COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, AND THE COMMITTEE OF THE REGIONS AND THE COURT OF AUDITORS ON THE COMMISSION ANTI-FRAUD STRATEGY
Date: 2011-06-24
Institutions: European Commission
Subjects: European Anti-fraud Office, administrative check, administrative cooperation, administrative sanction, administrative transparency, exchange of information, fraud, fraud against the EU

EUROPEAN COMMISSION 

Brussels, 24.6.2011 
COM(2011) 376 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE, AND THE COMMITTEE OF THE REGIONS AND THE COURT OF 
AUDITORS 

ON THE COMMISSION ANTI-FRAUD STRATEGY 

{SEC(2011) 791 final} 

 
 
 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE COURT OF 
AUDITORS  

ON THE COMMISSION ANTI-FRAUD STRATEGY 

TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

Introduction .................................................................................................................. 3 

A comprehensive Commission anti-fraud strategy ...................................................... 5 

Basic principles and priorities...................................................................................... 8 

Prevention and detection of fraud ................................................................................ 9 

2.2.1.  Anti-fraud strategies at Commission Service level.................................................... 10 

2.2.2.  OLAF’s role in developing and implementing strategies .......................................... 11 

2.2.3.  Systematic controls and risk analyses ........................................................................ 12 

2.2.4.  Awareness-raising and training.................................................................................. 13 

2.3. 

Investigations ............................................................................................................. 13 

2.3.1.  OLAF investigations .................................................................................................. 13 

2.3.2. 

Informants and whistleblowers .................................................................................. 15 

2.4. 

2.5. 

2.6. 

Sanctions .................................................................................................................... 15 

Recovery .................................................................................................................... 16 

Other cross-cutting fraud prevention instruments...................................................... 16 

2.6.1. 

International legislative standards.............................................................................. 16 

2.6.2.  Ethics and integrity .................................................................................................... 16 

2.6.3.  Transparency and access to information .................................................................... 17 

2.6.4.  Procurement and grants.............................................................................................. 17 

3. 

Monitoring of and reporting on implementation........................................................ 17 

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1. 

INTRODUCTION 

With this Communication the Commission improves and modernises its Anti-Fraud Strategy. 
The overall objective of this new Commission Anti-Fraud Strategy is to improve prevention, 
detection and the conditions for investigations of fraud and to achieve adequate reparation 
and  deterrence,  with  proportionate  and  dissuasive  sanctions,  and  respecting  the  due 
process,  especially  by  introducing  anti-fraud  strategies  at  Commission  Service  level 
respecting and clarifying the different responsibilities of the various stakeholders. 

Article  325  of  the  Treaty  on  the  functioning  of  the  European  Union  (TFEU)  requires  the 
Commission  and  the  Member  States  to  counter  fraud  and  any  illegal  activities  affecting  the 
financial  interests  of  the  Union.  Preventing  and  detecting  fraud  is  therefore  a  general 
obligation for all Commission Services in the framework of their daily activities involving the 
use of resources.  

The  European  Commission  implements  the  EU  budget  in  accordance  with  the  principles  of 
sound  financial  management  (Article  317  TFEU).  It  is  committed  to  ensuring  that  the 
framework, the policies, the rules and the procedures in place enable the effective prevention 
and detection of fraud.1 

Financial management and accountability have been strengthened. The Commission Services2 
are responsible for the management of the operational and administrative resources allocated 
to  them  to  implement  EU  policies  or  to  contribute  to  the  smooth  functioning  of  EU 
institutions in a cost-effective way and reducing administrative burden as far as possible. In 
this  respect,  Commission  Services3  are  responsible  for  taking  the  necessary  measures  to 
provide  reasonable  assurance  of  achieving  prevention  and  detection  of  fraud.4  and 
irregularities.5 

The European Anti-Fraud Office (OLAF) conducts administrative investigations. It draws on 
its  experience  and  expertise  to  support  other  Commission  Services  in  the  prevention  and 
detection of fraud.6  

1 

2 

3 

4 
5 

6 

The definition of fraud can be found in Article 1 of the Convention drawn up on the basis of Article K.3 
of the Treaty on European Union, on the protection of the European Communities’ financial interests 
(OJ C 316 , 27/11/1995, p. 49). 
References to Commission Services cover all Commission Directorates-General and Services plus the 
executive agencies. 
Authorising  Officers by  Delegation,  within  the  meaning of  the  TFEU  (Article  322)  and  the  Financial 
Regulation  (Council  Regulation  (EC,  Euratom)  No  1605/2002  of  25  June  2002  on  the  Financial 
Regulation applicable to the general budget of the European Communities (OJ L 248, 16.9.2002, p. 1).). 
See Article 28 and Article 28a of the Financial Regulation. 
An irregularity is any infringement of an EU provision by an economic operator which has, or would 
have,  the  effect  of  prejudicing  the  EU’s  financial  interests,  Article  1(2)  of  Council  Regulation  (EC, 
Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities’ financial 
interests (OJ L 312, 23.12.1995). 
Commission  Communication  ‘Prevention  of  fraud  by  building  on  operational  results:  a  dynamic 
approach to fraud-proofing’ (COM(2007)806 final). 

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Fraud  prevention  and  detection  are  at  the  core  of  the  Commission’s  anti-fraud  policies. 
However,  other  factors  are  equally  important,  namely  effective  and  efficient  investigation, 
swift recovery of money unduly paid from the EU budget, and deterrent sanctions.  

The Member States administer nearly all the revenues of the EU budget. They also share the 
management  of  around  80 %  of  budget  expenditure  with  the  Commission.  The  remaining 
20 %  is  administered  directly  by  the  Commission  Services,  partly  together  with  the 
administrations of non-EU countries and international organisations.  

In  recommendations  on  discharge  procedures  and  various  other  resolutions  and  reports,  the 
European Parliament (EP),7 the Council8 and the European Court of Auditors9 have called for 
better  protection  of  EU  financial  interests  against  irregularities  and  fraud.  However,  the 
Council10  and  Parliament11  have  also  called  for  simplification  and 
the  avoidance 
administrative  burden  in  European  programmes.  The  Commission  therefore  needs  to  strike 
the balance between cost effective control and simplification. 

In  2010,  the  Council  adopted  the  multi-annual  Stockholm  Programme12  for  policies  in  the 
area of justice, civil liberties and security. It calls on the EU and its Member States to step up 
their efforts to combat corruption and other forms of financial crime. This includes building 
capacity for financial investigations and making it clearer who are the ‘beneficial owners’ of 
assets. 

In 2011, several initiatives will be taken to step up the fight against fraud and corruption affecting EU 
public money: 

The  Commission’s  proposal  for  amending  the  legal  framework  of  OLAF13  aims  at  increasing  the 
efficiency  and  speed  of  OLAF  investigations,  at  strengthening  procedural  guarantees,  at  reinforcing 
OLAF’s cooperation with Member States and at improving its governance. 

The  Communication  on  the  protection  of  EU  financial  interests  by  criminal  law  and 
administrative investigations14 sets out how the Commission intends to safeguard taxpayers’ money 

7 

8 

9 

10 

11 

12 
13 
14 

E.g. the Reports on the protection of the Communities’ financial interests and the fight against fraud - 
Annual Reports 2008 (2009/2167(INI)) and 2009 (2010/2247(INI)). 
See, e.g. the Council Resolution concerning a comprehensive EU policy against corruption — 14 April 
2005; conclusions of the Working Group on the European Public Prosecutor’s Office organised by the 
Spanish  Presidency  (first  half  of  2010),  and  the  statement  of  the  Belgian  Presidency  (second  half  of 
2010) on the Stockholm Programme. 
ECA  Opinion  No  1/2010  –  Improving  the  financial  management  of  the  EU  budget:  risks  and 
challenges,  OJ  C35,  12.2.2010,  p.  4;  ECA  Report  concerning  the  financial  year  2009,  OJ  C  303, 
9.11.2010, p. 10, 11, 26. 
See  for  example  EUCO  2/1/11  REV1,  8  March  2011  ("it  is  crucial  that  EU  instruments  aimed  at 
fostering Research and Development and Innovation be simplified in order to facilitate their take-up by 
the  best  scientists  and  the  most  innovative  companies,  in  particular  by  agreeing  between  the  relevant 
institutions a new balance between trust and control and between risk taking and risk avoidance") 
EP  Resolution  of  11  November  2010  –  P7  TA(2010)0401  -  (highlighting  the  complex  and  time-
consuming rules governing participation, high personnel costs and red tape) 
OJ 4.5.2010, C 115, p.1. 
COM(2011)135 final. 
Communication on the protection of the financial interests of the European Union by criminal law and 
by  administrative 
taxpayers’  money, 
integrated  policy 
COM(2011)293 final. 

investigations:  An 

to  safeguard 

the 

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at EU level against illegal activities, including threats posed by corruption inside and outside the EU 
institutions.  The  Communication  points  to  opportunities  for  improving  the  criminal  law  framework 
and the procedural tools for investigators and prosecutors, and to possible institutional developments 
such as the setting up of a European Public Prosecutor’s Office. 

Complementing those initiatives, the  Communication on Fighting Corruption in the EU15 sets  an 
EU  anti-corruption  reporting  mechanism  for  periodic  assessment  of  Member  States  (‘EU  Anti-
Corruption Report’). 

The Commission Work Programme for 2011 also includes a Proposal for a new legal framework on 
the  confiscation  and  recovery  of  criminal  assets  under  the  heading  ‘Initiatives  on  Protecting  the 
Licit Economy’.16 

Complementing these initiatives, this Anti-Fraud Strategy deals mainly with aspects of good 
administration. All these communications together develop the future EU anti-fraud and anti-
corruption policies within a coherent and comprehensive framework. 

This Anti-Fraud Strategy of the Commission is directed primarily to the Commission Services 
and  will  reinforce  the  EU’s  policies  and  contribute  to  the  protection  of  the  EU’s  financial 
interests. It complements the fundamental policy orientations of the Commission which were 
presented in its recent Communications on Europe 202017 and in the Budget Review,18 and 
which  highlighted  important  objectives  for  the  simplification  and  coherence  of  EU  rules 
while,  at  the  same  time,  maintaining  high  standards  of  accountability  and  oversight  of 
financial risks.  

2. 

A COMPREHENSIVE COMMISSION ANTI-FRAUD STRATEGY 

Fraud affecting the EU budget — where are we and what challenges do we face?  

The  last  Commission  Anti-Fraud  Strategy  was  adopted  in  200019  and  the  ensuing  Action 
Plans  for  2001-2003  and  2004-2005  created  a  basis  for  a  comprehensive  EU  policy  against 
fraud.20 The Commission reported on the implementation of the Action Plan and on progress 
in the development of anti-fraud policies in its annual reports on the protection of the financial 
interests  of  the  Communities  and  the  fight  against  fraud  from  2001  to  2005.21  In  2007,  the 
Commission  adopted  a  Communication  on  fraud-proofing22  together  with  a  Communication 
on  the  division  of  responsibilities  between  OLAF  and  the  Commission  Services  for 
expenditure  under  shared  management,  whereby  the  Services  assumed  responsibility  for 
these 
financial 

implementation  of 

irregularities  and 

fraud.23  The 

follow-up  of 

15 

16 
17 
18 
19 
20 
21 
22 
23 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council  and  the  European 
Economic and Social Committee on Fighting Corruption in the EU (COM(2011) 308 final). 
http://ec.europa.eu/atwork/programmes/index_en.htm. 
COM(2010)2020. 
COM(2010)700. 
COM(2000)358 final. 
COM(2001)254 final; COM(2004)544 final. 
See COM(2006)378, p.5-12 for more details (assessment of the strategy for the years 2000-2005). 
COM(2007)806 final. 
C(2007)5709. 

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Communications shows that OLAF’s know-how, drawn from its investigative experience, can 
provide valuable input into the Commission.  

The  current  context  of  the  preparation  of  the  new  multi-annual  financial  framework  (MFF) 
gives the Commission the opportunity to reinforce anti-fraud approaches across different EU 
policies.  The  MFF  for  the  period  after  2013  will  be  supported  by  new  specific  legislative 
proposals  for  EU  programmes.  Complementing  the  overall  objective  of  far-reaching 
simplification,  these  should  include  appropriate  anti-fraud  measures.  The  Commission  is 
committed to the further enhancement of anti-fraud legislative provisions in a cost-effective 
and proportionate manner. This process will take into account the actions already being taken 
by Commission Services. 

Fraudsters,  in  particular  organised  crime,  adapt  quickly  to  new  circumstances.  The 
Commission must be in a position to face such new challenges. The changing context of fraud 
requires continuous adjustment to EU anti-fraud policies. Fraud prevention and detection is a 
key  governance  issue  which  the  Commission  is  committed  to  addressing  at  all  levels  and 
throughout the whole expenditure/income cycle.  

The  EU  budget  is  taxpayer’s  money  that  must  be  used  only  for  implementing  the  policies 
which  the  EU  legislature  has  approved.  Yet  in  2009,  Member  States  reported  EUR 279.8 
million  worth  of  suspected  fraud  cases  involving  EU  funds  managed  in  their  respective 
countries24. 

This is only an indicator of the financial impact of the issue, as it does not mean the cases will 
be proven, or that money cannot be recovered. But it shows that prevention efforts have to be 
made  and  that  the  measures  in  place  have  to  be  adapted  regularly  to  counter  new  fraud 
schemes. 

On the other hand, further controls that the Commission suggests putting in place should be 
proportional, efficient and cost-effective. As fraud often involves sophisticated and carefully 
organised schemes to conceal it, the risk of non-detection is higher than for other irregularities 
and so anti-fraud systems, if they are to be efficient, must be smarter and more sophisticated 
and  are  likely  to  be  more  costly.  The  marginal  value  of  fraud  likely  to  be  detected  and 
corrected  by  the  Member  States  and  the  Commission  as  a  result  of  additional  anti-fraud 
controls must exceed the marginal cost of additional controls and costs,  taking into account 
the reputational risk as well.  

In  addition,  anti-fraud  measures  have  to  be  achieved  in  line  with  the  Commission’s  stated 
objective of maintaining zero growth of resources and reducing the administrative support and 
coordination functions.25 Additional investments, if any, must therefore be achieved through 
staff redeployment within the Services in line with these principles. 

24 

25 

COM(2010)382,  p.6.  This  figure  refers  to  an  early  stage,  after  the  opening  of  investigations  into 
irregularities, where there is an initial suspicion of a criminal offence. 
SEC(2007)530. 

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The Commission has already developed and is developing anti-fraud measures. The following 
examples of best practice show the potential of well designed anti-fraud measures: 

For structural actions,26 the Commission has put in place a Joint Fraud Prevention Strategy whose 
objective is to strengthen its capacity to deal with fraud, to raise awareness in the Member States and 
in the Commission Services of the importance of fraud prevention and to strengthen cooperation with 
OLAF.  This  Joint  Fraud  Prevention  Strategy  reinforces  existing  measures  for  the  Funds  concerned, 
and  will  facilitate  the  implementation  of  this  Anti-Fraud  Strategy  in  this  budget  area.  Other 
Commission Services, such as those responsible for research policies, have also adopted specific anti-
fraud strategies that exploit the available data for anti-fraud purposes.  

However,  not  all  Commission  Services  managing  EU  funds  follow  such  a  systematic 
approach yet. 

Developing the ‘Pluto’ approach to fraud detection and prevention: 
The  Pluto  project  was  set  up  to  help  the  Commission’s  Directorate-General  for  the  Information 
Society  to  improve  its  audit  capabilities  and  control  functions  through  the  provision  of  powerful 
analytical  tools  and  information  on  fraud  indicators  based  on  OLAF’s  operational  experience.  With 
this approach it has been possible to detect many more cases of suspected fraud..27 

Given  the  success  of  the  project,  notably  in  terms  of  the  timely  detection  of  cases  of  fraud, 
there  has  been  widespread  interest  from  other  operational  Commission  Services  in 
implementing such an approach. This will be facilitated. 

A single technical platform for secure exchange of data between customs and other relevant national 
authorities,  including  the  EU  Financial  Intelligence  Units28  (anti-money  laundering  authorities), 
accessible by using a web browser has been developed under the name "Mutual Assistance Broker 
(MAB)"  by  the  European  Commission.  It  allows  for  secure  exchange  of  information  regarding 
established or suspected illicit movements of goods and cash entering or leaving the EU eradicating 
the need for burdensome duplicate of data input, while respecting the rules on data protection. 

New  IT  tools  can  reduce  considerably  the  administrative  burden  to  detect  fraud  and 
irregularities also for the management of the revenue side of the budget. 

The Commission developed a fraud awareness training course based on real cases that a Commission 
Service had encountered. 

This  kind  of  tailor-made  training  course  will  be  developed  using  real  cases  encountered  by 
other Commission Services too, and offered on a regular basis as outlined in Section 2.2.4.  

26 

27 
28 

In particular, the European Regional Development Funds (ERDF), the European Social Fund (ESF) and 
the Financial Instrument for Fisheries Guidance (FIFG). 
OLAF Annual Report 2010, p. 30. 
This development is particularly aimed at fulfilling the requirement for exchange of information fixed 
by the Financial Action Task Force (FATF) in the Special Recommendation IX on cash couriers, which 
is implemented in the EU by virtue of the provisions in Article 6 of the Regulation (EC) No 1889/2005 
of  the  European  Parliament  and  of  the  Council  of  26  October  2005  on  controls  of  cash  entering  or 
leaving the EU (OJ L 309, 25.11.2005, p. 9-12). 

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2.1. 

Basic principles and priorities 

What are the basic principles of the Commission Anti-Fraud Strategy? 

The Commission Anti-Fraud Strategy applies to both the expenditure and the revenue sides of 
the budget.  

The main guiding principles and target standards of the Commission’s policy in this area are 
as follows: 

Ethics.  The  Commission  and  the  other  authorities  responsible  for  the  management  of  EU 
funds  must  observe  the  highest  standards  of  ethical  behaviour  and  integrity.  Their  staff 
must comply with these standards and must be adequately trained both on the risks of fraud 
and the need to fight it. 

Enhanced  transparency.  This  is  an  important  tool  in  the  fight  against  fraud.  The  relevant 
information on the use of EU funds should so far as possible be available in a format which 
can  be  audited,  compared  and  analysed  for  anti-fraud  purposes,  subject  to  the  relevant  data 
protection rules.29  

Fraud  prevention.  The  design  of  spending  programmes  is  the  first  stage  of  effective  fraud 
prevention.  Therefore,  an  analysis  of  the  potential  for  exposure  to  fraud  will  be  included  in 
feasibility studies and impact assessments, wherever relevant. At the implementation stage of 
the  programmes,  cost-effective  and  risk-based  monitoring  and  control  mechanisms  should 
ensure proper mitigation of the risk of fraud. 

Effective  investigation  capacity.  Adequate  tools  and  incentives  are  important  for  the 
effective detection and investigation of fraud. When fraud is suspected, anti-fraud bodies need 
discreet  access  to  the  necessary  information,  in  cooperation  with  the  institutions  and  bodies 
concerned with an audit trail and in compliance with the regulations in force. In addition, the 
institutions and bodies concerned need adequate and timely information from the investigative 
body  in  order  to  take  precautionary  measures  and  prevent  the  continuation  of  any 
irregularities  or  fraud  having  an  impact  on  the  EU  budget.  Whistleblowers,  witnesses  and 
informants need easy, secure and fast procedures for reporting fraud.  

Sanctions.  Justice  must  be  achieved  with  due  process  and  in  reasonable  time.  Procedures 
must provide for enhanced standards of due process using mechanisms that enable swift and 
independent  action.  In  addition  to  adequate  sanctions,  convicted  and  administratively 
sanctioned  persons  must  be  effectively  deprived  of  the  proceeds  of  their  offence  and 
defrauded resources must be recovered. 

Good  cooperation  between  internal  and  external  actors.  In  particular,  good  cooperation 
between  the  EU  and  national  authorities  responsible,  and  between  the  Services  of  all  the 
institutions  concerned,  is  a  prerequisite  for  efficiently  combating  fraud.  The  Commission 

29 

See Article 29 and 30 of the Financial Regulation (principle of transparency). 

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takes  into  account  the  important  role  of  its  implementation  partners,  notably  within  shared 
management systems. 

Where does the Commission set its priorities?  

The  Commission  Anti-Fraud  Strategy  will  provide  for  anti-fraud  measures  in  the  areas  of 
prevention  and  detection  (2.2.),  investigations  (2.3.),  sanctions  (2.4.),  recovery  (2.5.)  and 
other  horizontal  fraud  prevention  policies  such  as  ethics  and  integrity;  transparency  and 
access to information; and procurement and grants (2.6.).  

The issues that need to be addressed as a matter of priority relate to fraud prevention:  

(1) 

(2) 

(3) 

Adequate  anti-fraud  provisions  in  Commission  proposals  on  spending  programmes 
under the new multi-annual financial framework, in the light of impact analyses, as 
referred to in section 2.2.1;  

The  development  of  anti-fraud  strategies  at  Commission  Service  level  with  the 
assistance  of  OLAF  (section  2.2.2.)  and  of  the  central  Services,  and  their 
implementation (sections 2.2.1 to 2.2.3 and 2.2.4); and  

The revision of the public procurement directives with a view to addressing the need 
for simplification while limiting the risks of procurement fraud in the Member States 
(section 2.6.4).  

These priorities will be put into effect by the end of 2013 at the latest. The other measures set 
out in this Anti-Fraud Strategy will be implemented at the latest by the end of 2014.  

2.2. 

Prevention and detection of fraud 

Prevention and detection of fraud and irregularities30 are objectives to be achieved through the 
internal control process within the Commission that is applicable at all management levels.31 
All entities managing EU funds are legally bound to prevent irregularities and fraud affecting 
the  EU  budget.  In  practical  terms,  the  Commission,  the  Member  States  and  other 
implementing  partners  have  an  obligation  to  put  in  place  management  and  internal  control 
procedures designed to prevent and detect irregularities, errors and fraud.32  

The controls aimed at preventing and detecting fraud are part of those intended to ensure the 
legality and regularity of transactions. This Anti-Fraud Strategy should not, therefore, result in 
an additional layer of controls. It is necessary nonetheless to ensure that the internal control 
systems in place adequately cover the risk of fraud.  

30 

31 
32 

Fraud is a penal law qualification given by a judge. In the context of this communication, detection of 
fraud and irregularities, refers to the detection of facts or highly suspicious circumstances that point at 
irregularities  and  therefore  potential  fraud  (e.g.  by  financial  staff  or  auditors)  which  require 
transmission to OLAF with a view to have them investigated by OLAF. 
Article 28a of the Financial Regulation. 
Article 60(4) in conjunction with Article 48 of the Implementing Rules of the Financial Regulation (OJ 
L 357, 31.12.2002, p. 1-71). 

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While the legal framework already provides a full set of requirements to ensure the regularity 
and legality of the procedures, further improvements are needed in order to address specific 
exposure  to  fraud  in  a  satisfactory  manner.  The  Commission’s  central,  and  certain 
management, Services have developed risk analysis tools which are also suited to managing 
fraud risks, but these need to be reviewed regularly in order better to address these issues.33 
The Commission will actively promote fraud risk management and will monitor the practical 
results stemming from the fraud prevention measures which are already in place. 

2.2.1.  Anti-fraud strategies at Commission Service level 

Depending on the management mode and the policy area, the responsibilities of the actors vary. This 
calls for a tailored approach: anti-fraud strategies at Commission Service level have to be designed on 
an  individual  basis  with  some  common  features,  depending  on  the  policy  area  and  Commission 
Service  concerned.  A  ‘one-size-fits-all’  solution  would  not  be  the  most  efficient.  Where  applicable, 
implementation must be based on specific sectoral anti-fraud strategies, which must be adopted by 
all Services managing or supervising EU funds. 

As  far  as  direct  management  is  concerned,  the  Commission  Services  responsible  for  the 
different policies are primarily responsible for prevention of fraud, for the financial follow-up 
of fraud cases in their areas of responsibility, and where appropriate and in close cooperation 
with  OLAF,  for  the  adoption  of  mitigating  measures  to  avoid  the  continuation  of  fraud  or 
irregularities.34 

In the shared  management domain,  the  Member States have  primary responsibility  for the 
implementation  of  a  significant  part  of  the  EU  budget  (some  80 %).35  This  poses  specific 
challenges  to  the  Commission  Services  concerned  in  relation  to  fraud  prevention  and 
detection.  In  relation  to  shared  management,  Member  States  are  responsible  in  the  first 
instance  for  the  establishment  of  management  and  control  systems  for  operational 
programmes that are compliant with the regulatory framework. Member States are required to 
operate these systems effectively so as to prevent, detect and correct irregularities, including 
fraud.  The  Commission  has  then  to  apply  clearance-of-accounts  procedures  or  financial 
correction mechanisms which enable it to assume final responsibility for the implementation 
of the budget under shared management. 

Regarding  indirect,  joint  and  decentralised36  and  shared  management,  Commission  Services 
rely on external partners for the implementation of the EU budget. An anti-fraud strategy at 
Commission  Service  level  will  have  to  respect  the  proportionality  and  cost-benefit  of  the 
measures  to  be  implemented,  where  possible  building  on  an  existing  strategy.  The 
particularities  of  management  by  external  partners  vary,  so  Commission  Services  need  to 
determine  how  best  to  protect  the  EU’s  financial  interests  in  each  area,  taking  into  account 
cost-benefit considerations. OLAF will support the Commission Services as set out in Section 
2.2.2.  Where  appropriate,  the  Commission  will  propose  or  reinforce  legislation,  modify 

33 

34 

35 
36 

See  Communication  to  the  Commission  ‘Towards  an  effective  and  coherent  risk  management  in  the 
Commission services’ (SEC(2005)1327). 
In  direct  management,  under  Article  53a  of  the  Financial  Regulation,  implementation  tasks  must  be 
performed either directly by the Commission Services or by EU Delegations. 
Article 53b of the Financial Regulation. 
Articles 54, 53, 56, and 163 of the Financial Regulation. 

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agreements  or  negotiate  necessary  changes  with  Member  States  and  other  external  partners. 
Such proposals will also take into account relevant fraud risk assessments and other analysis. 

Which elements are needed in anti-fraud strategies at Commission Service level? 

The  Commission  Services  will  adjust  their  internal  control  systems  and  procedures  in  a 
coherent manner, with due regard for the principle of proportionality. 

Sectoral strategies should address the whole anti-fraud cycle, namely fraud prevention and detection, 
cooperation  between  OLAF  and  Commission  Services,  recovery,  and  penalties.  They  should  adjust 
these elements to the specific needs and circumstances of the individual policy sector including to the 
risk of fraud in that sector.  

Existing  sectoral  strategies  may  be  used  as  a  basis,  duly  augmented  or  supplemented  as 
appropriate.  

The  Commission  may  also  put  in  place  regional  strategies  covering  specific types  of  fraud.  A  new 
example  of  a  horizontal  approach  is  the  Action  Plan  to  fight  against  smuggling  of  cigarettes  and 
alcohol along the EU’s Eastern border, which accompanies this Strategy as a working document.37 

The Commission will develop close cooperation and synergies and also promote the relevant 
standards  set  out  in  this  Anti-Fraud  Strategy  within  EU  institutions,  including  the  EEAS, 
offices, agencies and bodies, including joint undertakings.  

2.2.2.  OLAF’s role in developing and implementing strategies 

According  to  Regulation  (EC)  No  1073/1999  OLAF  ‘shall  contribute  to  the  design  and 
development of methods of fighting fraud and any other illegal activity affecting the financial 
interests of the European Community.’38 OLAF should be involved in this exercise at an early 
stage. While fraud prevention and detection is primarily the responsibility of each Head of a 
Commission  Service  (as  appropriate  in  each  management  mode),  OLAF  plays  an  important 
role throughout the process.  

OLAF  will  play  a  proactive  and  reinforced  role,  assisting  the  Services  by  providing,  inter  alia,  a 
methodology  and  guidance  on  the  development  and  implementation  of  the  sectoral  anti-fraud 
strategies.  

Currently  there  is  only  an  exchange  of  best  practices  between  certain  Commission  Services 
managing  EU  funds,  but  it  is  does  not  involve  all  Commission  Services.  The  Inter-service 
group  of  Fraud  Proofing  Correspondents  will  be  developed  into  a  Fraud  Prevention  and 
Detection  Network  organised  by  OLAF.  This  network  will  be  used  as  centre  of  expertise 
providing support and advice. It will disseminate best practices (e.g. the data mining project 
‘Pluto’ mentioned above) and fraud risk assessments based on OLAF’s operational experience 

37 
38 

SEC(2011)791 
Article  1;  in  the  amended  proposal  for  reforming  OLAF  (COM(2011)135  this  part  has  been  slightly 
adapted insofar as OLAF must contribute to the design and development of methods of preventing and 
combating fraud, corruption and any other illegal activity affecting the financial interests of the Union. 

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as well as the relevant information from Member States, non-EU countries and international 
organisations which OLAF holds. This network should also help develop and regularly update 
the sectoral strategies adopted by Commission Services. 

OLAF  contributes  to  coordinating  Member  States’  cooperation  against  fraud  in  accordance 
with Article 325(3) TFEU and the applicable regulatory framework39. Member States’ action 
is supported by regular consultation, notably within the Committee on the coordination of the 
fight  against  fraud  (COCOLAF).40  This  Committee  could  have  more  sectoral  subgroups, 
ensuring  the  presence  of  experts  for  the  different  policy  sectors.  These  subgroups  should 
stimulate cooperation among the anti-fraud services of the Member States, encouraging them 
to  share  their  operational  experiences  and  to  raise  awareness  of  the  fraudulent  practices 
detected in the different Member States. 

This reflects OLAF’s role, which is to investigate allegations of fraud and to actively assist all 
Commission Services in developing fraud prevention policies. 

2.2.3. 

Systematic controls and risk analyses 

As appropriate in each management mode, the Commission Services will, with the assistance 
of OLAF, put in place systems which give them a reasonable assurance that they will detect 
major  irregularities  and  fraud.  In  particular,  conditions  should  be  created  for  identifying 
suspicious operations or operators through the presence of specific indicators (‘red flags’).  

The  Services  will  assess  the  need  to  improve  fraud  risk  assessment  by  developing  a  more 
systematic and formalised process for identifying areas of fraud risk. In parallel, making the 
most  efficient  use  of  existing  resources,  they  should  introduce  smart  controls  using  the  IT 
tools,  duly  adapted  to  their  needs,  which  have  been  developed  by  some  Services  in 
collaboration  with  OLAF.41  Such  tools  enable,  for  example,  the  pooling  of  existing  data 
linked to closed or ongoing EU-funded projects. This is useful for fraud prevention purposes, 
but  can  also  detect  plagiarism  and  fraudulent  double  funding.  These  tools  will  be  fully 
effective  only  if  the  relevant  information  systems  contain  complete,  consistent  and  reliable 
data on EU funds. The possibility of analysing data for fraud prevention purposes should also 
be taken into consideration when defining business requirements for new IT systems. 

Communication between Commission Services about fraud risks could be improved. The use 
made  of  the  Commission’s  internal  Early  Warning  System  (EWS)42  will  be  reviewed  to 
make it an even more effective fraud prevention tool for direct management. The conditions 
should  be  put  in  place  for  a  more  extensive  exchange  of  information  with  external 

39 

40 
41 

42 

Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative 
authorities of the Member States (OJ L 82, 22.3.1997, p. 1) and Regulation (EC) No 1073/1999 of the 
European  Parliament  and  of  the  Council  of  25  May  1999  concerning  investigations  conducted  by 
OLAF, Article 1 (OJ L 136, 31.5.1999, p. 1). 
Commission Decision 94/140/EC, OJ L 61, 4.3.1994, p. 27. 
Such as the ‘Pluto’ data-mining project mentioned under Section 1 developed by Services involved in 
research funding and OLAF. 
Commission Decision C(2008) 3872 of 16 December 2008 on the Early Warning System for the use of 
authorising officers of the Commission and the executive agencies OJ L 344, 20.12.2008, p.125. 

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stakeholders  via  the  Central  Exclusion  Database,43  based  on  relevant  legislation  and 
respecting data protection rules. 

Effective monitoring may be hampered by inadequate access to documents and information in 
some  areas  of  joint  management  involving  international  organisations.44  The  Commission 
will  continue  to  endeavour  to  improve  the  legal  instruments  for  cooperating  with  non-EU 
countries and international organisations, and to ensure that  these are properly implemented 
and  applied.  This  may  include  inserting  in  international  agreements  and  memoranda  of 
understanding,  in  line  with  existing  regulations  on  investigations,  provisions  on  exchanging 
information and on cooperating at operational level, including joint investigations. 

2.2.4.  Awareness-raising and training 

The  Commission  will  regularly  raise  awareness  of  potential  fraud  among  its  staff,  in 
particular  project  managers,  financial  staff  and  auditors  and  staff  posted  in  the  EU 
delegations.  It  will  cooperate  closely  with  the  EEAS  and  other  EU  bodies  to  promote  this 
policy. It will disseminate information on the Early Warning System, on the procedures for 
reporting fraud and on measures for countering fraud. These include limiting the impact of 
fraud  and  irregularities  by  taking  timely  and  appropriate  action  to  prevent  them  continuing, 
focusing  initially  on  the  bodies  and  entities  most  concerned.  The  information  disseminated 
should include information on anti-fraud measures and on OLAF. 

All  staff  working  in  project  management  and  financial  operations  have  a  responsibility  in 
fraud  prevention  and  detection  and  should  be  sufficiently  trained,  including  in  anti-fraud 
matters.  OLAF  will  provide  an  internal  dedicated  Commission  anti-fraud  website  with 
methodological  guidance  to  help  services  and  executive  agencies  to  develop  anti-fraud 
strategies,  including  best  practices  and  fraud  patterns,  and  will  provide  its  expertise  for  the 
development of training programmes.  

The  OLAF  Fraud  Prevention  and  Detection  Network  and  possibly  other  existing  expert 
groups will contribute to awareness raising and training. 

The Commission, and in particular OLAF, will also continue to exchange best practices, assist 
and  cooperate  with  other  international  organisations  and  expert  bodies  in  developing  anti-
fraud and anti-corruption policies. The activities related to the latter will be coordinated with 
the EU anti-corruption reporting mechanism. 

2.3. 

Investigations 

2.3.1.  OLAF investigations 

The  Commission  has  presented  its  amended  proposal  for  reforming  OLAF.45  This  proposal 
reinforces OLAF’s efficiency in the conduct of its investigations.46 The proposal also provides 

43 
44 

45 

Article 95 of the Financial Regulation. 
ECA  Opinion  No  1/2010  —  Improving  the  financial  management  of  the  EU  budget:  risks  and 
challenges , OJ C35, 12.2.2010, point 14. 
COM(2011)135. 

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for  better  cooperation  with  other  authorities.  It  provides  for  specific  procedural  rights  and 
guarantees  the  protection  of  individual  rights  in  line  with  the  EU  Charter  of  Fundamental 
Rights.  

Information  flow  between  the  Commission  Services  and  OLAF  before,  during  and  after 
investigations  should  enable  the  Commission  to  take  appropriate  precautionary  measures, 
such as suspending grants, contracts or payments and halting ongoing irregular practices. This 
will also help OLAF to access all relevant information for the purpose of its investigations.  

Where investigations involve staff members of the EU Institutions (‘internal investigations’), 
intensive  cooperation  between  OLAF  and  other  investigation  services  is  an  essential 
condition  for  success.  Such  cooperation  should  be  reinforced  wherever  necessary,  in 
particular between OLAF  and the other  investigation and inspection  services of the  EU 
Institutions. 47 

For  all  management  modes,  central  contact  point  authorities  should  be  identified  within 
Member States,48 non-EU countries and international organisations. OLAF can then use these 
contact points as a direct link for investigation purposes, as proposed in the amended proposal 
for reforming OLAF. 

Where  appropriate,  and  for  the  purposes  of  OLAF  investigations,  cooperation  between 
OLAF  and  external  auditors  of  the  Commission  Services  should  be  further  enhanced  to 
profit  from  their  respective  expertise.  To  this  end,  Commission  auditors  can  take  part  in 
OLAF’s missions and on-the-spot checks. 

OLAF  promotes  and  shares  with  the  Member  States  its  operational  experience  and  best 
practices in protecting the EU’s financial interests. It should support joint anti-fraud measures 
undertaken by Member States.49 The partners should inform OLAF about detected cases of 
fraud at an early stage and update this information as the matter is followed up, respecting the 
applicable legal framework. 

With a view to the new Multi-annual Financial Framework, the spending programmes and all 
related decisions, contracts and grant agreements financed by the EU must state that OLAF 
has the competence to investigate suspected fraud in EU financed programmes and projects.50 
The clauses concerned should place a duty on all contractors and grant beneficiaries and their 
staff  to  give  OLAF,  at  its  request,  access  to  all  information  on  the  implementation  of  the 
programmes and projects. Contractors and grant beneficiaries should be required to include in 

46 

47 

48 

49 

50 

The European Court of Auditors highlights also the need to improve efficiency. See Special Report No 
2/2011  of  the  European  Court  of  Auditors  ‘Follow-up  of  Special  Report  No  1/2005  concerning  the 
management of the European Anti-Fraud Office’. 
The amended proposal for the OLAF reform (COM(2011)135) foresees therefore that OLAF prioritises 
its investigative work, see Article 5(1) and Explanatory Memorandum, p.4. 
Article  3  of  the  amended  proposal  for  OLAF  reform  (COM(2011)135)  provides  for  this.  See  also 
Explanatory Memorandum, p.4. 
Under  Article  1  of  the  amended  proposal  for  OLAF  reform  (COM(2011)135),  OLAF  shall  ‘support 
joint anti-fraud actions undertaken by Member States on a voluntary basis’. 
See in this context SEC(2007)1676 on the fraud proofing activities with regard to spending programmes 
under the Financial Perspectives 2001-2006. 

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contracts signed with their subcontractors the necessary clauses giving OLAF the same access 
rights in relation to all subcontractors.  

2.3.2. 

Informants and whistleblowers  

The  framework  for  reporting  suspected  fraud  and  corruption  and  for  protecting  all 
informants who act in good faith is important for the detection of fraud. EU legislation lays 
down  whistleblowing  rules  for  EU  staff.51  All  other  parties  (informants)  should  also  have 
easy access to the investigation authorities, such as OLAF.52 The Commission will consider 
how  whistleblowers  can  receive  better  guidance  and  protection  from  the  authorities 
concerned,  and  how  further  to  encourage  informants  to  communicate  irregularities,  fraud 
and  corruption  (for  example  measures  to  motivate  informants  and  to  encourage  voluntary 
disclosure). 

2.4. 

Sanctions 

The  Commission  will  streamline  and  reinforce  the  use  of  financial  and/or  administrative 
penalties, including exclusion from EU financing in the event of serious irregularities, fraud 
and corruption. When deciding what penalties to impose on legal entities, account should be 
taken  of  the  measures  which  these  entities  have  taken  against  persons  responsible  for  fraud 
and corruption. These penalties should receive appropriate publicity, in compliance with the 
existing legal framework. 

Member  States  are  obliged  to  report  certain  cases  of  fraud  against  the  EU  budget  that  may 
provide a basis for excluding beneficiaries from further EU financing.53 However, they have 
no  obligation  to  keep  this  information  in  a  centralised  system  which  would  channel 
information flows through a single responsible authority, making the system more effective. 
The Commission will therefore encourage Member States to adopt guidelines for authorities 
at national level to ensure that notifications are properly communicated to the Commission’s 
Central  Exclusion  Database  (CED).  The  Commission  will  encourage  action  within  Member 
States’ authorities and EU bodies to raise awareness of the CED. 

To  ensure  a  level  playing  field  across  the  EU,54  the  Commission  will  assess  whether  the 
financial and/or administrative penalties applied by Member States under national rules 
are  sufficiently  effective,  proportionate  and  dissuasive.  It  will  also  prepare  relevant 
legislative  initiatives,  in  particular  in  the  customs  area  as  provided  for  in  the  Stockholm 
Action Plan.55 

To  increase  the  deterrent  effect  of  disciplinary  sanctions,  the  outcome  of  disciplinary 
proceedings  should  be  communicated  more  effectively,  while  respecting  the  fundamental 
rights of the persons concerned and data protection. Information on sanctioned staff should 

51 
52 

53 
54 

55 

Staff Regulations, Article 22a and 22b (OJ 45, 14.6.1962, p. 1385). 
For  example,  the  Fraud  Notification  System  (FNS)  can  be  used  for  confidential  reporting: 
https://fns.olaf.europa.eu/. 
Article 95 (2) of the Financial Regulation. 
See relevant initiatives, which are considered in the Communication on the Protection of the Financial 
Interests of the EU by criminal law and administrative investigations, COM(2011)293. 
COM(2010)171, p.22. 

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be  kept  and  shared  with  other  authorities  on  a  need-to-know  basis  for  fraud  prevention 
purposes,  in  compliance  with  data  protection  rules  and  subject  to  appropriate  specific 
safeguards.56 

2.5. 

Recovery 

In the case of shared management, the Member States are in the first instance responsible for 
investigating  irregularities  and  fraud  and  for  recovering  funds  wrongly  paid,  including  as  a 
follow-up to OLAF investigations.57 In the case of direct management, Commission Services 
should  without  delay  issue  recovery  orders  as  a  follow-up  to  OLAF  investigations.  It  is 
important  that  information  on  these  recoveries  be  systematically  fed  back  into  OLAF’s 
operational  activities.  The  Commission  will  further  improve  the  completeness,  quality  and 
presentation of data on recoveries in its report on the Protection of the Financial Interests of 
the European Union.58 

2.6. 

Other cross-cutting fraud prevention instruments 

2.6.1. 

International legislative standards 

The Commission will ensure due implementation of the relevant international conventions 
and  standards  relating  to  anti-fraud  policies,  with  a  particular  focus  on  the  UN  Convention 
against  Corruption  (UNCAC),  the  Council  of  Europe  instruments  (GRECO)  and  the  OECD 
and G20 standards and recommendations.59 

2.6.2.  Ethics and integrity 

The Commission is equipped with a comprehensive system of rules on ethics and integrity for 
staff60  as  well  as  for  the  Members  of  the  Commission.61  These  rules  have  recently  been 
revised.  The  Commission  provides  all  newcomers  with  training,  and  refresher  courses  are 
available. 

The Commission will ensure that the rules and the ethical values of the EU public service are 
properly  and  regularly  communicated  from  the  highest  levels  to  all  of  its  staff  and  that 
appropriate training is provided.  

The Commission must ensure that there are efficient fraud prevention measures in place in its 
recruitment and staff policies. These should include effective checks on a candidate’s past. 

56 
57 
58 
59 

60 

61 

See Article 8(5) of Directive 95/46/EC and Article 10(5) of Regulation (EC) No 45/2001. 
Article 53b(2)(c) of the Financial Regulation. 
http://ec.europa.eu/anti_fraud/reports/anti-fraud_en.html. 
See The Communication of the Commission ‘Fighting Corruption in the EU’ (COM(2011)308), p. 9-
10. 
Staff  Regulations  (OJ  45,  14.6.1962,  p.  1385),  Code  of  Good  Administrative  Behaviour  (OJ  L  267, 
20.10.2000), the Practical Guide to Staff Ethics and Conduct and other specific rules. 
Code  of  Conduct 
2014/pdf/code_conduct_en.pdf). 

(C(2011)2904):  http://ec.europa.eu/commission_2010-

for  Commissioners 

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2.6.3.  Transparency and access to information 

Transparency  contributes  to  fraud  prevention  and  detection.  To  ensure  that  EU  finances  are 
managed  in  a  transparent  way,  and  subject  to  the  applicable  legal  requirements,  citizens 
should enjoy easy access to relevant information.  

Following  the  European  Transparency  Initiative,62,  the  Commission  has  also  introduced  a 
voluntary  regime  for  more  transparency  in  the  representation  of  interests  at  EU  level.  A 
register  has  been  set  up  and  a  code  of  conduct  has  been  adopted.  On  23  June  2011,  the 
Commission  signed  an  inter-institutional  agreement  with  the  European  Parliament  on  a 
common register.63  

2.6.4.  Procurement and grants 

The  Commission  is  currently  reviewing  the  EU  procurement  directives.64  This  should 
simplify and increase transparency of procurement procedures at all levels, the EU and the 
Member States. In the context of the reform, the Commission will examine additional possible 
means  of prevention  of  fraudulent  behaviour  and  conflicts  of  interest  in  distribution  of 
public funds. 

The  Commission  is  also  considering  proposing  rules  with  regard  to  the  award  of  service 
concessions, which may involve the use of the EU funds in public private partnerships, and 
which today are not covered by any clear requirement of transparency. 

Entities  receiving  EU  funds  should  be  able  to  demonstrate,  on  request,  transparent 
ownership. All entities in the ownership structure should be verifiable by the authorities on a 
need-to-know  basis.  This  also  applies  to  the  consortium  partners  and  third  parties  receiving 
financial support when a grant is implemented.  

3. 

MONITORING OF AND REPORTING ON IMPLEMENTATION  

The  reference  to  the  implementation  of  this  Anti-Fraud  Strategy  should  be  integrated  in  the 
Commission’s existing Strategic Planning and Programming cycle, which provides for a full 
set of mechanisms for planning, monitoring and reporting. Anti-fraud strategies do not require 
additional layers of control and administrative burden, but need to be properly integrated into 
existing planning, control and reporting mechanisms. 

At the Commission Services level, the Annual Management Plans are used for planning and 
monitoring  activities;  they  should  also  include  the  implementation  of  their  anti-fraud 
strategies. The Annual Activity Report is the reporting tool which explains what each Service 
has  achieved  that  year,  including  how  it  has  improved  its  management  and  control  systems 
and  financial  management,  including  anti-fraud  issues.  The  Annual  Activity  Reports  65 
should contain information on fraud prevention as part of the assessment of their internal 
control  systems,  reflecting  the  implementation  of  the  sectoral  strategy  and  describing 

62 
63 
64 
65 

EN 

SEC(2005)1300 and SEC(2005)1301. 
http://ec.europa.eu/transparency/index_en.htm. 
Green Paper on the modernisation of EU public procurement policy (COM(2011)15). 
These 
of 
are 
http://ec.europa.eu/atwork/synthesis/aar/index_en.htm. 

published 

website 

reports 

the 

on 

17 

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EU: 

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measures  to  mitigate  fraud  risks.66  They  should  also  include  regular  updates  on  the 
implementation of the sectoral anti-fraud strategies. 

The Commission will report on the implementation of this Anti-Fraud Strategy starting from 
the 2013 Commission report on the protection of EU financial interests. 

These  arrangements  will  ensure  that  anti-fraud  measures  remain  high  on  the  Commission’s 
agenda and will emphasise their relevance to the discharge procedure. 

66 

For overall reporting on this Anti-Fraud Strategy see Section 3. 

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