COMMISSION STAFF WORKING DOCUMENT Statistical Evaluation of Irregularities- Own Resources, Agriculture, Cohesion Policy, Pre-Accession Funds and Direct Expenditure -Year 2009   Accompanying document to the   Report from the Commission on the protection of the European Communities’ financial interests and the fight against fraud – 2009
Date: 2010-07-14
Institutions: European Commission
Subjects: EU statistics, European Anti-fraud Office, activity report, agricultural production, economic and social cohesion, financial control, fraud, fraud against the EU, fund (EU), management of resources

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EUROPEAN COMMISSION 

Brussels, 14.7.2010 
SEC(2010) 898 final 

COMMISSION STAFF WORKING DOCUMENT 

Statistical Evaluation of Irregularities- Own Resources, Agriculture, Cohesion Policy, 
Pre-Accession Funds and Direct Expenditure -Year 2009 

Accompanying document to the 

Report from the Commission on the protection of the European Communities’ financial 
interests and the fight against fraud – 2009 

{SEC(2010) 897} 
{COM(2010) 382} 

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COMMISSION STAFF WORKING DOCUMENT 

Statistical Evaluation of Irregularities- Own Resources, Agriculture, Cohesion Policy, 
Pre-Accession Funds and Direct Expenditure -Year 2009 

Accompanying document to the 

Report from the Commission on the protection of the European Communities’ financial 
interests and the fight against fraud – 2009 

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TABLE OF CONTENTS 

PART I - INTRODUCTION...................................................................................................... 7 

1. 

1.1. 

1.2. 

INTRODUCTION........................................................................................................ 7 

Structure of the document ............................................................................................ 7 

Definitions.................................................................................................................... 7 

1.2.1. 

Irregularity.................................................................................................................... 7 

1.2.2.  Fraud ............................................................................................................................ 7 

1.2.3.  Suspected fraud ............................................................................................................ 8 

1.2.4. 

Irregularity and Fraud Rates......................................................................................... 9 

1.2.5.  Fraud Frequency and Fraud Amounts Levels .............................................................. 9 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

The European Union Budget...................................................................................... 10 

Revenues .................................................................................................................... 10 

Expenditure ................................................................................................................ 11 

Management of the Budget and Legal Framework for the Reporting of irregularities
.................................................................................................................................... 12 

The Legal Framework for Irregularities Reporting and the Reporting Systems........ 13 

The Legal Framework ................................................................................................ 13 

The irregularity reporting systems ............................................................................. 14 

3.2.1.  Own Resources........................................................................................................... 14 

3.2.2. 

Irregularity Management System............................................................................... 14 

3.3. 

Implementation of the Reporting Obligation ............................................................. 15 

PART II - REVENUES............................................................................................................ 17 

4. 

TRADITIONAL OWN RESOURCES (ANNEXES 3-13) ....................................... 17 

4.1. 

Management of Traditional Own Resources (TOR).................................................. 17 

4.1.1.  Monitoring of establishment and recovery of TOR ................................................... 17 

4.1.2.  Procedure for managing Member States’ reports for write-off.................................. 18 

4.1.3.  Particular cases of Member State failure to recover TOR ......................................... 19 

4.2. 

Reporting discipline ................................................................................................... 19 

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4.2.1.  Year of discovery versus year reported...................................................................... 20 

4.3. 

General trends ............................................................................................................ 20 

4.3.1.  Types of irregularity and fraud .................................................................................. 21 

4.3.2.  TOR and cigarettes..................................................................................................... 22 

4.3.3.  Data main sectors TOR .............................................................................................. 22 

4.4. 

Recovery .................................................................................................................... 22 

4.4.1.  Recovery rate ............................................................................................................. 23 

4.5. 

Detection of fraud and irregularities .......................................................................... 23 

4.5.1.  Member States' control systems ................................................................................. 25 

4.6. 

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

PART II - EXPENDITURE ..................................................................................................... 29 

5. 

5.1. 

5.2. 

5.3. 

AGRICULTURAL EXPENDITURE (Annexes 14-15) ............................................ 29 

Introduction ................................................................................................................ 29 

Reporting discipline ................................................................................................... 31 

General trends ............................................................................................................ 35 

5.3.1. 

Irregularities in perspective – cases reported in 2009................................................ 35 

5.3.2. 

Impact on the budget – cases reported for the financial years 2006 - 2009............... 38 

5.3.3. 

Impact on the budget – overview per budget chapter financial years 2006 - 2009 ... 40 

5.3.4.  Financial follow up of irregularity cases.................................................................... 42 

5.3.4.1.  Method of detection – Controls by national authorities............................................. 42 

5.3.4.2.  Method of detection - Controls by the Commission .................................................. 43 

5.3.4.3.  Recovery .................................................................................................................... 44 

5.4. 

Specific analysis......................................................................................................... 46 

5.4.1. 

Introduction ................................................................................................................ 46 

5.4.2.  Sector 050203: direct payments for arable crops....................................................... 47 

5.4.3.  Sector 050302: beef and veal ..................................................................................... 48 

5.4.4.  Sector 050401: rural development ............................................................................. 50 

5.4.5.  Other sectors: fraud rates ........................................................................................... 51 

5.4.6.  Patchy reporting ......................................................................................................... 51 

5.4.7. 

summary: 2004- rates and levels................................................................................ 54 

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5.5. 

Conclusions ................................................................................................................ 55 

6. 

7. 

7.1. 

7.2. 

European Fisheries Fund............................................................................................ 57 

COHESION POLICY (Annexes 16-20) .................................................................... 58 

Reporting Discipline .................................................................................................. 58 

General Trends ........................................................................................................... 60 

7.2.1.  Yearly trends .............................................................................................................. 60 

7.2.2. 

Irregularities reported in 2009.................................................................................... 62 

7.2.3.  Detection methods...................................................................................................... 63 

7.2.4.  Types of irregularity................................................................................................... 64 

7.2.5.  Suspected frauds......................................................................................................... 65 

7.3. 

Specific analysis – Irregularities related to the programming period 2000-2006...... 67 

7.3.1. 

Irregularities affecting the different funds ................................................................. 69 

7.3.2. 

Irregularities by Objective.......................................................................................... 70 

7.3.3. 

Irregularities by Member State................................................................................... 72 

7.3.4.  Suspected frauds......................................................................................................... 74 

7.3.5.  Preventive action and Recovery................................................................................. 77 

7.3.6.  Cohesion Fund ........................................................................................................... 79 

7.4. 

Conclusions ................................................................................................................ 80 

8. 

8.1. 

8.2. 

8.3. 

PRE-ACCESSION FUNDS (Annexes 21-23)........................................................... 82 

General overview ....................................................................................................... 83 

IMS and reporting discipline...................................................................................... 83 

General Trends ........................................................................................................... 85 

8.3.1.  Overall trend............................................................................................................... 85 

8.3.2.  Trend related to Member States and Candidate countries 2009 ................................ 86 

8.3.3. 

Irregularities affecting different funds ....................................................................... 87 

8.3.4.  Amounts involved ...................................................................................................... 87 

8.3.5. 

Impact on the budget and irregularity rate ................................................................. 88 

8.3.6.  Method of detection ................................................................................................... 89 

8.3.7.  Types of irregularities ................................................................................................ 90 

8.4. 

Specific analysis......................................................................................................... 90 

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8.4.1.  Suspected fraud .......................................................................................................... 90 

8.4.2.  Recovery .................................................................................................................... 95 

8.5. 

Conclusions ................................................................................................................ 97 

9. 

9.1. 

9.2. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT ............ 99 

Methodology and scope ............................................................................................. 99 

General analysis ....................................................................................................... 100 

9.2.1.  Financial amounts involved ..................................................................................... 100 

9.2.2.  Financial amounts involved by geographical area and Member State..................... 102 

9.2.3.  Method of detection ................................................................................................. 104 

9.2.4.  Types of irregularity................................................................................................. 105 

9.3. 

Specific analysis....................................................................................................... 109 

9.3.1. 

Irregularity versus Suspected Fraud......................................................................... 109 

9.3.2.  Time delay................................................................................................................ 109 

9.3.3.  Trends....................................................................................................................... 110 

9.4. 

9.5. 

Recovery .................................................................................................................. 111 

Conclusions .............................................................................................................. 111 

ANNEXES ............................................................................................................................. 114 

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PART I - INTRODUCTION 

1. 

INTRODUCTION 

1.1. 

Structure of the document 

The present document1 is divided in four parts.  

The first introductory part is composed of four chapters which contain, respectively, 
the  definitions  of  the  specific  terms  used  throughout  the  document;  give  a  short 
description of the European Budget and its different “management” modes; describe 
the legal background for the reporting of irregularities and the new reporting system. 

The  second  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 chapter 2.2 letter b) – shared management. 

The  third  is  composed  of  5  chapters  dedicated,  respectively,  to  Agricultural 
expenditure,  European  Fisheries  Fund,  Structural  measures  (for  these  three  sectors 
the  management  mode  is  that  indicated  under  chapter  2.2  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 chapter 2.2 letter a.). 

The fourth part summarises the main conclusions of parts 2 and 3. 

1.2. 

Definitions 

For the purposes of this document, the following definitions apply. 

1.2.1. 

Irregularity 

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  by  charging  an 
unjustified item of expenditure to the Community budget. 

1.2.2.  Fraud 

Fraud:  There  is  clear  distinction  between  the  legal  notion  of  fraud  and  a  more 
common sense's notion of the term.  

The  former  refers  to  definition(s)  contained  in  legal  acts  which  establish  the 
behaviour  and  its  subjective  and  objective  elements  that  constitute  a  fraud.  These 
elements  need  to  be  ascertained  in  a  court  of  law  decision  which  is  not  open  for 
(further) appeal (‘res iudicata’).  

1 

This document cannot be considered as an official poistion of the Commission. 

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The "European" legal definition of the behaviour characterising fraud is contained in 
article  1(1),  point  (a),  of  the  "Convention  on  the  Protection  of  the  European 
Communities'  Financial  Interests"  according  to  which,  “[…]  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.” 

National  legislations  contain  several  articles  in  the  criminal  and  civil  code  that 
describe  the  conducts  and  the  related  penalties.  Some  of  these  provisions  are  the 
result of the implementation of the Convention into the national legal system. 

The distinction between irregularities and fraud is that fraud 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. 

1.2.3. 

Suspected fraud 

Suspected fraud: means an irregularity giving rise to the initiation of administrative 
and/or  judicial  proceedings  at  national  level  in  order  to  establish  the  presence  of 
intentional behaviour, in particular fraud, such as is referred to in Article 1(1), point 
(a),  of  the  Convention  on  the  protection  of  the  European  Communities'  financial 
interests. 

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This definition has been introduced in Commission Regulation (EC) N. 2035/2005. It 
has been "confirmed" in Regulation N. 1828/2006 for the Programming Period 2007-
2013. 

In their communications of irregularity to the Commission, Member States have been 
requested  to  indicate  whether  a  reported  irregularity  can  be  regarded  as  'suspected 
fraud'.  This  notion  was  introduced  in  order  to  provide  some  data  for  statistical 
purposes and to avoid the necessity of waiting until the end of criminal procedures 
for a final indictment. 

1.2.4. 

Irregularity and Fraud Rates 

The Irregularity Rate (IrR) is calculated using Equation 1-1 below: 

Equation Error! No text of specified style in document.-1: Irregularity Rate 

Irregularity Rate (IR) 

Total financial amount affected by irregularity 

x 100 

The Fraud Rate (FrR) is calculated using Equation 1-2 below: 

Total payments/expenditure 

Equation Error! No text of specified style in document.-2: Fraud Rate: 

Fraud Rate (FrR) 

Total financial amount affected by suspected fraud  x 100 

Total payments/expenditure 

The IrR and FrR can be calculated by financial year (as in the case of the Agriculture 
sector  –  see  Chapter  6)  or  on  the  entire  Programming  Period  (as  in  the  case  of 
Structural Funds – see Chapter 7) and by Member State. Please note that the FrR is 
calculated using amounts linked to cases of suspected fraud2. In the 2008 report the 
same concept was identified as “suspected fraud rate” or “estimated fraud rate”. 

1.2.5.  Fraud Frequency and Fraud Amounts Levels 

The  Fraud  Frequency  Level  (FFL)  represents  the  percentage  of  cases  qualified  as 
suspected frauds on the total number of reported irregularities and is calculated using 
Equation 1-3 below. 

Equation Error! No text of specified style in document.-3: Fraud Frequency Level 

Fraud Frequency Level (FFL) 

Total number of suspected fraud cases 

x 100  

Total number of reported irregularities  

The  Fraud  Amounts  Level  (FAL)  represents  the  percentage  of  financial  amounts 
involved  in  cases  qualified  as  suspected  frauds  on  the  total  reported  financial 
amounts affected by irregularities and it is calculated using Equation 1-4 below. 

2 

These  rates  and  the  following  levels  had  already  been  introduced  in  the  2008  Report  and  Statistical 
Annex with similar names. This year’s Statistical Annex defines precisely these concepts in order to use 
them in the years to come. In other parts of the Statistical Annex or in the Report itself, the Fraud Rate 
may be referred to also as Suspected Fraud Rate. The calculation method remains the same. 

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Equation Error! No text of specified style in document.-4: Fraud Amounts Level 

Fraud Amount Level (FAL)  Total financial amount affected by suspected fraud 

x 100 

Total amount affected by irregularities 

FFL and FAL can be calculated by financial year (as in the case of the Agriculture 
sector  –  see  Chapter  6)  or  on  an  entire  Programming  Period  (as  in  the  case  of 
Structural Funds – see Chapter 7) and by Member State. 

2. 

THE EUROPEAN UNION BUDGET 

Taxpayers'  money  is  used  by  the  European  Union  (EU)  to  fund  activities  that  all 
Member States and parliaments have agreed upon in the Treaties. A small amount – 
around 1% of the Union's national wealth, which is equivalent to about EUR 235 per 
head of the population – comes into the EU's annual budget and is then spent mainly 
for its citizens and communities. 

2.1. 

Revenues 

The European Union has its 'own resources' to finance its expenditure. Legally, these 
resources belong to the Union. Member States collect them on behalf of the EU and 
transfer them to the EU budget. 

Own resources are of three kinds: 

–  Traditional  own  resources  (TOR)  —  these  mainly  consist  of  duties  that  are 

charged on imports of products coming from a non-EU state. 

–  The resource based on value added tax (VAT) is a uniform percentage rate that is 

applied to each Member State’s harmonised VAT revenue. 

–  The resource based on gross national income (GNI) is a uniform percentage rate 

applied to the GNI of each Member State. 

The  budget  also  receives  other  revenue,  such  as  taxes  paid  by  EU  staff  on  their 
salaries,  contributions  from  non-EU  countries  to  certain  EU  programmes  and  fines 
on companies that breach competition or other laws. 

Revenue flows into the budget in a way which is roughly proportionate to the wealth 
of the Member States. The United Kingdom, Germany, the Netherlands, Austria and 
Sweden,  however,  benefit  from  some  adjustments  when  calculating 
their 
contributions. 

Chart 2-1 shows how the four elements indicated above contribute to the EU budget, 
while  Annex  1  provides  a  summary  of  financing  by  type  of  own  resource  and  by 
Member State. 

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Chart Error! No text of specified style in document.-1: Source of financial resource to the European Budget 

2.2. 

Expenditure 

The EU Budget for 2009 included 6 headings of expenditure: 

–  Sustainable Growth represents the largest share of EU budget the biggest share 
of the EU budget, which will go to research, innovation, employment and regional 
development programmes; 

–  Natural Resources cover the second largest portion of the expenditure supporting 
the  agricultural  expenditure  and  direct  aids,  rural  development,  fisheries  and 
environment; 

–  Citizenship,  Freedom,  Security  and  Justice  supports  initiatives  aiming  at 
strengthening  active  citizenship  or  addressing  issues  like  terrorism,  crime  and 
immigration; 

–  The  EU  as  a  Global  Player  sets  the  resources  for  the  Common  Foreign  and 
Security  Policy,  the  EU  Neighbourhood  Policy,  Pre-Accession  Assistance, 
Humanitarian Aid and Development Cooperation; 

–  Other  expenditure  includes  the  running  costs  for  the  European  Institutions  and 

some compensation to New EU Countries. 

Chart  2-2  shows  the  distribution  of  the  EU  financial  resources  among  the  six 
different  headings,  while  Annex  2  provides  a  more  detailed  overview  of  the  2009 
budget by sub-heading. 

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Chart Error! No text of specified style in document.-2: Distribution of the expenditure financial resource by 
Budget Heading 

2.3.  Management  of  the  Budget  and  Legal  Framework  for  the  Reporting  of 

irregularities 

According to article 317 of the Treaty on the Functioning of the European Union (ex 
Article  274  of  the  Treaty  establishing  the  European  Community),  the  Commission 
shall implement the budget. Council Regulation (EC, Euratom) No 1605/20023 of 25 
June 2002 on the Financial Regulation (FinR) applicable to the general budget of the 
European Communities indicates that the Commission implements the budget: 

(1) 

indirectly  by  executive  agencies  created  by 

on a centralised basis: implementation tasks are performed either directly by 
the 
its  departments  or 
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; 

(2) 

on a shared or decentralised basis: implementation tasks are delegated to the 
Member  States  (shared  management)  or  third  countries  (decentralised 
management);  the  Commission  applies  clearance-of-accounts  procedures  or 

3 

Official Journal L 248 of 16.09.2002 

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financial correction mechanisms enabling it to assume final responsibility for 
the implementation of the budget; 

(3) 

by joint management with international organisations: certain implementation 
tasks are entrusted to international organisations. 

3. 

THE LEGAL FRAMEWORK FOR IRREGULARITIES REPORTING AND THE REPORTING 
SYSTEMS 

3.1. 

The Legal Framework 

European legislation provides for the protection of the Union’s financial interests in 
all  areas  of  activity4.  The  FinR  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. 

Regulation  No.  1150/2000  specifies  the  requirement  for  own  resources  and 
Regulation No. 1848/20065 for the agriculture sector. For the cohesion policy, which 
runs  over  multi-annual  programmes  the  legal  framework  is  more  complex  and  is 
covered  by  Regulations  Nos.  1681/946  and  1831/947  for  the  programming  periods 
until the 2000-2006 and by Regulation No 1828/20068 for the period 2007-20139. In 

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

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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.  

Member States are required to report detected irregularities within two months of the 
end  of  each  quarter.  The  initial  communication  has  to  be  updated  with  follow-up 
communications  to  provide  relevant  information  about  the  financial,  administrative 
and judicial follow-up.  

3.2. 

The irregularity reporting systems 

Two main systems are in place for the reporting of irregularities to the Commission: 
Own Resources (OWNRES) managed by the Directorate General for Budget and the 
Irregularity Management System (IMS) managed by the European Anti-Fraud Office 
(OLAF). 

3.2.1.  Own Resources 

Under  Article  6(5)  of  Regulation  No  1150/2000,  Member  States  are  required  to 
communicate  to  the  Commission,  via  the  OWNRES  system,  cases  of  fraud  and 
irregularity, if the TOR amount exceeds €10 000. 

3.2.2. 

Irregularity Management System 

The  Irregularity  Management  System  (IMS)  is  an  application  of  the  Anti-Fraud 
Information  System  (AFIS),  developed  and  maintained  by  OLAF  for  a  secure 
exchange of information between Member States and the Commission.  

IMS  is  a  complex  application  divided  in  several  modules  which  enable  Member 
States  to  report  irregularities  and  (suspected)  frauds  under  the  different  sectoral 
legislations  mentioned  in  paragraph  1.2.  The  modules  are  named  after  the 
corresponding Regulation. 

Figure  3-1  summarises  the  architecture  of  IMS  and  distinguishes  between  modules 
under  development  (framed  by  a  dotted  line)  and  modules  currently  operational 
(framed by a continuous line). 

Figure Error! No text of specified style in document.-1: IMS architecture 

No 1081/2006 of the European Parliament and of the Council of 5 July 2006 on the European Social 
Fund and repealing Regulation (EC) No 1784/1999; Council Regulation (EC) No 1083/2006 of 11 July 
2006  laying  down  general  provisions  on  the  European  Regional  Development  Fund,  the  European 
Social Fund and the Cohesion Fund and repealing Regulation (EC) No 1260/1999; Council Regulation 
(EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 
1164/94, OJ L 210, 31.7.2006. 

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IMS is a web based application that can be accessed directly via internet; this easies 
accessibility to the system, which has led to an enormous increase of the number of 
users in relation to the previous electronic reporting system which was using a more 
rigid connectivity and therefore a more limited number of users.  

Another important feature of IMS is also the possibility of creating different cascade 
levels for each Member States, allowing establishing a “workflow” which effectively 
reflects  the  complexity  of  the  reporting  system  which  normally  involves  several 
bodies with different levels of responsibility, often requiring the superior to approve 
the transmission of the notification further on up to OLAF. 

This  flexibility  of  the  system  ,  however,  implies  an  increased  complexity  in  its 
setting up, considering that Member States’ organisation for irregularity reporting ay 
involve many bodies and authorities, which, then, need to be set up into the system. 
To  exemplify  such  complexity,  it  could  be  mentioned  the  case  of  Spain  for  the 
Structural  Funds,  for  which  1  organisation  needs  to  be  set  up  for  each  Operational 
Programme (OP). For the Programming Period 2007-2013 alone, 46 OPs (excluding 
those of the Territorial Cooperation Objective) have been approved.  

Due to these complexities, 2009 needs to be seen as a transition year for irregularity 
reporting,  because  it  implied  a  great  effort  from  Member  States  and  OLAF  for  the 
design and implementation of the reporting structures, the creation of the users, the 
verification  and  migration  of  existing  communications.  Chapter  6,  7  and  8  provide 
more details about the implementation of IMS in the relevant fields. 

3.3. 

Implementation of the Reporting Obligation 

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 

EN 

15 

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distinction  between  “suspected  fraud”  and  other  irregularities  is  not  consistent  as 
Member  States  do  not  always  have  the  same  definition  of  criminal  risk. 
Consequently, a certain proportion of communications received by the Commission 
does not distinguish between suspected fraud and irregularity. 

The Commission works in close cooperation with the Member States to improve the 
notification system for irregularities, in particular to clarify the concepts of “fraud” 
and “irregularity”10 and as a result of this, attempts to measure the possible economic 
impact of fraud in certain sectors have been made. However, for the reasons outlined 
above,  the  figures  presented  in  the  document  should  be  interpreted  with  caution.  It 
would  be  particularly 
the 
geographical  distribution  of  fraud  or  on  the  efficiency  of  the  services  which 
contribute to the protection of financial interests. The findings can not be considered 
as empirical evidence of the level of fraud and irregularity. 

to  draw  simple  conclusions  about 

inappropriate 

10 

The  Commission  opened  a  dialogue  with  the  representatives  of  the  Member  States  to  clarify  basic 
concepts and to re-assure Member States that the communication of irregularities in no way prejudices 
the outcome of criminal judicial proceedings. A working document on the practical modalities for the 
communication of irregularities was established. Discussions are continuing in the Advisory Committee 
on the Coordination of Fraud Prevention. 

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16 

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PART II - REVENUES 

4. 

TRADITIONAL OWN RESOURCES (ANNEXES 3-13) 

4.1.  Management of Traditional Own Resources (TOR) 

The Community must have access to Traditional Own Resources (‘TOR’)11 under the 
best  possible  conditions.  In  conformity  with  Regulation  (EC,  EURATOM)  No 
1150/200012  Member  States  are  responsible  for  making  TOR  available  to  the 
Commission,  within  the  deadlines  set,  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, if TOR have been established by a Member State but not yet recovered and 
if  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  made  available  until  actually  recovered.  Most  fraud  and  irregularity 
cases relate to B-account items.  

4.1.1.  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  recovered.  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: 

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

–  Regular inspection in Member States of the establishment and recovery of TOR, 

and B-account entries; 

–  Specific  monitoring  (in  close  cooperation  with  OLAF,  DG  TAXUD  and  DG 
AGRI) of Member States’ follow-up of recovery in individual cases, which have a 
significant  financial 
involve  Mutual  Administrative 
Assistance.  

impact  and  usually 

11  These are mainly customs and agricultural duties but also include anti-dumping duties and sugar levies 
12 

Regulation No 1150/2000 of 22 May 2000. 

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17 

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

4.1.2.  Procedure for managing Member States’ reports for write-off  

Member States must take all requisite measures to ensure that established amounts of 
TOR are made available to the Commission. This requirement, mentioned in Article 
17(1) of Regulation No 1150/2000, also implies that a Member State is only released 
from  its  obligation  to  make  available  TOR  if  it  can  prove  that  the  debt  is 
irrecoverable either: 

(1) 

for reasons of force majeure; or 

(2) 

for other reasons, which cannot be attributed to that Member State. 

Amounts  of  TOR  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  debt  was 
established, or in the event of an administrative or judicial appeal, the final decision 
was given, or the last part-payment to the debt was made, whichever is the later. If 
the amount of the written-off debt is less than EUR 50°000, Member States do not 
have to communicate the case  to the Commission, unless the  Commission makes a 
specific request. However, if the irrecoverable amount of TOR exceeds EUR 50°000, 
the  write-off  must  be  reported  to  the  Commission  which  has  to  decide  whether  the 
necessary  conditions  are  fulfilled  in  order  to  release  the  Member  State  from  the 
obligation to make the TOR available. 

A  2004  amendment  to  Regulation  No  1150/200013  introduced  certain  timeframes 
within  which  a  Member  State  has  to  provide  the  Commission  with  information  on 
amounts of established entitlements of TOR declared or deemed irrecoverable where 
these exceed EUR 50°000. Consequently, the reports by Member States to write off 
established  TOR  amounts  deemed  irrecoverable  increased  significantly  to  589  in 
2008  compared  with  100  reports  in  2007.  In  2009  the  quantity  of  new  reports  was 
168.  The  increase  in  2008  primarily  consisted  of  old  cases  not  yet  reported  to  the 
Commission.  

A  new  IT  application  called  WOMIS14  was  introduced  in  January  2010  to  support 
Member States and the Commission in managing write-off reports. 

In  2009  168  write-off 
to  EUR  108 016 054.15  were 
communicated to the Commission by 11 Member States. In total, 527 reports were 
processed in 200915 with the following result16:  

reports  amounting 

13  Regulation No 2028/2004, amending Regulation No 1150/2000. 
14  WOMIS: Write-Off Management and Information System.  
15  Origin of the cases: 4 from Austria, 2 from Belgium, 1 from the Czech Republic, 243 from Germany, 9 from 
Denmark, 1 from Greece, 61 from Spain, 4 from France, 4 from Finland, 1 from Ireland, 60 from Italy, 
106 from the Netherlands, 2 from Portugal, 3 from Sweden and 26 from the UK. 

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18 

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Table OR1: Write-off reports treated in 2009 

Commission position 

cases 

% cases 

EUR 

% amount 

NON- ADMISSIBLE WRITE-OFF CASES 

WRITE-OFF CASES ACCEPTED 

ADDITIONAL INFORMATION REQUIRED 

WRITE-OFF CASES REFUSED 

TOTAL 

4

218

244

61

527

0.1%

330°889.10 

0.13%

41.7%

91°055°286.24 

37.06%

46.5%

142°767°541.03 

58.11%

11.7%

11°521°494.31 

4.69%

100%

245°675°210.68 

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.  

4.1.3.  Particular cases of Member State failure to recover TOR  

If TOR are not established because of an administrative error by a Member State, the 
Commission  applies  the  principle  of  financial  liability17.  In  2009  Member  States 
have  been  held  financially  liable  for  over  EUR  9  million  and  new  cases  are  being 
given appropriate follow-up.  

Altogether all cases up until the end of 2009 total nearly EUR 280 million. The main 
objective  of these  procedures is to encourage individual  Member States to improve 
their  administrative  performance  and  to  address  weaknesses  leading  to  a  loss  of 
TOR. Payments for these cases are made available via the A-account and they reduce 
in effect the contribution of the Member States via the GNI resource in proportion to 
their contribution to the EU budget.  

4.2. 

Reporting discipline  

Under  Article  6(5)  of  Regulation  No  1150/2000,  Member  States  are  required  to 
communicate  to  the  Commission,  via  the  OWNRES  system18,  cases  of  fraud  and 
irregularity, if the TOR amount exceeds EUR 10 000. The requirement to report such 
cases is designed to inform the Budgetary Authority of the state of play relating to 
fraud  and  irregularities  in  TOR.  This  political  dimension  is  a  clear  signal  to  all 

16  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. 
17  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. 

18  OWNRES is an abbreviation for Own Resources. 

EN 

19 

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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. 

Because  all  TOR  amounts  exceeding  EUR  10 000  in  the  B-account  normally 
represent an irregularity (fraud included) by definition, therefore 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 years20. 

4.2.1.  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  2008  in  last  year’s  report  was  5 344  cases, 
whereas the number of cases now shown for 2008 is 6 075 cases21. This continuing 
development is inherent to the system. 

4.3. 

General trends  

The number of cases communicated to OWNRES for 2009 is currently 23% lower in 
comparison  with  2008  (from  6 075  to  4 684).  The  amount  of  TOR  involved  is 
22. The trend for 
likewise 8.5% smaller (from EUR 375 million to EUR 343 million)
the  number  of  belatedly  discharged  Community  Transit  operations  to  decrease 
continued23whereas  the  amount  involved  remained  stable.  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. 

The number of communications from the ten new Member States showed continued 
growth  since  their  accession  in  2004  until  2007.  In  2008  the  growth  stopped  and 
2009 shows 2% less communicated cases compared with 2008 although the amount 
of TOR increased by 20% from 2008 to 2009.  

19 

Items  registered  in  OWNRES  are  not  necessarily  also  in  the  B-account.  If  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.  

20  At the end of 2009 the total amount that is still to be recovered according to OWNRES is higher than the 
amount of not yet recovered TOR in the B-account. This difference can mostly be explained by the fact 
that  OWNRES  is  updated  with  a  regulatory  delay,  as recovery  actions  should  be  registered  that  have 
taken place. Other explanations are cases seized and confiscated cigarettes and – unfortunately – undue 
delays. 

21  The information generated by OWNRES to produce the figures in this chapter was all obtained from queries 

made on 5 March 2010. 

22  See Annex 3 (table) and Annex 4 (chart). 
23 

In 2005 the number of cases of belatedly discharged Transit was 2 374, being 38.2% of the total number of 
cases  registered  and  27.9%  of  the  total  amount  initially  established.  In  2006  there  were  1 479  cases 
(24.2% of cases and 19.5% of the total amount) and in 2007 there were 1 395 cases (22.2% of cases and 
16.5% of the amount), in 2008 there were 1 136 (18.7% of cases and 13.8% of the amount). In 2009 the 
figures are respectively 738 (15.8% of cases and 13.8% of the amount). 

EN 

20 

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The OWNRES database now contains 57 183 cases in total (1989-2009) and shows 
an  increase  of  nearly  11%  during  200924.  Significant  changes  in  the  number  of 
registrations in 2009 compared with 2008 can be seen for Greece (- 68%), Estonia (- 
35%),  Austria  (+  61%),  Bulgaria  (+  79%)  and  Slovenia  (+  92%).  ,  and  Significant 
changes  of  amounts  can  be  seen  in  Estonia  (-  69%),  Portugal  (-  60%),  Austria  (+ 
39%),  Denmark  (+  121%),  Bulgaria  (+  146%),  Slovakia  (+  375%)  and  Malta  (+ 
467%)25.  

4.3.1.  Types of irregularity and fraud 

A  breakdown  of  frauds  and  irregularities  by  customs  procedure  and  by  mechanism 
type  confirms  that  most  cases  of  irregularity  or  fraud  relate  to  the  procedure  of 
release  for  free  circulation  (73%  of  cases26).  False  declarations  (false  description, 
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  code27)  most  affected  by 
fraud and irregularities in 2009, as in previous years, are TVs/monitors etc. (CN 85), 
Clothing (CN 61) and Tobacco products (CN 24). Cars/motors (CN 87) increased in 
importance when compared to 2008, as did Food (CN 16), Chemical products (CN 
29) and Articles of iron and steel (CN 73)28.  

Chart OR1: Fraud and irregularities breakdown by good in 2009 (in million EUR)29 

24 

25 

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 
14%). 
Significant changes in amounts involved generally relate to one or a few (very) big cases, e.g. Austria: 5 
cases  totalling  to  €14.8  million  (involving  Clothing  from  China,  CN  61);  Denmark:  2  cases  totalling 
€5.4 million (involving Clothing from China, CN 62 and Chemical Products from China, CN 29). 
26  See  Annex  5.  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. 

27  Combined nomenclature or CN — nomenclature of the Common Customs Tariff. 
28  See Annexes 4 and 5. 
29  The product description in the chart is a generic description of the goods involved. See Annexes 4 and 5 for 

detailed analysis.  

EN 

21 

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Fraud and Irregularities breakdown by goods in 2009 in Mio. €

Other 27 (8%)

Shoes 12 (4%)

Animals and products thereof 
14 (4%)

 TV's, (computer) monitors 
etc. 92 (27%) 

Vegetables 16 (5%)

Metals 20 (6%)

Vehicles etc. 24 (7%)

Chemical products 29 (8%)

Textile 62 (18%)

Food/Drinks/Tobacco 47 (14%)

Evaluation of the origin of goods subject to fraud and irregularity30 reveals that, just 
as  in  2008,  goods  originating  from  China,  the  US,  Japan,  South  Korea  and 
Bangladesh remain very much affected. The number of cases originating from Hong 
Kong, Vietnam and Argentina increased.  

4.3.2.  TOR and cigarettes 

In  2009  there  were  204  cases  registered  of  seized  and  confiscated  cigarettes  (CN 
code  24  02  20  90)  involving  estimated  TOR  of  over  EUR  19  million.  In  2008  the 
number  of  registered  cases  concerning  seized  and  confiscated  goods  was  312, 
totalling over EUR 23 million. The decrease of the number of cases is related to the 
EUR-15,  of  which  the  UK  shows  the  most  significant  decrease,  from  152  cases  in 
2008 down to 82 cases in 2009.  

4.3.3.  Data main sectors TOR 

See Annexes 3-12. 

4.4. 

Recovery 

•  Member States have to recover established amounts including those they register 
in  OWNRES.  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.  

30  See Annex 8. 

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22 

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•  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  that  approximately  45%  of  the  initially  established  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  occur  more 
frequently. This is due to the ports of Antwerp and Rotterdam.  

4.4.1.  Recovery rate  

Differences  in  recovery  results  arise  from  factors  such  as  the  type  of  fraud  or 
irregularity  or  the  type  of  debtor  involved.  The  recovery  rate  for  all  years  (1989-
2009) is 45.1%31.  

The overall recovery rate for 2008 recorded in last year’s report was 38%, although it 
has  since  then  climbed  to  52%.  At  present  the  recovery  rate  for  2009  is  44%32.  In 
other  words,  of  every  €10 000  of  duties  initially  established  in  2009  in  OWNRES, 
approximately  EUR  4 400  is  actually  paid.  Because  recovery  is  ongoing,  the 
recovery rate is constantly changing (payments are obtained, new establishments are 
made and corrections are taken into account). 

4.5. 

Detection of fraud and irregularities 

OWNRES uses the following definitions for fraud and irregularity: 

Fraud is defined33 as any intentional act (also cases of organised crime) or omission 

relating to: 

● 
information, which has as its effect the illegal reduction of Traditional Own Resources (TOR), 

the use or presentation of false, incorrect or incomplete declarations or documents or non-disclosure of 

●  misapplication of a legally obtained benefit, with the same effect. 

Irregularity is defined34 as: 

● 

● 

● 

any breach of a provision of Community law (also unintentional), 

resulting from an act or omission by an economic operator 

which has, or would have, the effect of reduction or a loss of own resources (e.g. customs duties). 

Irregularity includes negligence, errors, mistakes etc. 

Of  all  the  cases  registered  in  OWNRES  in  2009  19%  (893  out  of  4 684  registered 
cases) are categorised as fraud, which is the same proportion as in 200835. However, 

31 

This calculation is based on 57 183 cases, an established amount of €4.3 billion (after corrections) and a 
recovered amount of €1.9 billion. 

32  See Annex 9. 
33  Source:  Article  1  of  the  Convention  (Council  Act  of  26  July  1995)  drawn  up  on  the  basis  of  Article  235 
(protection of the Communities' financial interests) of the Treaty establishing the European Community. 

34  Source: Council Regulation n° 2988/95 on the protection of the European Communities financial interests. 

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23 

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like in previous years, the differences between Member States are relatively large. In 
2009 most of the Member States categorised between 10-50% of all cases as fraud. 
However,  six  Member  States  categorised  less  than  10%36  of  the  cases  as  fraud, 
whereas four Member States registered more than 50%37 of the cases as fraud. These 
figures  demonstrate  that  the  categorisation  of  irregularity  and  fraud  in  OWNRES 
may  still  not  be  fully  reliable  because  of  differences  in  the  interpretation  of  the 
definition of fraud and irregularities. 

Chart OR2: Fraud and irregularities breakdown by Member States in 2009 (in million EUR) 

Fraud and irregularities breakdown by Member States in 2009 

in Mio. €

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

Irregularity

Fraud

According  to  OWNRES  the  moment  of  discovery  is  an  indicator  for  classifying  a 
case  as  fraud,  since  primary  inspections  more  often  result  in  classifying  cases  as 
fraud than post-clearance inspections. 

35  See Annexes 11 and 12. 
36  Germany  (5%),  France  (8%),  Sweden  (9%),  Czech  Republic  (3%),  Estonia  (0%)  and  Latvia  (5%). 

37 

Luxemburg reported no cases of fraud and irregularity in 2009.  
Greece (83%), Italy (58%), Bulgaria (65%) and Malta (100%). 

EN 

24 

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Chart OR3: Percentage of fraud cases detected by primary inspection – 2007-2009 

%  of  fraud cases detected by primary inspections in 2007-2009

100 %

90 %

80 %

70 %

60 %

50 %

40 %

30 %

20 %

10 %

0 %

2007

2008

2009

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 EU

Member States

OWNRES  is  not  a  fully  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,  and,  these 
grounds vary between national administrations.  

4.5.1.  Member States' control systems 

The  methods  of  detection  of  irregularities  or  fraud  cases  registered  vary  between 
Member  States.  There  are  several  possible  explanations  for  these  differences,  for 
instance the customs control strategies applied, the way of classifying a method, the 
reporting authorities involved or the relative presence or absence of type of customs 
procedures.  

A range of detection methods can reveal irregularity or fraud. Judging from the 2009 
data  national  post-clearance  inspections  and  primary  national  inspections  (either 
physical  inspections  or  inspections  of  documents  —  the  latter  category  featuring 
most frequently) are detection methods that have revealed most cases. Post-clearance 
inspections  feature  in  44%  of  the  cases  discovered,  whereas  primary  national 
inspections cover 31%. All in all, the vast majority of cases (75%) were detected in 
2009  by  means  of  either  primary  national  inspections  or  post-clearance  control 
audits. 

It  is  clear  that  the  shift  from  primary  to  post-clearance  inspections,  which  could 
already  be  seen  in  previous  years,  continued  in  2009.  The  relative  importance  of 
inspections by anti-fraud services was stable with 7% in 2009. Since the final results 
of such inspections take more time than regular inspections, a (slight) increase in the 
percentage for 2009 may be expected in future registrations. 

EN 

25 

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Chart OR4: Method of detection – 2007-2009 

Method of detection 2007-2009

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

 2007

 2008

 2009

The  map  below  illustrates  by  which  methods  OWNRES  cases  -  in  amounts  -  have 
been  discovered  by  the  Member  States38  in  2009.  For  reasons  of  presentation  the 
following methods are included in the term "ex-post controls": audit of the accounts, 
Community inspections, inspections by anti-fraud services, inspection visits, national 
post-clearance audits and tax audits. 

38 

For details see annex 13. Luxemburg did not register any OWNRES case in 2009 

EN 

26 

   EN 

 
 
 
                                                 
Map OR1: Detection methods by Member State - 2009 

4.6. 

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 OLAF.  

(1) 

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.  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 

EN 

27 

   EN 

 
 
(2) 

(3) 

(4) 

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. TVs and monitors, clothing and of course tobacco 
keep their relevance in 2009 and are like in previous years the most important 
goods involved in registered cases of irregularity or fraud. 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). 
Irregularity or fraud are mostly discovered by a Member State in the customs 
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 €343 million in 2009. Of the amounts initially established, 
approximately 45% 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 2009 are comparable to those of previous years.  

The  methods  of  detection  vary  between  Member  States,  however,  in  2009 
post-clearance  inspections  and  primary  controls  (during  the  clearance)  are 
creating 75 % of all OWNRES cases. The Commission encourages Member 
States  to  continue  their  activities  in  the  field  of  recovery  and  to  provide 
required  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 

5. 

AGRICULTURAL EXPENDITURE (ANNEXES 14-15) 

5.1. 

Introduction 

The  Common  Agricultural  Policy  (CAP)  has  been  one  of  the  most  important 
common  policies  over  the  years,  as  a  large  part39  of  the  European  Union's  (EU) 
budget is spent in the agricultural sector.  

The agricultural expenditure is financed by 2 funds:  

•  EAGF 

•  EAFRD 

The  European  Agricultural  Guarantee  Fund  (EAGF)  finances  direct  payments  to 
farmers and measures to regulate agricultural markets such as intervention and export 
refunds, while the European Agricultural Fund for Rural Development (EAFRD) co-
finances the rural development programmes of Member States. 

The  EU-budget  for  the  year  2009  was  about  EUR  137  billion.  More  than  EUR  52 
billion40 was spent in the agricultural sector, of which EAFRD expenditure accounts 
for about EUR 8.2 billion. 

The  basic  rules  for  the  financial  management  of  the  CAP  can  be  found  in  Reg. 
1290/2005.  

The  Commission  retains  overall  responsibility  for  the  management  of  EAGF  and 
EAFRD but does not make payments to the beneficiaries. Member States make the 
payments  to  the  beneficiaries.  This  takes  places  under  the  principle  of  shared 
management.  Member  States  are  not  only  responsible  for  making  payments  to  the 
beneficiaries. Member States are also obliged to prevent and deal with irregularities 
and to recover amounts unduly paid. Granting subsidies, setting up audit strategies, 
performing  audits,  reporting  irregularities  and  recovery  of  unduly  paid  amounts  go 
hand in hand. 

Commission  Regulation  (EC)  No  1848/2006  obliges  Member  States  to  report 
irregularities to OLAF. Member States report irregularities via Module 1848. A web 
based application which facilitates reporting in digital format.  

Module 1848 was introduced in 2008 and is used by all Member States. It concerns a 
web based application that can be accessed directly via internet. Accessing Module 

39 
40 

Almost 40% of the total 2009-budget was spent in the agricultural sector. 
The amounts include "assigned revenue" of EUR 1.6 billion negative expenditure, representing amounts 
recovered  for  cases  of  irregularities  (including  fraud),  superlevy  from  milk  producers  and  temporary 
restructuring amounts. 

EN 

29 

   EN 

 
                                                 
1848 via internet is only possible since 16 May 2009 due to the later approval of the 
security  protocols.  Till  that  moment,  Member  States  had  to  use  the  old-fashioned 
CCN -gateway (ISDN-line) to get access to Module 1848.  

Access  via  internet  led  to  an  enormous  increase  of  the  number  of  users  of  Module 
1848.  In  the  past,  only  1  or  2  persons  per  Member  State  could  submit 
communications in electronic format. That changed with the introduction of "access 
via internet". The number of users became in principle "unlimited". Having access to 
internet means that access to Module 1848 can be obtained.  

The  year  2009  should  therefore  again  be  seen  as  a  transition  year  for  irregularity 
reporting  due  to  the  introduction  of  access  via  internet,  the  introduction  of  the 
cascaded reporting structure and the enormous increase of the number of users.  

The  introduction  of  the  cascaded  reporting  structure  made  it  possible  to  have 
reporting  authorities  and  users  on  different  levels.  The  total  number  of  users 
increased  from  less  than  50  to  more  than  800.  Germany  for  instance  has  now  40 
reporting authorities and 237 users. The increase of the number of users of Module 
1848 has also led to an increase of the number of cases reported, higher data quality 
and a higher compliance rate. Many hands make lighter and better work! 

2009 was also the year in which the 1848-liaison-officer was introduced. The 1848-
liaison-officer  is  the  linking-pin  between  OLAF  and  the  Member  States.  All 
information concerning Module 1848 is communicated via the 1848-liaison-officer. 
The 1848-liaison-officer is also responsible for the reporting structure of a Member 
State.  Only  the  1848-liaison-officer  can  modify  a  reporting  structure  and  grant  or 
revoke access to Module 1848. The 1848-liaison-officers play also an important role 
in  the  process  of  quality  checks.  Before  a  communication  is  submitted  to  OLAF,  a 
quality check is performed and necessary corrections are made.  

Member  States  reported  1°621  new  irregularities  under  Reg.  1848/2006  compared 
with 1°133 irregularities in 2008. The total amount affected in 2009 was about EUR 
125  million,  as  against  approximately  EUR  102  million  in  2008.  Luxembourg  and 
Slovenia did not report any irregularity in 2009. Irregularities notified in this sector 
represent 0.24% of the agricultural budget.  

Annex 13 provides an overview of the financial impact for the period 2000 – 2009 as 
annex  14  gives  an  overview  per  Member  State  of  the  number  of  irregularities,  the 
amounts involved and the percentage of agricultural expenditure. 

The  analysis  of  the  reported  cases  is  a  descriptive  analysis  based  on  the 
communications  forwarded  by  Member  States  under  Reg.  1848/2006.  It  should  be 
noted that not all irregularities have to be reported. 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, which had a threshold of 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  2009  is  about  half  (1/2)  the  number  of  reported 

EN 

30 

   EN 

 
irregularities before 2007. The descriptive analysis of this report therefore, cannot be 
right away compared with the results of previous years.  

5.2. 

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 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. 

The main purpose of forwarding information is to enable the Commission to perform 
risk  analyses41.  For  that  purpose,  OLAF  needs  to  receive  reliable,  consistent  and 
complete data and as early as possible (timely!).  

Table  AG1  provides  an  overview  of  the  compliance  rate  per  reporting  obligation. 
Member States are ranked in order of their overall 2009 compliance rate.  

Table AG1: compliance per Member State year 2009 

41 

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 

 
                                                 
timely
reporting

MS 

personal
data
(who)
l

measure
affected
(what)
a

table AG1
COMPLIANCE
FINANCIAL YEAR 2009
date
practices
committed employed

(when)
i

(how)
e, f

financial
impact
(why)
n

compliance

2009

2008

2007

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

100%
100%
100%
95%
91%
94%
99%
83%
78%
100%
64%
96%
98%
78%
89%
85%
50%
81%
52%
62%
95%
100%
33%
0%
63%
86%
Art. 3 (1) a - p Reg. 1848/2006

100%
100%
100%
100%
100%
100%
93%
100%
100%
94%
100%
90%
83%
100%
100%
99%
100%
100%
99%
97%
18%
75%
100%
100%
16%
91%

100%
93%
92%
99%
100%
96%
99%
100%
89%
70%
98%
85%
82%
96%
66%
100%
100%
78%
95%
76%
97%
58%
67%
75%
66%
95%

100%
100%
100%
98%
100%
100%
100%
100%
100%
100%
100%
96%
100%
100%
100%
80%
100%
100%
98%
100%
100%
75%
100%
100%
100%
98%

100%
100%
100%
100%
100%
100%
99%
100%
100%
100%
100%
91%
96%
96%
100%
100%
100%
90%
98%
88%
100%
100%
89%
100%
82%
99%

100%
100%
100%
100%
100%
100%
99%
99%
100%
100%
100%
100%
98%
85%
100%
91%
100%
100%
100%
100%
99%
100%
100%
100%
95%
99%

100%
99%
99%
99%
99%
98%
98%
97%
94%
94%
93%
93%
93%
93%
93%
93%
92%
91%
90%
87%
85%
85%
81%
79%
70%
95%

83%
100%
100%
87%
95%
97%
94%
94%
96%
98%
92%

92%
79%
86%
96%
81%
96%

84%
74%
86%
97%
100%
84%
94%
78%
92%

96%
85%
81%
81%
72%

90%
49%
64%
85%

77%
39%
73%
74%
85%
90%
97%
83%
83%
63%
83%

85%
88%
67%
78%

key elements for (performing) risk analysis

download 21 January 2010 (updated 14 April 2010)

MS 

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

Luxembourg and Slovenia had no irregularities to report and are therefore considered 
to be 100% compliant and are put on top of the table.  

Table AG1 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  fourth  column  from  the  right  hand  side  shows  the 
compliance rate per Member State for the financial year 2009. The second and third 
column from the right hand side contain the compliance rates for the years 2007 and 
2008 in order to make it possible to compare 2009 with previous years. 

A first conclusion is that the overall reporting discipline improved. This is thanks to a 
positive attitude of all Member States, the introduction of a new reporting system and 
the enormous increase of the number of users of Module 1848.  

19  Member  States  have  a  compliance  rate  above  90%.  4  Member  States  (NL,  PL, 
MT and AT) have a compliance rate between 80% and 90% as 2 Member States (UK 
and FI) have a compliance rate below 80%.. Luxembourg and Slovenia did not report 
irregularities, therefore, are not taken into consideration. 

Latvia is the Member State with the highest compliance rate: 100%.  

Finland has the lowest compliance rate: 70%.  

EN 

32 

   EN 

 
 
It is clear that Finland should pay more attention to the reporting obligations of Reg. 
1848/2006.  Other  Member  States  that  should  pay  more  attention  to  the  reporting 
obligations are Austria, Malta, the Netherlands, Poland and the United Kingdom. 

Finland, Malta and Poland could improve their compliance rate by reporting personal 
data.  The  non-reporting  of  personal  data  led  to  a  relatively  low  compliance  rate. 
Finland42 and Poland43 informed the Commission that due to national data protection 
legislation  no  personal  data  could  be  submitted.  The  obligation  to  report  personal 
data is based on EU-regulations. By granting subsidies, Member States also accepted 
the reporting obligations of Reg. 1848/2006, including the reporting of personal data. 

Timely reporting is still a concern for Austria, Finland, the Netherlands, Slovakia and 
the United Kingdom. 

For all Member States count that the reporting of the measure affected deserves some 
extra  attention.  Some  Member  States  still  use  a  budget  line  of  the  running  year  in 
stead  of  indicating  the  budget  line  that  was  really  affected  by  the  irregularity.  A 
simple example: a budget line of 2009 is used for a payment made in 2004.  

The overall compliance improved strongly since 2007. It went up from 78% to 95%. 
Member States that made a big step forward are Germany (↑54%) and Spain (↑49%). 
This enormous improvement can be explained by the fact that both started to report 
in electronic format. Some Member States had a small setback and need to pay some 
extra attention to their compliance. 

Overall compliance rate is 95%44. 

The map on the next page provides an overview of Member States' compliance. 

42 
43 
44 

Finland reports personal data for irregularities concerning structural funds. 
Poland used to report personal data but stopped doing that in 2008. 
The compliance rate is based on a quantitative analysis of data provided by Member States. A Member 
State  is  being  considered  as  compliant  as  soon  as  information  has  been  provided.  The  quality  of  the 
information is not relevant. That will change in 2010. The quality of the information provided will also 
be taken into account to determine the compliance level. 

EN 

33 

   EN 

 
                                                 
Member
States
Luxembourg
Slovenia
Lativa
Lithuania
Estonia
Portugal
Bulgaria
Czech Republic
Spain
Ireland
Denmark
Romania
Italy
Germany
Greece
Belgium
Hungary
France
Cyprus
Sweden
Slovakia
the Netherlands
Poland
Malta
Austria
United Kingdom
Finland
total

compliance
rate

100%
99%
99%
99%
99%
98%
98%
97%
94%
94%
93%
93%
93%
93%
93%
93%
92%
91%
90%
87%
85%
85%
81%
79%
70%
95%

The map indicates Member States’ compliance. The darker the colour, the higher the 
compliance.  Especially  the  Member  States  that  are  coloured  light  need  to  work  on 
their compliance. It concerns Finland, United Kingdom, Austria, Malta, Poland and 
the Netherlands. As already mentioned in the introduction, granting subsidies, setting 
up audit strategies, performing audits, reporting irregularities and recovery of unduly 
paid amounts go hand in hand. 

EN 

34 

   EN 

 
  
5.3. 

General trends 

In previous years, the statistical annex provided overviews of the expenditure of that 
financial  year  and  the  irregularities  that  were  reported  during  that  financial  year. 
These irregularities however, did not necessarily refer to the expenditure of that year. 
Irregularities are normally detected and reported 3 - 5 years after expenditures have 
taken place. In order to bring expenditure and cases of irregularities in line with each 
other,  the  statistical  annex  will  contain  from  this  year  on  analyses  of  expenditures 
and irregularities related to these expenditures. 

In order to make it possible to make a comparison with reports of previous years, an 
overview of the irregularities reported during the financial year 2009 (FY2009) will 
be provided. That overview can be found in paragraph 5.3.1. and table AG2. 

It is good to keep in mind that the analysis a descriptive analysis is. The aim of the 
analysis  is  to  provide  feedback  to  the  Member  States  on  the  communications  that 
were received by the Commission in the financial year 2009 and to give an overall 
view for the period 1971 - 2009.  

It is also good to bear in mind that Member States must only inform the Commission 
of irregularities involving more than EUR 10°000.  

5.3.1. 

Irregularities in perspective – cases reported in 2009 

Table AG2 provides an overview per Member State of the irregularities reported in 
the period 2006 - 2009.  

Table AG2: Irregularities reported in the financial year 2009 

EN 

35 

   EN 

 
table AG2
IRREGULARITIES
reported in the financial years 2006 - 2009 and concerning expenditure financial years 1991 - 2009

2009

87 322
858 665
1 848 338
234 476
793 364
2 797 903
202 892
736 057
1 817 050
27 834 613
941 541
9 142 421
2 082 316
1 793 216
54 480 766
897 251
0
297 150
139 439
1 978 235
2 374 202
3 440 974
2 235 958
449 519
0
7 541 131
21 153
125 025 951

amounts in €

2008

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

2007

401 511
13 866 333

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

141 835

4 349 283
1 099 347
5 570 368

214 065
38 808
639 613
225 775
102 259 365

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

2006
1 040 985
1 258 191

77 582
160 915
7 319 843
1 186 901
99 319
1 305 913
25 937 479
454 657
11 689 252
10 387
857 391
20 003 064
308 661
13 062
13 176

5 701 975
841 681
3 744 628

858 560

3 941 146
86 824 768

cases

2009

2008

2007

2006

3
27
23
2
35
68
9
12
44
404
19
127
19
72
288
45

13
8
37
87
121
82
16

58
2
1 621

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

27
34
0
6
10
94
20
16
86
335
20
147
12
26
237
10

11
0
64
62
190

93
57
0
7
9
489
33
10
111
683
33
548
3
94
140
30
3
1
0
87
67
359

10
1
11
7
1 133

14
9
23
95
1 548

80
1
0
311
3 249

MS

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

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

download 21 January 2010

These  irregularities  concern  expenditures  for  the  financial  years  1991  –  2009  and 
were first reported in the period 2006 – 2009.  

Member  States  reported  1,621  cases  during  the  financial  year  2009.  These  1,621 
cases amount to approximately EUR 125 million.  

In the period 2002 – 2006, Member States reported about 3°200 cases per year. In 2007, a new threshold, under 
which no irregularities have to be reported, was introduced. The threshold increased from EUR 4°000 to EUR 
10°000 and led to a strong decrease of the number of cases in 2007 and 2008, respectively 1°548 and 1°133. 

The  number  of  irregularities  increased  in  2009  with  almost  500  cases  (±  43%).  A  reason  for  this  remarkable 
increase  is  the  becoming  operational  of  IMS45,  which  made  it  possible  to  access  Module  1848  directly  via 
internet. Till 2009 it was only possible for Member States to process communications on a central level, which 
implies that only a limited number of users had access to the electronic reporting system. That changed with the 
introduction  of  IMS.  Module  1848  can  be  accessed  directly  via  internet.  This  made  it  possible  to  have  an 
unlimited number of reporting authorities and users. Having access to internet means also that access to Module 
1848 can be obtained. In 2009, the number of users increased from less than 50 to more than 800. This implies 
that  far  more  users  were  able  to  process  communications,  which  had  a  direct  impact  on  the  number  of  cases 
reported.  

Member  States  reported  30  cases  with  an  amount  affected  below  the  reporting 
threshold of EUR 10°000. 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 another 24 cases counts that Member States indicated 

45 

IMS = irregularity management system 

EN 

36 

   EN 

 
 
                                                 
a zero as amount affected by the irregularity. For almost all these cases counts that 
no  specific  reasons  were  given  why  these  cases  were  reported.  Only  Belgium  and 
Romania indicated that it concerned "suspected-fraud-cases". 

Spain  and  Italy  were  the  Member  States  that  reported  the  highest  number  of  cases 
with  404  and  288  cases  respectively.  Portugal  reported  as  usual  a  relatively  high 
number  of  cases  (121)  considering  the  fact  that  the  total  Portuguese  expenditure  is 
relatively  low,  about  2%  of  the  total  expenditure  (EU-27).  Austria  reported  a 
relatively low number of cases: 3.  

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 28 million.  

Member  States  reported  in  total  11  cases  in  which  the  total  amount  affected  by 
irregularities  was  higher  than  EUR  1  million.  Italy  reported  2  cases  for  which  the 
total amount affected was even more than EUR 10 million.  

The  amounts  affected  by 
irregularities  increased  with 
about  23%  to  approximately 
EUR  125  million  (see  also 
annex 14 and annex 15).  

The  chart  on  the  right  hand 
side reflects the trends for the 
period 1971 – 2009. 

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

9
0
0
2

cases

amounts in €

amounts in € -/- peak

EN 

37 

   EN 

 
 
 
5.3.2. 

Impact on the budget – cases reported for the financial years 2006 - 2009 

Table AG3 provides an overview of the expenditure46 of the financial years 2006 – 
2009 and the cases of irregularities related to this expenditure. Experience learns that 
Member States submit cases of irregularities in the first 3-5 years after expenditures 
have been made. This means that more cases of irregularities can still be expected for 
the  financial  years  2006  –  2009.  There  are  also  still  ex-post  audits  going  on  which 
findings can lead to more cases of irregularities. These figures therefore, cannot be 
considered as final figures but need to be seen as half-time-result. 

Table AG3: Expenditure and irregularities per budget chapter 

table AG3

FINANCIAL IMPACT IRREGULARITIES

financial years 2006 - 2009

expenditure 1)

cases of irregularities reported 2)

MS

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

amount in €
39 873 055 647
26 351 609 648
25 936 800 566
21 877 814 663
16 390 010 933
11 649 011 397
9 829 632 964
6 942 213 847
4 640 844 084
4 634 677 352
4 532 090 550
3 817 823 217
3 746 075 275
3 720 832 346
3 696 290 771
3 261 981 385
2 569 429 030
1 647 474 452
1 432 878 798
1 428 072 944
715 787 670
714 277 882
591 507 477
395 785 749
214 225 849
187 923 293
25 340 521
200 823 468 310

in % of total

expenditure

cases

irregularities
amount in €

19.85%
13.12%
12.92%
10.89%
8.16%
5.80%
4.89%
3.46%
2.31%
2.31%
2.26%
1.90%
1.87%
1.85%
1.84%
1.62%
1.28%
0.82%
0.71%
0.71%
0.36%
0.36%
0.29%
0.20%
0.11%
0.09%
0.01%
100.00%

249
232
377
108
59
29
183
127
63
6
21
23
155
27
44
19
58
82
63
74
29
1
25
14
9
0
9
2 086

11 761 063
5 840 467
13 973 530
14 157 282
842 227
3 186 745
4 332 523
2 278 026
2 393 744
86 799
474 489
2 669 475
3 658 080
652 787
13 891 387
512 605
1 355 912
2 235 958
8 250 928
1 429 164
549 267
10 195
1 940 428
158 311
356 934
0
177 253
97 175 581

IrR
0.03%
0.02%
0.05%
0.06%
0.01%
0.03%
0.04%
0.03%
0.05%
0.00%
0.01%
0.07%
0.10%
0.02%
0.38%
0.02%
0.05%
0.14%
0.58%
0.10%
0.08%
0.00%
0.33%
0.04%
0.17%
0.00%
0.70%
0.05%

1) based on a CATS-download of 26 May 2010

2) based on a Module 1848-download of 21 January 2010

3) Poland reported 1 case of "established fraud"

of which suspected fraud 3)

cases

amounts in €

FrR

11
7
5
10
1
2
140

1

2
1
3

1
75

2

25
1
1

2 429 720
152 202
144 482
1 326 697
13 127
86 916
3 446 735

0.01%
0.00%
0.00%
0.01%
0.00%
0.00%
0.04%

12 479

0.00%

182 383
28 818
63 983

0.00%
0.00%
0.00%

65 828
2 136 159

0.00%
0.13%

33 196

0.00%

1 940 428
17 473
39 125

0.33%
0.00%
0.02%

288

12 119 753

0.01%

Member States are ranked on basis of the total expenditure. The total expenditure in 
the period 2006 - 2009 was almost EUR 201 billion. France spent, with almost EUR 
40  billion,  the  highest  amount  and  can  be  found  on  top  of  the  table.  Malta  had  an 
expenditure of about EUR 25 million and can be found at the bottom of the table.  

The  third  column  on  the  left  hand  side  indicates  the  relation  between  a  Member 
State's  expenditure  and  the  total  expenditure  (EU-27).  France  spent  about  20%  as 
Germany and Spain spent about 13%.  

46 

Expenditure is based on DG AGRI's database CATS - table 106 (download 26 May 2010) 

EN 

38 

   EN 

 
 
                                                 
In column 5 an overview is given of the number of cases reported by Member States. 
Member States reported in total 2,086 cases for the financial years 2006 – 2009. The 
highest  number  of  cases  is  reported  by  Spain:  377  cases.  Some  Member  States 
reported a rather low number of cases. Luxembourg, Slovenia and Austria reported 0, 
1 and 6 cases respectively. 

Column  6  indicates  the  amounts  affected  by  the  irregularities.  The  total  amount 
affected  is  about  EUR  97  million.  The  highest  amount  is  reported  by  Italy.  Italy 
reported  a  total  amount  affected  by  irregularities  of  about  EUR  14.2  million.  It 
concerns 108 cases. Remarkable is the high amount affected by irregularities already 
reported  by  Belgium:  EUR  13.9  million.  As  mentioned,  these  irregularity  figures 
relate to the 2006-2009-expenditure, which implies that more cases can be expected. 

Column  7  provides  the  so  called  irregularity  rate  (IrR)47,48.  It  is  the  total  amount 
affected  by  irregularities  divided  by  the  total  expenditure  (e.g.  for  France  0.03%  = 
EUR  11°761°063  /  EUR  39°873°055°647).  The  overall  average  is  0.05%.  These 
figures  should  however  be  interpreted  cautiously.  As  indicated  at  the  beginning  of 
this chapter, this should be seen as a "half-time-result". There are still ex-post audits 
going on which means that more cases of irregularities can be expected. Big spenders 
like  Poland,  Ireland,  France,  Greece,  Germany  and  United  Kingdom  have  an 
irregularity rate that is below the average of 0.05%. The other 2 big spenders, Spain 
and  Italy,  have  an  irregularity  rate  just  above  the  average,  respectively  0.06%  and 
0.07%. The 3 Scandinavian countries (DK, FI and SE) have a comparable and rather 
low irregularity rate: < 0.02%.  

The number of cases reported does not necessarily mean that more irregularities are 
committed in a Member State. A more developed audit strategy, tailor made audits, 
higher  number  of  performed  audits  and  so  forth  will  normally  lead  to  a  higher 
number of detected irregularities. In other words,  it could  be possible that  Member 
States with a higher irregularity rate perform better than Member States with a lower 
irregularity rate. 

A higher expenditure leads normally to a higher number of cases. The figures in table 
AG3  confirm  this  hypothesis.  The  Member  States  with  the  highest  expenditure 
(Spain, France, Germany and Poland) reported the highest number of cases. Portugal 
is the exception on the rule. It reports traditionally a higher number of cases. Portugal 
reported for the period 2006 – 2009 already 155 cases. The number of cases reported 
by France, Italy, United Kingdom, Greece and Austria is relatively low. It concerns 
however a "half-time-result" therefore it is possible that more cases will be reported 
in the near future. It indicates however, that these Member States detect and/or report 
their  cases  later  than  other  Member  States.  The  United  Kingdom  informed  the 
Commission that due to technical problems not all cases were submitted. Also here 
counts  that  more  cases  can  be  expected  in  the  near  future.  The  Reports  on  the 
Protection  of  EU  Financial  Interests  of  previous  years  mentioned  that  Austria  is 

47 
48 

See also chapter 5.4. Specific analysis 
See for a more in depth explanation paragraph 1.2.4.  

EN 

39 

   EN 

 
                                                 
rather late with the reporting of irregularities49. This could be the explanation for the 
rather low number of cases reported by Austria.  

5.3.3. 

Impact on the budget – overview per budget chapter financial years 2006 - 2009 

Table  AG4  provides  an  overview  per  budget  chapter  of  the  expenditure  and 
irregularities  reported  for  the  financial  years  2006  -  2009.  The  budget  chapters  are 
ranked on basis of the expenditure. It still counts that this should be seen as a "half-
time-result". Audits are still ongoing, therefore, more irregularities will be reported.  

Table AG4: Amounts affected per budget chapter 

table AG4

AMOUNTS AFFECTED PER BUDGET CHAPTER

financial years 2006 - 2009

description

budget
chapter
050301 Decoupled direct aids
050302 Other direct aid
050405 Rural development (EAFRD) (2007-2013)
050401 Rural development (EAGGF) (2000-2006)
050209 Products of the wine-growing sector
050216 Sugar restructuring fund
050404 Rural development (EAGGF) (2004-2006) transitional instrument new MS
050208 Fruit and vegetables
050205 Sugar
050212 Milk and milk products
050303 Additional amounts of aid
050211 Other plant products/measures
050204 Food programmes
050207 Textile plants
050215 Pigmeat, eggs and poultry, bee-keeping and other animal products
050203 Non-Annex 1 products
050213 Beef and veal
050201 Cereals
050206 Olive oil
050210 Promotion
110203 Fisheries programme for the outermost regions
110201 Intervention in fishery products

expenditure
amounts in €
110 414 178 271
35 516 817 348
16 806 203 217
6 108 918 043
5 091 548 992
4 850 093 112
4 720 777 646
4 558 886 603
2 621 242 341
2 243 830 444
1 818 731 223
1 402 377 789
1 065 398 838
997 150 960
715 367 053
667 183 810
451 774 536
387 240 850
182 612 526
177 999 061
13 184 824
11 950 824

irregular

amounts in €

IrR

cases

14 821 476
3 604 367
8 225 234
17 569 139
5 415 433

8 317 762
12 143 621
18 715 280
1 729 683
286 842
2 268 537
142 006

3 674 212
528 950
336 298
717 842
173 602
402 329
20 619

≈

0.01%
0.01%
0.05%
0.29%
0.11%

0.18%
0.27%
0.71%
0.08%
0.02%
0.16%
0.01%

0.51%
0.08%
0.07%
0.19%
0.10%
0.23%
0.16%

≈
0.05%

585
135
140
468
144

245
141
38
79
5
31
4

91
19
21
21
7
16
1

≈

other
total

200 823 468 310

99 093 233

The  highest  expenditure  concerns  budget  chapter  050301  "decoupled  direct  aids". 
The  total  expenditure  is  about  EUR  110  billion,  which  is  55%  of  the  total 
expenditure. It can be assumed that a sector that "consumes" already 55% of the total 
agricultural budget will get more attention of the authorities. Member States reported 
also the highest number of irregularities for this sector: 585 cases. The total amount 
affected was about EUR 14.8 million.  

Budget  chapter  050302  "other  direct  aid"  can  be  found  on  the  second  place.  An 
amount of about € 35 billion has been spent for this sector. That is about 18% of the 
total  expenditure.  These  2  sectors  consume  together  already  more  than  70%  of  the 
total  2006-2009  expenditure.  For  both  sectors  count  that  the  amounts  affected  by 
irregularities are rather low. Both sectors have an irregularity rate of 0.01% 

Sectors that have a rather high irregularity rate are: 

•  050205: sugar 

0.71% 

49 

See OLAF’s website: http://ec.europa.eu/anti_fraud/reports/ 

EN 

40 

   EN 

 
 
                                                 
•  050215: pigmeat, eggs and poultry etc.  0.51% 

•  050401: rural development 

0.29% 

•  050208: fruits and vegetables  0.27% 

•  050210: promotion 

0.23% 

No  cases  of  irregularities  were  reported  for  the  sectors  "sugar  restructuring  fund" 
(050216) and "textile plants" (050207) although there was a substantial expenditure. 
The  latter  counts  especially  for  the  sector  sugar  restructuring  fund  now  the  total 
expenditure was almost EUR 4.9 billion. 

050301 decoupled direct aids 

As mentioned, about 55% of the expenditure concerns "decoupled direct aids" which 
justifies a closer look at this sector. The overall irregularity rate for "decoupled direct 
aids", which is controlled through the Integrated Administration and Control System 
(IACS),  is  rather  low.  It  differs  however  strongly  per  Member  State.  Table  AG5 
provides an overview.  

Remarkable is that a rather large number 
of  Member  States  with  a  relatively  low 
expenditure  reported  a  relatively  high 
number of cases.  

Germany  reported  the  highest  number 
and the highest amounts: 107 cases and a 
total  amount  affected  of  more  than  EUR 
2.5  million.  The  latter  seems  to  be  logic 
as Germany is the Member State with the 
highest expenditure: ± EUR 21.1 billion.  

France  spent  the  second  highest  amount 
for this sector: ± EUR 17.2 billion. It did 
not  report  any  irregularity.  It  has  to  be 
noted that decoupled direct aid payments 
started in France only in 2007. 

AG5
DECOUPLED DIRECT AIDS
financial years 2006 - 2009

irregular

cases amounts in €

107

2 527 340

IrR
0.012%

8
26
99
7
104
70
12
3

106 481
1 113 686
2 303 902
200 205
1 939 591
1 726 467
202 232
73 389

0.001%
0.009%
0.023%
0.003%
0.039%
0.038%
0.006%
0.003%

6
21
4
1
5
66
6
25
15

88 425
765 393
63 671
18 115
91 259
1 882 507
578 250
434 261
706 303

0.005%
0.047%
0.004%
0.001%
0.007%
0.198%
0.098%
0.075%
0.188%

expenditure
amounts in € 
21 056 414 986
17 164 402 944
13 857 498 263
11 917 159 175
9 957 549 909
5 876 129 921
4 937 527 999
4 581 919 055
3 644 856 740
2 493 028 556
2 208 925 929
2 036 913 308
1 656 077 231
1 644 364 526
1 473 454 738
1 436 031 424
1 278 052 134
951 513 453
588 210 795
578 522 638
374 772 422
222 976 006
154 030 188
135 090 195
109 636 770
74 830 506
4 288 461
110 414 178 271

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

Other  Member  States  that  had  a  rather 
high expenditure and reported a relatively 
low  number  of  cases  are  the  United 
Kingdom,  Italy  and  Greece.  The  United 
Kingdom  spent  almost  EUR  13.9  billion 
and reported 8 cases  with  a total amount 
affected  of  EUR  106°481,  which  is 
0.001%  of  the  total  expenditure.  As  already  mentioned,  the  United  Kingdom  has 
some (IT-related) problems with forwarding cases in electronic format, therefore, it 
is possible that the United Kingdom still has some cases in the pipeline. Italy spent 
an  amount  that  is  more  or  less  comparable  with  the  United  Kingdom:  ±  EUR  11.9 
billion.  Italy  reported  26  cases  with  a  total  amount  affected  of  about  EUR  1.1 

14 821 476

0.013%

585

EN 

41 

   EN 

 
million.  Greece  spent  almost  EUR  5.8  billion  and  reported  7  cases  with  a  total 
amount  affected  of  EUR  202°232.  The  irregularity  rates  for  the  United  Kingdom, 
Greece and Italy are respectively 0.001%, 0.003% and 0.009%. 

Ireland, Romania and Bulgaria reported a relatively high number of irregularities for 
the sector "decoupled direct aids". The Irish expenditure was about EUR 4.9 billion, 
which  is  less  than  one  quarter  of  the  total  German  expenditure  but  the  number  of 
reported  cases  is  almost  the  same.  Romania  and  Bulgaria  have  a  comparable 
irregularity rate, respectively 0.198% and 0.188%. 

Austria and Hungary had also a substantial expenditure, respectively EUR 2.2 billion 
and EUR 2.0 billion, but did not (yet) report any irregularities.  

Reporting  may  also  be  effected  by  the EUR  10°000  reporting  threshold,  given  that 
most payments concern smaller amounts.  

5.3.4.  Financial follow up of irregularity cases 50 

5.3.4.1.  Method of detection – Controls by national authorities 

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  agencies51,  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 

50 

51 

The  text,  analysis  and  table  of  paragraph  5.3.4.  is  provided  by  DG  AGRI.  Under  Reg.  1848/2006 
Member States are not required to indicate the amounts to recover to OLAF. 
Regulation (EC) No 1290/2005 (OJ L 209, 11.8.2005) 

EN 

42 

   EN 

 
                                                 
Commission are true, complete and accurate and that the internal control procedures 
have operated satisfactorily. 

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 and is subject to an opinion of the certification bodies. 

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. 

5.3.4.2.  Method of detection - Controls by the Commission 

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

Conformity clearance shields the EU 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. Financial corrections are determined on 
the  basis  of  the  nature  and  gravity  of  the  infringement  and  the  financial  damage 
caused to the EU. 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 EU. In financial year 2009 the Commission excluded EUR 655 million from EU 
financing under the EAGF and the EAFRD52 on grounds of its non-compliance with 
EU 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 
clearance thereby contributes to the legality and regularity of transactions at the level 
of the final beneficiaries. 

52 

Decisions 2008/960/EC (OJ L 340, 19.12.2008) and 2009/253/EC (OJ L 75, 21.3.2009) 

EN 

43 

   EN 

 
                                                 
5.3.4.3.  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  EU  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. 

Undue  payments  that  are  the  result  of  administrative  errors  committed  by  the 
national  authorities  have  to  be  deducted  from  the  annual  accounts  of  the  paying 
agencies concerned and, thus, excluded from EU financing. 

In  the  year  2009,  the  50/50  mechanism  was  applied  by  the  financial  clearance 
decision for the financial year 200853 on all pending non-recovered cases dating from 
2004 or 2000 (cases that were four or eight years old respectively). EUR 31.4 million 
was charged to the Member States in this way and EUR 20.1 million was borne by 
the EU budget for reasons of irrecoverability. A further EUR 0.8 million was charged 
to  the  Member  States  by  a  subsequent  decision54  that  cleared  the  accounts  for 
financial year 2008 of those paying agencies that were disjoined in April 2009. 

During  financial  year  2009  Member  States  recovered  EUR 167.3 million  and  the 
outstanding  amount  still  to  be  recovered  from  the  beneficiaries  at  the  end  of  that 
financial  year  was  EUR 1 136.2 million.  Table  AG6  provides  an  overview  of  the 
recovered, irrecoverable and outstanding amounts at the level of beneficiaries at the 
end of financial year 2009. 

Table AG6: financial information on recovery (EAGF, EAFRD, TRDI) 

53 
54 

Commission Decision 2009/367/EC (OJ L 111, 5.5.2009) 
Commission Decision 2010/56/EU (OJ L 32, 4.2.2010) 

EN 

44 

   EN 

 
                                                 
table AG6
FINANCIAL INFORMATION ON RECOVERY CASES
financial year 2009

during 2009

outstanding

recovered

declared irrecoverable

at the end of FY2009

in % of total

20 031 814
2 001 322
0
610 217
528 504
14 054 259
18 522 156
460 074
33 639 713
1 317 297
20 837 296
3 036 750
3 001 283
2 830 435
5 633 179
10 262 855
996 945
42 363
1 264 663
200 066
6 854 119
9 994 066
5 699 055
557 150
1 891 692
2 909 658
87 033
167 263 961

184 050
30 538
0
0
42 995
744 278
56 122
1 848
35 220 073
63 508
15 960 035
3 274 714
263
2 970
122 269
3 841 402
65
0
4 383
20 305
3 909 946
33 363
350 617
0
10 962
1 660
559 018
64 435 383

4 952 763
53 609 855
108 891
0
457 252
55 859 633
13 783 176
379 992
150 285 663
756 934
156 906 284
8 725 074
52 002 613
1 674 036
11 370 241
542 061 150
648 456
92 350
847 138
822 891
12 633 750
3 458 633
54 178 272
1 991 091
1 746 408
707 702
6 114 955
1 136 175 204

0.44%
4.72%
0.01%
0.00%
0.04%
4.92%
1.21%
0.03%
13.23%
0.07%
13.81%
0.77%
4.58%
0.15%
1.00%
47.71%
0.06%
0.01%
0.07%
0.07%
1.11%
0.30%
4.77%
0.18%
0.15%
0.06%
0.54%
100.00%

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

updated 10 May 2010

The financial consequences of non recovery for cases dating from 2005 or 2001 was 
determined  in  accordance  with  the  50/50  rule  mentioned  above  by  charging 
EUR 22.8 million  to  the  Member  States  concerned55.  Moreover,  EUR 20.3 million 
was  borne  by  the  EU  budget  for  cases  reported  irrecoverable  during  financial  year 
2009.  For  those  paying  agencies  for  which  the  2009  accounts  were  disjoined  from 
the  financial  clearance  decision,  a  further  EUR 11.9 million  will  be  charged  by 
subsequent Commission Decisions. 

Due  the  application  of  the  50/50  mechanism  since  its  introduction  in  2006  the 
amount outstanding from the Member States towards the EU budget was reduced to 
EUR 830 million56. 

During the years 2007-2009 the Commission was auditing the correct application of 
the  new  clearance  mechanism  through  15  on  the  spot  controls  covering  14  paying 
agencies  in  11  Member  States.  In  general  the  Member  States'  authorities  have 
adequate procedures in place to protect the financial interest of the European Union. 
Deficiencies  found  during  these  on  the  spot  controls  are  being  followed  up  in  the 
context of conformity clearance procedures. 

55 
56 

Commission Decision 2010/258/EU (OJ L 112, 5.5.2010) 
Amount includes updated financial information provided by Member States for Financial Year 2009. 

EN 

45 

   EN 

 
 
                                                 
5.4. 

Specific analysis 

5.4.1. 

Introduction 

The  statistical  annex  introduces  this  year some  new  rates  and  levels.  The  rates  and 
levels that are used are the Irregularity Rate (IrR), Fraud Rate (FrR), Fraud Amount 
Level and Fraud Frequence Level (FFL)57. 

To  calculate  reliable  rates  and  levels,  a  time  frame  should  be  used  that  can  be 
considered  as  "finalised".  The  financial  year  2009  cannot  yet  be  used  to  calculate 
rates and levels as a large number of irregularities concerning the financial year 2009 
will be reported in the coming 3 – 5 years. The same counts for the period 2006 – 
2009. Member States still need to finalise audits and to report detected irregularities.  

To determine reliable rates and levels, a financial year should be selected that can be 
considered, from an irregularity reporting point of view, as "closed" or "finalised". 

The  financial  year  2004  can  be  considered,  from  an  irregularity  reporting  point  of 
view,  as  finalised58.  Member  States  had  set  up  audit  strategies  and  audit  plans  and 
performed audits on basis of these strategies and plans. Audit findings have become 
definitive  and  irregularities  have  been  reported.  Tables  AG7,  AG8  and  AG9  also 
support  the  assumption  that  the  financial  year  2004  can  be  considered  as  finalised. 
Most of the cases were reported in the first 2-3 years after the expenditure. Almost 
no cases were reported in the last 2 years.  

The  total  2004-expenditure  was  about  EUR  43  billion.  Member  States  reported 
2°216 cases of irregularities with a total amount affected of about EUR 99 million, 
which implies an overall irregularity rate of 0.23%. Member States classified 73% of 
these cases as "irregularity" or as "suspicion of fraud". 608 cases were not classified. 
The largest part of these "non-classified-cases" was reported by Germany and Spain. 
Both  were  not  using  the  electronic  reporting  system  at  that  time  and  did  not  yet 
update all their 2004-cases. 

9 Member States (EU-25) classified 37 cases as "suspicion of fraud", which is 1.67% 
of  the  total  number  of  reported  cases  and  2.30%  of  the  total  number  of  classified 
cases. More than 60% of the suspected-fraud-cases were reported by Italy. The total 
amount  affected  by  suspected-fraud-cases  is  about  EUR  14.9  million,  which  would 
imply an overall fraud rate of 0.03%. The fact that more than 60% of the cases were 
reported by only 1 Member State makes already clear that one cannot speak about an 
overall fraud rate or EU-25-rate. 

Approximately 70% of the 2004-expenditure concerns 3 sectors: 

1. 

2. 

budget chapter 050203 

: direct payments for arable crops  ± EUR 17 billion 

budget chapter 050302 

: beef and veal 

± EUR 7.8 billion 

57 
58 

IrR, FrR, FAL and FLL are explained in paragraphs 1.24 – 1.2.5. 
In next years report, the financial year 2005 will be used to determine the different rates and levels. 

EN 

46 

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3. 

budget chapter 050401 

: rural development 

± EUR 4.7 billion 

These  3  sectors  will  be  used  to  make  a  more precise estimate of  the different rates 
and levels.  

Member States reported 1,471 cases for these 3 sectors, which is ± 66% of the total 
number  of  cases  reported  for  the  financial  year  2004.  In  ±  82%  of  these  cases, 
Member States classified a case as "irregularity" or as "suspicion of fraud". 

5.4.2. 

Sector 050203: direct payments for arable crops 

Table  AG7  provides  an  overview  of  the  cases  that  have  been  reported  by  Member 
States  concerning  the  2004-expenditure  for  the  sector  "direct  payments  for  arable 
crops" (budget chapter 050203). 

Table AG7: direct payments for arable crops – rate and levels 

table AG7
FY-2004: RATES AND LEVELS
(16 October 2003 - 15 October 2004)
050203 = direct payment for arable crops

irregular

suspected fraud

irregularity cases reported in

amounts in €

cases

amounts in €

FrR

cases

FAL

FFL

2004

2005

2006

2007

2008

2009

MS
AT
BE
DE
DK
EL
ES
FI
FR
IE
IT
LU
NL
PT
SE
UK
total

expenditure
amounts in €

363 636 980
167 927 450
3 533 040 156
659 683 499
499 370 006
1 821 875 111
342 514 998
5 146 143 982
132 047 645
1 868 523 214
10 718 752
169 196 973
181 499 772
441 454 187
1 652 862 749
16 990 495 474

download 21 January 2010

IrR
0.00%
63 401 0.04%
902 570 0.03%
16 456 0.00%
85 473 0.02%
0.00%
7 042 0.00%
644 286 0.01%
284 586 0.22%
6 768 158 0.36%
0.00%
437 835 0.26%
118 791 0.07%
215 905 0.05%
221 998 0.01%
9 766 501 0.06%

5
46
1
11

1
70
37
8

74
11
22
21
307

4
16

11

69
36
1

18

7
10
172

28

1

1

56
1
9
10
106

1
2

1

3

9
5

21

1

2

1

1
5

1

1

1

1

2

6 613 059 0.35%

4 97.71% 50.00%

6 613 059 0.04%

4 67.71% 1.30%

The  second  column  of  the  left  hand  side  provides  an  overview  of  the  2004-
expenditure  per  Member  State.  Only  those  Member  States  that  had  a  2004-
expenditure are shown. The total expenditure was about EUR 17 million. In the third 
column the total amount affected by irregularities can be found.  

The irregularity rates (IrR) can be found in the fourth column of the left hand side. 
The  overall  rate  is  0.06%.  Italy  has  the  highest  rate:  0.36%.  Austria,  Spain  and 
Luxembourg did not report any cases of irregularities for this sector, therefore, their 
irregularity rates are 0%. 

The right hand side part of the table provides an overview of the years in which the 
irregularities  concerning  the  2004-expenditure  have  been  reported.  Member  States 
reported in total 307 cases of irregularities. 106 of these cases were already reported 
in 2004. The highest number was reported in 2005: 172 cases.  

A downfall of the number of reported cases can be seen in the period 2006 – 2009. 
This  is  also  logic.  Irregularities  are  normally  reported  in  the  first  years  after  the 
discovery of an irregularity. The sharp downfall of cases in the period 2006 – 2009 
confirms,  from  an  irregularity  reporting  point  of  view,  that  the  financial  year  2004 
can be considered as finalised.  

EN 

47 

   EN 

 
 
France had the highest expenditure, e.g. more than EUR 5.1 billion, and reported a 
total  amount  affected  by  irregularities  of  about  EUR  0.6  million.  This  leads  to  an 
irregularity rate of 0.01%. Almost all cases were reported in 2005. Only 1 case was 
reported in 2006. No more cases were reported in the period 2007 – 2009, therefore, 
it can be expected that no cases of irregularities will be reported anymore. 

Germany reported in the years 2004, 2005 and 2006 respectively 28, 16 and 2 cases. 
No  cases  were  reported  after  2006.  Germany  reported  a  total  amount  affected  by 
irregularities of about EUR 0.9 million. This means an irregularity rate of 0.03%. 

Rather  high  are  the  irregularity  rates  of  Italy,  the  Netherlands  and  Ireland, 
respectively 0.36%, 0.26% and 0.22%. 

No irregularities were reported by Austria, Spain and Luxembourg. 

The middle part of table AG7 contains the rates and levels linked to suspected fraud.  

Only 1 Member State reported suspected-fraud-cases: Italy. It reported 4 cases with a 
total amount affected of about EUR 6.6 million. The fraud rate for Italy is 0.35%. 

The  EU-25  FrR  would  be  0.04%.  Be  aware  that  only  1  Member  State  reported 
suspected-fraud-cases. This makes immediately clear that it is hard to speak about an 
EU-25 fraud rate. It is better to speak about the Italian fraud rate or even better of the 
fraud rates of the regions or provinces that reported the suspected-fraud-cases. 

The  FAL  is  almost  98%  now  almost  the  total  irregular  amount  was  linked  to 
suspected-fraud-cases.  The  FFL  is  50%  now  4  out  of  8  cases  were  classified  as 
suspected-fraud-cases. 

5.4.3. 

Sector 050302: beef and veal 

The  total  2004-expenditure  for  "beef  and  veal"  was  almost  EUR  7.8  billion  as  the 
total amount affected by irregularities was about EUR 10.7 million. This implies an 
overall irregularity rate of 0.14%. Member States reported in total 264 cases. Table 
AG8 provides an overview. 

EN 

48 

   EN 

 
Table AG8: beef and veal – rates and levels 

table AG8
financial year 2004
(16 October 2003 - 15 October 2004)

050302 = beef and veal

suspected fraud

irregular

amounts in €

IrR

cases

amounts in €

FrR

cases

FAL

FFL

2003

2004

197 230 0.08%
190 478 0.08%
390 055 0.04%
71 005 0.05%
0.00%
4 866 614 0.59%
4 400 0.00%
52 499 0.00%
0.00%
50 369 0.01%
3 945 825 0.73%
0.00%
0.00%
15 871 0.01%
36 332 7.18%
81 747 0.05%
279 703 0.17%
0.00%
484 182 0.03%
10 666 310 0.14%

22
18
48
5
0
34
1
3
0
3
19
0
0
2
2
8
34
0
65
264

31 740 0.01%

1 16.66% 5.56%

3 058 460 0.57%

5 77.51% 26.32%

3 090 200 0.04%

6 28.97% 2.27%

2

2

MS
AT
BE
DE
DK
EL
ES
FI
FR
HU
IE
IT
LT
LU
NL
PL
PT
SE
SI
UK
total

expenditure
amounts in €

234 698 430
242 065 802
954 798 283
142 704 367
95 368 478
830 112 661
93 827 739
1 793 306 418
59 762
927 491 670
540 275 603
52 409
12 249 401
164 847 789
506 010
178 797 511
161 906 276
17 729
1 394 353 024
7 767 439 362

download 21 January 2010

irregularity cases reported in

2005
12

16
1

16

1

1

2008

2009

2006
9
13
30
3

2007
1
5
2
1

1

1

1

6

9

4

1

7
1

2

1
1
2
29

6

1

4

1
3
5

32
79

18
116

15
44

5

8

10

The  total  amount  affected  by  irregularities  is  higher  for  the  sector  "beef  and  veal" 
than  for  the  sector  "direct  payments  for  arable  crops"  although  the  expenditure  for 
the sector "beef and veal" is far lower. 

The Member State with the highest expenditure was France, it spent almost EUR 1.8 
billion. France reported 3 cases of irregularities which were reported in 2006, 2008 
and 2009. It concerned in all 3 cases export of beef and veal. The export took place 
in 2004. The irregularity rate is low: 0.003%. 

The highest amounts affected by irregularities are reported by Spain and Italy.  

Spain  spent  about  EUR  830  million  and  reported  34  cases  with  a  total  amount 
affected by irregularities of about EUR 4.9 million. This means an irregularity rate of 
0.59%.  The  highest  number  of  cases  was  reported  in  the  year  of  expenditure:  16 
cases. In the following years, the number of cases decreased slowly.  

Italy  spent  a  bit  more  than  EUR  540  million.  The  total  amount  affected  by 
irregularities was almost EUR 4 million. It concerned 19 cases, which were reported 
in 2006, 2008 and 2009. The Italian irregularity rate is 0.73%.  

Poland is the Member State with the highest irregularity rate: 7.18%. That is high but 
it  should  be  taken  into  account  that  the  Polish  expenditure  was  rather  low:  EUR 
506°010.  This  means  that  2  cases  with  a  total  amount  affected  by  irregularities  of 
EUR 36.332 have a rather high impact on the irregularity rate. 

No  irregularities  were  reported  by  Greece,  Hungary,  Lithuania,  Luxembourg  and 
Slovenia. These countries had a relatively low expenditure.  

The  key-figures  concerning  suspected-fraud-cases  can  also  here  be  found  in  the 
middle of the table.  

EN 

49 

   EN 

 
 
Member States classified 6 out of 264 cases as suspected-fraud-cases. Italy reported 
5 of these cases as Belgium reported 1 case. Italy has a fraud rate 0.57% as the fraud 
rate for Belgium is 0.01%.  

The EU-25-fraud rate would be 0.04% which is equal to the rate for the sector "direct 
payments for arable crops".  

It has to be mentioned again that these figures need to be interpreted very cautiously 
now only 2 Member States reported suspected-fraud-cases. It is better to speak about 
the Italian and Belgium fraud rate. 

The same counts for fraud amount level (FAL) and fraud frequency level (FFL). Italy 
has a FAL of 77.51% and a FFL of 26.32% as Belgium has a FAL of 16.66% and a 
FFL of 5.56%. 

5.4.4. 

Sector 050401: rural development 

The  2004-expenditure  for  rural  development  was  almost  EUR  4.8  billion.  Member 
States reported 900 cases of irregularities with a total amount affected of almost EUR 
17.8 million. This makes an irregularity rate of 0.37%.  

In comparison with the other 2 sectors, "direct payments for arable crops" and "beef 
and veal", is the irregularity rate rather high for "rural development".  

The number of reported irregularities is also rather high. Member States reported the 
highest  number  of  cases  for  the  sector  "rural  development".  Member  States  as 
France, Portugal, Italy and Germany reported a relatively high number of cases for 
this sector.  

The Netherlands and Portugal have the highest irregularity rates, respectively 2.66% 
and 1.25%.  

Belgium did not report any irregularity. 

Table AG9 shows that only 2 Member States reported suspected-fraud-cases. France 
reported  1  case  with  a  total  amount  affected  of  EUR  131°065  as  Italy  reported  8 
cases with a total amount affected of EUR 550°695. Also for this sector counts that 
Italy is responsible for the reporting of almost all suspected-fraud-cases. 

Table AG9: rural development – rates and levels 

EN 

50 

   EN 

 
table AG9
budget year 2004
050401 = rural development EAGGF Guarantee Section

irregular

suspected fraud

irregularity cases reported in

amounts in €

IrR

cases

amounts in €

FrR

cases

FAL

FFL

2004

2005

2006

2007
3

2008

2009
1

MS
AT
BE
DE
DK
EL
ES
FI
FR
IE
IT
LU
NL
PT
SE
UK
total

expenditure
amounts in €

468 583 807
49 069 679
813 215 028
43 196 842
125 603 860
513 519 817
329 773 213
839 154 266
351 411 146
635 259 264
16 236 831
67 644 813
193 322 532
163 073 061
151 226 913
4 760 291 072

download 21 January 2010

141 368 0.03%

4

1 876 473 0.23%
372 134 0.86%
450 180 0.36%
2 876 082 0.56%
47 690 0.01%
2 817 429 0.34%
400 842 0.11%
4 183 035 0.66%
13 375 0.08%
1 797 420 2.66%
2 424 108 1.25%
123 437 0.08%
259 814 0.17%
17 783 388 0.37%

95
28
29
63
5
262
43
112
1
22
191
10
35
900

20
12

17

131 065 0.02%

1 4.65% 0.38%

163

550 696 0.09%

8 13.16% 7.14%

681 761 0.01%

9 3.83% 1.00%

6

4
7
4
17
250

38
8
6
8
3
41
23
23

2
83
5
13
253

22
4
10
7

19

31

8
63

3
170

11
2

3
2
25
3
11

7
1

2
67

1
1
6
9

10
9
13

3

3
1
7
19

4
8
28
1
1
34
1

108

52

The  fraud  rates  (FrR)  for  France  and  Italy  are  respectively  0.02%  and  0.09%.  The 
EU-25 fraud rate would be 0.01%. Once again, be aware that only 2 Member States 
reported suspected-fraud-cases, therefore, it is more correct to speak about the rates 
and levels of France and Italy. 

France has a FAL of 4.65% and a FFL of 0.38%. The Italian levels are 13.16% for 
the FAL and 7.14% for the FFL. 

5.4.5.  Other sectors: fraud rates 

description

table AG10

As  already  mentioned,  it  is  hard  to 
speak  about  an  "overall  fraud  rate" 
now  only  a  limited  number  of 
regions  of  a  limited  number  of 
Member  States  reported  suspected-
fraud-cases. The fraud rates for the 
2004-expenditures 
therefore  are 
low. The overall fraud rate is 0.03% 
as  the  rates  for  the  3  above  discussed  sectors  are  0.04%,  0.04%  and  0.01% 
respectively.  

Budget 
chapter
050208
050302
050203
050304
050301 milk and milk products
050401
050209 wine-growing sector
050303
other
total

2004 
expenditure
 €  1.6 billion
 €  7.8 billion
 € 17.0 billion
 €  0.2 billion
 €  2.3 billion
 €  4.7 billion
 €  1.1 billion
 €  1.5 billion
≈
€  43   billion

fruits and vegetables
beef and veal
direct payment for arable crops
pigmeat, eggs and poultry

6 613 059
3 823 662
3 090 200
681 761
495 086
91 019
46 949
14 252

fraud 
rate
0.24%
0.04%
0.04%
0.03%
0.02%
0.01%
0.01%
0.00%

fraud 
cases
8
6
4
3
2
9
4
1

sheepmeat and goatmeat

amount 
affected

rural development

14 855 988

0.03%

37

≈

The  question  arises  if  there  would  be  any  sectors  where  the  fraud  rate  would  be 
rather  high.  Table  AG10  provides  an  overview  of  all  sectors  for  which  suspected-
fraud-cases were reported. The sector fruits and vegetables (chapter 050208) has, in 
comparison with all other sectors, a rather high fraud rate: 0.24%. The 8 suspected-
fraud-cases together, amount to EUR 6.6 million. All other sectors have a fraud rate 
of 0.04% or lower. 

5.4.6.  Patchy reporting 

Most  Member  States  reported  "patchy".  The  sector  "rural  development"  is  a  good 
example of patchy reporting. The total expenditure for this sector was about EUR 4.8 
billion and these expenditures were spread across  all regions of all Member States. 
Member  States  reported  900  cases  of  irregularities  with  a  total  amount  affected  of 
about EUR 17.8 million. These irregularities are not spread across all Member States 
and  within  a  Member  State  not  across  all  regions.  2  examples  will  be  given  to 

EN 

51 

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visualise patchy reporting. Austria and Spain will be used as example now the total 
expenditures of these 2 Member States are more or less comparable. What counts for 
Austria and Spain, counts for almost all Member States. Only Denmark and Portugal 
reported irregularities across almost all regions. 

Example Austria.  

IrR

0.21%

mean 

Bundesland
Niederösterreich  
Oberösterreich
Steiermark
Tirol
Burgenland
Kärnten
Salzburg
Vorarlberg
Wien
TOTAL

The 
total  expenditure 
was  about  EUR  469 
million. Austria reported 
4  irregularities  with  a 
total  amount  affected  of 
141°368.  This 
EUR 
an 
would 
irregularity 
of 
0.03%.  All  irregularities 
were 
reported  by  1 
Bundesland: Steiermark. 
irregularities  were 
No 
reported by the other 8 Bundesländer. It would therefore be better to speak about the 
irregularity  rate  of  Bundesland  Steiermark  and  not  about  the  Austrian  irregularity 
rate.  The  irregularity  rate  of  Bundesland  Steiermark  is  0.21%,  which  is  far  higher 
than an overall Austrian irregularity rate of 0.03%.  

rate 

0.03%

Example Spain:  

total 

IrR
21.72%
11.49%
2.35%
1.69%
1.36%
1.20%
1.18%
0.78%
0.63%
0.50%
0.14%
0.11%
≈
0.56%

province
Málaga
Cádiz
Seville
Huesca
Jaén
Madrid
Almería
Córdoba
Cuenca
Biscay
Valencia
Huelva
other
total

map 
Spanish 
The 
provides the same image. 
The 
Spanish 
expenditure  was  about 
EUR  514  million.  The 
expenditure  was  spread 
across all provinces. The 
however, 
irregularities 
are  not  spread  across  all 
provinces. 
Spain 
reported  63  cases  with  a 
total  amount  affected  of 
about  EUR  2.9  million. 
These  irregularities  were 
reported  by  12  out  of  50 
provinces.  The  overall 
irregularity rate for Spain 
would be 0.56%. If the irregularity rate would be calculated  per  province, it  would 
vary between 0.11% for Huelva and 21.72% for Malaga.  

Remarkable is the huge difference in number of cases and amounts affected between 
Austria and Spain. Both have a comparable total expenditure but Austria reported 4 
cases with a total amount affected of EUR 141°368 as Spain reported 63 cases with a 
total amount affected of EUR 2°876°082. 

EN 

52 

   EN 

 
Again, what is said for Austria and Spain can be said for almost all Member States: 
irregularities are concentrated in a limited number of regions and not equally spread 
over all regions and Member States (see also table AG9). 

Patchy  reporting  has  also  its  impact  on  the  classification  of  suspected-fraud-cases. 
The following map shows an overview of the suspected-fraud cases reported for the 
sector "rural development" concerning the financial year 2004. 

Member  States  reported  900  cases  of  which  9  cases  were  classified  as  "suspected-
fraud".  That  is  exactly  1%  of  the  total  number  of  irregularities.  France  reported  1 
case as Italy reported the other 8 cases. The total amount affected by these suspected-
fraud-cases  is  almost  EUR  0.7  million  which  is  approximately  0.01%  of  the 
expenditure. The map provides an overview of the regions in which fraud took place. 

Remarkable is that almost all suspected-fraud-cases can be found in the same area: 
Rhone-Alpes, Piemont, Liguria, Emilia-Romagna, Veneto and Marche. This implies 

EN 

53 

   EN 

 
 
that no (suspected) fraud was committed in all other Member States. In other words, 
in almost all Member States no irregularities were committed intentionally. 

The  impression  is  that  not  all  irregularities  are  reported  and  classified  correctly.  A 
cause  could  be  the  heavy  workload  for  those  persons  that  had  to  process  the 
communications. In the past, communications had to be processed on a central level 
in a Member State. This meant in practice that only 1 or 2 persons per Member State 
could  submit  communications.  That  has  changed  with  the  introduction  of  Module 
1848 and the cascaded reporting structure. The number of persons that can process a 
communication  became  in  principle  unlimited.  Therefore,  the  number  of  users 
increased enormously during 2009. At the end of 2009, more than 800 persons were 
able  to  process  communications  via  Module  1848.  It  can  be  expected  that  the 
quantity and quality of the data will improve. The increase of the number of cases in 
2009 indicates already that more cases and a higher quality can be expected. Many 
hands make lighter and better work!  

The  patchy  reporting  and  the  limited  number  of  suspected-fraud-cases  makes 
however  clear  that  no  EU-27  rates  or  levels  can  be  determined  yet.  Only  rates  and 
levels per region can be determined. The year 2010 should be used to check and, if 
necessary, update cases of irregularities in order to provide next year fraud rates and 
levels. 

5.4.7. 

summary: 2004- rates and levels 

•  number of suspected-fraud-cases is rather low: 37 on a total of 2°216 (± 1.67%); 

•  9 Member States (EU-25) reported suspected-fraud-cases; 

•  16 Member States (EU-25) indicated that none of the reported irregularities were 

committed intentionally; 

•  suspected-fraud-cases are mainly reported by 1 Member State: Italy (> 60%); 

•  difficult to determine overall fraud rates and levels; 

•  sector "fruit and vegetables" has the highest fraud rate: 0.24%; 

•  fraud rates and levels need to be interpreted very cautiously! 

EN 

54 

   EN 

 
5.5. 

Conclusions 

(1) 

(2) 

(3) 

2009  was  a  transition  year  for  irregularity  reporting  thanks  to  the  introduction  of 
access  to  Module  1848  via  internet,  the  introduction  of  the  cascaded  reporting 
structure, the appointing of 1848-liaison-officers and the enormous increase of users. 

The  EU-27-compliance-2009  increased  to  95%  thanks  to  a  positive  attitude  of  all 
Member States, the introduction of a new reporting system and the enormous increase 
of the number users of the reporting module. All Member States used Module 1848 to 
submit  communications.  Member  States  that  should  pay  extra  attention  to  issues  as 
timely reporting, personal data and measures affected are Austria, Finland, Malta, the 
Netherlands,  Poland  and  the  United  Kingdom.  Finland  and  Poland  did  not  report 
personal  data  although  there  is  a  clear  obligation  to  do  so.  Latvia  has  the  highest 
compliance rate as Finland has the lowest. 

In  the  Financial  Year  2009,  Member  States  reported  1°621  new  cases  with  a  total 
amount affected of about EUR 125 million. These cases concern expenditures for the 
Financial Years 1991 – 2009. The number of cases and the amounts affected are not 
equally  spread  over  all  Member  States.  Spain  reported  the  highest  number  of  cases 
(404) as Italy reported the highest amounts affected (EUR 54 million). Austria and the 
United  Kingdom  reported  a  relatively  low  number  of  cases  as  Luxembourg  and 
Slovenia did not report any irregularity. 11 cases had a total amount affected of more 
than EUR 1 million. 

(4)  Member States recovered during the Financial Year 2009 about EUR 167 million and 
declared  irrecoverable  about  EUR  64  million.  The  overall  outstanding  amount  at  the 
end  of  Financial  Year  2009  is  about  EUR  1.1  billion  at  final  beneficiary  level  and 
EUR 830 million towards the EU-budget. 

(5) 

(6) 

(7) 

The figures concerning the financial years 2006 – 2009 can be used to identify trends. 
These figures should be considered as half-time-result now still cases of irregularities 
will be reported. Definitive figures can only be determined of financial years that can 
be considered, from an irregularity reporting point of view, as "finalised". 

The  total  expenditure  for  the  financial  years  2006-2009  was  about  EUR  201  billion. 
The highest expenditure was made by France (20%) and the lowest by Malta (0.01%). 
Member  States  reported  for  these  financial  years  2°086  cases  with  a  total  amount 
affected  of  about  EUR  97  million  which  means  a  provisional  irregularity  rate  of 
0.05%.  The  highest  number  of  cases  was  reported  by  Spain  (377)  as  the  highest 
amounts  affected  by  irregularities  were  reported  by  Italy  (EUR  14  million).  France, 
Italy,  United  Kingdom,  Greece  and  Austria  reported  a  relatively  low  number  of 
irregularities.  

55%  of  the  total  2006-2009  expenditure  concerns  the  sector  "decoupled  direct  aids". 
Member States reported for this sector 585 cases with a total amount affected of about 
EUR  109  million.  The  provisional  irregularity  rate  for  this  sector  is  0.01%.  Sectors 
with a rather high irregularity rate are sugar (0.71%), pigmeat, eggs  and poultry etc. 
(0.51%),  rural  development  (0.29%),  fruits  and  vegetables  (0.27%)  and  promotion 
(0.23%). 

EN 

55 

   EN 

 
(8) 

The  Financial  Year  2004  can  be  considered  as  finalised  now  audit  plans  have  been 
executed, recovery procedures have been started and irregularities have been reported. 
The total 2004-expenditure was about EUR 43 billion. Member States reported in total 
2,216 cases with a total amount affected of about EUR 99 million, which implies an 
overall irregularity rate of 0.23%.  

(9)  Member  States  classified  37  of  the  2004-cases  as  suspected-fraud.  23  cases  (62%) 
were  reported  by  1  Member  State:  Italy.  The  other  14  cases  were  reported  by  8 
Member  States.  All  other  Member  States  (16)  did  not  classify  any  of  their  cases  as 
fraud or suspected-fraud. An EU-25 fraud rate (FrR), fraud amount level (FAL), fraud 
frequency  level  (FFL)  cannot  be  determined  now  only  a  very  limited  number  of 
suspected-fraud-cases  were  reported  by  a  limited  number  (of  regions)  of  Member 
States. Rates and levels can only be determined for regions that reported (suspected-) 
fraud cases or submitted zero notifications.  

EN 

56 

   EN 

 
6. 

EUROPEAN FISHERIES FUND 

Commission Regulation (EC) No 498/2007 of 26 March 200759 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)  No  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 2009, no irregularities have been reported by the Member States concerning 
this Fund. As indicated in Chapter 1 of this document, the reporting module for the 
EFF irregularities is currently under development. 

59 

OJ L120, 10.05.2007. 

EN 

57 

   EN 

 
                                                 
7. 

COHESION POLICY (ANNEXES 16-20) 

The approach followed for the 2009 Statistical Annex changes in relation to previous 
years.  The  focus  will  be  much  less  on  yearly  developments  and  will  concentrate 
more  on  the  Programming  Period  developments  in  order  to  reflect  the  real 
functioning and implementation of the Cohesion Policy measures. 

In 2009, Member States reported 4°931 irregularities under the different regulations 
that  cover  the  reporting  obligation  for  the  Cohesion  Policy.  4°653  were  reported 
under  Regulation  (EC)  No  1681/94  which  covers  the  four  Structural  Funds60;  92 
under Regulation (EC) No 1831/94 (on the Cohesion Fund, with the exception of the 
period  2007-2013)  and  186  irregularities  under  Regulation  No  1828/2006,  which 
covers  the  programming period 2007-2013. Annexes 18 to 20 provide more details 
about the irregularities reported under the different regulations. 

The total amount affected by irregularities in 2009 was EUR 1.22 billion, EUR 1.15 
billion  of  which  was  from  the  Structural  Funds  and  EUR  67.3  million  from  the 
Cohesion Fund. Irregularities reported in this sector were equivalent to 2.53% of the 
resource allocations for 2009. 

7.1. 

Reporting Discipline 

In  2009  the  new  reporting  system  IMS  was  launched  also  for  the  Cohesion  Policy 
area,  following  the  Agricultural  sector.  Member  States  were  involved  at  several 
stages  (training,  definition  of  the  reporting  structure  and  assistance  during  the 
migration). 

In particular, Member States were requested to provide a description of the national 
reporting  structure  and  provide  assistance,  if  needed,  for  the  migration  of  the  data 
from the old system to the new. 

To date, all Member States have communicated their reporting structures (or at least 
an  interim  structure)  except  France.  Ireland  has  provided  a  reporting  structure  only 
for the European Social Fund (ESF). Sweden has indicated the reporting structure for 
the  new  programming  period,  but  no  responsible  authorities  has  been  indicated  for 
previous periods. The Czech Republic and Spain have communicated their reporting 
structures,  but  they  have  not  been  implemented  yet  in  the  system  due  to  some 
technical problems (for CZ) or their particular complexity (in the case of ES). OLAF 

60 

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 Fisheries Guidance (FIFG), supporting measures for the adjustment of 

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

EN 

58 

   EN 

 
                                                 
puts  in  place  everything  that  is  possible  to  solve  these  situations  in  the  shortest 
possible delay, but in the absence of the necessary information this is not possible. 

Map SF1 shows the situation of IMS implementation for each Member State. 

Map SF1: Implementation of IMS by Member State 

If a Member State has communicated an interim structure, it should be noted that the 
system  is  fully  operational  for  the  Member  State  concerned.  All  countries  with  a 
value  of  4  or  higher  are  to  be  considered  at  a  satisfactory  level  of  implementation. 
Problems still exist with the Member States presenting a value of 3 or less, with the 
exception of the Czech Republic for the reasons explained above. 

As  long  as  module  1828  is  not  fully  deployed,  module  1681  has  been  designed  to 
temporarily accept irregularities concerning the programming period 2007-2013. 

Given  the  complexity  of  the  implementation  of  module  1681,  module  1831  has 
suffered  some  delays  of  implementation  and  only  few  countries  (presenting  a  less 

EN 

59 

   EN 

 
 
complicated  reporting  structure)  have  received  access  to  this  module  in  2009  as 
showed in Table SF 1. The full implementation of module 1831 is expected in 2010. 

Table SF 1 IMS module 1831: status of implementation by beneficiary country  

Y
I
N

Legend

Implemented and used
Implemented but no irregularities received
Not implemented

BG*
CY
CZ**
EE
EL
ES**
HU
IE
LT
LV
MT
PL
PT
SI
SK
* Irregularities temporarily accepted awaiting solution of some technical problems in Module 1681

Y
I
N
Y
Y
N
I
N
Y
I
Y
Y
Y
Y
I

** Reporting structure has been received but not yet implemented

7.2. 

General Trends 

7.2.1.  Yearly trends 

In 2009 the number of reported irregularities and related financial amounts involved 
increased in relation to 2008 and represent the highest peak registered so far in the 
Cohesion  Policy.  4°931  irregularities  were  received  throughout  the  year,  involving 
an overall amount of EUR 1.22 billion, the highest ever. The number of irregularities 
increased by 23%, while the irregular amounts increased by 109%.  

Chart SF 1: 1994-2009 trend concerning number of reported irregularities for the Cohesion 
Policy 

s
e
i
t
i
r
a
l

u
g
e
r
r
i

f
o
°
N

6 000

5 000

4 000

3 000

2 000

1 000

0

1994-1999

2000-2006

2007-2013

TOTAL

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

4

14

73

185

268

516 1 045 1 264 4 237 1 343 1 289 618

314

135

74

21

30

223

917 1 845 2 774 2 653 3 620 3 971 4 724

9

186

4

14

73

185

268

516 1 045 1 294 4 460 2 260 3 134 3 392 2 967 3 755 4 054 4 931

YEAR

EN 

60 

   EN 

 
 
 
 
 
Three concurring elements contribute to explain this further increase: 

(1) Reported  irregularities  concern  three  programming  periods,  as  highlighted  in 

Chart SF 1; 

(2) The number of irregularities reported by the 2 new Member States (Bulgaria and 

Romania) is for the first time significant; 

(3) 2009 is the year before the closure of the majority of the programmes. Also for 
the  closure  of  the  previous  programming  period  (1994-1999)  a  comparably 
significant  increase  was  registered.  Periods  of  programmes  closures  always 
coincides with increased checks, audits and reporting. 

Since 1998, the impact of reported irregularities on the Cohesion Policy budget has 
showed two important increases, the first in 2002 and the second in 2009, as showed 
in Chart SF 2. In proportion, the increase in 2002 (more than doubled the value of 
2001) has been higher than that in 2009 (almost the double of the value of 2008). In 
both  cases,  the  explanation  rests  in  the  approaching  closure  of  the  corresponding 
programming period.  

Chart SF 2: Impact of irregularities on the Cohesion Policy budget 

t
e
g
d
u
b
f
o
%

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

1998 1999

2000 2001 2002

2003 2004 2005

2006 2007 2008

2009

Impact on budget 0.09% 0.22% 0.38% 0.71% 1.89% 1.44% 1.73% 1.56% 1.69% 1.77% 1.25% 2.53%

Year

The  second  interesting  aspect  is  that,  in  the  period  between  2003  and  2007,  the 
impact  on  the  budget  of  the  reported  irregularities  has  remained  rather  stable 
supporting  the  impression  that  a  certain  consistency  and  continuity  have  been 
achieved in the reporting of irregularities by Member States. In general, the increased 
level  of  impact  of  reported  irregularities  on  the  Cohesion  Policy  budget  should  be 
interpreted  positively,  as  increased  controls  and  compliance  with  the  reporting 
obligations. 

However,  on  the  other  hand,  figures  showed  in  Chart  SF2  are  still  difficult  to 
interpret because the reported irregularities refer to programmes and projects that are 
of  a  multi-annual  nature  and,  furthermore,  as  already  indicated  the  reported 

EN 

61 

   EN 

 
 
 
 
irregularities refer to three different programming periods61. Furthermore, the budget 
for  the  year  2009,  on  which  the  impact  of  irregularities  reported  by  the  Member 
States  has  been  calculated,  is  indicating  the  resources  allocated  to  the  third  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 7.3 will 
deal with these specific issues. 

7.2.2. 

Irregularities reported in 2009 

Chart SF 3 shows the distribution among the Funds of the irregularities reported in 
2009.  As  in  previous  years,  the  highest  number  of  irregularities  was  reported  in 
relation to ERDF. 

Chart SF 3: Distribution of irregularities by Fund - 2009 

580

58

109

1 621

2 563

CF

ERDF

ESF

EAGGF-G FIFG

The predominance of ERDF is even more evident in relation to the amounts affected 
by irregularities, of which about 78% are related to it, as showed in Chart SF 4. 

61 

In  reality  the  programming  periods  (and  the  related  irregularities)  are  four :  1989-1993 ;  1994-1999 ; 
2000-2006 and 2007-2013, but the overlaps involve a maximum of three periods. 

EN 

62 

   EN 

 
 
                                                 
Chart SF 4: Distribution of irregular amounts by Fund - 2009 

11%

4% 1%

5%

79%

CF

ERDF

ESF

EAGGF-G FIFG

The countries having reported the highest number of irregularities in 2009 were Italy, 
the  United  Kingdom,  Portugal  and  Germany.  Annexes  18.1,  18.2,  19  and  20  detail 
the number of irregularities and related amounts reported by Member State. 

7.2.3.  Detection methods 

Table  SF1  shows  the  most  frequent  detection  methods  (TOP  10)  and  the  related 
detected amounts. 

Table SF1: detection methods 

CODE

DESCRIPTION
National administrative or 
101
financial control
208 Documentary check
999 Other facts
230 On the spot checks
206 Control of documents
199 Other controls

Control on the premises 
of the company

209
307 Routine
320 Ex post control
302 Informant

Sub-Total TOP 10

TOTAL

FREQUENCY

N

SHARE OF 
TOTAL
%

INVOLVED 
AMOUNTS
EUR

SHARE OF 
TOTAL
%

AVERAGE 
AMOUNTS
EUR

1 031
602
563
463
363
230

137
129
123
96
3 737
4 931

20.9%
12.2%
11.4%
9.4%
7.4%
4.7%

240 359 499
36 657 940
85 272 768
80 196 910
63 662 639
222 730 486

2.8%
2.6%
2.5%
1.9%
75.8%

50 781 510
17 898 296
7 081 180
5 917 166
810 558 394
100.0% 1 224 427 269

19.6%
3.0%
7.0%
6.5%
5.2%
18.2%

4.1%
1.5%
0.6%
0.5%
66.2%
100.0%

233 132
60 894
151 461
173 211
175 379
968 393

370 668
138 746
57 571
61 637
216 901
248 312

The “TOP 10” detection methods relate to 76% of the total reported irregularities and 
66%  of  the  irregular  amounts.  The  main  two  types  of  controls  emerging  from  the 
table are documentary checks and on-the-spot controls. 

EN 

63 

   EN 

 
 
 
It should 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  they  concern  about  30%  of  detected  amounts.  In  comparison  with 
2008,  the  “National  administrative  or  financial  control  has  become  the  most 
frequently reported detection method. 

7.2.4.  Types of irregularity 

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. As a result, among the 
most  frequent  types  of  irregularity  reported  by  Member  States  are  the  “not  eligible 
expenditure” and “missing or incomplete supporting documents”.  

Table SF2 shows the most frequent types of irregularities together with the amounts 
involved and the indicative average amount:  

Table SF2: Most frequent types of irregularities reported by Member States 

CODE

DESCRIPTION

325 Not eligible expenditure
Missing or incomplete 
supporting documents

210

Infringement of rules concerned 
with public procurement

614
999 Other irregularities

741

201

612

812

Failure to fulfill commitments 
entered into
Missing or incomplete 
documents
Failure to respect other 
regulations / contracts 
provisions
Action not carried out in 
accordance with rules
False or falsified supporting 
documents

213
601 Failure to respect deadlines

Sub-Total TOP 10

TOTAL

FREQUENCY

N

SHARE OF 
TOTAL
%

INVOLVED 
AMOUNTS
EUR

SHARE OF 
TOTAL
%

AVERAGE 
AMOUNTS
EUR

1 114

22.6%

244 766 736

20.0%

219 719

530

10.7%

67 103 855

5.5%

126 611

485
416

332

268

188

151

112
111
3 707
4 931

9.8%
8.4%

262 973 678
266 573 504

6.7%

23 714 167

5.4%

23 963 212

3.8%

25 306 377

3.1%

20 205 732

2.3%
2.3%
75.2%

44 200 982
20 121 055
998 929 297
100.0% 1 224 427 269

21.5%
21.8%

1.9%

2.0%

2.1%

1.7%

3.6%
1.6%
81.6%
100.0%

542 214
640 802

71 428

89 415

134 608

133 813

394 652
181 271
269 471
248 312

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.  

Unfortunately,  the  generic  code  “other  irregularities”  is  still  the  second  most  used 
category and it is also the typology presenting the highest average amounts.  

The “nature” of the detected and reported irregularities points at the fact that detected 
irregularities  mainly  are  related  to  the  “Implementation  stage”  of  the  project  life 
cycle, while only a smaller part refers to the “Selection / Procurement Stage”. 

EN 

64 

   EN 

 
 
7.2.5. 

Suspected frauds 

First estimations of which proportion of the reported irregularities could be defined 
as  “suspected  fraud”  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  status  of  an  irregularity  and  the  additional  information  given  in  text 
fields. 

After the modifications introduced by Regulations Nos 2035/2005 and 2168/2005 to 
the  basic  Regulations  Nos  1681/94  and  1831/94,  as  of  January  1st  2006,  Member 
States  have  to  “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 court62.  

Thanks  to  the  introduction  of  the  new  reporting  system  IMS,  Member  States  have 
classified  (that  is  to  say  that  they  indicated  whether  the  reported  situation  was 
evaluated as an administrative irregularity or a suspected fraud) 85% of the reported 
irregularities.  It  is  a  further  encouraging  progress  in  relation  to  the  previous  year, 
when  78%  of  the  reported  cases  provided  for  this  indication.  France,  Spain  and 
partially  Ireland  are  the  only  Member  States  that  still  do  not  comply  with  this 
obligation. 

About  8.9%  of  the  4°128  irregularities  for  which  qualification  has  been  provided 
were  qualified  as  “suspected  fraud”  or  “established  fraud”.  This  result  is  one 
percentage point higher than last year.  

Furthermore,  by  applying  the  same  analytical  techniques  of  the  previous  years63  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. 
In fact, the results differ in only 2.3% 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. 

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 Commission64. 

Despite  this,  still  some  caution  is  recommended  in  assessing  the  meaning  of  these 
figures. A 100% qualification (towards which the system is approaching every year) 

62 
63 

64 

The definition of suspected fraud is explained in Paragraph 1.2.3. 
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 
2000-2009 in order to produce Chart SF5.  
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 

65 

   EN 

 
                                                 
from  the  Member  States  would  remove  this  caution,  but  these  results  are,  indeed, 
encouraging.  

Chart SF565 presents the trend of FFL66 and FAL67 in the last nine years calculated 
according to the Commission’s estimations. 

Chart SF 5: FFL and FAL from 2000 to 2009 

s
e
i
t
i
r
a
l

u
g
e
r
r
i

l
a
t
o
t

f
o
%

35,0%

30,0%

25,0%

20,0%

15,0%

10,0%

5,0%

0,0%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Year

FFL

FAL

Table SF3: FFL and FAL from 2000 to 2009 

FFL
FAL

2000
8.9%
20.1%

2001
7.5%
12.8%

2003
2002
3.2%
7.0%
4.1% 13.6%

2004

2006
2005
12.9% 14.3% 19.9%
20.5% 28.5% 32.2%

2007
14.5%
21.3% 15.3%

2008
2009
9.8% 10.4%
9.6%  

The  analysis  of  the  Commission  highlights  a  decreasing  tendency  of  the  reported 
suspicion  of  the  amounts  related  to  cases  of  suspicion  of  fraud  (expressed  as 
percentage of the total reported irregular amounts) from 2006 to 2009, while the FFL 
has been slightly increasing from 2008 to 2009, but its variation is not significant. 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. 

65 

66 
67 

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  footnotes  62  and  63  for  more  details  about  data 
showed on this chart. 
FFL is defined in paragraph 1.2.4. 
FAL is defined in paragraph 1.2.5. 

EN 

66 

   EN 

 
 
 
 
 
                                                 
On the basis of this estimation, the FrR68 for the annual budget 2009 of the Cohesion 
Policy is 0.23%. 

However, this does not necessarily 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.  The  amounts  still  to  be  recovered  linked  to  cases  of 
“suspected fraud” concern 0.11% of the EU budget. 

7.3. 

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 2009. 
In  order  to  improve  the  comparability  among  the  different  Member  States,  the 
irregularities  referred  to  the  Cohesion  Fund  are  not  included  and  a  specific  sub-
paragraph is dedicated to it at the end. 

Chart SF6 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  SF6:  2000-2009  trend  concerning  number  of  reported  irregularities  and  irregular 
amounts – Programming Period 2000-2006 

5 000

4 500

4 000

3 500

3 000

N

2 500

2 000

1 500

1 000

500

0

1 200 000 000

1 000 000 000

800 000 000

600 000 000

R
U
E

400 000 000

200 000 000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

YEAR

N° of irregularities

Irregular financial amounts

68 

The definition of FrR is in paragraph 1.2.4. 

EN 

67 

   EN 

 
 
                                                 
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. 2009 is 
the  year  approaching  the  final  closure  of  the  programmes  and  this  explains  the 
further increase in relation to the previous year in terms of reported irregularities. 

Table SF 4 shows the data displayed on Chart SF 6 and also includes the amounts of 
annual payments from the Commission to the Member States indicating the related 
Irregularity Rate (IrR)69. 

Table SF 4: number of reported irregularities, irregular amounts, payments and irregularity 
rate – Programming Period 2000-2006 

N° of 
irregularities

Irregular financial 
amounts

Payments

IrR

YEAR

N

EUR

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

TOTAL

0
30
223
923
1 847
2 737
2 546
3 560
3 857
4 632
20 355

0
2 448 674
17 452 085
86 944 516
265 271 318
346 524 005
374 195 974
639 022 056
496 002 260
1 111 971 171
3 339 832 060

EUR

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
6 184 649 596
209 719 266 874

%
0.00%
0.02%
0.09%
0.38%
0.95%
1.17%
1.29%
2.04%
2.09%
17.98%
1.59%  

The irregularity rate for the year  2009  should not  induce any alarm. It was already 
predicted in the Annual Report 2008 that it would be increasing due to the decrease 
in the payments and the incoming of more irregularities. The interesting information 
in  Table  SF  4  is  in  particular  the  overall  IrR  for  the  whole  programming  period  of 
1.6%. 

Chart  SF7  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 7: Comparison between Programming Periods 1994-1999 and 2000-2006 

69 

The definition and calculation method for IrR is in paragraph 1.2.4. 

EN 

68 

   EN 

 
                                                 
5 000

4 500

4 000

3 500

3 000

N

2 500

2 000

1 500

1 000

500

0

Y1

Y2

Y3

Y4

Y5

Y6

Y7

Y8

Y9

Y10 Y11 Y12 Y13 Y14 Y15 Y16

Year

PP 1994-1999

PP 2000-2006

The  chart  clearly  shows  that  the  number  of  irregularities  related  to  the  current 
programming period reported in the first 9 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, increased checks in quality and quantity which result in more detected and 
reported irregularities. 

7.3.1. 

Irregularities affecting the different funds 

Table  SF5  summarises,  in  relation  to  each  of  the  Structural  Funds,  the  number  of 
irregularities, the related irregular financial amounts, the payments and the IrR.  

Table SF5: Irregularities, payments and IrR by Fund  

FUND

ERDF
ESF
EAGGF-G
FIFG
TOTAL

N° of 
irregularities
N

Irregular financial 
amounts
EUR

10 370
7 365
2 326
294
20 355

2 528 809 574
596 105 817
179 076 144
35 840 524
3 339 832 060

Payments

IrR

EUR
121 443 076 413
63 795 358 611
21 180 473 978
3 629 416 390
210 048 325 392

%
2.1%
0.9%
0.8%
1.0%
1.6%  

Chart  SF  8  displays  the  distribution  of  the  21  028  irregularities  and  the  related 
irregular  financial  amounts  among  the  different  Funds.  The  inner  circle  represents 
the distribution of irregularities by number, the outer by irregular financial amounts. 

Chart SF8: Distribution of irregularities and related irregular financial amounts by Fund  

EN 

69 

   EN 

 
 
5% 1%

18%

294

2 326

N° of irreg.
10 370

7 365

Irreg. amounts
76%

ERDF

ESF

EAGGF-G FIFG

While in terms of number of reported irregularities the ERDF seems slightly under-
represented  in  comparison  with  its  share  of  the  payments  (52%),  the  irregularities 
financial amounts related to it have a higher relative weight that is greatly exceeding 
its share of the payments (76% 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 5, the other three funds have an IrR that is 
very similar, while that of the ERDF is more than their double. 

7.3.2. 

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 objective70.  

70 

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 

70 

   EN 

 
 
                                                 
Table  SF6  summarises,  in  relation  to  each  of  the  Objective,  the  number  of 
irregularities, the related irregular financial amounts, the payments and the IrR. 

Table SF6: Irregularities, payments and IrR by Objective 

OBJECTIVE

OBJECTIVE 1
OBJECTIVE 2
OBJECTIVE 3
INTERREG
EQUAL
LEADER
FISHERIES out Obj.1
URBAN
OTHER
TOTAL

N° of 
irregularities
N

Irregular financial 
amounts
EUR

12 603
3 260
3 093
694
256
206
99
121
23
20 355

2 439 915 382
511 104 018
255 743 487
93 782 299
20 555 050
6 013 478
3 997 393
8 064 160
656 793
3 339 832 060

Payments

IrR

EUR
151 369 020 388
22 743 788 486
24 247 005 059
5 208 992 564
2 910 119 486
1 948 917 861
934 706 075
685 775 471

N/A
210 048 325 390

%
1.6%
2.2%
1.1%
1.8%
0.7%
0.3%
0.4%
1.2%

N/A

1.6%  

Chart SF9 shows how the irregularities related to the programming period 2000-2006 
were distributed among the different objectives. 

Chart SF9: Distribution of irregularities and related irregular financial amounts by Objective 

3%

8%

694

15%

3 093

3 260

N° of irreg.
12 603

Irreg. amounts
73%

OBJECTIVE 1 OBJECTIVE 2 OBJECTIVE 3

INTERREG

EQUAL

LEADER

FISHERIES

URBAN

OTHER

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. 

EN 

71 

   EN 

 
 
Furthermore,  the  IrR  for  the  Objective  2  programmes  is  the  highest  (2.2%  of  the 
payments). The IrR for the Objective 1 equals the overall IrR (1.6%), while that for 
Objective 3 programmes, Fisheries out of Objective 1 regions, the Equal community 
initiative,  and  Leader+  are  lower  or  significantly  lower  (respectively  1.1%,  0.4%, 
0.7% and 0.3%). 

These  elements  may  imply  some  under-reporting  in  relation  to  programmes  / 
initiatives  presenting  a  very  low  IrR.  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. 

7.3.3. 

Irregularities by Member State 

Table  SF7  summarises,  in  relation  to  each  Member  State,  the  number  of 
irregularities, the related irregular financial amounts, the payments and the IrR. For 
convenience,  irregularities  related  to  INTERREG  programmes  have  been  grouped 
together and have not been related to a specific country. 

The  Initiative  “PEACE”  has  been  grouped 
programmes. 

together  with 

the  INTERREG 

EN 

72 

   EN 

 
Table SF7: Irregularities, payments and IrR by Member State 

N° of 
irregularities

Irregular financial 
amounts

Payments

IrR

MEMBER STATE

N

EUR

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
INTERREG
TOTAL

242
184
6
202
3 851
79
102
588
2 411
223
694
210
73
3 252
78
29
73
10
819
1 103
2 283
621
20
169
2 339
694
20 355

29 103 844
11 338 985
227 856
36 066 387
336 172 206
3 827 212
5 500 133
233 480 537
589 354 340
9 359 522
32 936 550
12 918 989
9 954 454
722 891 377
8 025 906
4 060 846
6 626 632
1 387 088
103 270 997
160 100 408
256 151 349
15 215 229
8 456 158
34 338 781
615 283 975
93 782 299
3 339 832 060

EUR

1 702 661 450
1 933 684 111
52 436 077
1 535 632 697
29 604 565 775
706 191 858
356 488 895
21 834 733 635
44 738 634 478
2 011 004 334
15 487 658 548
1 907 061 151
3 090 675 422
28 217 042 730
861 687 124
73 332 652
601 914 879
61 212 112
2 571 095 397
7 975 310 919
19 675 703 749
2 062 489 376
230 630 890
1 077 631 944
15 875 026 600
5 803 818 587
210 048 325 391

%
1.71%
0.59%
0.43%
2.35%
1.14%
0.54%
1.54%
1.07%
1.32%
0.47%
0.21%
0.68%
0.32%
2.56%
0.93%
5.54%
1.10%
2.27%
4.02%
2.01%
1.30%
0.74%
3.67%
3.19%
3.88%
1.62%
1.59%  

Map  2  displays  the  IrR  by  Member  State  highlighting  the  high  values  of 
Luxembourg, United Kingdom, the Netherlands and Slovenia and the low values of 
France  and  Ireland  in  particular.  Low  IrR  does  not  necessarily  imply  that  good 
management and control systems have been put in place. In general this is more the 
case for IrR around the average value of 1.6%. 

The  IrR  of  the  Netherlands  and  of  the  United  Kingdom  could  also  explain  the  fact 
that  Objective  2  programmes  have  the  highest  IR,  as  indicated  in  Table  SF  6  and 
could also have its explanation in a higher percentage of the expenditure audited in 
these  two  countries.  Unfortunately,  at  the  moment  of  closing  this  document,  data 
about audited expenditure were not available for all Member States and therefore did 
not allow for this type of analysis to be conducted. 

EN 

73 

   EN 

 
Map SF2: IR by Member State 

7.3.4. 

Suspected frauds 

On  the  basis  of  the  method  used  for  classifying  the  reported  irregularities  as 
illustrated  in  paragraph  7.2.6,  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 2009. 

Table  SF8  shows  an  overview  of  the  number  of  suspicions  of  fraud  detected  and 
reported and the related financial amounts, the payments and the FrR by Fund.  

EN 

74 

   EN 

 
 
Table SF8: Fraud rate by Fund 

FUND

ERDF
ESF
EAGGF-G
FIFG
TOTAL

N° of suspected 
fraud cases
N

Irregular financial 
amounts
EUR

938
814
429
53
2 234

354 656 944
123 428 181
42 123 776
9 402 900
529 611 801

Payments

FrR

EUR
121 443 076 413
63 795 358 611
21 180 473 978
3 629 416 390
210 048 325 392

%
0.29%
0.19%
0.20%
0.26%
0.25%  

ERDF  shows  the  highest  FrR,  followed  by  FIFG.  The  overall  FrR  is  0.25%.  This 
figure  is  exclusively  the  result  of  the  detected  and  reported  cases  of  suspected  and 
established fraud and therefore is still far from a real estimation of how much fraud 
affects the Cohesion Policy budget. 

In order to obtain a more accurate picture it would be necessary to establish the exact 
extension of audits or checks from which these results were obtained. 

Table SF9 shows the number of detected and reported suspicions of fraud, the related 
financial amounts, the payments and the FrR by Objective 

. Table SF9: Suspicions of fraud, payments and FrR by Objective 

FUND

OBJECTIVE 1
OBJECTIVE 2
OBJECTIVE 3
INTERREG
EQUAL
LEADER
FISHERIES out Obj. 1
URBAN
TOTAL

N° of suspected 
fraud cases
N

Irregular financial 
amounts
EUR

1 518
236
392
32
18
22
10
6
2 234

459 612 197
21 970 385
42 041 673
2 583 929
1 369 708
884 069
887 218
262 622
529 611 801

Payments

FrR

EUR
151 369 020 388
22 743 788 486
24 247 005 059
5 208 992 564
2 910 119 486
1 948 917 861
934 706 075
685 775 471
210 048 325 390

%
0.30%
0.10%
0.17%
0.05%
0.05%
0.05%
0.09%
0.04%
0.25%  

The  analysis  by  Objective  adds  some  further  elements  to  establish  the  impact  of 
suspicions of fraud on the budget. In particular, among the Objectives, programmes 
referred to the Objective 1 regions present the highest rate (0.30%), about the double 
than the second highest of the Objective 3 programmes (0.17%). The two Objectives 
represent,  somehow,  two  extremes,  as  regions  benefitting  from  Objective  1 
programmes  are  those  lagging  behind,  while  those  interested  by  the  Objective  3 
programmes  are  the  richest.  Objective  2 programmes  present  a  lower  rate  (0.10%), 
especially  in  consideration  of  the  fact  that  those  programme  presented  the  highest 
IrR. URBAN and EQUAL initiatives have the lowest FrR (0.04%). 

Table  SF  10  shows  the  number  of  detected  and  reported  suspicions  of  fraud,  the 
related  financial  amounts,  the  payments  and  the  FrR  by  Member  State.  Again, 
suspicions of fraud related to INTERREG programmes have been grouped together 
and have not been related to a specific country, and the Initiative “PEACE” has been 
grouped together with INTERREG programmes. 

EN 

75 

   EN 

 
. Table SF10: Suspicions of fraud, payments and FrR by Member State 

MEMBER STATE

N° of suspected 
fraud cases
N

Irregular financial 
amounts
EUR

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
INTERREG
TOTAL

4
5
2
10
361
2
24
25
116
12
12
18
2
1 131
10
8
4
0
9
243
57
23
4
10
110
32
2 234

103 586
186 187
3 601
3 273 452
34 265 736
62 205
1 685 721
28 263 767
25 301 380
163 087
267 401
1 442 504
0
320 120 863
1 052 574
292 071
740 948
0
453 415
65 148 082
8 915 536
540 171
50 801
5 016 438
29 678 346
2 583 929
529 611 801

Payments

FrR

EUR

1 702 661 450
1 933 684 111
52 436 077
1 535 632 697
29 604 565 775
706 191 858
356 488 895
21 834 733 635
44 738 634 478
2 011 004 334
15 487 658 548
1 907 061 151
3 090 675 422
28 217 042 730
861 687 124
73 332 652
601 914 879
61 212 112
2 571 095 397
7 975 310 919
19 675 703 749
2 062 489 376
230 630 890
1 077 631 944
15 875 026 600
5 803 818 587
210 048 325 391

%
0.01%
0.01%
0.01%
0.21%
0.12%
0.01%
0.47%
0.13%
0.06%
0.01%
0.00%
0.08%
0.00%
1.13%
0.12%
0.40%
0.12%
0.00%
0.02%
0.82%
0.05%
0.03%
0.02%
0.47%
0.19%
0.04%
0.25%  

Map 3 displays the FrR by Member State highlighting the high values, in particular, 
of Italy, Poland, Estonia and Slovakia. The high FrR of these two countries should be 
interpreted in a positive way, rather than negative. 

Looking  at  the  low  values,  among  these  are  Malta  (0%),  Ireland,  France,  Austria, 
Belgium, Cyprus, Denmark, Spain, Finland, the Netherlands, Portugal, Slovenia and 
Sweden.  If  very  low  values  are  explainable  especially  in  very  small  countries  like 
Malta and Cyprus, they seem less realistic in larger Member States like, in particular, 
France  and  Spain.  Their  result  could  indicate  either  a  lower  detection  capability  or 
the  non  reporting  of  a  part  of  eventually  detected  fraud.  In  the  case  of  these  two 
countries, it should also be emphasised that values displayed on the table are entirely 
the result of Commission estimation, as they failed to provide any qualification (see 
par. 7.2.5). 

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Map SF3: FrR by Member State 

Good anti-fraud systems show, inevitably, bad figures. By good anti-fraud system it 
is  meant  a  system  that  does  not  only  detect  fraud,  putting  in  place  adequate  means 
and resources; but also duly reports it according to the existing rules. 

7.3.5.  Preventive action and Recovery 

An  interesting  aspect  to  examine  in  the  framework  of  the  protection  of  the 
Communities’ financial interests is how effective is the preventive action of national 
authorities  and,  when  not  prevented,  what  proportion  of  the  detected  irregular 
amounts is effectively recovered from the beneficiaries. 

Table  SF11  shows  the  irregular  amounts  reported  by  each  Member  State  on  the 
whole  programming  period  2000-2006  (column  A);  the  part  of  these  irregular 
amounts for which payments were made to beneficiary (column B); the balance that 

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still  remain  to  be  recovered71  (column  C);  the  percentage  of  the  irregular  amounts 
which was not paid to beneficiary (column D – prevention rate); and the percentage 
of  the  paid  irregular  amounts  that  remains  to  has  been  recovered  (column  E  – 
recovery rate. 

Table  SF  11:  Irregular  amounts,  prevention  rate  and  recovery  rate  by  Member  State  – 
Programming Period 2000-2006 

IRREGULAR 
AMOUNTS

OF WHICH PAID

BALANCE TO BE 
RECOVERED

PREVENTION 
RATE

RECOVERY 
RATE

MEMBER STATE

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

EUR
A
34 668 931
11 751 758
227 856
36 066 387
350 311 937
4 626 849
5 574 521
266 714 577
600 410 423
9 697 293
33 449 900
13 438 751
10 036 556
725 318 966
8 037 982
4 060 846
6 646 330
1 387 088
104 112 995
161 134 607
256 579 932
16 457 713
8 998 462
34 831 951
635 289 449
3 339 832 060

EUR
B

EUR
C

%
D=(A-B)/A

%
E=(B-C)/B

31 002 709
9 176 294
227 583
19 319 515
283 013 793
3 932 383
3 947 496
236 057 572
597 116 386
7 022 120
30 040 281
5 410 849
4 628 898
425 143 012
4 728 794
4 060 846
6 493 041
1 303 882
16 870 300
87 512 996
221 072 513
5 874 927
8 896 355
32 308 844
581 103 646
2 626 265 035

13 414 180
1 825 351
63 767
17 815 088
212 738 939
2 170 202
2 531 665
56 077 203
130 610 359
1 383 428
13 231 190
4 547 018
195 943
222 092 743
4 502 613
0
3 771 447
1 000 677
9 010 760
19 551 988
79 727 139
2 707 564
7 292 480
29 708 486
403 043 175
1 239 013 404

10.6%
21.9%
0.1%
46.4%
19.2%
15.0%
29.2%
11.5%
0.5%
27.6%
10.2%
59.7%
53.9%
41.4%
41.2%
0.0%
2.3%
6.0%
83.8%
45.7%
13.8%
64.3%
1.1%
7.2%
8.5%
21.4%

56.7%
80.1%
72.0%
7.8%
24.8%
44.8%
35.9%
76.2%
78.1%
80.3%
56.0%
16.0%
95.8%
47.8%
4.8%
100.0%
41.9%
23.3%
46.6%
77.7%
63.9%
53.9%
18.0%
8.0%
30.6%
52.8%  

Looking  at  column  D,  very  high  prevention  rates  emerge  especially  in  the 
Netherlands, Sweden, Hungary, Poland, Italy, Czech Republic and Lithuania. Some 
caution is needed on these data, because some Member States may have not reported 
the irregularities they detected before payment. 

Looking  at  column  E,  very  high  recovery  rates  are  those  of  Luxembourg  (100%!), 
Ireland, Finland, Belgium, Spain, Poland and Greece. Also in this case some caution 
is  due.  In  many  Member  States  is  a  common  practise  to  exclude  projects  found  as 
irregular from the expenditure declaration to the Commission72. This implies that EU 

71 

72 

Member  States  continue  to  report  the  amounts  recovered  also  after  (partial)  programme  closure  and 
must return the recovered amounts to the Commission. The Commission monitors the correctness of the 
financial follow-up given by the Member States to pending recoveries. 
In fact, in order to correct detected irregularities, Member States have two choices: they can choose to 
either immediately withdraw irregular expenditure by deducting it from the next payment claim or they 
can  choose  to  deduct  the  irregular  expenditure  from  a  future  payment  claim  only  once  recovery  has 
been affected from the final beneficiary. This is a choice left to the Member States’ discretion. 

EN 

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resources are somehow protected and those resources can be re-used to finance other 
eligible projects, but the full burden of recovery is shifted on national budgets. When 
this decision is taken, the Commission does not receive anymore data about recovery 
of those sums and therefore the picture presented here is only partial. 

7.3.6.  Cohesion Fund 

A total of 499 cases were reported since 2003, concerning the Cohesion Fund for the 
programming period 2000-2006. A total amount of EUR 278 million was reported of 
which EUR 73 million remain to be recovered. 

Table SF 12 details the information by Member State benefitting from this Fund. 

Table  SF  12:  N°  of  irregularities,  related  irregular  amounts  and  amounts  to  be 
recovered – Cohesion Fund 2000-2006 

N° of 
irregularities

Irregular financial 
amounts

Balance to be 
recovered

N

EUR

EUR

MEMBER 
STATE

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

16
6
57
217
27
4
16
9
1
47
95
1
3
499

2.143.552
843.326
50.931.138
114.537.747
20.783.728
11.454.935
13.187.135
152.157
39.133
4.038.561
56.485.250
2.552.398
1.048.487
278.197.547

33.947
32.040
15.404.266
43.896.881
1.782.404
0
280.690
105.130
39.133
90.058
10.731.364
0
1.004.063
73.399.976  

There  table  presents  great  disparities  that  do  not  allow  comparing  the  different 
Member States. 

More interesting are the results of the analysis focusing on the typology of projects 
financed by the Cohesion Fund affected by irregularities. 

As  showed  in  Table  SF  13,  the  majority  of  irregularities  and  related  irregular 
amounts  affect  Environmental  projects.  However,  the  irregularities  affecting 
Transport  Projects  are  of  a  higher  average  value  (more  than  double  of  the 
Environmental Projects). 

Table  SF  13:  N°  of  irregularities,  related  irregular  amounts  and  amounts  to  be 
recovered by type of project – Cohesion Fund 2000-2006 

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N° of 
irregularities

Irregular financial 
amounts

Average irregular 
amount

TYPE OF PROJECT

N

Environment
Transport
Technical Assistance
Mixed
TOTAL

389
91
18
1
499

EUR
162.765.212
113.372.294
868.924
1.191.116
278.197.547

EUR

418.420
1.245.849
48.274
1.191.116
557.510  

Table  SF  14  shows  the  irregularity  by  category  of  project  and  highlights  that 
Environmental Projects present an irregularity rate that is higher than all others. 

Table SF 14: Irregularity Rate by type of Cohesion Fund Project 2000-2006 

N° of projects

Certified 
expenditure

Irregular financial 
amounts

IrR

TYPE OF PROJECT

N

Environment
Transport
Technical Assistance
Mixed
TOTAL

763
285
60
4
1.112

EUR

15.407.362.160
19.329.808.535
140.881.647
251.441.351
35.129.493.693

EUR
162.765.212
113.372.294
868.924
1.191.116
278.197.547

%
1,1%
0,6%
0,6%
0,5%
0,8%  

7.4. 

Conclusions 

(1) 

In  2009,  4  931  irregularities  were  reported,  involving  an  overall  amount  of 
EUR 1.22 billion. Reported irregularities and related financial amounts have 
been increasing in relation to 2008. The increase has been significant both in 
terms  of  number  of  reported  irregularities  (+23%)  and  irregular  amounts 
(+109%).  A  number  of  elements  could  explain  these  increases:  reported 
irregularities concern three different programming periods (1994-1999, 2000-
2006  and  2007-2013);  Romania  and  Bulgaria  have  both 
reported 
irregularities; the approaching closure of the programming period 2000-2006 
and an increase in checks and audits linked to this event. 

In  particular,  the  last  seems  the  most  relevant  explanation  also  considering  that  a 
similar situation has been encountered (and with even higher differentials in relation 
to the preceding year) for the closure of the programming period 1994-1999. 

(2) 

Given  the  multi-annual  nature  of  the  programmes  run  under  the  Cohesion 
Policy,  the  analysis  by  Programming  Period  provides  more  interesting 
elements than an analysis based on yearly budgets. 

Throughout  the  Programming  Period  2000-2006,  which  is  approaching  its  closure 
(2010),  the  overall  Irregularity  Rate  is  about  1.6%,  while  the  Fraud  Rate  is  about 
0.25%.  These  rates  exclusively  represent  the  impact  on  the  payments  from  the 
Commission  to  the  Member  States  of,  respectively,  irregularities  (including 
suspected and established fraud) and suspected and established fraud (alone). In both 
cases,  therefore,  these  rates  do  fail  to  indicate  what  the  real  dimension  of 
irregularities and fraud is. These rates represent the results of the checks and audits 

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80 

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of national competent authorities and no extrapolation is allowed unless the size of 
the audited and checked sample would be known. 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

The  highest  Irregularity  Rates  concern  the  ERDF  (2.1%)  and  Objective  2 
programmes (2.2%). For the ERDF the most plausible explanation is that this 
Fund finances projects of a higher value and therefore irregularities tend also 
to  have  a  greater  amount.  For  the  Objective  2  programmes,  the  very  high 
Irregularity Rates of the United Kingdom and the Netherlands which mainly 
benefit from this type of programmes may have influenced the overall rate. 

In terms of Fraud Rate, looking at the funds, ERDF shows the highest rate of 
suspected fraud (0.29%), followed by the FIFG (0.26%); from the objectives 
perspective,  Objective  1  programmes  present  the  highest  rate  (0.30%), 
followed  by  the  Objective  3  programmes  with  0.17%.  Given  the  fact  that 
regions benefitting from the Objective 1 programmes are the less prosperous 
regions  and  those  benefitting  from  Objective  3  programmes  are  the  richest, 
need and greed seem the principal drivers behind fraud.  

Italy,  Poland,  Estonia  and  Slovakia  present  the  highest  Fraud  Rates  among 
Member  States.  Higher  Fraud  Rates  do  not  indicate  countries  where  more 
fraud  is  committed,  but  are  more  likely  to  point  at  good  anti-fraud  systems 
(capable  of  detecting  fraud  and  willing  to  report  it),  which  always  produce 
higher results.  

Among  the  Member  States  with  very  low  fraud  rates  emerge  Spain  and 
France  (especially  in  relation  to  their  size  and  to  the  financial  support 
received)  in  particular,  whose  results  could  indicate  either  a  lower  fraud 
detection capability or the fact that a part of eventually detected fraud remains 
unreported. 

Recovery  rates  throughout  the  Programming  Period  2000-2006  are  good 
(exceeding 50%) but may be heavily influenced by the practise of excluding 
projects  found  to  be  irregular  from  the  expenditure  declaration  to  the 
Commission.  In  this  way  EU  resources  can  be  re-used  to  finance  other 
eligible projects and the burden of recovery is shifted on national budgets. 

Data  related  to  the  Cohesion  Fund  remain  too  fragmented  to  provide  a 
reliable  picture,  but  highlight  that  Environmental  projects  present  an 
irregularity  rate  higher  than  the  others.  The  Commission  is  working  on  the 
full  deployment  of  IMS  also  for  the  Cohesion  Fund  and  this  is  expected  to 
improve the quality ad reliability of available data in the coming years. 

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8. 

PRE-ACCESSION FUNDS (ANNEXES 21-23) 

Descriptive  statistical  analysis  presented  hereinafter  relates  to  the  developments  in 
the area of enlargement and assistance provided to enhance administrative capacities 
during the pre-accession period for candidate countries and to assist in the fulfilment 
of the Copenhagen criteria for EU membership. 

The  forthcoming  analysis  is  limited  to  the  programmes  implemented  under 
decentralised management subject to irregularity reporting obligation established by 
Financing  Agreements  and  other  relevant  Community  legislation.  It  covers 
programming period 2000-2006. 

Agenda  200073  set  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. 
ISPA74 and SAPARD75 complement the actions of the PHARE76 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  which  is 
regarded as post-accession assistance.  

Croatia  benefits  from  several  types  of  pre-accession  assistance  like  Community 
Assistance  for  Reconstruction,  Development  and  Stabilisation  (CARDS)  (2001-
2004),  PHARE  and  ISPA  (2005-2006)  as  well  as  SAPARD  (2006).  It  is  the  only 
country subject to reporting CARDS77 irregularities since 200678. 

Turkey  has  been  receiving  pre-accession  assistance  since  200279.  The  financial 
support  provided  falls  under  two  periods:  2002-2006  -  Turkish  Pre-accession 
assistance (TPA) with a total allocation of EUR 1°249 million and 164 projects and 
2007-2013 – Instrument for Pre-accession Assistance (five components) with a total 
allocation of EUR 4°873 million 

73 

74 

75 
76 

77 

78 

79 

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 
Community  financial  contribution  in  the  framework  of  pre-accession  strategy  was  first  granted  to 
Turkey under Council Regulation 2500/2001. 

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Since  1  January  2007  EU  pre-accession  assistance  has  been  channeled  through  a 
single  Instrument  for  Pre-accession  Assistance  (IPA)80  designed  to  deliver  support 
for  candidate  and  potential  candidate  countries.  The  preliminary  allocation  for  IPA 
country programmes in the period 2007-2013 is EUR 8.4 billion (in 2009 – EUR 1.3 
billion). 

8.1. 

General overview 

In  2009  European  Anti-Fraud  Office  (OLAF)  received  2°607  reports  on  pre-
accession  funds  (PHARE,  SAPARD,  ISPA,  Transition  Facility  (TF),  CARDS, 
Turkish  pre-accession  instrument  (TPA))  from  the  Member  states  and  Candidate 
countries.  The  received  information  consists  of  706  new  cases  detected  by  the 
national authorities in 2009 and 1°901 follow-up reports on the previously reported 
cases.  The  number  of  new  cases  received  on  pre-accession  assistance  has  reached 
another peak with an increase of 35% in the number of cases and 18% in the number 
of communications comparing to 2008 figures.  

The first IPA cases were received (1 for Turkey, 2 for Croatia). All of them concern 
Technical Assistance component and were detected at the initial stages of tendering. 

The total Community amount affected by irregularities in 2009 (programming period 
2000-2006)  was  EUR  116°660°911  where  PHARE  accounts  for  EUR  13°283°054 
(124 cases), SAPARD – EUR 88°015°555 (482 cases), ISPA – EUR 11°747°682 (55 
cases), TF – EUR 1°065°499 (5 cases), TPA – EUR 2°378°737 (26 cases), CARDS – 
EUR 170°384 (14 cases). 

8.2. 

IMS and reporting discipline 

In  line  with  the  developments  in  the  area  of  Structural  Funds  on  Irregularities 
Management  System  (IMS)  a  module  for  Pre-Accession  Assistance  (PAA  Module) 
irregularity reporting is being finalised. This module addresses the need to shift from 
paper  reporting  to  electronic  reporting  and  allows  OLAF  to  concentrate  on  quality 
checks and the analysis of the reported information. Reporting authorities get more 
responsibilities for correct filling of the reports as some of the fields are compulsory. 
Once the module becomes fully operational it will manifest a number of advantages 
like  improved  compliance,  less  technical  nature  mistakes,  possibility  for  reporting 
authorities  at  different  levels  to  access  information  on  all  the  (open)  irregularities 
already reported. 

At  the  end  of  2009  reporting  authorities  in  12  Member  States  and  2  Candidate 
countries  were  requested  to  send  a  reporting  structure  on  the  basis  of  which  user 
rights are granted. 

Bulgaria is the first reporting country that entered into a pilot phase for using PAA 
module. Fourth quarter irregularity notifications were received electronically. 

In response to the need created by the Instrument for Pre-Accession Assistance – IPA 
for 2007-2013 period, IPA electronic reporting module is being developed. Croatia, 

80 

Council Regulation (EC) No 1085/2006 

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Turkey  and  FYROM  are  the  target  users  for  IPA  components  under  DIS 
accreditation. 

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)  1681/199481  and  1828/200682. 
This  obligation  is  yet  enhanced  by  the  Commission  decision  granting  conferral  of 
management on extended decentralised basis (EDIS). 

issues.  Intensive  bilateral  cooperation  on 

In  contrast  to  the  report  from  the  previous  years  the  current  report  focuses  less  on 
the  spotted  mistakes, 
compliance 
controversies  and  drawbacks  is  maintained  throughout  the  year.  More  systematic 
administrative  inefficiency  on  the  recovery  and  follow-up  side  (failure  to  start 
administrative recovery procedures, report external audit findings on time) has lead 
to returning the reports back for amendments. In general, reporting countries are well 
aware of the shortcomings and are wiling to progress. The data quality is expected to 
considerably  improve  with  the  introduction  of  the  electronic  reporting  module  (see 
par 3.2.2). 

The  most  common  mistakes  are  incorrect  or  incomplete  financial  aspects  of  the 
reports,  missing  practices  employed  in  committing  irregularities,  missing  types  of 
irregularities. Insufficient or obscure reported information still hampers an in depth 
analysis.  Failure  to  comply  with  the  requirement  to  classify  reported  cases  as 
‘suspected fraud’ or 'irregularity' limits the analysis carried out by OLAF. 

Table  PA  1  provides  a  rate  of  compliance  with  respect  to  classification  of 
irregularity. 

Table PA 1: Compliance in 2009 - classification of irregularities  

Classification of cases by reporting countries - compliance

Blank

Suspected 
fraud

Irregularity

Total

Compliance %

216

1

1
18

3
7
246

160
2
2
24
10
1
2
42
165
1
4
19
433

376
2
2
25
11
3
2
53
196
1
9
26
706

100.00%
100.00%
100.00%
96.00%
100.00%
33.33%
100.00%
81.13%
93.37%
100.00%
77.78%
100.00%
96.03%

1

2

10
13

2

28

Country
BG
CZ
EE
HR
HU
LT
LV
PL
RO
SI
SK
TR
Total

81 
82 

As amended by Regulation (EC) No 2035/2005 
As amended by Regulation (EC) No 846/2009 

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Romania  and  Poland  should  pay  more  attention  to  providing  classification  in  the 
notifications. On average 96% of cases were classified. There is a visible increase in 
compliance if compared with 2008. Admittedly, reporting countries are putting more 
efforts in fulfilling the necessary obligations. 

As established by the regulatory requirements, within two months following the end 
of each quarter irregularities which have been the subject of initial administrative or 
judicial  investigations need to  be reported to the Commission. The date of  the first 
written  assessment  by  a  competent  authority83  serves  as  a  reference  date  to  assess 
whether  reporting  countries  fulfilled  their  obligations.  The  average  time  span 
between  detection  of  an  irregularity  and  reporting  it  to  the  Commission  is  5.8 
months.  However,  this  figure  needs  to  be  interpreted  with  caution.  Many  reporting 
countries do not indicate dates when filling in reports so the analysis is limited to the 
ones provided. Yet, it is apparent that Slovakia was very late (34 months), followed 
by Turkey (7.7), Bulgaria (6.5), Poland and Check Republic (6.2). 

The  estimation  of  a  time  span  to  detect  irregularities  takes  the  date  of  first 
information and date of administrative and judicial finding as reference points. The 
overall average result of 2.5 years manifests that some cases were only traced at the 
end of the project cycle. To illustrate it, Check Republic took 4.2 years, Poland – 3.8, 
Estonia 2.7, Romania and Slovakia (2.5).  

8.3. 

General Trends 

The  intention  of  this  descriptive  analysis  is  to  provide  an  overview  of  the  reported 
irregularities in 2009 and to compare the reporting trends observed during the period 
2002 -2008.  

8.3.1.  Overall trend 

The  number  of  cases  reported  (first  communications)  in  2009  increased  by  35%, 
while the number of follow-up reports increased by 18% in comparison to 2008.  

The  reporting  tendencies  for  2009  require  to  limit  generalized  analysis  on  all  14 
reporting  countries  as  it  does  not  reveal  the  precise  picture  in  terms  of  irregularity 
prevention, detection, and reporting. There are several reasons behind this tendency. 
Firstly,  a  wider  variety  of  pre-accession  instruments  is  covered  due  to  different 
programming  periods.  Secondly,  ongoing  enlargement  process  changes  beneficiary 
countries.  Thirdly,  Member  states  and  Candidate  countries  do  not  have  the  same 
approach towards reporting.  

Reporting countries happen to be at different stages of the project cycle. EU-10 have 
finalized the projects and report very few new cases, the focus, however, remains on 
administrative and judicial follow-up.  EU-2 report a considerable number of newly 
detected cases which certainly affect the overall tendency. Croatia and Turkey have 
become  more  active  in  reporting  and  increasing  tendencies  are  expected  in  the 
coming  years.  Therefore,  Chart  PA  1  only  presents  an  overview;  further  on  the 
analysis attempts to show the situation behind the rising trends. 

83 

Primary administrative or judicial finding as defined in the Commission Regulation 2035/2005. 

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Chart PA 1: Irregularities communicated by reporting countries (2002-2009) 

8.3.2.  Trend related to Member States and Candidate countries 2009 

Irregularities  are  not  distributed  equally  among  the  reporting  countries  due  to 
different  periods  of  eligibility  of  expenditure,  implementation  phases,  as  well  as 
varying types of support instruments. 

Three  groups  of  reporting  countries  can  be  distinguished,  namely  2004  accession 
Member  States,  2007  accession  Member  States,  and  Candidate  countries  –  Croatia 
and Turkey.  

In 2009 EU-10 account for 12%, Bulgaria and Romania – 81%, Croatia and Turkey – 
7%  of  the  total  number  of  cases.  Talking  about  the  total  EC  affected  amount  as 
reported, EU-10 make 5%, Bulgaria and Romania - 93%, Croatia and Turkey – 2%. 

Chart PA 2: Distribution of reported cases by groups of countries (2009) 

No of cases 2009

12%

7%

81%

EU-2 HR, TR EU-10

EC amounts affected

2% 5%

93%

EU-2 HR, TR EU-10

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The charts manifest that the greater part of the data set (irregularity reports received 
in  2009)  analysed  originates  from  Romania  and  Bulgaria.  Consequently,  the  trends 
are highly influenced by their reporting patterns.  

Comparing  2008  and  2009  figures  a  rising  tendency  in  cases  reported  and  EC 
affected amounts is observed for Bulgaria (134% for cases), Croatia (39%), Poland 
(15%), and Turkey (44%). The remaining countries disclose a falling tendency. 

8.3.3. 

Irregularities affecting different funds 

The total number of cases reported augmented in comparison to 2008 (by 30%). The 
biggest change observed in the reporting tendencies is the sharply rising number of 
SAPARD cases. 64% of those cases were detected in Bulgaria, 23% were discovered 
in Romania.  

As  demonstrated  by  Chart  PA  3  the  highest  number  of  cases  reported  in  2009 
concerned SAPARD and made more than half of the total cases reported in numbers 
(67%). The biggest share of irregular amount was also reported for SAPARD (77% 
of the total).  

Chart PA 3: Distribution of communications per fund in 2009 

No of cases by fund

1% 4%

2%

8%

18%

Affected EC amounts by fund

2%

0%

0%

10%

11%

67%

77%

CARDS

ISPA

PHARE SAPARD TF

TPA

CARDS ISPA

PHARE SAPARD TF

TPA

8.3.4.  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 by 71% and reached EUR 117 million, while the 
total eligible amount went down by 27% and stands at EUR 832 million. 

The  downfall  of  the  eligible  amount  is  explained  by  changes  in  ISPA  (-41%)  and 
PHARE (-45%) expenditure, whereas the rise of irregular amount is mainly affected 
by SAPARD (+109%) and by ISPA (+48%). 

The  overall  figures  have  to  be  interpreted  rather  carefully.  Pre-accession  assistance 
funded projects run over several years while the affected amounts are calculated with 

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reference to the reporting year. So the closing years are becoming peak years. With 
the appearance of new instruments and new programmes also new irregularities are 
spotted on the field. 

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 Table PA 4). 

A deeper analysis into the EC amount affected by irregularities for reporting period 
2002-2009  demonstrates  that  the  majority  of  cases  for  all  the  programmes 
accumulate  within  a  range  of  EUR  10°000  to  40°000.  There  are  some  deviations 
from the overall pattern for TF and TPA. ISPA, PHARE, and SAPARD are spread 
throughout. 

As for the total Community contribution in the cases that were found irregular, the 
range is around EUR 10°000 to 50°000. For SAPARD it is broader. 

In  general,  one  can  observe  that  controls  are  well  spread  but  mostly  low  value 
irregularities  are  found  in  high  value  projects  or  medium  value  projects  are  found 
almost fully ineligible (80-90% irregular). 

8.3.5. 

Impact on the budget and irregularity rate 

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 
cooperating 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. 

Chart PA 4: Share of irregular amount in eligible amount of reported cases 

100.00% 100.00%

100.00%

90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%

82.80%

78.00%77.75%

66.14%

56.78%

30.44%

16.32%

14.02%

5.29%

3.47% 0.88%

SI

LV

HU

LT

PL

BG

CZ

EE

TR

RO

SK

HR

Total

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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  14%  in 
2009  while  in  2008  it  was  5%.  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 little.  

In comparison to the overall tendency, the share for Croatia and Slovakia is very low. 
Slovenia,  Latvia,  Hungary,  Lithuania,  and  Poland  report  cases  with  rather  high 
irregular share, which sometimes equals the total value of the project. 

The impact of irregularities (irregularity rate) reported in 2009 on the payments made 
that year would be 14.49%. Nevertheless, irregularity rate on the budget for the same 
year becomes 9.75% if calculated on the payment appropriations (EUR 117 million 
irregular on EUR 1.2 billion of payment appropriations). However, this figure should 
be  taken  with  great  caution  as  irregularities  are  not  necessarily  from  that  payment 
year.  In  most  cases  irregularities  have  occurred  earlier,  but  were  only  traced  (or 
reported)  in  2009.  Moreover,  irregular  amounts  keep  rising,  but  the  amounts  for 
payments are declining each year; therefore, it is inevitable that irregularity rate has a 
rising tendency. 

It would be more precise to calculate the impact of irregularities (irregularity rate) on 
the  whole  programming  period  (2000-2006)  and  the  'actual'  beneficiary  countries. 
Thus the result is 1.4% (EUR 266 million total irregular amount reported so far on 
the overall budget of roughly EUR 19 billion). 

8.3.6.  Method of detection  

Most of the irregularities and the highest irregular amounts in 2009 were detected by 
means  of  ‘Control  of  documents’  (EUR  24  million).  The  second  most  frequent 
method is audit which detected almost the same affected amounts (EUR 23 million). 
Control of documents and audit make key responsibilities of the national authorities 
implementing  EU  funds  under  decentralised  and  shared  management  modes. 
According  to  the  dataset,  the  same  methods  seem  to  be  used  while  detecting 
suspected fraud cases. 

On  the  spot  controls  account  for  6%  of  the  detected  irregular  amount  and  were 
effectively used in Bulgaria, Croatia, Lithuania, Poland, Romania, and Turkey.  

5 % of irregular amount were discovered by means of EC interventions and their role 
remains to be significant in Bulgaria, Croatia, and Romania.  

Interestingly, the majority of Bulgarian suspected fraud cases were detected by audit 
(EC audit, external audit companies, and national internal audit). Fraud detection is 
not the main task of audit but rather part of due professional care.  

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. 

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8.3.7.  Types of irregularities 

The most common type of irregularity by the number of received cases and amounts 
affected in 2009 was 'Falsified supporting documents' (33% of amounts) followed by 
‘Failure to respect other regulations/contract conditions' (13%) and 'Infringement of 
rules concerned with public procurement' (11%).  

Although cases involving falsified supporting documents were detected in Romania, 
Poland,  Slovakia,  cases  from  Bulgaria  are  the  most  abundant  (16%  of  the  total 
number reported in 2009). Most of them affect SAPARD programme. 

8.4. 

Specific analysis 

8.4.1. 

Suspected fraud 

In 2009 cases classified as suspected fraud (fraud frequency level) made 37% (262) 
of irregularities and 50% of the EC affected amount (fraud amount level) (EUR 117 
million). For the sake of transparency it is worth mentioning that OLAF reclassified 
3% of cases into 'suspected frauds'.  

In general, reporting countries do not classify only some 4% of the reported cases so 
there  is  a  visible  improvement  in  compliance  which  positively  affects  the  analysis. 
However, some cases need to be reclassified before their closure. Countries reporting 
high numbers of cases (e.g. Bulgaria) so far have not done it. Once this exercise is 
accomplished the drastically rising share of suspected fraud is expected to stabilize. 

Meanwhile, it is important to note that the analysed cases are just 'suspected frauds' 
and  are  undergoing  investigation  by  the  relevant  national  authorities.  The  final 
precise  figures  can only be  presented on 'established frauds' when the court rulings 
are made. At the moment there are only two cases of established fraud reported by 
Romania on PHARE. 

18.7%  of  cases  reported  in  2009  had  an  element  of  fraud  i.e.  falsified  supporting 
documents, certificates, requests. In PHARE they make 2% while in SAPARD 27% 
of the reported cases. This has to be interpreted with caution as reporting countries 
sometimes  classify  the  case  as  suspected  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. 

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Chart PA 5: Share of suspected fraud in reported cases 

60,00%

50,00%

40,00%

30,00%

20,00%

10,00%

0,00%

49,56%

33,58%

37,16%

16,90%

12,84%

16,28%

9,50%

9,14%

9,73%

16,10%

11,56%

21,20%

11,82%

14,77%

2003

2004

2005

2006

2007

2008

2009

% of cases (FFL)

% of amounts (FAL)

To illustrate the situation better and to show what looms behind the reporting trend 
lines  a  breakdown  by  county  is  presented.  It  appears  that  6  out  of  14  reporting 
countries  reported  suspected  fraud  cases  in  2009.  The  highest  number  of  suspected 
fraud  cases  was  reported  by  Bulgaria.  Suspected  fraud  cases  detected  in  Bulgarian 
SAPARD  clearly  dominate  the  picture.  They  make  67%  of  all  the  cases  from  this 
country.  Another  observation  is  that  Bulgarian  SAPARD  cases  make  92%  of  all 
SAPARD suspected fraud in 2009 reported to OLAF. Nonetheless, this should not be 
surprising taking into account the number of ex-post and external audits and checks 
carried  out  by  the  Commission  on  SAPARD  programme,  audit  findings  and 
operational work undertaken by OLAF. The rising figures of SAPARD cases in the 
last  years  reveal  a  reactive  approach  by  Bulgarian  authorities.  The  greater  part  of 
suspected  fraud  cases  were  initiated  by  external  controls/interventions  rather  than 
internal/national  ones.  However,  in  general,  it  needs  to  be  mentioned  that  high 
pressure put on Bulgarian authorities by the Commission to enhance control systems, 
to  carry  out  additional  checks  is  reflected  in  the  rising  figures  of  detected  and 
reported suspected fraud cases. 

Romanian SAPARD suspected fraud cases account for 14% of the total reported. A 
new  element  in  the  picture  is  added  by  the  Turkish  instrument  for  pre-accession 
where suspected fraud makes 31%. 

Looking  at  both  amounts  at  stake  and  number  of  cases  from  various  programmes, 
SAPARD appears to be mostly affected.  

Chart PA 6: Suspected fraud cases by country and fund in 2009 

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Distribution  of  fraud  cases  across  the  funds  is  not  adequate.  The  numbers  of  cases 
received since 2002 manifest predominance of SAPARD (348 out of which 224 for 
2009). PHARE counts 151 for all years and 29 in 2009, while ISPA only 2 (1 in 2008 
and 1 in 2009).  

Due  to  a  particular  situation  with  SAPARD,  OLAF  carried  out  a  pilot  exercise  to 
measure  the  fraud  rate  (FR)  against  payments  made  for  this  programme  under  the 
budget lines 05.050101 and 05.050102. 

The total fraud rate for the whole programming period of SAPARD is at the level of 
2.8%.  However,  looking  at  the  individual  reporting  countries  in  Table  PA  2,  it 
becomes obvious that the rate is highly affected by a particular situation in Bulgaria. 
Bulgarian fraud rate for SAPARD is 20%, which is the highest rate seen by OLAF in 
all  the  funds  analyzed  (see  chapters  6  and  7).  Meanwhile,  the  Czech  Republic, 
Estonia,  Latvia,  and  Slovakia  have  zero  fraud  rate.  Even  though  a  few  cases  were 
reported by Estonia and Latvia their financial impact is rather small to be reflected in 
the  fraud  rate  or  no  impact  indicated  at  all.  Taking  into  account  the  fact  that 
SAPARD  programme  was  prone  to  particular  irregularities,  and  the  same  modus 
operandi  for  suspected  fraud  were  identified  in  several  countries,  there  are  some 
doubts whether all the detected cases of suspected fraud were reported to OLAF. 

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Map PA 1. Fraud rate for SAPARD by reporting country 

Table PA 2: SAPARD fraud rates by reporting country 

Country
Bulgaria
Rom ania
Croatia
Czech Rep.
Estonia
Hungary
Lithuania
Latvia
Poland
Slovenia
Slovakia
T otal

EN 

Com mitm ents by 
AFAs

Paym ents m ade until 
31.12.2009 since start

371.409.686
1.159.785.692
25.000.000
92.787.704
51.043.119
160.039.127
125.448.234
91.883.502
709.409.786
26.650.758
76.915.845
2.890.373.453

327.613.779
1.030.733.816
13.960.233
92.778.479
50.647.873
159.962.208
125.338.243
87.289.326
708.655.558
26.648.593
76.904.471
2.700.532.579

93 

No of 
reported 
suspected 
fraud cases
265
30
2
0
1
3
9
6
28
5
0
349

EC am ount 
affected by 
suspected fraud 
since start of 
reporting

FR%

66.589.377
5.901.649
659.549
0
193
641.259
247.671
0
403.953
241.621
0
74.685.079

20,33%
0,57%
4,72%
0,00%
0,00%
0,40%
0,20%
0,00%
0,06%
0,91%
0,00%
2,77%  

   EN 

 
 
SAPARD projects present a very broad range of EC contribution from EUR 10°000 
to EUR 7 million, yet the higher the project value the lower the number of detections. 
It implies that big scale frauds are single instances, however medium scale frauds are 
spread  around.  Mostly  that  observation  refers  to  Bulgaria  being  the  country  mostly 
affected by suspected fraud in SAPARD programme. 

The  majority  of  the  projects  affected  by  suspected  fraud  fall  in  a  range  of  EUR 
10°000  -70°000  while  there  appear  single  cases  of  high  impact  in  all  programmes 
except CARDS and TF. 

In 2009 suspected fraud value in relation to the eligible value of the reported projects 
made a share of 6.89% (in 2008 it was 1.17%). The total irregular amount of all the 
reported projects in relation to the total eligible amount is 14%.  

In 2009 fraud rate which stands for suspected fraud value divided by actual payments 
of 2009 accounts for 7.12%. If the rate is calculated on the payment appropriations 
for 2009 it becomes 4.70%. It needs to be emphasized here that this is a pilot attempt 
to  estimate  suspected  fraud  rate  on  payments.  One  needs  to  be  very  cautions  to 
prevent far-fetched conclusions on this figure. Most suspected fraud cases appeared 
earlier but were only traced (or reported) in 2009. As already mentioned, the greater 
part  of  them  is  Bulgarian  cases.  The  payments  in  2009  were  made  to  Bulgaria, 
Romania,  Croatia  and  some  remaining  parts  to  EU-10.  Part  of  these  projects  with 
allegations of suspected fraud has not been paid for or deductions were made before 
submitting payments requests to the Commission. 

The percentage of the sum of suspected fraud in the total allocated amount for period 
2002-2009 is respectively even lower – 0.48%. The figure, however, is much higher 
in comparison to 2008 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 2009. 

In general, amounts involved in suspected fraud cases keep rising, but the amounts 
for payments are declining each year; therefore, it is inevitable that fraud rate has a 
rising tendency. 

It needs to be taken into account, that the cases classified as suspected fraud do not 
imply  actual  losses  for  the  EU  budget.  The  real  pre-accession  assistance  related 
losses for EU budget could only be estimated when the programmes and the reported 
cases are closed (when deductions are made, recoveries are finalized, or final court 
rulings are published). 

The summary table provides an overview of the rates which result at different stages 
of the analysis on pre-accession assistance for period 2000-2006. 

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Table PA 3: Summary table  

Rates % 

2009 

Explanation 

2000-2006  Explanation 

Irregularity rate - IR 

9.75% 

(14.49%) 

Fraud 
level - FFL 

frequency 

37.16% 

Fraud  amount  level 
- FAL 

49.56% 

total 

value 

of 
The 
irregularities  reported  for 
2009  divided  by  payment 
appropriations 2009 (or by 
actual payments for 2009)  

Total  number  of  2009 
suspected  fraud  cases  by 
of 
the 
reported cases 

number 

total 

Total  amount  involved  in 
2009 suspected fraud cases 
total 
divided 
amount 
as 
irregular 

the 
reported 

by 

Fraud rate - FR 

4.70% 

(7.12%) 

The  total  value  of  2009 
suspected  fraud  cases  by 
appropriations 
payment 
2009 
actual 
(or 
payments for 2009) 

by 

Fraud 
SAPARD 

rate 

8.4.2.  Recovery 

1.4% 

20.08% 

34.74% 

0.48% 

2.77% 

The value of irregularities 
the  whole 
reported  for 
period 
indicative 
by 
allocation  for  the  whole 
period 

Total 
suspected 
divided  by 
number of reported cases 

number 
fraud 
the 

of 
cases 
total 

Total  amount  involved  in 
cases 
suspected 
total 
divided  by 
amount 
as 
irregular 

fraud 
the 
reported 

Total amount of suspected 
fraud  cases  divided  by 
indicative  allocation  for 
the whole period 

Total  amount  involved  in 
suspected fraud SAPARD 
cases  divided  by  actual 
payments  for  the  whole 
period for SAPARD 

Recovery  becomes  a  topical  issue  when  the  project  cycle  is  about  to  close. 
Administrative  procedures  (recoveries  and  sanctions)  together  with  effective 
prosecution are the cornerstones of fraud prevention.  

In  2009  the  amounts  reported  to  be  recovered  increased  by  135%.  Table  PA  4 
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.  Malta  has  the 
highest recovery rate, followed by Estonia.  

The  highest  amount  to  be  recovered  in  2009  comes  from  SAPARD  (EUR  61.6 
million while EUR 41 million are due for Bulgaria). The amount to be recovered for 
PHARE is second highest – EUR 6.9 million. Romania and Bulgaria need to recover 
around EUR 3 million each for PHARE projects. ISPA amount to be recovered is yet 
lower - EUR 4 million.  

In general, the recovery rate got worse in comparison to 2008 (36.16%) and reached 
only 27.22% in 2009.  

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Analysis  on  recovery  rate  for  suspected  fraud  reveals  a  rate  of  only  4.6%  for  the 
whole  programming  period.  It  seemingly  suggests  that  recovery  process  in  cases 
undergoing  prosecution  is  even  more  difficult.  Frequently  recoveries  are  not  even 
initiated when the case is under pre-trial investigation or they are stopped waiting for 
the  court  ruling.  Administrative  procedures  and  criminal  investigation  in  most 
countries do not go hand in hand, therefore recovery rates are influenced. 

Table PA 4: Recovery by reporting country 

Reporting 
country

EU amount 
irregular

EU amount to be 
recovered

EU amount 
recovered

BG
CY
CZ
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
TR
TOTAL

122 301 077
23 807
2 868 759
6 649 147
5 049 419
7 960 936
4 893 815
1 101 128
112 620
7 708 168
93 734 219
1 586 859
8 592 891
3 059 637
265 642 481

60 438 727
0
1 334 968
857 717
716 719
2 959 658
4 269 347
900 700
0
2 846 716
41 936 064
53 374
3 410 914
2 121 944
121 846 848

2 902 974
0
756 843
2 868 086
101 664
1 412 873
475 568
173 825
112 620
2 099 176
32 784 980
13 473
1 764 201
116 110
45 582 392

Recovery 
rate %

4.58%

36.18%
76.98%
12.42%
32.31%
10.02%
16.18%
100.00%
42.44%
43.88%
20.15%
34.09%
5.19%
27.22%  

The  overview  in  Table  PA  4  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  slightly.  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 2005 and 2006 shows that only half of the amounts due 
were  recovered  and  more  efforts  need  to  be  taken  to  speed  up  the  process.  2007 
reveals a substantial rate; however, the amounts might be written off or covered by 
the  national  funds.  Reporting  countries  should  undertake  recovery  measures  soon 
after the detection of irregularities and inform the Commission about the deductions 
made. The figure for 2009 is very low. 

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Table PA 5: Recovery rate by reporting year 

Year

EC amount 
irregular

EC amount to be 
recovered

EC amount 
recovered

Recovery 
rate %

2002
2003
2004
2005
2006
2007
2008
2009

TOTAL

6 122
5 360 614
10 686 900
17 381 582
18 068 632
29 401 690
68 076 029
116 660 911
265 642 481

0
304 198
909 146
3 727 481
5 117 405
4 634 686
31 967 699
75 186 233
121 846 848

6 122
621 874
3 825 276
4 733 146
6 141 949
13 626 233
8 647 854
7 979 938
45 582 392

100.00%
67.15%
80.80%
55.94%
54.55%
74.62%
21.29%
9.60%
27.22%  

However, this figure reflect only the information provided in the irregularity reports, 
but does not take into account the recoveries and financial corrections made by the 
Commission. 

8.5. 

Conclusions 

(1) 

(2) 

(3) 

(4) 

(5) 

In 2009 706 newly detected irregular cases with an affected amount of EUR 
117  million  were  received  from  the  national  authorities  in  14  reporting 
countries  (EU-10,  EU-2,  Croatia  and  Turkey).  An  increase  of  35%  in  the 
number of cases is recorded. It demonstrates that detections in the area of pre-
accession assistance are not phasing out but rather shifting towards a smaller 
group of countries, i.e. EU – 2 and Candidate countries (Croatia and Turkey). 
Bulgarian and Romanian irregularities together make 81% of cases and 93% 
of  irregular  amounts  reported  in  2009.  Yet,  the  rising  tendency  is  only 
applicable to Bulgaria with an increase of 134% in cases. Consequently, the 
trends are highly influenced by their reporting patterns and thus the focus of 
analysis is narrowed down. 

Controls seems to be well spread but mostly low value irregularities are found 
in  high  value  projects  as  a  result  of  desk  controls  or  medium  value  projects 
are found almost fully ineligible after on-spot checks. 

Control  of  documents  and  audit  are  the  most  frequently  applied  methods  of 
detecting  irregularities  in  2009.  The  majority  of  suspected  fraud  cases  in 
Bulgaria  were  detected  by  audit.  The  primary  goal  of  audit  is  not  related  to 
fraud  detection  but  assurance  of  the  reliability  and  regularity  of  financial 
transactions.  The  exceptional  situation  in  Bulgaria  seemingly  implies  some 
weaknesses in the national anti-fraud system. 

The affected EU amounts keep rising and thus accumulate with reference to 
the whole programming period, while allocations remain fixed and payments 
are  gradually  declining.  As  a  consequence  irregularity  and  suspected  fraud 
rates (see Table PA 3 for rates) manifest a rising tendency. 

6  (Bulgaria,  Hungary,  Poland,  Romania,  Slovakia,  and  Turkey)  out  of  14 
countries  reported  suspected  fraud  cases  in  2009.  The  highest  number  of 
suspected  fraud  cases  was  reported  by  Bulgaria.  Suspected  fraud  cases 

EN 

97 

   EN 

 
detected in Bulgarian SAPARD clearly dominate the picture. They make 67% 
of  all  the  cases  from  this  country.  In  fact,  Bulgarian  SAPARD  cases  make 
92%  of  all  SAPARD  suspected  fraud  in  2009  reported  to  OLAF.  High 
pressure put on Bulgarian authorities by the Commission to enhance control 
systems,  to  carry  out  additional  checks  is  reflected  in  the  rising  figures  of 
detected  and  reported  suspected  fraud  cases.  The  drastically  rising  share  of 
suspected  fraud  is  expected  to  decline  following  the  finalisation  of  judicial 
procedures and communication of updated reports in the coming years. 

The total fraud rate for the whole programming period of SAPARD is at the 
level of 2.8%. Bulgarian fraud rate for SAPARD is 20%, which is the highest 
rate seen in all analysed funds (Cohesion Policy and Agriculture). Meanwhile 
the Czech Republic, Estonia, Latvia, and Slovakia have zero fraud rate which 
puts  in  question  the  reliability  of  the  reported  information  or  the  fraud 
detection capability in this specific sector 

Analysis on recovery rate for suspected fraud reveals a rate of only 4.6% for 
the  whole  programming  period.  The  recovery  process  in  cases  undergoing 
prosecution is complex and lengthy. Administrative procedures and criminal 
investigation  in  most  countries  do  not  go  hand  in  hand,  therefore  recovery 
rates  are  influenced.  Safeguarding/conservation  measures  should  be  put  in 
place  for  suspected  fraud  cases  to  make  sure  that  after  final  court  ruling 
recovery can  still take place (in the  form of seizure of assets,  suspension of 
payments, bank guarantees, et cetera). 

(6) 

(7) 

EN 

98 

   EN 

 
9. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT  

9.1.  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’84, 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 
conducted  in  2008  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.  The  Commission  has  tried  to  diminish  the 
impact of these shortcomings to provide more accurate analysis of the irregularities 
in  expenditures  managed  directly  by  the  Commission.  Nevertheless,  the  limitations 
of  the  data  have  not  been  removed  completely  and  they  might  still  influence  the 
analysis which therefore should be treated extremely cautiously. 

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; 

84 

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’). 

EN 

99 

   EN 

 
                                                 
•  The amount of a commitment to which a recovery order is linked and for which a 

payment has been made to a beneficiary. 

•  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. 

9.2. 

General analysis 

In 2009, the Commission services registered 705 recovery orders in ABAC that were 
qualified  as  irregularities  or  suspected  fraud.  The  committed  budget  for  these  705 
recoveries  was  EUR  2.5  billion,  of  which  EUR  27.5  million  was  identified  as 
irregular85. 

9.2.1.  Financial amounts involved 

The financial impact of the 705 recoveries registered in 2009 was EUR 27.5 million, 
which  includes  an  amount  of  EUR  1.5  million  for  the  15  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. The classification into policy domain is provided for 
‘internal  policies’  and  ‘external  actions’.  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 the table 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. In both tables the 
column ‘commitments’ contains the aggregate of all the commitments made during 
previous budget exercises for which recovery orders were issued in 2009. In the table 
DE1  the  last  column  indicates  the  amount  to  be  recovered  (including  suspected 
fraud) as percentage of the aggregated commitments. 

Table DE 1:  Commitments and Recoveries (number and amounts) by policy domain, 2009. 

Commitments 

Recoveries 

€ 1,000 

% 

Average 
€ 1 000 

N 

% 

€ 1,000 

% 

Average 
€ 1 000 

Recoveries 
as % of 
commitments

Area 

Internal 
policies 

External 
actions 

2°041°939 

81.6 

3°398

601

85.2

23°093

83.9 

38.4 

460°667 

18.4 

Total 

2°502°606 

100.0 

4°429

3°550

104

705

14.8

100.0

4°436

16.1 

27°529

100.0 

42.7 

39.0 

1.1

1.0

1.1

The table shows  that the irregular amounts only represent 1.1% of  the value of  the 
commitments  for  which  recovery  orders  were  issued.  More  recovery  orders  were 

85 

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. 

EN 

100 

   EN 

 
                                                 
issued  for  commitments  made  under  the  internal  policies  domain  than  the  external 
assistance  actions,  but  the  relative  share  of  recoveries  in  commitments  for  both 
policy domains remains at the same level. 

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  does  not  refer  to  the 
number  of  irregularities  or  suspected  fraud  per  Directorate  General.  In  seven  cases 
recovery  orders  were  linked  to  commitments  from  more  than  one  budget  line;  in 
order  to  calculate  the  number  of  recoveries  per  budget  title,  a  recovery  order  was 
assigned  to  the  budget  title  to  which  the  highest  irregular  amount  was  linked. 
Therefore some budget titles make reference to an irregular amount for which there 
is no link to a specific recovery order. 

Table DE 2:  Recoveries (number and amounts) by qualification and budget title, 2009 

Budget Title 

Economic and financial affairs 
Enterprise 
Competition 
Employment and social affairs 
Agriculture and rural development 
Energy and transport 
Environment 
Research 
Information society and media 
Fisheries and maritime affairs 
Regional policy 
Education and culture 
Communication 
Health and consumer protection 
Area of freedom, security and justice 
External relations 
Trade 
Development and relations with African, 
Caribbean and Pacific (ACP) States 
Enlargement 
Humanitarian aid 
Commission's administration 
Statistics 

Commitme
nts € 1 
000 

1°841
117°419
141
9°546
1°288
142°434
38°291
903°686
716°102
15°031
367
35°811
849
5°979
22°461
407°947
451

40°037
7°925
4°306
29°621
1°071

N 

1
13
1
12
2
27
31
109
115
5
1
192
6
1
68
61
2

7
24
3
8
1

Total 

2°502°606

690

Recoveries 

Irregularity 
% 

€1 000  % 

Suspected 
Fraud 

N 

€1 000

0.1
1.9
0.1
1.7
0.3
3.9
4.5
15.8
16.7
0.7
0.1
27.8
0.9
0.1
9.9
8.8
0.3

1.0
3.5
0.4
1.2
0.1

0.4 
1.9 
0.1 
0.5 
0.0 
7.8 
12.1 
17.6 
19.9 
1.8 
0.0 
11.7 
0.4 
0.5 
9.1 
6.1 
0.0 

6.5 
2.7 
0.3 
0.4 
0.0 

97 
483 
24 
138 
8 
2°037 
3°163 
4°589 
5°181 
468 
8 
3°053 
112 
143 
2°374 
1°593 
1 

1°683 
700 
83 
95 
10 
26°04
3 

4
63
13
369
463

68
25

237

94
23
22
8
98

1

1
3

1

3

1
1
2
1
1

15

1°485

EN 

101 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
9.2.2.  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, 2009 

Contractor 
place of 
residence 

Commit-
ments € 1 
000 

ACP 
Africa 
Asia & Pacific 
EFTA 
EU 
NEP & PA 

N 

58°237 
7°429 
135°328 
164°385 

% 
1.2
0.1
0.6
2.5
2°274°563  608  88.1
7.5

8 
1 
4 
17 

157°297 

52 

Recoveries 

Irregularity 
€1 000  % 
0.3
74
3.9
1°013
0.3
69
1.7
434
90.9
23°663
3.0
790

Average 
9.2
1°013.1
17.2
25.6
38.9
15.2

Suspected Fraud 
€1 000  % 

Average 

N 

1 

8 

0.5

8

14 

1°477  99.5

106

Most  of  the  entities  concerned  have  their  residence  in  the  European  Union:  622 
recovery  orders  (88.2%  of  705)  were  issued  for  an  amount  of  EUR  25.1  million 
(91.3%  of  EUR  27.5  million).  83  recovery  orders  (11.8%)  were  issued  to  entities 
residing outside the EU, for a total amount of EUR 2.4 million (8.7%). In the latter 
category, more than 40% of the amount of recoveries relates to an entity residing in 
South Africa (EUR 1 million), followed by countries eligible for assistance under the 
neighbourhood policies and pre-accession assistance (EUR 0.8 million). 

There was only one case qualified as suspected fraud involving beneficiaries residing 
outside  the  EU.  The  case  concerned  a  beneficiary  registered  in  South  Africa  and 
amounted to EUR 8°116. 

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 

102 

   EN 

 
  
  
 
 
  
  
 
 
  
  
 
 
  
  
 
 
Table DE 4:  Recoveries (number and amounts) by Member State and qualification, 2009 

Contractor 
place of 
origin 

Commit-
ments 
€ 1 000 

Recoveries 

Irregularity 

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  

69°448
169°857
947
1°281
856
493°946
29°449
332
60°083
96°551
50°198
521°771
5°991
21°636
130°915
280
3°857
1°460
541
156°487
14°854
71°074
8°624
5°570
650
33°307
324°598

N 
23 
83 
6 
8 
7 
70 
6 
7 
28 
24 
10 
85 
9 
11 
46 
1 
5 
6 
4 
39 
15 
14 
2 
3 
3 
18 
75 

% 

3.8
13.7
1.0
1.3
1.2
11.5
1.0
1.2
4.6
3.9
1.6
14.0
1.5
1.8
7.6
0.2
0.8
1.0
0.7
6.4
2.5
2.3
0.3
0.5
0.5
3.0
12.3

€ 1 000 
645
3°055
189
101
118
2°201
64
99
916
908
257
3°555
173
190
1°453
12
89
62
316
2°272
128
517
21
179
45
1°146
4°953

% 

2.7
12.9
0.8
0.4
0.5
9.3
0.3
0.4
3.9
3.8
1.1
15.0
0.7
0.8
6.1
0.1
0.4
0.3
1.3
9.6
0.5
2.2
0.1
0.8
0.2
4.8
20.9

Average 
28.1 
36.8 
31.6 
12.6 
16.9 
31.4 
10.6 
14.2 
32.7 
37.8 
25.7 
41.8 
19.2 
17.3 
31.6 
12.1 
17.9 
10.3 
79.0 
58.2 
8.5 
36.9 
10.6 
59.5 
14.9 
63.7 
66.0 

Suspected 
Fraud 

N 

€ 1 000

1 

1 
3 

2 

2 

25

81
373

130

29

1 

235

1 
3 

369
237

Total EU 

2°274°563

608 

100.0

23°663

100.0

38.9 

14 

1°477

Most  of  the  recoveries  were  made  from  beneficiaries  residing  in  5  Member  States: 
France (14.0%), Belgium (13.7%), the United Kingdom (12.3%), Germany (11.5%) 
and Italy (7.6%). Entities residing in the Member States of the EU account for more 
than  90%  of  the  amount  of  the  recoveries.  Entities  from  whom  the  highest 
aggregated  amounts  have  to  be  recovered  are  residing  in  the  United  Kingdom 
(20.6%, EUR 5.2 million), France (14.7%, EUR 3.7 million), Belgium (12.2%, EUR 
3.1 million), the Netherlands (9.0%, EUR 2.3 million) and Germany (8.9%, EUR 2.2 
million).  These  five  Member  States  account  for  65%  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.  

In 2009 almost all recovery orders involving cases of suspected fraud were reported 
to  involve  beneficiaries  residing  in  the  EU.  The  highest  number  of  recoveries  with 

EN 

103 

   EN 

 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
  
 
suspected  fraud  qualifications  concerned  beneficiaries  in  Spain  and  the  United 
Kingdom, 3 in each. The highest amounts involved per project in cases quantified as 
suspected  fraud  were  recorded  for  Sweden  (EUR  368°686)  and  Portugal  (EUR 
235 146). Both countries have only one case of suspected fraud but of a considerable 
amount. 

9.2.3.  Method of detection 

For each recovery order, the Commission service that issues the order has to indicate 
how  the  irregularity  or  suspected  fraud  has  been  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, 2009  

Method of detection 

Community control / Check on the spot 
Community control / Desk check documents 
Control by national authorities 
European Court of Auditors 
Independent control (supervising engineers, auditors) 
OLAF 
Other 

Total 

N 
210
348
1
2
103
8
33

705

% 
29.8
49.4
0.1
0.3
14.6
1.1
4.7

€ 1 000  % 
10°810 
11°126 
20 
13 
3°261 
669 
1°631 

39.3 
40.4 
0.1 
0.0 
11.8 
2.4 
5.9 

Average 
€ 1000 
51.5
32.0
19.5
6.3
31.7
83.6
49.4

100

27°529  100.0 

39.0

Most of the irregularities or suspected fraud for which a recovery order was issued, 
were  detected  on  the  basis  of  Community  controls:  558  recoveries  (79.1%) 
accounting  for  EUR  21.9  million  (79.7%).  Within  the  ‘Community  controls’  desk 
controls  and  on  the  spot  checks  generated  amounts  of  recoveries  of  the  similar 
magnitude. However checks on the spot detected irregularities involving 60 % higher 
amounts  per  project  than  desk  checks.  The  average  amount  for  recoveries  is 
EUR°39°048.  Recoveries  detected  by  OLAF  and  Community  controls  on  the  spot 
have  a  substantially  higher  average.  Recoveries  issued  on  the  basis  of  OLAF 
activities  had  the  highest  value  per  recovery  (EUR  83°643)  but  account  for  an 
amount  to  be  recovered  of  2.4%.  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. 

EN 

104 

   EN 

 
Table DE 6:  Recoveries  (number  and  amount)  by  method  of  detection  and  by 
qualification, 2009  

Qualification 

Method of detection 

Irregularity 

Community control / Check on the spot 
Community control / Desk check documents 
Control by national authorities 
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 
Other 

Total of Suspected fraud 
Total 

N 
207
345
1
2
103
1
31

40.4
41.1
0.1
0.0
12.5

€ 1 000  % 
% 
10°523
30.0 
10°712
50.0 
0.1 
20
0.3  12.5859
3°261
106
1°409

Av. € 
1000
50.8
31.0
19.5
6.3
31.7
0.4 105.6
45.5
5.4
37.7
26°043 100.0
19.3
95.4
27.9 138.1
80.5
37.9
14.9 110.6
99.0
39.0

286
414
564
221

1°485 100.0

27°529

14.9 
0.1 
4.5 
690 100.0 
20.0 
20.0 
46.7 
13.3 
15 100.0 

3
3
7
2

705

Table  DE6  shows  the  differences  in  the  method  of  detection  between  irregularities 
and suspected fraud. ‘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,  it  constituted  half  of  all  the  recoveries  and 
over 40% of the amounts. The Community controls are the most important method of 
detection  concerning  recoveries  classified  as  irregularity,  they  make  around  80%, 
both  of  the  number  of  recoveries  and  amounts  involved.  Their  share  in  recoveries 
classified  as  suspected  fraud  drops  considerable,  the  'Community  desk  check 
documents' makes 20% both by the number of recoveries and amounts. Surprisingly, 
Community  on  the  spot  checks  did  not  lead  to  detection  of  any  suspected  fraud 
recoveries.  Most  of  the  recoveries  classified  as  suspected  fraud  were  detected  by 
OLAF:  7  out  15  (46.7%),  representing  EUR  0.6  million  (37.9%)  of  the  recovered 
amounts.  The  second  most  efficient  detection  method  was  'Independent  control' 
carried out by external actors. 'Independent control' allowed for the detection of the 
same  number  of  suspected  fraud  cases  as  Communities  desk  controls,  however  the 
amounts  involved  were  considerable  higher  in  recoveries  detected  by  independent 
controllers. This method of detection seems to be the best way to identify big cases 
involving fraudulent actions. 

9.2.4.  Types of irregularity 

The  Commission  services  also  have  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. 

EN 

105 

   EN 

 
  
 
Table DE 7: Recoveries (number and amount) by type of irregularity, 2009 

Type of irregularity 

Action not implemented 
Action not in accordance with the rules 
Advances not correctly reflected 
Beneficiary ineligible 
Calculation error 
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 
Lack of necessary co-financing 
Missing documents 
Not Applicable 
Public procurement procedures not respected 
Quality of action inadequate 
Recoverable VAT, interest received not correctly reflected 

% 
7.5
14.9
1.6
1.3
10.6
2.0
5.2
15.3
1.0
0.6
6.5
8.1
0.1
16.7
1.4
1.6
3.8
1.7

€ 1 000  % 

2°734 
5°254 
793 
132 
2°439 
276 
974 
4°534 
330 
449 
2°249 
1°835 
243 
3°211 
74 
329 
1°593 
80 

9.9 
19.1 
2.9 
0.5 
8.9 
1.0 
3.5 
16.5 
1.2 
1.6 
8.2 
6.7 
0.9 
11.7 
0.3 
1.2 
5.8 
0.3 

Average 
€1 000 
51.6
50.0
72.1
14.7
32.5
19.7
26.3
42.0
47.2
112.3
48.9
32.2
243.2
27.2
7.4
29.9
59.0
6.7

N 
53
105
11
9
75
14
37
108
7
4
46
57
1
118
10
11
27
12

Total 

705 100.0

27°529  100.0 

39.0

The  most  common  type  of  recoveries  qualified  as  irregularities  is  ‘Missing 
Documents’  (118  recoveries  or  16.7%).  The  average  amount  per  recovery  for  this 
type  however  is  modest  and  only  ranks  13th  of  the  18  types.  The  qualification 
'Expenditure  not  covered  by  legal  base’  follows  with  108  recoveries  (15.3%).  The 
third most common type is ‘Action not in accordance with the rules’ (105 recoveries 
or 14.9%). The last type for which the share exceeds 10% is ‘Calculation error’ (75 
recoveries  or  10.6%).  The  four  most  frequent  types  of  irregularity  amount  to  more 
than 55% both by number and irregular amount. 

For  134  recoveries,  more  than  one  type  of  irregularity  was  indicated.  The  most 
frequent  pair  of  identified  irregularities  was  ‘Missing  documents’  combined  with 
‘Incorrect rates used in calculating the claim’. This pair of irregularities occurred in 
23  recoveries.  The  second  pair  consisted  of  ‘Missing  Documents’  and  ‘Incomplete 
documents’,  which  occurred  in  20  recoveries.  The  pair  ’Recoverable  VAT,  interest 
received  not  correctly  reflected’  and  ’Incorrect  rates  used  in  calculating  the  claim’ 
occurred in 16 recoveries. The following table presents the four types of irregularity 
which  most  frequently  appeared  in  cases  involving  more  than  one  type  of 
irregularity. 

EN 

106 

   EN 

 
Table DE 8:  The most frequently indicated pairs of irregularity types, 2009 

Type of irregularity 

Missing 
Documents 

Incorrect 
rates used in 
calculating 
the claim 

Expenditure 
not covered 
by legal 
base 

Expenditure 
declared 
not related 
to the 
action 

Action not implemented 
Action not in accordance with the rules 
Beneficiary ineligible 
Calculation error 
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 
Lack of necessary co-financing 
Missing Documents 
Public procurement procedures not respected 
Quality of action inadequate 
Recoverable VAT, interest received not correctly 
reflected 

1
5
1
6
5
11
17
1
1
20
23
0
N/A
0
3

6

1 
4 
0 
3 
1 
7 
13 
0 
2 
5 
N/A 
0 
23 
0 
1 

16 

3
3
1
2
0
7
N/A
0
1
5
13
0
17
1
1

4

2
2
1
5
0
N/A
7
1
1
12
7
2
11
0
1

4

The most common modus operandi identified in parallel with other modus operandi 
is ‘Missing documents’. It is indicated in 100 recoveries, which represents 74.6% of 
recoveries  with  more  than  one  type  of  irregularity  indicated.  The  second  most 
frequent  modus  operandi  is  ‘Incorrect  rates  used  in  calculating  the  claim’,  which 
occurred in 76 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. 

EN 

107 

   EN 

 
Table DE 9:  Recoveries (number and amount) by type of irregularity and by qualification, 
2009 

Qualification 

Type of irregularity 

N 

Irregularity 

Action not implemented 
Action not in accordance with the rules 
Advances not correctly reflected 
Beneficiary ineligible 
Calculation error 
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 
Lack of necessary co-financing 
Missing Documents 
Not Applicable 
Public procurement procedures not respected
Quality of action inadequate 

Recoverable  VAT, 
correctly reflected 

interest 

received  not 

 Total of Irregularity 

Suspected 
fraud 

Action not in accordance with the rules 
Deadline not respected 
Expenditure not covered by legal base 
Falsified documents 
Incomplete Documents 
Incorrect rates used in calculating the claim 
Missing Documents 
Public procurement procedures not respected

Total of Suspected fraud 

Total  

% 
7.7 
14.6 
1.6 
1.3 
10.9 
1.9 
5.4 
15.5 
0.4 
0.6 
6.5 
8.1 
0.1 
17.0 
1.4 
1.3 
3.9 

€ 1 000 
2°733.7 
4°275.8 
793.4 
132.1 
2°438.5 
188.9 
973.8 
4°507.0 
225.0 
449.0 
2°224.8 
1°806.7 
243.2 
3°196.1 
74.4 
107.4 
1°593.2 

% 
10.5
16.4
3.0
0.5
9.4
0.7
3.7
17.3
0.9
1.7
8.5
6.9
0.9
12.3
0.3
0.4
6.1

Average
51.6
42.3
72.1
14.7
32.5
14.5
26.3
42.1
75.0
112.3
49.4
32.3
243.2
27.3
7.4
11.9
59.0

53
101
11
9
75
13
37
107
3
4
45
56
1
117
10
9
27

12

1.7 

80.1 

0.3

690 100.0 
26.7 
6.7 
6.7 
26.7 
6.7 
6.7 
6.7 
13.3 

4
1
1
4
1
1
1
2

26°043  100.0
65.8
5.8
1.8
7.1
1.6
1.9
1.0
14.9

977.8 
86.7 
27.4 
105.3 
24.0 
28.1 
14.9 
221.2 

15 100.0 

1°485  100.0

705

27°529 

6.7

37.7
244.4
86.7
27.4
26.3
24.0
28.1
14.9
110.6

99.0

39.0

Among  the  recoveries  qualified  as  irregularities  ‘Missing  documents'  was  the  most 
frequent  identified  category  (117  recoveries  or  17.0%).  The  next  category  was 
‘Expenditure  not  covered  by  legal  base’  (107  recoveries  or  15.5%).  The  four  most 
frequent  categories  account  for  58.0%  of  the  recoveries  qualified  as  irregularity, 
which shows a big variety in modus operandi used in irregular transactions. It should 
be observed that the share of these categories is very similar (55.4%) if the amounts 
involved in the recovery are taken into account. 

Among  the  recoveries  qualified  as  suspected  fraud,  ‘Falsified  documents’  and 
'Action not in accordance with the rules' are the most frequent types of irregularity 
(each 4 recoveries or 26.7%). Suspected fraud in public procurement is identified in 
two  cases  qualified  as  suspected  fraud.  However,  the  amounts  involved  in  the 
recovery  show  a  different  pattern:  the  four  cases  where  the  type  of  irregularity  is 
'Action not in accordance with the rules' account for 65.8% of the amounts, whereas 

EN 

108 

   EN 

 
 
the category ‘Falsified documents’ only accounts for 7.1%. The two cases with type 
of  irregularity  'Public  procurement  procedures  not  respected'  involve  14.9%  of  the 
amounts identified as suspected fraud. 

9.3. 

Specific analysis 

9.3.1. 

Irregularity versus Suspected Fraud 

Only  2.1%  of  the  705  issued  recovery  orders  were  qualified  by  the  Commission 
services as suspected fraud, but they account for 5.4% of the amounts involved in the 
recoveries. Table DE10 provides an overview of these findings.  

Table DE 10:  Recoveries (number and amounts) by qualification, 2009 

Qualification 

Irregularity  
Suspected fraud 

Commitments  
% 
94.9
5.1

€ 1 000 
2°376°019 
126°587 

Average
3°444
8°439

N 
690
15

% 
97.9
2.1

Recoveries 
€1 000 

26°043 
1°485 

% 
94.6
5.4

Average
37.7
99.0

Total 

2°502°606 

100.0

3°550

705 100.0

27°529 

100.0

39.0

The  average  irregular  amount  per  recovery  is  two  and  a  half  times  higher  in 
suspected  fraud  recoveries  than  in  recoveries  qualified  as  irregularity.  The  average 
for recoveries qualified as irregularity is EUR 37°744 compared to EUR 99°031 for 
recoveries  qualified  as  suspected  fraud.  The  commitments  in  which  irregularities 
qualified  as  suspected  fraud  were  identified  were  substantially  higher  as  well.  It 
should be noted that the financial impact of suspected fraud cases could be revised 
following OLAF's investigations. 

9.3.2.  Time delay 

Half of the irregularities for which a recovery order was issued in 2009 occur within 
one year after the first payment was made by the Commission. More than 80% of all 
irregularities are perpetrated within the first three years from the first payment. The 
average  time  delay  between  payment  and  committing  an  irregularity  is  only  11 
months. The contract value does not play an important role: irregularities in both big 
and  small  contracts  appear  within  the  first  year  from  payment.  The  average  delay 
between  first  payment  and  occurrence  of  the  irregularity,  taking  account  of  the 
amounts involved, is 9 months. 

For  the  recovery  orders  issued  in  2009,  the  average  delay  between  the  irregularity 
and its detection is 2 years and 11 months. There is a limited number of irregularities 
that  are  detected  almost  immediately:  12.1%  of  the  irregularities  for  which  a 
recovery orders were issued, were detected during the first year after. The percentage 
of detected irregularities does not change substantially for the period between 2 and 6 
years  after  the  irregularity  was  committed.  This  clearly  reflects  the  project 
management  cycle  in  the  Commission  and  shows  the  systematic  way  in  which  the 
Commission implements its controls. There is no relationship between the amount of 
the irregularity and its duration at the moment of its detection. Taking account of the 
amounts  involved  in  the  weighted  average  of  time  delay  it  takes  2  years  and  7 
months, from the moment an irregularity starts to the moment it is detected. 

EN 

109 

   EN 

 
The  chart  below  presents  the  recoveries  registered  in  2009  by  number  (line)  and 
amounts (bars) of commitments by a year in which the commitment was made (e.g.: 
in  2009,  101  recoveries  were  registered  in  ABAC  that  were  made  in  2006.  The 
corresponding  amount  to  be  recovered  is  EUR  3.9  million).  For  recovery  orders 
issued in 2009 for direct expenditures commitments, most commitments were made 
in 2004 and 2008. In both years more than 120 commitments were made for which a 
recovery order was issued in 2009. More than 90% of the recovery orders concerned 
commitments which were made between 2002 and 2008. The corresponding amounts 
account for almost 85%. 

Chart DE 1:  Recoveries in 2009 (number and amounts) by year of commitment 

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

1998

1999

2000

2001

9.3.3.  Trends 

160

140

120

100

80

60

40

20

0

N
u
m
b
e
r

Irregular amount

Number

2006

2007

2008

2009

2002

2003

2005
2004
Commitment Year

The total number of recorded recoveries decreased in 2009 in comparison to 2008 by 
24.4%. The number of recoveries qualified as suspected fraud decreased by 21.1%. 
The corresponding amounts decreased by 20.6% (all recoveries) respectively 54.0% 
(suspected fraud). The main reason for the decline in the number of recoveries is the 
proportional decrease of the number of payments made by the European Commission 
in recent years. The decline in the amounts to be recovered could be explained by 
the improved and stricter controls applied by the Commission as well as the decrease 
of  the  amounts  paid  from  the  Communities  budget  under  centralised  direct 
management. 

The  distribution  of  irregularities  between  internal  and  external  policies  follows  the 
share of the amounts committed in the two policy areas. Internal policies account for 
80%  of  the  commitments,  which  is  reflected  in  its  share  of  recoveries  and 
corresponding amounts. The recoveries follow the same pattern as the previous year. 

EN 

110 

   EN 

 
€
 
However,  the  number  of  irregularities  in  the  area  of  external  actions  slightly 
increased  in  2009  while  the  corresponding  amounts  decreased.  This  brings  the 
average  amount  of  an  irregularity  in  external  actions  more  in  line  with  the  ones 
observed  in  internal  policies.  In  2008,  the  average  amount  of  an  irregularity  in 
external  actions  was  two  times  higher  than  the  one  in  internal  policies  whereas  in 
2009, the average values for the two areas are at the similar level – the difference is 
only 10%. 

In  comparison  to  2008,  there  are  no  major  shifts  in  the  most  frequent  methods  of 
detection and the most frequent types of irregularities. 'Community controls' was the 
most  frequent  method  of  detection  in  both  years,  with  share  of  'Desk  check  of 
documents'  around  50%.  Among  cases  qualified  as  suspected  fraud  'Independent 
controls' increased its significance as an efficient method of fraud identification.  

The average delay between the first payment to a beneficiary and the detection of an 
irregularity for recovery orders issued in 2009 was 3 years and 9 months. For 2008, 
this figure was 4 years and 8 months, which represents a reduction of almost 20%. 
An even stronger progress can be observed if the average delays are weighted with 
the corresponding amounts: the average delay then drops from 5 years and 6 months 
in 2008 to 3 years and 6 months in 2009, which represents a reduction of 36%. 

9.4. 

Recovery  

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 2009, full or partial 
recovery  was  recorded  in  478  cases  (67.8%  of  the  705  recovery  orders),  which 
represents  an  amount  of  almost  EUR  15.5  million  (56.1%  of  the  amounts  to  be 
recovered).  In  463  recovery  orders  (65.7%)  the  full  amount  has  already  been 
recovered.  However  there  are  still  242  (34.3%)  outstanding  recovery  orders  which 
account for EUR 12 million (43.9%). 

Table DE 11:  Recoveries in 2009 (number and amount) by payment status and qualification. 

Qualification 

Irregularity  
Suspected fraud 

Total 

N 
471 
7 

478 

Recovered 

To be Recovered 

Cashed Amount 
€ 1 000 

14°886
559

15°445

N 
233
9

242

Open Amount 
(€ 1 000) 

11°157
927

12°084

The recovery rate for recoveries qualified as irregularity is 57.2% and is higher than 
for  cases  qualified  as  suspected  fraud  (37.6%).  The  latter  percentage  represents  a 
substantial  improvement  as  it  increased  from  18.6%  in  2008  to  37.6%  in  2009, 
despite the fact that there are more suspected fraud recovery orders of 2009 still open 
(60%) than there were in 2008 (31.6%). 

9.5. 

Conclusions 

The  analysis  of  the  irregularities  detected  in  the  expenditure  managed  by  the 
Commission on a centralised direct basis, as registered in the recovery context of the 

EN 

111 

   EN 

 
Commission's financial system, is only at its beginning. Taking into consideration its 
limitations  described  in  the  methodological  section  as  well  as  the  relatively  short 
time the recovery context functions, the findings in this chapter must be interpreted 
with care.  

Following  the  rates  presented  in  previous  chapters  the  respective  figures  for 
expenditures managed directly by the Commission are presented in the table below. 

Table DE 12: 

Summary table for 2009 

(1) 

(2) 

(3) 

(4) 

Rates in % 
Irregularity rate - IrR 
Fraud rate – FrR 
Fraud frequency level - FFL
Fraud amounts level - FAL 

2009 

2008 

Total 2008-9 

0.17 
0.01 
2.13 
5.39 

0.17 
0.02 
2.04 
9.31 

0.17 
0.01 
2.08 
7.58 

Only  a  small  part  of  the  Commission  expenditures  is  concerned  by 
irregularities.  Recovery  orders  issued  in  2009  relate  to  0.17%  of  the  overall 
amounts  paid  by  the  Commission,  whereas  recovery  orders  classified  as 
suspected fraud are lower and affect less than 0.01% of the those payments. 
The aggregated amount of the recovery orders issued in 2009 represents 1.1% 
of  the  commitments  made  by  the  Commission  for  internal  policies  and 
external  actions.  This  is  an  improvement  compared  to  2008  when  this  rate 
was 6%. 

The  number  of  recovery  orders  issued  in  2009  decreased  by  24.4%  in 
comparison to the previous year, which could be explained by the decrease of 
payments in the respective areas. The number of cases qualified as suspected 
fraud  decreased  from  19  in  2008  (2.0%)  to  15  in  2009  (2.1%).  The 
corresponding  amounts  decreased  more  rapidly:  from  EUR  3.2  million  in 
2008 to EUR 1.5 million in 2009, which represents a reduction of 54%. 

The majority of the irregularities were committed by a beneficiary residing in 
one of the Member States. The beneficiaries registered in the EU committed 
88.2% of irregularities, which corresponds to more than 90% of the irregular 
amounts.  For  recovery  orders  qualified  as  suspected  fraud,  there  is  even  a 
higher concentration of the beneficiaries in the European Union - 14 out of 15 
beneficiaries, corresponding to almost 100% of the amounts, had one of the 
Member States as their place of residence. 

The  most  successful  method  of  detection  is  'Communities  controls':  almost 
80%  of  the  irregularities  (numbers  and  corresponding  amounts)  were 
identified  on  the  basis  of  'On-the-spot  checks'  and  'Desk  checks  of 
documents'.  The  average  amount  of  the  irregularities  detected  with  "on-the-
spot  checks"  was  60%  higher  than  the  average  for  "Desk  checks  of 
documents".  It  was  only  in  a  few  recoveries  that  desk  controls  led  to  a 
‘suspected  fraud  qualification’.  'Independent  controls'  carried  out  by  e.g. 
engineers and external auditors detected a similar number of cases involving 
higher amounts. This might indicate the need to increase such controls of the 
EU financed projects in order to better tackle the fraud question. 

EN 

112 

   EN 

 
(5) 

(6) 

The types of irregularity show a large variance. In recovery orders qualified 
as  irregularity,  ‘Missing  documents’  and  'Expenditures  not  covered  by  the 
legal basis' are the most frequent categories, whereas the type of irregularity 
most  frequently  observed  in  recovery  orders  qualified  as  suspected  fraud  is 
‘Falsified  documents’.  However  if  the  irregular  amounts  are  compared  the 
most frequent type of irregularity among suspected fraud cases is 'Action not 
in accordance with rules' (65.8%). 

Commitments made in 2004 have a high share in the recovery orders issued 
in 2008 and 2009. The Commission has already recovered or offset 56.1% of 
value of the recovery orders issued in 2009. 65.7% recovery orders issued in 
2009 have already been fully recovered. 

EN 

113 

   EN 

 
ANNEXES 

EN 

114 

   EN 

 
ANNEX 1 – SUMMARY OF FINANCING1 OF THE GENERAL BUDGET BY TYPE OF OWN RESOURCE AND BY MEMBER 
STATE (in million Euros) 

EN 

115 

EN 

 
  
 
ANNEX 2 

EN 

116 

   EN 

 
 
ANNEX 3 – NUMBER OF CASES OWNRES AND AMOUNTS – PERIOD 2004-2007 PER MEMBER STATE 

Number of cases OWNRES and amounts for the period 2006-2009 by Member State 

2006 

2007 

2008 

2009 

Cases 

Amount € 

Cases 

Amount € 

Cases 

Amount € 

Cases 

Amount € 

% Change 
cases 2008- 
2009 

% Change 
amount 
2008-2009 

5°877°026 
75 
12°071°264 
442 
57°451°497 
1°156 
6°068°089 
67 
33°379°949 
643 
1°989°495 
28 
28°824°380 
314 
11°697°070 
48 
2°864°369 
48 
64°913°724 
341 
49°291 
1 
36°376°427 
1°404 
807°725 
21 
2°164°111 
47 
1°086 
64°492°022 
5°721  329°026°439 
192°160 
2°298°548 
178°010 
7°654°127 
1°548°735 
2°274°172 
1°226°978 
1°739°568 
950°848 
1°561°967 
19°625°113 
0 
0 
0 

9 
63 
5 
103 
39 
29 
11 
69 
24 
28 
380 
0 
0 
0 

94 
462 
1°614 
54 
464 
34 
327 
57 
34 
288 
0 
1°145 
23 
44 
1°161 
5°801 
11 
50 
12 
69 
41 
41 
10 
159 
27 
21 
441 
15 
37 
52 

36°532°901 
22°233°141 
76°134°997 
7°209°425 
20°660°465 
1°820°185 
32°430°736 
2°976°051 
2°426°561 
22°940°129 
- 
27°768°747 
1°635°142 
2°620°160 
108°342°942 
365°731°582 
750°964 
2°202°574 
362°193 
6°260°184 
1°069°437 
2°265°331 
404°949 
8°419°370 
1°579°108 
950°725 
24°264°835 
308°192 
3°770°239 
4°078°431 

103 
368 
1696 
47 
485 
21 
317 
37 
53 
320 
1 
912 
29 
71 
1078 
5°538 
14 
65 
17 
71 
64 
25 
3 
141 
26 
17 
443 
19 
75 
94 

15°446°113 
15°001°626 
87°012°563 
4°196°196 
23°650°089 
1°035°615 
17°024°066 
1°751°545 
1°839°749 
33°744°661 
109°902 
45°817°303 
2°253°594 
6°503°546 
90°150°802 
345°537°370 
787°523 
4°893°646 
838°216 
6°069°639 
1°580°853 
944°250 
279°533 
5°361°790 
897°474 
520°789 
22°173°713 
502°373 
7°151°645 
7°654°018 

166 
286 
927 
44 
432 
31 
285 
12 
49 
312 
0 
742 
22 
58 
791 
4°157 
11 
67 
11 
59 
47 
19 
6 
142 
50 
22 
434 
34 
59 
93 

21°479°526 
9°496°939 
73°591°941 
9°277°407 
23°880°689 
1°747°094 
20°551°562 
534°742 
2°003°110 
39°859°261 
- 
33°280°727 
901°744 
4°871°519 
65°659°462 
307°135°723 
718°211 
3°668°883 
259°221 
6°403°096 
1°842°512 
1°011°059 
1°585°808 
6°033°647 
2°652°248 
2°474°719 
26°649°404 
1°235°236 
8°419°903 
9°655°139 

61.17% 
-22.28% 
-45.34% 
-6.38% 
-10.93% 
47.62% 
-10.09% 
-67.57% 
-7.55% 
-2.50% 
-100.00% 
-18.64% 
-24.14% 
-18.31% 
-26.62% 
-24.94% 
-21.43% 
3.08% 
-35.29% 
-16.90% 
-26.56% 
-24.00% 
100.00% 
0.71% 
92.31% 
29.41% 
-2.03% 
78.95% 
-21.33% 
-1.06% 

39.06% 
-36.69% 
-15.42% 
121.09% 
0.98% 
68.70% 
20.72% 
-69.47% 
8.88% 
18.12% 
-100.00% 
-27.36% 
-59.99% 
-25.09% 
-27.17% 
-11.11% 
-8.80% 
-25.03% 
-69.07% 
5.49% 
16.55% 
7.08% 
467.31% 
12.53% 
195.52% 
375.19% 
20.18% 
145.88% 
17.73% 
26.14% 

Member State 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EUR-15 TOTAL 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
SI 
SK 
EUR-10 TOTAL 
BG 
RO 
EUR-2 TOTAL 

EUR-27 TOTAL 

6°101  348°651°552 

6°294 

394°074°848 

6°075 

375°365°101 

4°684 

343°440°266 

-22.90% 

-8.51% 

EN 

117 

EN 

 
  
ANNEX 4 – OWNRES CASES PER MEMBER STATE 

EN 

118 

EN 

 
  
ANNEX 5 – 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 

2005 

2006 

2007 

2008 

2009 

3°316 

3°922 

4°131 

4°157 

3°428 

53.37% 

64.28% 

65.63% 

68.43% 

73.19% 

259°674°964 

263°562°760 

327°655°670 

311°176°854 

286°236°587 

81.69% 

75.59% 

83.15% 

82.90% 

83.34% 

EN 

119 

EN 

 
  
ANNEX 6 – TOP 10 CHAPTER HEADINGS 

2007 

CN 

PRODUCT 

AMOUNT 
€ 

CASES CN

PRODUCT 

2008 

AMOUNT 
€ 

2009 

CASES CN 

PRODUCT 

AMOUNT 
€ 

CASES 

85 

TVs and parts etc. 

86°803°868  

1°087  85 

TVs and parts etc° 

105°108°766  

970  85 

TVs and parts etc° 

76°663°396 

64 

Footwear 

48°263°851  

284  24 

Tobacco / cigarettes 

32°724°945  

457  61 

Clothing 

35°668°571 

24 

87 

Tobacco / cigarettes 

35°393°266  

459  61 

Clothing 

29°733°092  

418  24 

Tobacco / cigarettes 

23°647°113 

(Parts of) cars / motors  

21°258°981  

341  84  Machines 

16°652°468  

412  87 

(Parts of) cars / motors  

22°367°120 

07 

Edible vegetables 

19°523°232  

92  62 

Clothing 

16°530°654  

456  62 

Clothing 

16°413°636 

61 

Clothing 

17°851°469  

390  87 

(Parts  of)  cars 
motors  

/ 

15°600°151  

383  84 

Machines 

15°379°233 

62 

Clothing 

14°239°112  

448  02  Meat 

12°114°908  

149  29 

Chemical products 

13°851°751 

84  Machines 

14°018°082  

397  39 

Plastics 

10°584°566  

253  16 

Food 

63 

Other textile articles 

10°471°221  

80  64 

Footwear 

10°375°890  

253  64 

Footwear 

12°747°855 

12°269°915 

Articles  of 
steel 

73 

iron  and 

8°693°476  

187  07 

Vegetables 

9°442°210  

158  73 

Articles  of 
steel 

iron  and 

12°106°655 

724 

250 

340 

258 

338 

338 

161 

86 

165 

194 

EN 

120 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 7 – GOOD AFFECTED BY FRAUD AND IRREGULARITY – PERIOD 2005-2007 

GOODS AFFECTED BY FRAUD AND IRREGULARITY PERIOD 2007-2009 

2007 

2008 

2009 

TARIFF 
CODES 
64039998 
85282190 
24022090 
07032000 
85281298 
87031018 
64030000 
63039118 
85393190 
02071410 
85219000 
61103099 
24031010 
24012010 
62034231 
20031030 
61101190 
96131000 
04051000 
85281294 
85369010 
64039938 
85254091 
48103900 
85253090 

CASES AMOUNTS €

39 
75 
353 
49 
4 
50 
6 
1 
102 
116 
116 
89 
43 
9 
21 
45 
14 
20 
1 
42 
2 
3 
12 
1 
14 

30°825°995 
23°793°372 
22°828°664 
18°056°964 
13°221°267 
9°399°746 
6°706°330 
6°468°283 
5°995°910 
4°307°828 
4°155°951 
3°829°741 
3°711°910 
3°711°817 
3°460°033 
3°326°846 
3°157°134 
3°073°440 
3°071°722 
2°635°082 
2°549°674 
2°548°693 
2°484°027 
2°111°908 
2°060°399 

TARIFF 
CODES 
   85219000 
   24022090 
   85282190 
   61046300 
   85393190 
   02071410 
   07032000 
   85366990 
   28046900 
   96131000 
   24012010 
   85287220 
   61101190 
   39232100 
   85285990 
   83112000 
   61091000 
   61103099 
   87031018 
   17019999 
   02023090 
   84099100 
   62046231 
   85269120 
   15119019 

EN 

TARIFF 
CODES 
   85219000 
   24022090 
   61091000 
   16041416 
   61046300 
   87032410 
   85393190 
   07032000 
   85365080 
   85287119 
   85285990 
   38249091 
   29310095 
   04021019 
   87032319 
   55032000 
   84279000 
   29371200 
   85269120 
   61159399 
   39232100 
   08030019 
   87120030 
   85299092 
   64041990 

CASES AMOUNTS €

87 
270 
43 
28 
1 
19 
41 
80 
4 
37 
62 
3 
3 
4 
13 
16 
36 
1 
11 
2 
75 
5 
29 
30 
14 

21°575°586 
20°367°653 
12°575°370 
9°677°039 
9°500°000 
8°565°338 
8°133°673 
7°473°658 
5°427°349 
4°964°827 
4°257°315 
4°008°418 
3°962°877 
3°914°753 
3°771°018 
3°581°021 
3°546°120 
3°356°160 
3°014°630 
2°860°760 
2°647°302 
2°516°879 
2°474°057 
2°184°703 
2°092°903 

CASES AMOUNTS €

124 
393 
26 
3 
99 
60 
116 
22 
6 
21 
11 
6 
12 
68 
48 
1 
47 
59 
20 
2 
22 
5 
27 
20 
3 

30°512°258 
28°261°950 
18°607°596 
9°674°750 
9°498°895 
7°779°662 
7°404°350 
6°140°220 
5°565°548 
4°803°557 
3°766°811 
3°613°262 
3°512°930 
3°017°653 
2°997°649 
2°765°919 
2°743°745 
2°568°161 
2°564°623 
2°376°061 
2°216°134 
2°214°657 
2°156°788 
2°138°476 
2°130°303 

121 

EN 

 
  
 
  
 
  
ANNEX 8 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 

FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS DURING 2007-2009 

2007 

2008 

2009 

COUNTRY 

€ 

CASES 

COUNTRY 

€ 

CASES 

COUNTRY 

€ 

CASES 

171°060°976 

1°814   China 

154°752°686 

1°922   China 

136°708°058 

1°700 

43°341°410 

793   USA 

39°622°046 

700   USA 

26°401°632 

271  

Japan 

20°723°309 

259  

Japan 

South Korea 

17°472°146 

178   Brazil 

15°286°109 

168   Hong Kong 

11°691°233 

266   South Korea 

14°957°163 

109   Not specified 

10°649°807 

11°659°218 

136   Bangladesh 

13°056°184 

185   Vietnam 

Bangladesh 

8°836°565 

188   Not specified 

10°702°944 

608   Argentina 

Vietnam 

Thailand 

8°572°969 

64   Switzerland 

9°188°001 

99   Seychelles and dep° 

8°255°834 

6°486°764 

98   Malaysia 

7°242°777 

63   South Korea 

7°451°742 

34°799°342 

18°002°252 

16°860°334 

10°281°100 

9°884°440 

506 

202 

70 

443 

32 

37 

2 

84 

China 

USA 

Japan 

Brazil 

Taiwan 

Not specified 

5°614°034 

686   Russian Federation 

6°807°555 

131   Bangladesh 

7°394°940 

113 

EN 

122 

EN 

 
  
 
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 8.1: RECOVERY RATE (RR) BREAKDOWN BY ORIGIN OF GOODS 2006-2008 

FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS DURING 2007-2009 

2007 

2008 

2009 

Country 

Recovered € 

RR  

Country 

Recovered € 

RR  

Country 

Recovered € 

RR  

China 

USA 

Japan 

68°632°686 

40%   China 

71°966°983

47%   China 

35°665°619 

82%   USA 

27°145°501

69%   USA 

23°053°039 

87%  

Japan 

18°582°660

90%  

Japan 

53°816°471 

24°290°222 

16°555°497 

South Korea 

7°627°144 

44%   Brazil 

6°508°892

43%   Hong Kong 

1°398°600 

6°856°801 

59%   South Korea 

10°263°429

69%   Not specified  

4°251°269 

4°846°428 

42%   Bangladesh 

5°630°766

43%   Vietnam 

Bangladesh 

5°191°437 

59%   Not specified  

2°640°954

25%   Argentina 

1°141°529 

9°560°508 

8°033°229 

94%   Switzerland 

1°173°408

13%  

Seychelles 
dep° 

and 

0 

0% 

3°093°715 

48%   Malaysia 

1°997°391

28%   South Korea 

4°880°536 

Not specified 

4.193.562 

75%   Russian Federation

1.837.503

27%   Bangladesh 

1.652.680 

39% 

70% 

92% 

8% 

40% 

11% 

97% 

65% 

22% 

Brazil 

Taiwan 

Vietnam 

Thailand 

EN 

123 

EN 

 
  
 
 
 
 
ANNEX 9 – RECOVERY RATES OWNRES 

RECOVERY RATES TRADITIONAL OWN RESOURCES (RR) 

MEMBER 
STATES 

AMOUNT € 
2008 

RECOVERED € 
2008 

RR 
2008 

AMOUNT € 
IN 2009 

2008 

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

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  33.37% 
2°216°020  17.49% 
289°569  57.64% 
134°134  17.03% 
1°292°086  25.71% 
40°753°580  61.85% 
3°295°562  83.15% 
411°651  30.30% 
10°662°361  56.06% 
384°491  54.31% 
11°235°749  64.03% 
387°361  26.82% 
2°988°620  51.07% 
1°544°260  93.84% 
8.98% 
2°812°556 
688°732  44.59% 
0.00% 
7.80% 
4.52% 
8°289°082  15.18% 
1°832°197  32.66% 
328°155  15.01% 
5°516°513  76.88% 
4°501°990  71.10% 
613°472  67.00% 
236°534  50.35% 
29°851°886  30.35% 

0 
73°706 
20°319 

15°446°113 
15°001°626 
502°373 
787°523 
4°893°646 
87°012°563 
4°196°196 
838°216 
23°650°089 
1°035°615 
17°024°066 
1°751°545 
6°069°639 
1°839°749 
33°744°661 
1°580°853 
109°902 
944°250 
279°533 
45°817°303 
5°361°790 
2°253°594 
7°151°645 
6°503°546 
897°474 
520°789 
90°150°802 

RECOVERED 
€ IN 2009 

RR for 
2008 IN 
2009 
1°876°662 
12.15%
5°823°112 
38.82%
289°569 
57.64%
134°134 
17.03%
1°358°064 
27.75%
58°118°848 
66.79%
3°604°634 
85.90%
443°820 
52.95%
11°810°143 
49.94%
392°807 
37.93%
13°263°839 
77.91%
387°401 
22.12%
3°398°654 
55.99%
1°797°003 
97.68%
4°144°365 
12.28%
59.13%
934°818 
109°902  100.00%
12.07%
113°970 
7.27%
20°319 
66.56%
30°497°688 
47.47%
2°545°038 
17.54%
395°325 
77.37%
5°533°457 
93.56%
6°084°758 
68.36%
613°472 
56.59%
294°696 
43.70%
39°392°170 

AMOUNT € 2009 

2009 

RECOVERED € 
2009 

RR 2009 

21°479°526 
9°496°939 
1°235°236 
718°211 
3°668°883 
73°591°941 
9°277°407 
259°221 
23°880°689 
1°747°094 
20°551°562 
534°742 
6°403°096 
2°003°110 
39°859°261 
1°842°512 
0 
1°011°059 
1°585°808 
33°280°727 
6°033°647 
901°744 
8°419°903 
4°871°519 
2°652°248 
2°474°719 
65°659°462 

1°711°593 
1°744°655 
482°555 
99°147 
1°564°753 
50°871°218 
6°722°362 
173°933 
12°355°734 
1°117°717 
10°739°506 
6°684 
3°883°932 
1°978°926 
3°062°519 
950°076 
0 
36°509 
0 
14°365°082 
3°290°563 
431°807 
1°115°411 
4°595°049 
964°737 
320°365 
29°378°179 

7.97% 
18.37% 
39.07% 
13.80% 
42.65% 
69.13% 
72.46% 
67.10% 
51.74% 
63.98% 
52.26% 
1.25% 
60.66% 
98.79% 
7.68% 
51.56% 
0.00% 
3.61% 
0.00% 
43.16% 
54.54% 
47.89% 
13.25% 
94.32% 
36.37% 
12.95% 
44.74% 

EUR-27 
TOTAL 

EN 

351°618°572 

132°038°628  37.55% 

375°365°101 

193°378°668 

51.52%

343°440°266 

151°963°012 

44.25% 

124 

EN 

 
  
ANNEX 10 – SEIZED AND CONFISCATED GOODS 

SEIZED AND CONFISCATED GOODS (Cigarettes CN 24022090) 

2007 

CASES 

ESTIMATED AMOUNT 
OF TOR € 

CASES 

2008 
ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR 
€ 

2009 

ESTIMATED 
AMOUNT OF 
TOR € 

CASES 

2 
6 
2 
0 
0 
8 
29 
13 
5 
4 
0 
0 
0 
3 
131 
203 
0 
1 
0 
1 
6 
0 
4 
2 
34 
19 
6 
1 
74 
277 

48°255 
13°903 
94°985 
0 
0 
160°326 
21°101 
1°206°270 
2°540°368 
1°694°276 
0 
0 
0 
116°014 
13°080°541 
18°976°039 
52°543 
0 
204°578 
0 
669°162 
78°624 
365°572 
0 
1°068°633 
1°134°311 
261°035 
0 
3°834°458 
22°810°497 

1 
4 
3 
0 
0 
4 
20 
5 
6 
16 
0 
0 
0 
5 
82 
146 
0 
0 
0 
0 
4 
2 
9 
1 
30 
11 
1 
0 
58 
204 

20°227 
462°439 
51°261 
0 
0 
88°151 
989°920 
767°505 
1°174°410 
2°426°867 
0 
0 
0 
265°589 
5°846°358 
12°092°727 
0 
0 
0 
0 
416°536 
115°057 
490°369 
60°912 
828°588 
4°941°994 
83°209 
0 
6°936°665 
19°029°392 

11°958 
12°580 
151°597 
0 
0 
139°145 
1°679°953 
2°072°640 
388°821 
345°467 
0 
0 
0 
385°600 
9°809°628 
14°997°389 
0 
33°673 
0 
41°304 
193°168 
0 
693°930 
205°013 
809°383 
3°211°696 
187°055 
144°760 
5°519°982 
20°517°371 

2 
4 
6 
0 
0 
6 
33 
10 
13 
13 
0 
0 
0 
3 
152 
242 
2 
0 
1 
0 
4 
3 
4 
0 
36 
16 
4 
0 
70 
312 

125 

EN 

MEMBER 
STATES 

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 

EN 

 
  
ANNEX 11 – PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 

PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 
2007-2009

S
E
S
A
C
D
U
A
R
F
%

120.00%

100.00%

80.00%

60.00%

40.00%

20.00%

0.00%

AT

BE DE DK ES

FI

FR GR

IE

IT

LU

NL

PT

SE UK BG CY CZ

EE HU LT

LV MT

PL RO SI

SK

MEMBER STATE

2007

2008

2009

EN 

126 

EN 

 
  
 
 
 
AMOUNTS INVOLVED IN FRAUD PER MEMBER STATE PERIOD 2007-2009 

ANNEX 12 – AMOUNTS INVOLVED IN FRAUD 

CASES 

2009 
FRAUD 
CASES 

MEMBER STATE 

CASES 

2007 
FRAUD 
CASES 

FRAUD IN € 

CASES 

2008 
FRAUD 
CASES 

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 

94 
462 
1°614 
54 
464 
34 
327 
57 
34 
288 
0 
1°145 
23 
44 
1°161 
5°801 
15 
11 
50 
12 
69 
41 
41 
10 
159 
37 
27 
21 

493 
6°294 

31 
56 
222 
2 
196 
21 
153 
57 
4 
101 
0 
341 
2 
3 
193 
1°382 
8 
3 
3 
1 
16 
7 
0 
5 
68 
19 
6 
10 

146 
1°538 

34°103°931 
2°193°816 
15°081°027 
213°813 
10°482°321 
1°207°186 
6°064°600 
2°976°051 
134°805 
11°231°037 
0 
22°388°674 
394°483 
0 
15°453°616 
121°925°360 
79°536 
26°456 
559°995 
41°304 
2°505°463 
77°041 
0 
285°766 
5°940°049 
3°211°696 
187°055 
189°623 

13°103°984 
135°029°344 

103 
368 
1°696 
47 
485 
21 
317 
37 
53 
320 
1 
912 
29 
71 
1°078 
5°538 
19 
14 
65 
17 
71 
64 
25 
3 
141 
75 
26 
17 
537 
6°075 

EN 

25 
46 
214 
6 
216 
11 
123 
37 
13 
179 
0 
101 
5 
3 
144 
1°123 
15 
3 
5 
1 
26 
15 
0 
2 
49 
27 
5 
4 

152 
1°275 

127 

FRAUD IN 
€ 
11°299°158 
3°411°591 
14°684°577 
671°103 
14°900°293 
651°465 
4°415°700 
1°751°545 
0 
19°490°171 
0 
2°455°234 
1°676°333 
0 
12°668°045 
88°075°215 
447°721 
378°947 
79°088 
100°592 
2°438°843 
469°924 
0 
259°214 
1°793°594 
1°501°929 
277°754 
125°579 

7°873°185 
95°948°400 

166 
286 
927 
44 
432 
31 
285 
12 
49 
312 
0 
742 
22 
58 
791 
4°157 
34 
11 
67 
11 
59 
47 
19 
6 
142 
59 
50 
22 
527 
4°684 

FRAUD IN 
€ 
13°646°462 
2°224°292 
14°128°607 
2°895°762 
15°355°224 
441°108 
23°659 
440°791 
0 
21°935°990 
0 
7°165°386 
0 
0 
6°001°044 
84°258°325 
901°678 
237°313 
23°656 
0 
1°866°737 
563°629 
173°160 
1°585°808 
940°331 
6°458°174 
1°187°798 
1°278°880 

63 
46 
43 
10 
193 
12 
22 
10 
6 
182 
0 
75 
4 
5 
80 
751 
22 
2 
2 

9 
14 
1 
6 
38 
15 
22 
11 

142 
893 

15°217°164 
99°475°489 

EN 

 
  
  
  
  
 
 
 
 
 
Annex 13-Methods of detection of OWNRES cases – Year 2009 

Primary inspections 

Ex-post controls 

Voluntary admission 

Total 
amounts 

Amounts 

% 

Amounts 

% 

Amounts 

% 

1°877°336 

629°744 

7°170°543 

8.7% 

6.6% 

9.7% 

19°287°039 

89.8% 

315°151 

8°844°645 

93.1% 

22°550 

61°017°116 

82.9% 

5°404°282 

6°169°327 

66.5% 

3°108°080 

33.5% 

0 

1.5% 

0.2% 

7.3% 

0.0% 

21°479°526 

9°496°939 

73°591°941 

9°277°407 

5°843°876 

24.5% 

15°605°530 

65.3% 

2°431°283 

10.2% 

23°880°689 

807°561 

46.2% 

773°687 

44.3% 

165°846 

8°185°614 

39.8% 

12°365°948 

60.2% 

428°565 

80.1% 

106°177 

19.9% 

186°528 

9.3% 

1°678°616 

83.8% 

19°114°574 

48.0% 

20°555°217 

51.6% 

0 

0.0% 

- 

0.0% 

9°018°593 

27.1% 

24°262°134 

72.9% 

0 

0 

137°966 

189°470 

0 

0 

9.5% 

0.0% 

0.0% 

6.9% 

0.5% 

0.0% 

0.0% 

1°747°094 

20°551°562 

534°742 

2°003°110 

39°859°261 

0 

33°280°727 

130°633 

14.5% 

645°251 

71.6% 

125°860 

14.0% 

901°744 

0 

6°100°562 

0 

103°219 

0.0% 

9.3% 

0.0% 

2.8% 

4°871°519  100.0% 

59°558°900 

90.7% 

718°211  100.0% 

0 

0 

0 

0.0% 

0.0% 

0.0% 

4°871°519 

65°659°462 

718°211 

2°945°652 

80.3% 

620°012 

16.9% 

3°668°883 

30°586 

11.8% 

228°635 

88.2% 

1°179°822 

18.4% 

5°223°274 

81.6% 

509°056 

27.6% 

1°333°456 

72.4% 

0 

0 

0 

507°905 

50.2% 

492°576 

48.7% 

10°578 

1°136°012 

71.6% 

449°796 

28.4% 

1°912°436 

31.7% 

4°095°516 

67.9% 

2°096°793 

79.1% 

528°451 

19.9% 

98°727 

0 

4.0% 

0.0% 

2°375°992 

96.0% 

1°235°236  100.0% 

5°263°491 

62.5% 

3°156°412 

37.5% 

0 

25°695 

27°004 

0 

0 

0 

Total 

78°501°503 

22.9% 

255°463°066 

74.4% 

9°475°697 

0.0% 

0.0% 

0.0% 

1.0% 

0.0% 

0.4% 

1.0% 

0.0% 

0.0% 

0.0% 

2.8% 

259°221 

6°403°096 

1°842°512 

1°011°059 

1°585°808 

6°033°647 

2°652°248 

2°474°719 

1°235°236 

8°419°903 

343°440°266 

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 

EN 

128 

   EN 

 
  
  
ANNEX 14

AGRICULTURAL SECTOR

update 26/05/2010

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

YEARS 2000 - 2009

(amounts in € 1,000)

Year

Cases

Amounts affected

% of Agricultural 
expenditure

Agricultural 
expenditure

125 026
102 259
154 993
86 825
102 112
82 064
169 724
198 079
140 685
474 562

0.24
0.21
0.33
0.17
0.21
0.19
0.39
0.46
0.34
1.17

EAGF & EAFRD

2009
2008
2007
2006
2005
2004
2003
2002
2001
2000

1 621
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

s
e
s
a
c
f
o
°
N

4 000

3 500

3 000

2 500

2 000

1 500

1 000

500

0

Expenditure

Cases

52 558 305
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

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

year

*) The concept "irregularity" includes fraud. The qualification as fraud, meaning criminal behaviour, can only be 
made following a penal procedure.

EN 

129 

   EN 

 
 
 
 
ANNEX 15

AGRICULTURAL SECTOR

update 26/05/2010

IRREGULARITIES
COMMUNICATED BY MEMBER STATES
UNDER
Reg. 1848/2006

2009
(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

3
27
23
2
35
68
9
12
44
404
19
127
19
72
288
45
0
13
8
37
87
121
82
16
0
58
2
1 621

87
859
1 848
234
793
2 798
203
736
1 817
27 835
942
9 142
2 082
1 793
54 481
897
0
297
139
1 978
2 374
3 441
2 236
450
0
7 541
21
125 026

0.01%
0.10%
0.53%
0.37%
0.09%
0.04%
0.02%
0.49%
0.06%
0.42%
0.12%
0.09%
0.15%
0.11%
1.01%
0.19%
0.00%
0.14%
1.14%
0.18%
0.08%
0.36%
0.19%
0.05%
0.00%
1.41%
0.00%
0.24%

EN 

130 

   EN 

 
 
ANNEX 16 

STRUCTURAL FUNDS 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 2000-2009** 

N° OF 
IRREGULARITIES
N°

FINANCIAL 
AMOUNTS
EUR

TOTAL BUDGET

Million EUR

IMPACT ON 
BUDGET
%

YEAR

2009
2008
2007
2006
2005
2004
2003
2002
2001
2000

4 931 1 224 427 269
585 249 322
4 007
804 102 077
3 756
647 773 952
3 047
581 214 090
3 417
617 099 163
3 123
444 278 642
2 323
579 010 650
4 607
210 329 680
1 337
97 160 006
1 109

48 400
46 889
45 327
3 843
37 192
35 665
30 764
30 556
29 823
25 556

2.53%
1.25%
1.77%
1.69%
1.56%
1.73%
1.44%
1.89%
0.71%
0.38%  

6 000

5 000

4 000

3 000

2 000

1 000

0

1 400 000 000

1 200 000 000

1 000 000 000

800 000 000

600 000 000

400 000 000

200 000 000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Financial amounts

N° of irregularities

*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 

131 

   EN 

 
 
ANNEX 17 

COHESION FUND 

IRREGULARITIES* COMMUNICATED BY MEMBER STATES 2000-2009 

350

300

250

200

150

100

50

0

250 000 000

200 000 000

150 000 000

100 000 000

50 000 000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Irregular amounts

N° of irregularities

YEAR

N° OF IRREGULARITIES
N

IRREGULAR AMOUNTS
EUR

2009
2008
2007
2006
2005
2004
2003
2002
2001
2000

109
140
86
219
208
291
48
4
3
2

67 304 951
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  

*The concept of irregularity includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 

EN 

132 

   EN 

 
 
ANNEX 18.1 

STRUCTURAL FUNDS 

REGULATION No 1681/94 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 1994-1999 
REPORTED IN 2009 

N° OF IRREGULARITIES BY MEMBER STATE 

MEMBER 
STATE

AT
DE
IT
UK
TOTAL

ERDF

EAGGF-G

FIFG

TOTAL

6
6

12

1
3
1

5

1

3
4

1
10
7
3
21  

FINANCIAL AMOUNTS INVOLVED IN IRREGULARITIES BY MEMBER STATE  

MEMBER 
STATE

AT
DE
IT
UK
TOTAL

ERDF

EAGGF-G

FIFG

TOTAL

573 214
234 065

70 070
90 334
40 481

807 279

200 885

12 382

70 070
675 930
274 546
63 495
63 495
75 877 1 084 041

EN 

133 

   EN 

 
ANNEX 18.2 

STRUCTURAL FUNDS 

REGULATION No 1681/1994 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 2000-2006 
REPORTED IN 2009 

N° OF IRREGULARITIES BY MEMBER STATE 

MEMBER 
STATE

ERDF

ESF

EAGGF-G

FIFG

TOTAL

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

78
63

45
215
10
11
38
167
10
139
9
1
519
11
4
10
2
26
256
263
2
12
33
549
2 473

1
12
1
33
315

5
17
132
5
34
53
15
146
4
8
25
1
102
31
247
7
1
48
287
1 530

1

1
11

3
20
127

28

215
12

2

41
95

1
18
575

1

5

3

23

4
1

1
1

2
7
3

3
54

79
77
1
79
546
10
22
75
449
15
173
90
16
884
28
12
38
4
128
330
612
12
13
82
857
4 632  

IRREGULAR AMOUNTS BY FUND AND BY MEMBER STATES 

MEMBER 
STATE

ERDF

ESF

EAGGF-G

FIFG

TOTAL

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

19 609

21 393

993 270

173 864

8 690 736

104 883
550 789

9 917 733
4 252 993

119 086
3 967 140
8 294 430

22 110
893 887
63 594
3 558 626
13 870 084

107 228
3 212 171
5 750 803
66 573
853 197
1 947 006
866 612

9 939 843
5 187 882
63 594
9 240 312
12 903 821
29 013 886
44 428 029
605 634
605 634
989 680
1 389 858
39 742 531
46 921 842
124 216 835
146 952 804
238 573
305 146
10 611 538
11 464 735
234 424
4 090 007
61 543
928 155
290 713 648
328 367 077
1 774 905
4 400 905
1 748 257
3 331 038
963 724
3 070 298
568 769
589 916
2 345 613
19 318 683
43 549 842
48 360 036
82 888 629
110 258 042
31 782
714 212
5 103 131
5 130 098
21 670 887
17 656
23 583 422
239 552 129
687 993
279 611 768
920 036 999 133 810 855 44 025 281 14 043 712 1 111 916 846  

152 732
1 582 781
1 902 853
10 441
16 973 070
3 006 174
23 220 053
567 166
26 967
1 894 879
39 254 625

14 007 223 21 836 267
1 247 076

205 362
671 986
115 264

1 809 939
1 226 192

1 598 658
3 477 375

9 763
10 706

1 908 577

117 021

193 958

EN 

134 

   EN 

 
ANNEX 19 

STRUCTURAL FUNDS 

REGULATION No 1828/2006 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 2000-2006 
REPORTED IN 2009 

N° OF IRREGULARITIES BY MEMBER STATE 

MEMBER 
STATE

CF

ERDF

ESF

TOTAL

BG
DE
EE
FI
FR
HU
IE
LV
PL
RO
SI
SK
UK
TOTAL

17

17

13
7
3
1

10

1
24

8
10
1
78

9
35
1

1
24
6
1
11
2

1

91

39
42
4
1
1
34
6
2
35
2
8
11
1
186  

IRREGULAR AMOUNTS BY FUND AND BY MEMBER STATES 

MEMBER 
STATE

CF

ERDF

ESF

TOTAL

BG
DE
EE
FI
FR
HU
IE
LV
PL
RO
SI
SK
UK
TOTAL

53 680

3 578 740

0
959 148
10 737

0
759 655
248 828
17 741

3 578 740
1 718 803
259 565
17 741
53 680
22 399 400 1 399 243 23 798 643
232 860
232 860
101 530
72 396
4 343 574
3 087 294 1 256 280
45 806
45 806
2 978 489
7 343 033
12 699
3 578 740 36 865 704 4 040 719 44 485 163  

2 978 489
7 332 464
12 699

29 134

10 569

EN 

135 

   EN 

 
ANNEX 20 

COHESION FUND 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 IN 2009 

MS

CZ
EL
ES
HU
LT
MT
PL
PT
SI
SK
TOTAL

N° OF 
IRREGULARITIES

FINANCIAL 
AMOUNTS

AMOUNTS TO BE 
RECOVERED

3
14
20
4
2
1
19
27
1
1
92

1 924 920
4 780 520
4 351 765
18 449 851
4 491 703
39 133
2 275 178
24 575 760
2 552 398
284 983
63 726 211

0
1 684 211
3 622 443
40 387
0
39 133
49 542
1 332 009
0
284 983
7 052 708  

EN 

136 

   EN 

 
Annex 21 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2009 

2009 all programs

Member State
BG
CZ
EE
HR
HU
LT
LV
PL
RO
SI
SK
TR
Total

No of Cases EC amount eligible
112.448.918
96.401
163.097
50.652.358
1.745.841
1.879.465
140.756
2.673.134
644.233.221
13.473
3.353.061
14.573.332
831.973.056

376
2
2
25
11
3
2
53
196
1
9
26
706

2009 PHARE

Member State
BG
CZ
HR
LT
PL
RO
SK
Total

No of Cases EC amount eligible
16.590.476
96.401
674.344
669.270
127.148
21.136.875
3.341.044
42.635.558

65
2
9
1
3
36
8
124

2009 SAPARD

Member State
BG
EE
HU
LT
LV
PL
RO
SI
SK
Total

No of Cases EC amount eligible
88.752.138
163.097
1.745.841
261.496
140.756
2.500.186
47.763.692
13.473
12.017
141.352.696

307
2
11
1
2
48
109
1
1
482

EC amount 
irregular

EC amount to be 
recovered

74.368.334
54.736
49.653
445.704
1.445.473
1.465.982
140.756
2.078.295
34.103.432
13.473
116.336
2.378.737
116.660.911

45.471.356
49.023
49.653
257.724
1.445.473
1.465.982
140.756
1.892.760
22.738.652
0
99.639
1.575.214
75.186.233

EC amount 
irregular

EC amount to be 
recovered

7.441.309
54.736
204.320
267.708
70.586
5.140.076
104.319
13.283.054

3.334.802
49.023
108.009
267.708
70.586
2.959.561
87.622
6.877.311

EC amount 
irregular

EC amount to be 
recovered

65.540.447
49.653
1.445.473
249.575
140.756
1.961.909
18.602.252
13.473
12.017
88.015.555

41.077.540
49.653
1.445.473
249.575
140.756
1.790.114
16.831.369
0
12.017
61.596.498

EN 

137 

   EN 

 
 
 
 
 
 
2009 ISPA

Member State
BG
RO
Total

No of Cases EC amount eligible
7.106.304
575.332.654
582.438.958

4
51
55

EC amount 
irregular

EC amount to be 
recovered

1.386.578
10.361.104
11.747.682

1.059.014
2.947.722
4.006.736

2009 Transition Facility

Member State
HR
LT
PL
Total

No of Cases EC amount eligible
1.062.000
948.699
45.800
2.056.499

2
1
2
5

EC amount 
irregular

EC amount to be 
recovered

71.000
948.699
45.800
1.065.499

0
948.699
32.060
980.759

2009 Turkish Instrument for Pre-accession Assistance

Member State
TR
Total

No of Cases EC amount eligible
14.573.332
14.573.332

26
26

EC amount 
irregular

EC amount to be 
recovered

2.378.737
2.378.737

1.575.214
1.575.214

2009 CARDS

Member State
HR
Total

No of Cases EC amount eligible
48.916.014
48.916.014

14
14

EC amount 
irregular

EC amount to be 
recovered

170.384
170.384

149.715
149.715

EN 

138 

   EN 

 
 
 
 
 
Annex 22 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED – 2002-2009 

2002-2009 All programmes

Country

No of cases

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

BG

CY

CZ

EE

HR

HU

LT

LV

MT

PL

RO

SI

SK
TR

675

201.125.301

122.301.077

60.438.727

5

54

43

48

119

49

40

8

357

1057

39

117
51

5.624.616

25.065.548

28.424.691

67.962.370

18.149.540

107.460.712

3.454.147

4.913.491

794.156.755

23.807

2.868.759

6.649.147

5.049.419

7.960.936

4.893.815

1.101.128

112.620

7.708.168

0

1.334.968

857.717

716.719

2.959.658

4.269.347

900.700

0

2.846.716

4.439.444.937

93.734.219

41.936.064

4.066.455

52.308.577
20.871.758

1.586.859

8.592.891
3.059.637

53.374

3.410.914
2.121.944

Total

2.662

5.773.028.896

265.642.481

121.846.848

Country

No of cases

2002-2009 PHARE

EC amount 
eligible

EC amount 
irregular

EC amount to be 
recovered

BG
CY
CZ
EE
HR
HU
LT
LV
MT
PL
RO
SI
SK
Total

201
5
35
17
18
45
21
19
8
114
289
6
101
879

62.572.529
5.624.616
3.059.498
11.069.315
5.719.256
12.560.823
1.581.361
1.157.589
4.913.491
353.189.808
346.664.470
2.115.972
22.662.986
832.891.712

27.386.291
23.807
1.064.982
3.212.191
2.349.301
4.126.778
844.197
214.082
112.620
3.256.073
31.996.224
189.006
6.489.882
81.265.433

7.663.860
0
574.790
217.829
108.009
652.714
673.597
41.294
0
363.030
12.799.616
36.079
2.103.656
25.234.475

EN 

139 

   EN 

 
 
 
Country

No of cases

BG
CZ
EE
HR
HU
LT
LV
PL
RO
SI
SK
Total

443
18
22
4
74
19
20
220
492
32
15
1.359

Country

No of cases

BG
CZ
EE
HR
LT
PL
RO
SK
Total

30
1
4
2
7
21
276
1
342

2002-2009 SAPARD

EC amount 
eligible
117.103.599
1.114.637
4.131.884
1.222.218
5.588.717
7.875.937
2.206.810
14.364.413
234.323.118
1.570.483
2.496.391
391.998.207

2002-2009 ISPA
EC amount 
eligible

21.209.173
20.891.413
13.223.492
9.113.943
96.848.580
426.556.734
3.858.457.349
27.149.200
4.473.449.884

EC amount 
irregular

EC amount to be 
recovered

87.992.601
921.999
3.266.179
932.569
3.834.158
2.892.452
847.359
4.336.552
37.460.652
1.337.852
2.053.955
145.876.327

51.715.853
760.178
639.888
447.368
2.306.944
2.646.574
819.719
2.446.170
22.725.056
17.295
1.307.258
85.832.303

EC amount 
irregular

EC amount to be 
recovered

6.682.185
881.778
170.777
1.367.091
2.332
69.743
24.277.344
49.054
33.500.304

1.059.014
0
0
0
476
5.456
6.411.392
0
7.476.338

EN 

140 

   EN 

 
 
 
IRREGULARITIES COMMUNICATED BY MEMBER STATES AND CANDIDATE COUNTRIES 

ANNEX 23 

Year
2002 No of cases

Data

EC amount eligible
EC amount irregular
EC amount to be recovered

2003 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2004 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2005 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2006 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2007 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2008 No of cases

EC amount eligible
EC amount irregular
EC amount to be recovered

2009 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

EN 

CARDS

ISPA

Programme
PHARE

SAPARD

TF

TPA

6
113.406
6.122
0
18
282.278.784
932.451
0
26
279.027.957
251.987
5.456
25
165.424.740
6.160.535
476
26
338.171.186
1.145.338
244
87
1.842.464.080
5.332.290
381.770
99
983.530.774
7.923.899
3.081.656
55
582.438.958
11.747.682
4.006.736
342
4.473.449.884
33.500.304
7.476.338

2
223.957
0
0
6
1.704.982
159.074
11.627
14
48.916.014
170.384
149.715
22
50.844.953
329.458
161.342

34
5.942.454
3.797.224
11.839
133
50.530.803
5.995.739
178.366
165
53.242.582
3.436.300
1.098.868
164
43.762.829
3.127.999
1.135.792
150
33.431.930
7.762.913
3.092.430
231
63.734.913
33.740.596
18.718.511
482
141.352.696
88.015.555
61.596.498
1359
391.998.207
145.876.327
85.832.303

52
320.163.309
630.939
292.359
68
13.029.377
4.439.174
725.324
151
65.516.726
7.784.746
2.628.138
208
256.957.824
13.647.480
3.833.553
91
56.499.479
16.069.983
947.404
185
78.089.440
25.410.058
9.930.386
124
42.635.558
13.283.054
6.877.311
879
832.891.712
81.265.433
25.234.475

141 

1
147.816
147.816
147.816
6
1.253.092
236.504
213.082
18
4.897.518
296.580
185.832
26
14.573.332
2.378.737
1.575.214
51
20.871.758
3.059.637
2.121.944

4
915.883
545.822
39.687
5
2.056.499
1.065.499
980.759
9
2.972.382
1.611.321
1.020.446

Total

6
113.406
6.122
0
104
608.384.547
5.360.614
304.198
227
342.588.137
10.686.900
909.146
341
284.184.048
17.381.582
3.727.481
399
639.039.654
18.068.632
5.117.405
336
1.933.872.538
29.401.690
4.634.686
543
1.132.873.510
68.076.029
31.967.699
706
831.973.056
116.660.911
75.186.233
2662
5.773.028.896
265.642.481
121.846.848

EN 

 
  
 
IRREGULARITIES REPORTED BY MEMBER STATES IN 2008 – AGRICULTURE, COHESION POLICY, OWN RESOURCES 

ANNEX 24 

MS

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
TOTAL

AGRICULTURE

COHESION POLICY

OWN RESOURCES

ALL SECTORS

CASES

TOTAL AMOUNTS CASES

TOTAL AMOUNTS CASES

TOTAL AMOUNTS CASES

TOTAL AMOUNTS

3
27
23
2
35
68
9
12
44
404
19
127
19
72
288
45
0
13
8
37
87
121
82
16
0
58
2
1 621

87 322
858 665
1 848 338
234 476
793 364
2 797 903
202 892
736 057
1 817 050
27 834 613
941 541
9 142 421
2 082 316
1 793 216
54 480 766
897 251
0
297 150
139 439
1 978 235
2 374 202
3 440 974
2 235 958
449 519
0
7 541 131
21 153
125 025 951

80
77
39
1
82
598
10
26
89
469
16
174
128
22
891
30
12
40
5
128
384
639
2
12
22
94
861
4 931

10 009 913
5 187 882
6 739 424
63 594
14 828 741
46 822 762
605 634
1 649 423
51 702 362
151 304 569
322 887
11 518 415
46 338 501
1 161 015
328 641 623
8 892 608
3 331 038
3 171 828
629 049
19 318 683
55 033 113
134 833 802
45 806
714 212
10 660 985
31 211 438
279 687 962
1 224 427 269

142 

166
286
34
11
67
927
44
11
432
31
285
12
59
49
312
47
0
19
6
742
142
22
59
58
50
22
791
4 684

21 479 526
9 496 939
1 235 236
718 211
3 668 883
73 591 941
9 277 407
259 221
23 880 689
1 747 094
20 551 562
534 742
6 403 096
2 003 110
39 859 261
1 842 512
0
1 011 059
1 585 808
33 280 727
6 033 647
901 744
8 419 903
4 871 519
2 652 248
2 474 719
65 659 462
343 440 266

249
390
96
14
184
1 593
63
49
565
904
320
313
206
143
1 491
122
12
72
19
907
613
782
143
86
72
174
1 654
11 236

31 576 761
15 543 486
9 822 998
1 016 281
19 290 988
123 212 606
10 085 933
2 644 701
77 400 101
180 886 276
21 815 990
21 195 578
54 823 913
4 957 341
422 981 650
11 632 371
3 331 038
4 480 037
2 354 296
54 577 645
63 440 962
139 176 520
10 701 667
6 035 250
13 313 233
41 227 288
345 368 576
1 692 893 486

EN 

EN