity.  Of  the  Member  States  receiving  support  from  the  pre-accession  funds, 
seven74 have such guidelines. The main criterion used is the irregular amount having 
an  impact  on  Community  budget  which  is  to  be  paid  or  which  was  unduly  paid75. 
Another  criterion  is  the  eligibility  of  expenditure  claimed76.  Supplementary  criteria 
relating to the irregularity itself are also employed: the scale and seriousness of the 
irregularity, the existence of intentional/deliberate behaviour, the category/nature of 
the irregularity, previous occurrence of the irregularity. Other criteria77 — especially 
in the Structural Actions sector — may be the legal provision infringed, the type of 
project  and  expenditure,  the  practice  employed  in  committing  the  irregularity,  the 
penalties  applicable  in  the  event  of  failure  to  meet  the  requirements  laid  down  in 
legal acts, or the impact that the irregularity might have on other projects funded for 
the same beneficiary78.  

Where  several  individual  irregularities  with  a  financial  impact  under  the  reporting 
threshold relate to the same beneficiary running one or more projects under the same 
programme/measure,  a  large  number  of  Member  States  communicate  this  fact  to 
OLAF79.  Member  States  also  make  use  of  information  on  irregularities  for  risk 
analysis  purposes80.  In  cases  where  an  irregularity  with  a  financial  impact  was 
initially  estimated  above  the  reporting  threshold,  but  is  subsequently  recalculated 
below the threshold, Member States have indicated that an update will be sent to the 
Commission on any such reduction. 

4.3.3.  Classification of irregularities 

Member  States  are  required  to  classify  irregularities  in  specific  categories  — 
irregularity81, suspected fraud82 and fraud83.  

73 

74 
75 
76 
77 
78 
79 

80 
81 

82 

20 Member States for agricultural funds: BG, CZ, DK, DE, EE, IE, ES, FR, IT, CY, LV, LT, LU, HU, 
MT,  AT  (excluding  export  refunds),  PL,  PT,  RO,  UK;  19  for  the  Structural  Funds:  BE  (BERBC03, 
Walloon region, ESF Agency, French Community; ESF VL Flemish Community), BG, CZ, DK, DE, 
EE, IE, ES, FR, CY, LV, HU, MT,NL, AT, PT, RO, SK,UK. 
BG, EE, CY, LV, MT, RO, SK. 
BG, CZ, DK, EE, IE, ES, CY, LV, LT, LU, HU, MT, PT, SK and UK. 
BE (French Community), FR, AT, PL. 
MT, UK (Northern Ireland), EE. 
UK (JIU). 
BE (except Walloon region), BG, CZ, FR (for agriculture only), IT, LV, LT, HU, MT, PL, PT (only for 
agriculture), RO, SI (only for agriculture), UK (except Scotland). 
For agriculture: all except DK; for the Structural Funds: all except EL, LT, LU, NL, FI. 
In  conformity  with  European  Council  Regulation  2988/95  of  18  December  1995,  an  ‘irregularity’ 
means  any  infringement  of  a  provision  of  Community  law  resulting  from  an  act  or  omission  by  an 
economic  operator  which  has,  or  would  have,  the  effect  of  prejudicing  the  general  budget  of  the 
Communities. 
Given that the reporting of irregularities is done at an early stage, the sectoral regulations provide that 
Member  States  must  include,  among  the  communicated  irregularities,  not  only  cases  of  established 
fraud but also cases of suspected fraud. According to EC Regulation Nos 1848/2006 for the agriculture 

EN 

25 

   EN 

                                                 
According  to  the  2007  Report  on  the  protection  of  the  Communities’  financial 
interests,  in  the  agricultural  sector,  Member  States  classified  only  68 %  of  the 
irregularities reported, while the figure was 67 % for the Structural Actions and 57 % 
for the pre-accession funds.  

While  the  majority  of  Member  States  find  it  relatively  easy  to  distinguish  between 
irregularity and established fraud, some find it harder to identify cases of suspected 
fraud,  because  of  difficulties  in  determining  fraudulent  or  intentional  behaviour84. 
Difficulties  in  classifying  irregularities  arise  from  insufficient  information  or 
evidence  being  available  to  the  authorities  at  an  early  stage  in  the  procedure85  or 
from  the  limited  practical  experience  or  lack  of  expertise  of  the  staff  handling  the 
irregularity86.  Classification  is  also  hindered  by  lengthy  administrative  and  judicial 
procedures87,  as  an  irregularity  initially  classified  in  a  given  category  may 
subsequently need to be reclassified.  

For agriculture, Member States88 stated that they would classify an irregularity as a 
case  of  suspected  fraud  where  this  was  indicated  by  the  findings  of  the  national 
management  and  control  system  (e.g.  internal  and  external  audits,  internal  control 
procedures, on-the-spot checks). In the same sector, only two Member States would 
classify  an  irregularity  as  a  case  of  suspected  fraud  if  the  case  had  been  brought 
before a court. For the Structural Funds, most89 Member States use the first criterion 
and  only  four  the  second  criterion.  The  first  criterion  is  largely  used  for  the  pre-
accession funds as well.  

5. 

RECOVERY 

5.1. 

Own Resources 

The  Member  States  have  to  recover  established  amounts,  including  those  they 
register  in  the  shared  database  OWNRES.  The  amount  to  be  recovered  following 
irregularities detected in 2008 is approximately €351 million.  

An  established  amount  may  not  be  recovered  completely,  despite  Member  States’ 
efforts.  Amounts  established  may  change  because  of  additional  information  or 
judicial procedures, or the debt may be deemed irrecoverable because of the debtor’s 
financial problems. 

At  present,  the  recovery  rate  for  irregularities  occurring  in  2008  is  37.5 % 
(approximately  €132 million).  This  is  an  average  starting  position,  although  lower 

sector, and 2035/2005 and 2168/2005 for the structural and cohesion funds, ‘suspected fraud’ means an 
irregularity  giving  rise  to  administrative  and/or  judicial  proceedings  at  national  level  in  order  to 
establish the presence of intentional behaviour. 
According to the Convention on the protection of the European Communities’ financial interests, fraud 
is an irregularity committed intentionally, and is determined to be a criminal act only by the outcome of 
judicial proceedings. 
BE, ES, HU, LV, LT, PT. 
CY, MT. 
EE, HU, RO, FI, SE. 
RO, SI. 
BE, BG, CZ, DK, EE, FR, IT, LT, LU, PL, RO, SI, UK. 
BE, BG, CZ, DK, EE, IE, IT, CY, LV, LT, LU (ERDF), NL, PL, PT, RO, SI, SK, FI, SE, UK. 

83 

84 
85 
86 
87 
88 
89 

EN 

26 

   EN 

                                                                                                                                                         
than  last  year’s  of  40 %. Over the  last  decade the  recovery rate has varied between 
40 % and 55 %.  

When non-recovery of an established debt is not attributable to a Member State, the 
Member State may request that the irrecoverable amount be written off. In 2008 the 
Commission  refused  Member  States’  write-off  requests  in  32  cases  totalling  some 
€17.4 million  because  it  deemed  that  non-r ecovery  was  attributable  to  the 
Member States. 

Moreover,  certain  Member  States  were  held  financially  responsible  for  a  total  of 
more  than  €43 million  because  they  did  not  establish  customs  debts  where  they 
should have done so. 

5.2. 

Agriculture 

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

As  of  financial  year  2008,  where  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  2007,90  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  th e  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  decision91,  and  a 
further €6.2 million still remains to be charged. 

Regarding the financial year 2008, Member States recovered €108 million, 32.2 was 
declared  irrecoverable  and  the  outstanding  amount  still  to  be  recovered  from  the 
 1 246 million  for  EAGF.  The 
beneficiaries  at  the  end  of  the  financial  year  was  €
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  200992.  A  further  €0.8  million  will  be 

90 
91 
92 

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 

27 

   EN 

                                                 
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 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 irrecoverable during financial year 2008. 

5.3. 

Structural Funds 

For  the  Structural  Funds,  recovery  from  the  beneficiaries  of  amounts  unduly  paid 
owing to irregularity or fraud is also a matter for the Member States. These amounts 
can  be  recovered  at  Commission  level  by  reducing  or  cancelling  the  financial 
contribution. 

The programmes co-financed by the Structural Funds are multiannual and based on 
interim payments. Recovery of amounts unduly paid may take place before or after 
conclusion of the programme. For the 1994-99 programming period, the deadline for 
requesting final payment from the Commission was 31 March 2003. In that period, 
the  Community  co-financed  around  1 000  programmes  worth  some  €159 billion  in 
total.93  The  Commission’s  authorising  and  managing  departments,  assisted  by 
OLAF,  are  responsible  for  administrative  and  financial  follow-up  once  these 
programmes have been concluded.  

the  1994-99  programming  period, 

For 
the  Member  States  communicated 
11 035 cases  of  irregularities  (62  in  2008)  with  a  financial  impact  estimated  at 
€1.51 billion 94 for the Community contribution (€10.95 million for 2008). 

Of  these  cases,  5 944  have  been  closed  definitively  at  Commission  level  and  an 
amount of €697 million was taken into acc ount during final payment or decommitted 
after closure or reimbursed to the Community budget. Member States indicated that 
administrative and judicial procedures had been finalised at national level in a further 
861 cases,  with  a  financial  impact  of  €59 million  for  the  same  period.  The 
Commission has started reconciliation procedures with a view to closing these cases. 

In  2008,  the  Commission  adopted  three  decisions  on  how  to  treat  24  cases  of 
irregularities for which the Member States concerned asked the Commission to bear 
the financial consequences of the irrecoverable amounts. One decision concerning 20 
 3 851 988 and two decisions concerning the 
cases financed by FIFG in the sum of €
ESF in the sum of €

 120 359 were charged to the Community budget. 

For the 2000-06 programming period, the Member States have so far communicated 
15 574  cases  of  irregularities  (3 791  in  2008)  with  a  financial  impact  of  some 
€2.30 billion for the Community contribution (€516.3 million for 2008). 

93 

94 

These  are  multiannual  programmes.  This  figure  does  not  include  projects  directly  financed  under  the 
Structural Funds and Cohesion Fund. 
Situation according to the data in the ECR database as at 15 April 2008. 

EN 

28 

   EN 

                                                 
The  Member  States  have  informed  the  Commission  that  administrative  and/or 
judicial procedures have been finalised at national level for 7 389 of these cases and 
that some €704 million has been recovered. 

 1 995 million  (€414 million  in  2008)  and 

At the end of 2008, the total amount of financial corrections concerning the 1994-99 
and  2000-06  programming  periods  was  €
 3 313 million  (€

 1 173 million  in  2008)  respectively.  These  are  the  result  of  audits 
by  the  Commission  and  the  European  Court  of  Auditors,  OLAF  investigations  and 
the closure procedure for the two programming periods. They consist of expenditure 
affected by irregularities which, for this reason, must be excluded from co-financing 
by  the  EU  budget.  On  top  of  that,  the  Member  States  also  effect  corrections 
following their own audits or Commission’s and European Court of Auditors’ audits. 
These are not registered in the Commission’s accounting system, but the information 
is reported by the Member States to the Commission once a year.  

5.4. 

Direct expenditure  

In  the  areas  where  funds  are  managed  directly  by  the  institutions,  amounts  unduly 
paid are recovered directly by them, without the intervention of the Member States. 
The  Financial  Regulation  and  its  implementing  rules  set  out  the  different  stages  in 
the recovery procedure: 

–  estimation  and  establishment  of  the  entitlement  by  the  authorising  officer  (who 
must ensure that the claim is certain, of a fixed amount and due), 

–  establishment  of  a  recovery  order  (instruction  from  the  authorising  officer  to  the 
accounting officer to proceed with recovery) followed by a debit note to the debtor, 
and 

–  recovery  by  the  accounting  officer,  who  will,  if  possible,  effect  the  recovery  by 
offsetting  if  the  debtor  has  a  claim  on  the  Communities  that  is  certain,  of  a  fixed 
amount and due. 

If, after reminders and letters of formal notice have been sent out, the debtor has not 
paid the debt and the accounting officer has not been able to recover the amount due 
by offsetting or calling in a bank guarantee provided by the debtor, the authorising 
officer  determines,  without  delay,  what  method  of  enforced  recovery  should  be 
applied to the debt. 

There are two mutually exclusive ways of obtaining an enforcement order: 

–a decision constituting an enforcement order within the meaning of Article 256 of 
the  EC  Treaty  (formalises  the  establishment  of  the  entitlement  in  a  decision  which 
constitutes an enforcement order); 

–an order before the national or Community courts. This also includes a civil action 
within criminal proceedings in jurisdictions where this is possible. 

In  cases  where  recovery  orders  concerning  irregularities  and  cases  of  fraud  were 
launched  during  2008,  full  or  partial  recovery  has  already  been  announced  in  679 
reported  cases.  The  Commission  has  recovered  €22  million.  In  670  cases  the  full 

EN 

29 

   EN 

€
irregular  amount  has  been  recovered.  An  amount  of  €13  million  st ill remains to  be 
recovered, concerning 262 cases. 

5.5. 

Recovery following an OLAF case 

Where the final report of an OLAF case concludes that certain sums have probably 
been  paid  to  a  beneficiary  against  the  rules  or  that  sums  that  should  have  been 
collected  have  not  been,  the  relevant  authorities  (generally  the  authorities  in  the 
Member States or third countries concerned) must recover the amounts in question. 
OLAF follows the course of these recovery proceedings.  

In 2008, OLAF formally closed the financial follow-up for more than €146.8 million. 
€128 million was recovered in the fiel d of the Structural Funds.  

In 2008, OLAF also reviewed the financial follow-up procedures relating to OLAF 
cases.  This  resulted  in  new  case  handling  and  acceptance  criteria  involving  de 
minimis  thresholds  to  be  applied  from  1  January  2009.  The  introduction  of  these 
thresholds  will  enable  OLAF’s  limited  financial  follow-up  resources  to  be  focused 
more sharply on the more significant cases of fraud or irregularity involving sizeable 
amounts of money. For more details see the OLAF report95.  

95 

http://ec.europa.eu/comm/anti_fraud/reports/index_en.html. 

EN 

30 

   EN