COMMISSION STAFF WORKING PAPER Statistical Evaluation of Irregularities- Own Resources, Agriculture, Cohesion Policy, Pre-Accession Funds and Direct Expenditure -Year 2010
Date: 2011-09-29
Institutions: European Commission
Subjects: EU statistics, agricultural expenditure, disclosure of information, economic and social cohesion, fraud against the EU, fund (EU), own resources, pre-accession aid

EUROPEAN COMMISSION 

Brussels, 29.9.2011 
SEC(2011) 1108 final 

COMMISSION STAFF WORKING PAPER 

Statistical Evaluation of Irregularities- Own Resources, Agriculture, Cohesion Policy, 
Pre-Accession Funds and Direct Expenditure -Year 2010 

Accompanying document to the 

Report from the Commission on the protection of the European Union’s  financial 
interests and the fight against fraud – 2010 

{COM(2011) 595 final} 
{SEC(2011) 1107 final} 
{SEC(2011) 1109 final} 

 
 
 
 
  
 
TABLE OF CONTENTS 

LIST OF ABBREVIATIONS .................................................................................................... 6 

PART I – INTRODUCTION AND METHODOLOGY ........................................................... 8 

1. 

1.1. 

1.2. 

2. 

2.1. 

2.2. 

2.3. 

3. 

INTRODUCTION........................................................................................................ 8 

Scope of the document ................................................................................................. 8 

Structure of the document ............................................................................................ 8 

THE EUROPEAN UNION BUDGET......................................................................... 9 

Revenues ...................................................................................................................... 9 

Expenditure ................................................................................................................ 10 

Management of the Budget ........................................................................................ 11 

THE LEGAL FRAMEWORK FOR IRREGULARITIES REPORTING ................. 12 

3.1. 

The legal framework .................................................................................................. 12 

3.1.1.  The reporting obligation............................................................................................. 13 

3.1.2.  Derogations to the reporting obligation ..................................................................... 14 

3.2. 

Implementation of the Reporting Obligation ............................................................. 14 

4. 

DEFINITIONS........................................................................................................... 15 

4.1. 

Legal definitions......................................................................................................... 15 

4.1.1. 

Irregularity.................................................................................................................. 15 

4.1.2.  Fraud .......................................................................................................................... 15 

4.1.3.  Suspected fraud .......................................................................................................... 16 

4.2. 

Indicators.................................................................................................................... 17 

4.2.1. 

Irregularity and Fraud Rates....................................................................................... 17 

4.2.2.  Fraud Frequency and Fraud Amounts Levels ............................................................ 17 

5. 

METHODOLOGY..................................................................................................... 18 

5.1. 

Data Capturing – The irregularity reporting systems................................................. 18 

5.1.1.  OWNRES................................................................................................................... 18 

5.1.2. 

Irregularity Management System (IMS) .................................................................... 18 

5.1.2.1.  The modules ............................................................................................................... 18 

5.1.2.2.  The national structures and users ............................................................................... 19 

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5.1.2.3.  Data input and data quality ........................................................................................ 21 

5.1.2.4.  Impact of IMS on irregularity reporting..................................................................... 22 

5.1.3.  ABAC – Recovery context......................................................................................... 22 

5.2. 

Data analysis – cases of irregularity and (suspected) fraud ....................................... 23 

PART II - REVENUES............................................................................................................ 25 

6. 

TRADITIONAL OWN RESOURCES (ANNEXES 3-13) ....................................... 25 

6.1. 

Management of Traditional Own Resources (TOR).................................................. 25 

6.1.1.  Monitoring of establishment and recovery of TOR ................................................... 25 

6.1.2.  Procedure for managing Member States’ reports for write-off.................................. 26 

6.1.3.  Particular cases of Member State failure to recover TOR ......................................... 27 

6.2. 

Reporting discipline ................................................................................................... 28 

6.2.1.  Year of discovery versus year reported...................................................................... 28 

6.3. 

General trends ............................................................................................................ 29 

6.3.1.  Types of irregularity and fraud .................................................................................. 29 

6.3.2.  TOR and cigarettes..................................................................................................... 31 

6.3.3.  Data main sectors TOR .............................................................................................. 31 

6.4. 

Detection of fraud and irregularity............................................................................. 31 

6.4.1.  Member States' control systems – Method of detection expressed in cases .............. 31 

6.4.2.  Member States' control systems – Method of detection expressed in monetary terms

.................................................................................................................................... 32 

6.4.3.  Customs procedures affected to fraud and irregularity in 2010................................. 33 

6.4.4.  Percentage of established or estimated amounts in OWNRES to collected TOR ..... 35 

6.5. 

Recovery .................................................................................................................... 37 

6.5.1.  Recovery rate ............................................................................................................. 38 

6.6. 

Conclusions ................................................................................................................ 38 

PART III - EXPENDITURE.................................................................................................... 40 

7. 

7.1. 

7.2. 

AGRICULTURAL EXPENDITURE (Annexes 13-14) ............................................ 40 

Introduction ................................................................................................................ 40 

Financial Year 2010 ................................................................................................... 42 

7.2.1.  Financial Year 2010: cases reported .......................................................................... 42 

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7.2.2.  Financial Year 2010: reporting discipline.................................................................. 43 

7.2.3.  Financial Year 2010: financial follow up of irregularity cases.................................. 45 

7.3. 

General trends ............................................................................................................ 48 

7.3.1.  Financial Years 2006-2010: impact on the budget .................................................... 48 

7.3.2.  Financial Years 2006-2010: cases classified as suspected fraud ............................... 51 

7.3.3.  Financial Years 2006-2010: overview per budget post.............................................. 53 

7.3.3.1.  Financial Years 2006-2010: decoupled direct aids (B-050301) ................................ 55 

7.4. 

Specific analysis......................................................................................................... 57 

7.4.1.  Financial Years 2004-2005: expenditures and cases reported per Member State ..... 58 

7.4.2.  Financial Years 2004-2005: expenditures and cases reported per budget post ......... 61 

7.4.2.1.  Financial Years 2004-2005: fruits and vegetables (B-050208) ................................. 63 

7.4.2.2.  Financial Years 2004-2005: direct payment for arable crops (B-050203) ................ 66 

7.4.2.3.  Financial Years 2004-2005: beef and veal (B-050302) ............................................. 71 

7.4.2.4.  Financial Years 2004-2005: rural development (B-0504xx) ..................................... 74 

7.4.2.5.  Financial Years 2004-2005: milk and milk products (B-050301) ............................. 76 

7.4.2.6.  Financial Years 2004-2005: olive oil (B-050206) ..................................................... 77 

7.5. 

Conclusions ................................................................................................................ 78 

7.5.1.  Financial Year 2010 ................................................................................................... 78 

7.5.2.  Financial Years 2006-2010 ........................................................................................ 79 

7.5.3.  Financial Years 2004-2005 ........................................................................................ 79 

8. 

9. 

9.1. 

9.2. 

European Fisheries Fund............................................................................................ 80 

COHESION POLICY (Annexes 15-20) .................................................................... 81 

Reporting Discipline .................................................................................................. 81 

General Trends ........................................................................................................... 82 

9.2.1.  Yearly trends .............................................................................................................. 82 

9.2.2.  Detection of irregularities .......................................................................................... 85 

9.2.3.  Types of irregularity................................................................................................... 86 

9.2.4.  Suspected frauds......................................................................................................... 86 

9.3. 

Specific analysis – Analysis by Programming Period: 2000-2006 and 2007-2013... 89 

9.3.1. 

Irregularities related to the programming period 2000-2006 – Structural Funds ...... 89 

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9.3.2.  Established fraud – Structural Funds ......................................................................... 95 

9.3.3. 

Irregularities related to the programming period 2000-2006 – Cohesion Fund......... 96 

9.3.4. 

Irregularities related to the programming period 2007-2013..................................... 98 

9.4. 

Conclusions ................................................................................................................ 99 

9.4.1.  Structural Actions....................................................................................................... 99 

9.4.2.  Programming Period 2000-2006 ................................................................................ 99 

9.4.3.  Cohesion Fund ......................................................................................................... 100 

10. 

Pre-accession funds (Annexes 21-22)...................................................................... 101 

10.1.  Reporting discipline ................................................................................................. 102 

10.2.  General Trends ......................................................................................................... 103 

10.2.1.  Overall trend............................................................................................................. 103 

10.2.2.  Irregularities affecting different funds ..................................................................... 105 

10.2.3.  Amounts involved and impact on budget................................................................. 106 

10.2.4.  Detection of irregularities ........................................................................................ 106 

10.2.5.  Detected types of irregularities / modus operandi.................................................... 107 

10.3. 

Specific analysis....................................................................................................... 107 

10.3.1.  Suspected and established fraud............................................................................... 107 

10.3.2.  Cases of suspected fraud related to the programming period 2002-2006................ 109 

10.3.3.  Fraud rates related to SAPARD – programming period 2002-2006........................ 109 

10.3.4.  Estimated Fraud Rate for the Programming Period 2002-2006 – all funds............. 111 

10.3.5.  Recovery .................................................................................................................. 111 

10.4.  Conclusions .............................................................................................................. 112 

11. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT .......... 114 

11.1.  Methodology and scope ........................................................................................... 114 

11.2.  General analysis ....................................................................................................... 114 

11.2.1.  Financial amounts involved ..................................................................................... 114 

11.2.2.  Financial amounts involved by geographical area and Member State..................... 116 

11.2.3.  Method of detection ................................................................................................. 119 

11.2.4.  Types of irregularity................................................................................................. 121 

11.3. 

Specific analysis....................................................................................................... 124 

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11.3.1.  Irregularity versus Suspected Fraud......................................................................... 124 

11.3.2.  Time delay................................................................................................................ 124 

11.3.3.  Trends....................................................................................................................... 125 

11.4.  Recovery .................................................................................................................. 126 

11.5.  Conclusions .............................................................................................................. 127 

ANNEXES ............................................................................................................................. 129 

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LIST OF ABBREVIATIONS 

ABAC  
AFIS  
CN  
COCOLAF  
DG AGRI  
DG EMPL  
DG MARE  
DG REGIO  
DG TAXUD  
EAFRD 
EAGF 
EAGGF  
EC  
EFF  
EP  
ERDF  
ESF  
EU  
EU-10  
EU-15  
EU-2  
EU-25 
EU-27  
EUR  
EURATOM  
FAL  
FFL  
FIFG  
FinR  
FrR  
FY 
GNI  
IMS  
IPA  
IrR  
OLAF  
OWNRES  
PAA  
PIF 
TFEU 

Accrual Based Accounting 

Anti-Fraud Information System 

Combined Nomenclature 

Advisory Committee for the Coordination of Fraud Prevention 

Directorate General for Agriculture and Rural Development 

Directorate General for Employment, Social Affairs and Equal Opportunities 

Directorate General for Maritime Affairs and Fisheries 

Directorate General for Regional Policy 

Directorate General for Taxation and Customs Union 

European Agricultural Fund for Rural Development 

European Agricultural Guarantee Fund 

European Agricultural Guidance and Guarantee Fund 

European Commission 

European Fishery Fund 

European Parliament 

European Regional Development Fund 

European Social Fund 

European Union 

The 10 Member States joining the EU in 2004 

The 15 Member States before the enlargement of 2004 

The 2 Member States joining the EU in 2007 

The 25 Member States before the enlargement of 2007 

The 27 Member States of the European Union 

Euro 

European Atomic Energy Community 

Fraud Amount Level 

Fraud Frequency Level 

Financial Instrument for Fishery Guidance 

Financial Regulation 

Fraud Rate 

Financial Year 

Gross National Income 

Irregularity Management System 

Instrument for Pre-Accession 

Irregularity Rate 

European Anti-Fraud Office 

Own Resources 

Pre-Accession Assistance 

Protection of Financial Interests (European Convention on the) 

Treaty on the Functioning of the European Union 

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TOR  
VAT  
WOMIS  

Traditional Own Resources 

Value Added Tax 

Write-Off Management and Information System 

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PART I – INTRODUCTION AND METHODOLOGY 

1. 

INTRODUCTION 

1.1. 

Scope of the document 

The  present  document1  is  based  on  the  analysis  of  the  notifications  provided  by 
national authorities of cases of irregularities and suspected or established fraud. The 
reporting  is  performed  in  fulfilment  of  a  legal  obligation  enshrined  in  sectoral 
European legislation. 

The  document  is  accompanying  the  Annual  Report  adopted  on  the  basis  of  article 
325 of the Treaty on the Functioning of the European Union (TFEU), according to 
which “The Commission, in cooperation with Member States, shall each year submit 
to the European Parliament and to the Council a report on the measures taken for the 
implementation of this article”. 

For  this  reason,  this  document  should  be  regarded  more  as  an  analysis  of  the 
achievements of Member States rather than of their failures. 

Being  based  on  the  notifications  of  cases  of  irregularities  and  suspected  and 
established  fraud,  the  paragraphs  dedicated  to  recovery  (with  the  exception  of  that 
related to Agriculture) are limited to the results of the actions undertaken by national 
authorities  to  recuperate  amounts  unduly  paid  to  beneficiaries  (mostly  private 
economic  operators).  Moreover,  as  explained  more  in  details  in  paragraph  3.1.2. 
from these analyses are excluded recoveries concerning irregularities whose amount 
does  not  exceed  EUR  10 000.  Chapter  7  (Agricultural  expenditure)  covers  all 
recoveries. 

In  this  respect,  the  present  document  differs  in  scope  and  results  from  other 
Commission  publications  dealing  with  financial  corrections  and  recoveries2 
following  the  detection  of  irregularities,  as  these  concern  actions  taken  by  the 
Commission  in  relation  to  Member  States.  This  document,  instead,  reflects  the 
amounts recovered by the national authorities and not by the Commission services. 

The exception is Chapter 11 of this document, dedicated to the expenditure directly 
managed  by  the  Commission  services,  which  uses  data  extracted  from  the 
Commission Accrual Based Accounting (ABAC) system. 

1.2. 

Structure of the document 

The present document is divided in three parts.  

1 
2 

This document cannot be considered as an official poistion of the Commission. 
See for example the Annual Accounts of the European Union – Financial Year 2009, and in particular 
note  6  of  the  Notes  to  the  financial  statements,  “Financial  corrections  and  recoveries  following  the 
detection of irregularities”. 
http://ec.europa.eu/budget/library/biblio/documents/2009/EU_final_accounts_2009_en.pdf . 

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The first introductory part is composed of five chapters which contain, respectively: 
the structure and scope of the document; a short description of the European Budget 
and  its  different  “management”  modes;  a  summary  of  the  legal  background  for  the 
reporting  of  irregularities;  the  definitions  of  the  specific  terms  used  throughout  the 
document;  and  the  methodology  adopted  for  data  capturing  and  analysing  (the 
reporting  system  and 
the 
techniques  adopted  for 
irregularities). 

the  qualification  of 

the 

The  second  is  dedicated  to  the  analysis  of  irregularities  reported  in  the  area  of  the 
Traditional Own Resources (Revenues).  

The  third  is  composed  of  5  chapters  dedicated,  respectively,  to  Agricultural 
expenditure, European Fisheries Fund, Structural measures, Pre-accession Assistance 
and Direct expenditure. 

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. The overall budget 
for  2010  is  about  EUR  141.5  billion  and  it  represents  around  1%  of  the  Union's 
wealth. 

2.1. 

Revenues 

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

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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. 

Chart 2-1: Source of financial resource to the European Budget 

Gross national 
income (GNI)
76%

Value-added 
tax (VAT) 
11%

Customs 
duties and 
sugar levies
12%

Other
1%

2.2. 

Expenditure 

The EU Budget for 2010 includes 6 headings of expenditure: 

–  Sustainable Growth represents the largest 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;  it  is  divided  between  ‘Modernising  farming  and  producing  high-
quality food’ and ‘Rural development’; 

–  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 Bulgaria and Romania. 

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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  2010 
budget. 

Chart 2-2: Distribution of the expenditure financial resource by Budget Heading 

Other 
expenditure incl. 
Administration
6%

A global player
6%

rural 
development
11%

Sustainable 
growth
45%

Modernising 
farming
31%

Citizenship, 
freedom, security 
and justice
1%

2.3.  Management of the Budget 

According to article 317 of the TFUE, the Commission shall implement the budget. 
Council Regulation (EC, Euratom) No 1605/20023 of 25 June 2002 on the Financial 
Regulation  (FinR)4  applicable  to  the  general  budget  of  the  EU  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 EU - 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 

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Official Journal L 248 of 16.09.2002 
Amended  by  Council  Regulation  (EC,  Euratom)  No  1995/2006  of  13  December  2006  (OJ  L  390  of 
30.12.2006) and by Regulation (EC) No 1525/2007 of 17 December 2007 (OJ L 343 of 27.12.2007). 

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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 

3.1. 

The legal framework 

European legislation provides for the protection of the Union’s financial interests in 
all  areas  of  activity5.  The  FinR  sets  the  principles  and  rules  for  the  correct 
implementation  of  the  budget.  Member  States  are  required  to  notify  the  European 
Commission  (EC)  of  evidence  of  fraud  and  other  irregularities.  This  need  is 
particularly evident in those sectors of the EU budget where the main responsibility 
for management is with the Member States, namely, in the fields of Agriculture and 
Cohesion Policy (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  EUR  10 000  of  EU  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 1848/2006 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. 
Regulation No 498/2007 covers the European Fishery Fund (EFF).  

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See  in  particular  for  traditional  own  resources:  Article  6(5)  of  Council  Regulation  (EC,  Euratom)  No 
1150/2000;  for  expenditure:  Articles  3  and  5  of  Council  Regulation  (EC)  No  1848/2006  of  14 
December  2006  (OJ  L  355,  15.12.2006)  for  Agriculture;  articles  3  and  5  of  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)  for  the  Structural  Funds  until  the 
programming period 2000-2006 included; articles 3 and 5 of Regulation 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  the  Cohesion  Fund  until  the  programming  period  2000-2006  included;  articles  28 
and 30 of Commission Regulation (EC) No 1828/2006 of 8 December 2006 (OJ L 371, 27.12.2006) as 
amended by Commission Regulation (EC) No 846/2009 of 1 September 2009 (OJ L 250, 23.9.2009) for 
the Cohesion Policy 2007-2013; Articles 55 and 57 of Commission Regulation (EC) No 498/2007 of 26 
March 2007 (OJ L 120, 10.5.2007) as amended by Commission Regulation (EC) No 1249/2010 (OJ L 
341, 23.12.2010) for the European Fishery Fund (EFF). 
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 

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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/Union  and  is  in 
accordance  with  the  provisions  of  Commission  Regulation  (EC)  1681/199410  and 
1828/200611.  This  obligation  is  yet  enhanced  by  the  Commission  decision  granting 
conferral of management on extended decentralised basis (EDIS). 

3.1.1.  The reporting obligation 

Member States shall report to the EC any irregularities which have been the subject 
of a primary administrative or judicial finding, within two months following the end 
of each quarter. Therefore, the reporting period is divided in four quarters the last of 
which has as deadline the end of February of the following year12.  

The  first  communication  of  a  case  of  irregularity  is  also  known  as  ‘Initial 
Communication’ 

The information to be submitted concerns, among others: 

(1) 

The identification of the operation or budget line (for agriculture) affected by 
the irregularity; 

(2) 

The detection method and the modus operandi; 

(3) 

The financial impact of the irregularity; 

(4) 

The natural and legal persons having committed the irregularity. 

Member States can differ to a subsequent updating communication the integration of 
the  information  of  which  they  do  not  dispose  at  the  moment  of  the  initial 
communication. 

Updating communications provide relevant information about the administrative and 
judicial  follow-up  of  the  irregularities.  In  the  areas  of  Cohesion  and  Pre-Accession 

(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) 
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. 
As amended by Regulation (EC) No 2035/2005 
As amended by Regulation (EC) No 846/2009 
For  the  Agriculture  sector,  however,  the  financial  year,  which  is  also  taken  as  a  reference  for  the 
analysis of reported irregularities, runs from October 15 to October 14 of the following year. 

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information about financial follow-up has to be provided for irregularities related to 
previous programming periods (until 2000-2006 included)13. 

The reporting of irregularities shall happen by electronic means, using the modules 
provided by the EC (see Chapter 5 about the electronic reporting systems). 

In certain sectors, namely Cohesion Policy and Pre-accession, financial information 
has to be expressed in Euro by countries which have not adopted it as their currency. 

3.1.2.  Derogations to the reporting obligation 

As a general rule, where the irregularities relate to amounts of less than EUR 10 000 
chargeable to the general budget of the EU, Member States shall not send the EC the 
irregularity communication, unless the Commission expressly requests it. 

Further  specific  derogations  to  the  reporting  obligation  are  foreseen  in  the  areas  of 
Agriculture,  Cohesion  and  Pre-accession  policies.  In  particular,  should  not  be 
reported: 

–  cases  where  the  irregularity  consists  solely  of  the  failure  to  partially  or  totally 
execute a (co-)financed operation owing to the bankruptcy of the final beneficiary 
or the final recipient; however, irregularities preceding a bankruptcy and cases of 
suspected fraud must be reported, 

–  cases  brought  to  the  attention  of  the  administrative  authority  by  the  final 
beneficiary or the final recipient voluntarily and before detection by the relevant 
authority, whether before or after the payment of the public contribution, 

–  cases where the administrative authority finds a mistake regarding the eligibility 
of  the  financed  expenditure  and  corrects  the  mistake  prior  to  payment  of  the 
public contribution. 

3.2. 

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 
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”14 and as a result of this, some measures of the possible economic 

13 

14 

Regulation (EC) No 846/2009 has simplified the reporting obligation specified in Regulation (EC) No 
1828/2006. 
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 

EN 

14 

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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 

4. 

DEFINITIONS  

For  the  purposes  of  this  document,  two  sets  of  definitions  are  used.  The  first  set 
refers  to  legal  definitions,  the  second  to  specific  indicators  used  throughout  the 
different chapters. 

4.1. 

Legal definitions 

4.1.1. 

Irregularity 

Irregularity: means any infringement of a provision of European 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  European  Union  or  budgets  managed  by  it, 
either by reducing or losing revenue accruing from own resources collected directly 
on behalf of the Union, or by an unjustified item of expenditure15. 

4.1.2.  Fraud 

Fraud: affecting the European Communities' financial interests shall consist of16: 

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 

15 
16 

communication of irregularities was established in 2002 and is currently under revision. Discussions are 
continuing in the Advisory Committee on the Coordination of Fraud Prevention. 
Article 2 of Regulation (EC) No 2988/95. 
Article  1(1),  point  (a),  of  the  "Convention  on  the  Protection  of  the  European  Communities'  Financial 
Interests" (PIF Convention). 

EN 

15 

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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  provisions  that  describe  the  conducts  and  the 
related  penalties  and  sanctions.  Some  of  these  provisions  are  the  result  of  the 
implementation of the PIF Convention into the national legal system. 

The  two  definitions  indicated  above  seem  similar  as  both  refer  to  “acts  or 
omissions”.  In  fact,  the  concept  of  irregularity  is  much  wider  than  that  of  fraud, 
which explicitly refers to “intentional” act or omission. In this respect, the concept of 
irregularity includes that of fraud, but refers also to a whole series of infringements 
of rules which do not imply a deliberate intent to violate or for which such intent is 
not  clear  (for  instance  a  breach  of  rules  due  to  the  misinterpretation  of  certain 
provisions because of their complexity).  

Therefore, 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 these 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  (as  explained  in  paragraph 4.1.3).  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. 

4.1.3. 

Suspected fraud 

Suspected  fraud17:  means  an 
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 PIF Convention. 

irregularity  giving  rise 

the 

to 

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. 

17 

This  definition  has  been  introduced  in  Commission  Regulation  (EC)  No  2035/2005.  It  has  been 
"confirmed"  in  Regulation  (EC)  No  1828/2006  for  the  Programming  Period  2007-2013  and  in 
Regulation (EC) No 1848/2006 for the agriculture sector. 

EN 

16 

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4.2. 

Indicators 

4.2.1. 

Irregularity and Fraud Rates 

The Irregularity Rate (IrR) is calculated using Equation 4-1 below: 

Equation 4-1: Irregularity Rate 

The Fraud Rate (FrR) is calculated using Equation 4-2 below: 

Equation 4-2: Fraud Rate 

The IrR and FrR can be calculated by financial year (as in the case of the Agriculture 
sector  –  see  Chapter  7)  or  on  the  entire  Programming  Period  (as  in  the  case  of 
Structural Funds – see Chapter 9) and by Member State. The FrR is calculated using 
amounts linked to cases of suspected and established fraud18. 

4.2.2.  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 4-3 below. 

Equation 4-3: Fraud Frequency Level 

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 4-4 below. 

18 

These rates and the following levels had already been introduced in the 2008 Report and Commission 
Staff  Working  Paper  “Statistical  Evaluation  of  Irregularities”  with  similar  names.  This  year’s 
Commission  Staff  Working  Paper  “Statistical  Evaluation  of  Irregularities”  defines  precisely  these 
concepts  in  order  to  use  them  in  the  years  to  come.  In  other  parts  of  the  Commission  Staff  Working 
Paper “Statistical Evaluation of Irregularities” or in the Report itself, the Fraud Rate may be referred to 
also as Suspected Fraud Rate. The calculation method remains the same. In the 2008 report the same 
concept was identified as “suspected fraud rate” or “estimated fraud rate”. 

EN 

17 

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Equation 4-4: Fraud Amounts Level 

FFL and FAL can be calculated by financial year (as in the case of the Agriculture 
sector  –  see  Chapter  7)  or  on  an  entire  Programming  Period  (as  in  the  case  of 
Structural Funds – see Chapter 9) and by Member State. 

5. 

METHODOLOGY 

5.1. 

Data Capturing – 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). For the chapter dedicated to ‘Direct expenditure’, data come from a specific 
functionality of the ABAC (Accrual Based Accounting) system of the Commission. 

5.1.1.  OWNRES 

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 EUR 10 000. 

5.1.2. 

Irregularity Management System (IMS) 

5.1.2.1.  The modules 

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  cases  of  irregularities  and  (suspected)  fraud  under  the  different 
sectoral  legislations  mentioned  in  chapter  3.  The  modules  are  named  after  the 
corresponding  Regulation,  with  the  exception  of  the  two  modules  related  to  Pre-
Accession Assistance. 

Figure  5-1  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). 

EN 

18 

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Figure 5-1: IMS architecture 

S
M

I

STRUCTURAL FUNDS
(until programming period 2000-2006 included)

COHESION FUND
(until programming period 2000-2006 included)

EAGF/EAFRD
Agricultural Policy (all programming periods)

EUROPEAN FISHERY FUND
(programming period 2007-2013)

COHESION POLICY
(programming period 20007-2013)

PRE-ACCESSION ASSISTANCE
(programming period 2002-2006)

INSTRUMENT FOR PRE ACCESSION (IPA)
(programming period 2007-2013)

1681

1831

1848

498

1828

PAA

IPA

5.1.2.2.  The national structures and users 

According to their competencies and responsibilities national authorities have access 
to the module(s) which is(are) relevant for them. IMS flexibility allows a cascading 
system to be set up: national organisations can be arranged in a hierarchical structure 
with  different  levels  of  responsibility,  in  which  the  superior  level  approves  the 
communication prepared by the inferior and forwards it to the next level or to OLAF. 
Within  each  organisation,  users  can  receive  different  roles  such  as  creator  (creates 
the communication of irregularity), manager (validates it and forwards it to the next 
level) and observer (read-only access). 584 national organisations and 3 572 users are 
set up in IMS. Some of them may be responsible for more than 1 module. 

Figure 5-2 provides an example of a national structure, showing the complexity that 
the system allows and supports. 

EN 

19 

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Figure 5-2: Example of a national reporting structure 

IMS  does  not  exclusively  support  the  needs  of  the  organisations  to  structure  the 
reporting task, but, being a web based application that can be accessed directly via 
internet,  also  introduces  an  extended  accessibility  to  the  system.  This  has  led  to  an 
enormous  increase  in  the  number  of  users  if  compared  to  the  previous  electronic 
reporting system (from less than 200 to 3 572 users). 

Table 5-1 summarises the number of organisations and users per Member State and 
per module19. 

19 

As already mentioned, the same organisation and user can be “operational” in more than one module. 
Therefore only sums of users and organisations per columns are displayed.  

EN 

20 

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Table 5-1: number of organisations and users per Member State and module 

Member 
States

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

1848

1831
Organis. Users Organis. Users Organis. Users Organis. Users Organis. Users

1681

PAA

IPA

2
3
2
2
6
41
1
1
26
4
5
6
2
2
39
2
1
2
2
1
27
4
4
28
2
2
4
221

5
21
54
3
32
126
2
12
55
14
12
41
21
24
216
11
5
23
5
1
112
12
17
65
5
11
16
921

4
10
13
2
21
75
7
1
7

5

-

-

12
30
136
14
59
341
20
2
17

-

-

35

19
1
28
2
2
2
2
12
87
1
13
25
2
10
9

66
6
326
16
6
144
4
92
585
4
60
53
5
179
132
360 2344

3

1

3

1

5

25

7

16

1

1

1

2
1

2

13

3

14

9
4

2

10

137

2

1
5

6

1

3
1

3

10

1
6

8

2
9

33

3

23
3

11

61

2
33

20

86

49

325

4

4

5.1.2.3.  Data input and data quality 

The  different  modules  of  IMS  offer  the  users  the  possibility  of  submitting  the 
information  requested  by  the  sectoral  regulations  in  a  structured  manner.  The 
different  fields  are  grouped  in  pages  according  to  “subjects”  and  users  are  assisted 
through the possibility of choosing from pre-defined selection lists.  

Communications of irregularity can also be imported into the system using excel or 
xml files structured according to specific templates. 

Information  considered  to  be  essential  are  treated  as  mandatory,  meaning  that  a 
communication  cannot  be  successfully  finalised  and  transmitted  without  it.  Other 
‘business rules’ provide warnings or produce errors if the user does not fill correctly 
the requested data. 

Data quality checks are also provided by the different levels of the reporting structure 
and by OLAF. 

The ‘Initial Communication’ and its ‘Updating Communication(s)’ form a ‘Case’. 

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21 

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5.1.2.4.  Impact of IMS on irregularity reporting 

The  introduction  and  successful  implementation  of  IMS  has  produced  a  number  of 
consequences  on  the  reporting  behaviour  and  practise  of  Member  States.  Those 
countries which have adopted the system have  

(1) 

(2) 

rationalised  the  distribution  of  the  workload  related  to  the  reporting 
obligation: in the past, level 2 or 3 was filling a paper form and transmitting it 
to  level  1,  which  had  the  task  to  perform  a  quality  check  and  to  submit  the 
form  to  the  Commission,  on  paper  or  electronically.  If  the  communication 
was  forwarded  on  paper,  someone  in  OLAF  was  keying  in  the  information 
into the irregularities database. This duplication of tasks was at the origin of 
several clerical mistakes;  

accelerated  the  reporting  process.  The  decentralisation  of  the  reporting  task 
through  the  same  system  allows  more  users  to  prepare,  at  the  same  time,  a 
greater number of communications. The “superior” levels are freed from the 
“filling”  of  communications  and  can,  therefore,  concentrate  on  data  quality 
and process the irregularities in a faster way. This acceleration is possibly the 
source for an increased number of reported irregularities in the first years of 
implementation of the IMS; 

(3) 

improved the completeness and overall quality of the communications, thanks 
to the mandatory fields and the “consistency rules” foreseen by the system. 

5.1.3.  ABAC – Recovery context 

The ABAC system 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 

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22 

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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. 

5.2. 

Data analysis – cases of irregularity and (suspected) fraud 

The analyses presented in parts II and III of the present document are based on the 
cases of irregularities and (suspected) fraud gathered through the tools described in 
paragraph  5.1.  The  extent  to  which  those  systems  are  implemented  and  correctly 
used influences the accuracy and completeness of the analytical results. 

Each  chapter  devotes  a  specific  attention  to  the  analysis  cases  of  suspected  and 
established  fraud  detected  and  reported  by  national  authorities  and  Commission 
services. For this reason, the distinction between simple irregularities and instances 
of possible fraud is one of the bases for a correct interpretation of the data. 

As  already  indicated  in  paragraph  4.1.3,  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 action is performed in IMS by 
filling  a  specific  field  (which  is  mandatory  in  all  modules  except  module  1848) 
which allows classifying any case under three possible categories: (a) irregularity; (b) 
suspected  fraud;  (c)  established  fraud.  Therefore,  all  Member  States  having 
implemented IMS specify the requested information. 

The  analysis  of  this  information,  however,  has  revealed  that  a  number  of 
inconsistencies  are  still  present.  Namely,  the  classification  provided  by  national 
authorities  can  be  contradictory  with  other  data  given  in  the  same  communication, 
for instance the description of the types of irregularities committed and the judicial 
follow-up undertaken.  

In  particular,  the  inconsistencies  appear  evident  in  the  presence  of  the  following 
information: 

(1) 

(2) 

the  case  is  classified  as  “irregularity”,  but  it  is  also  indicated  that  penal 
proceedings have been initiated; 

the case is classified as “irregularity”, but one or more of the modus operandi 
described in Table 5-2 are indicated. 

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23 

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Table 5-2: List of modus operandi conflicting with the classification ‘irregularity’ 

IMS 
CODE

DESCRIPTION

103 Falsified Accounts
104 Accounts Not Presented
205 False Or Falsified Commercial Documents
208 False Or Falsified Request For Aid
213 Falsified Supporting Documents
214 False Or Falsified Certificates
316 Falsified Product
402 Non Existant Operator
411 False Declaration Of Loss Or Damage
412 Declaration Of Ficticious Land
504 Theft
606 Incompatible Cumulation Of Aid
608 Refusal Of Control
611 Several Requests For The Same Object
818 Falsified Declaration
850 Corrruption
851 Abuse

ARTICLE OF THE 
CONVENTION

Art. 1(a) first alinea
Art. 1(a) second alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Art. 1(a) third alinea
Art. 1(a) first alinea
Art. 1(a) second alinea
Art. 1(a) first alinea
Art. 1(a) first alinea
Protocol
Protocol

For the purposes of the analyses conducted in Chapters 8 and 9 of this document, in 
presence of one of the two conditions mentioned above, the case has been considered 
as  a  “suspected  fraud”  even  in  absence  of  such  classification  from  the  national 
authorities.  

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PART II - REVENUES 

6. 

TRADITIONAL OWN RESOURCES (ANNEXES 3-13) 

6.1.  Management of Traditional Own Resources (TOR) 

The Union must have access to Traditional Own Resources (‘TOR’)20 under the best 
possible  conditions.  In  conformity  with  Regulation  (EC,  EURATOM)  No 
1150/200021  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 secured 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. 

6.1.1.  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  97%  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: 

(1) 

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

(2) 

(3) 

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 impact and usually involve Mutual Administrative 
Assistance. 

20 
21 

These are mainly customs and agricultural duties but also include anti-dumping duties and sugar levies. 
Regulation No 1150/2000 of 22 May 2000. 

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25 

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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. 

6.1.2.  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. 

There  are  two  ways  to  conclude  that  amounts  of  TOR  have  become  irrecoverable. 
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. 

An amendment to Regulation No 1150/200022 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, in years 2008 and 2009 the number of Member 
States'  write-off  reports  increased  significantly.  A  new  IT  application  called 
WOMIS23  was  introduced  in  January  2010  to  support  Member  States  and  the 
Commission  in  managing  write-off reports. Member States submit their requests to 
be  released  from  the  obligation  to  make  the  TOR  available  directly  via  WOMIS. 
Experience  in  the  first  year  showed  that  it  cuts  delays  in  the  process  and  permits 
improved up-to-date and easy-to-obtain management information. In 2012 a WOMIS 
version 2.0 will be released. 

In 2010 116 write-off reports amounting to EUR 42 million were communicated via 
WOMIS  to  the  Commission  by  13  Member  States.  The  following  table  shows  that 
thereof 53 cases have been processed by the Commission in 2010 with the following 
results: 

22 
23 

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

EN 

26 

   EN 

 
                                                 
Table OR1: Write-off reports treated in 2010 

MS 

AT 
CZ 
DE 
ES 
FI 
UK 
HU 
IT 
NL 
Total 

Cases24 

N 

12 
1 
11 
6 
6 
6 
3 
7 
1 
53 

Total 
amount 
EUR 
1 730 716 
73 305 
2 091 599 
323 853 
541 637 
8 726 983 
822 619 
1 337 402 
1 114 350 
16 762 464 

Acceptance 

Refusal 

Additional information 
request 

N 

EUR 
254 706 

1 453 929 
65 487 
259 330 
875 305 

286 651 

2 

6 
2 
3 
3 

2 

N 

EUR 

N 

1 

267 224 

18 

3 195 408 

1 

267 224 

10 
1 
5 
4 

2 
2 
5 
1 
30 

EUR 
1 476 010
73 305
637 670
258 366,42

7 696 147
555 395
1 050 751
1 114 350
12 861 994

In addition, 294 cases which had been communicated before 2010 to the Commission 
have been processed in 2010 with the following results: 

OR: TABLE 2 

MS 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
IT 
LV 
NL 
PT 
SE 
UK 
Total 

Cases25 

N 

3 
10 
69 
17 
94 
1 
1 
47 
1 
44 
2 
3 
2 
294 

Total 
amount 
EUR 
2 217 810 

1 691 376 
28 897 230 
3 952 012 
25 426 940 
226 820 
48 568 
29 462 972 
109 969 
28 356 691 
1 731 625 
537 402 
234 666 
122 894 081 

Acceptance 

Refusal 

N 

2 

1 
39 
14 
31 

1 
5 

EUR 
2 153 780 

168 024 
7 792 226 
2 355 405 
4 695 999 

48 568 
1 665 657 

18 

2 951 337 

3 
1 
115 

537 402 
53 444 
22 421 842 

N 

1
2 
6 
2 
19 

EUR 

64 030 

395 068 
700 612 
1 484 152 
5 588 538 

34 

12 669 134 

7 
2 

916 474 
1 731 625 

Additional information 
request 

N 

EUR 

7 
24 
1 
44 
1 

5 
1 
18 

1 128 284
20 404 392
112 455
15 142 403
226 820

14 803 910
109 969
24 436 819

73 

23 549 633 

1 
102 

181 222
76 564 275

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.  

6.1.3.  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  liability26.  In  2010  Member  States 

24 

25 

26 

Thereof, 4 cases were non-admissible as write-off cases: 3 cases from Finland with a total of EUR 282 
307 and 1 case from the UK with an amount of EUR 155 531.  
Thereof, 4 cases have been considered as non-admissible: 3 cases from Finland involving EUR 324 270 
and 1 case from the Netherlands with EUR 52 061.  
Case  C-392/02  of  15  November  2005.  These  cases  are  identified  on  the  basis  of  Articles  220(2)(b) 
(administrative errors which could not reasonably have been detected by the person liable for payment) 

EN 

27 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
have been held financially liable for over EUR 37 million and new cases are being 
given appropriate follow-up.  

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. 

6.2. 

Reporting discipline  

Under  Article  6(5)  of  Regulation  No  1150/2000,  Member  States  are  required  to 
communicate  to  the  Commission,  via  the  OWNRES  system27,  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 
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%28.  This  match  is 
checked during the regular inspections in the Member States. New analysis showed 
some unexplained discrepancies. The Commission will therefore start an enquiry to 
the Member States to clarify the situation. 

6.2.1.  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  2009  in  last  year’s  report  was  4 684  cases, 
whereas the number of cases now shown for 2009 is 5 204 cases29. This continuing 
development is inherent to the system. 

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. 
OWNRES is an abbreviation for Own Resources. 
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.  
The  information generated by  OWNRES  to produce  the figures  in  this  chapter was  all obtained  from 
queries made on 4 March 2011. Subsequent corrections by Spain related to the country of origin Ceuta 
have been taken into consideration.  

27 
28 

29 

EN 

28 

   EN 

 
                                                                                                                                                         
6.3. 

General trends  

The number of cases communicated to OWNRES for 2010 is currently 9% lower in 
comparison  with  2009  (from  5 204  to  4 744).  The  amount  of  TOR  involved  is 
however 10% bigger (from EUR 357 million to EUR 393 million)

30.  

The number of communications from the ten new Member States showed continued 
growth  since  their  accession  in  2004  until  2007.  From  2007  to  2009  the 
communicated  cases  remained  stable.  2010  shows  17%  less  communicated  cases 
compared  with  2009  although  the  amount  of  TOR  increased  by  5%  from  2009  to 
2010.  

The  number  of  communications  from  Bulgaria  and  Romania  increased  since  their 
accession. In 2007 both countries together reported 52 cases, whereas in 2010 both 
countries reported 151 cases.  

The OWNRES database now contains 62 743 cases in total (1989-2010) and shows 
an increase of 9% during 201031. Significant changes in the number of registrations 
in  2010  compared  with  2009  can  be  seen  for  Romania  (+71%),  Bulgaria  (+  47%), 
Malta  (-  71%),  Estonia  (-  55%),  Latvia  (-37%)  and  Slovakia  (-36%).  Significant 
changes  of  amounts  can  be  seen  in  Spain  (+169%),  Denmark  (+158%),  Czech 
Republic (+119%) and Malta (-72 %)32.  

From 2006 to 2009 the number of belatedly discharged transit operations decreased 
continually. Compared to 2009 the number of belatedly discharged transit operations 
increased.33  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. 

6.3.1.  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 (81% of established amounts34). False declarations (false 
description,  incorrect  value,  origin  and  preferential  arrangements)  and  formal 

30 
31 

32 

33 

34 

See annex 1 (table) and annex 2 (chart). 
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 
11%). 
Significant changes in amounts involved generally relate to one or a few (very) big cases, e.g. Spain: 4 
cases totalling to EUR 27 million involving Sugar levies, CN 17 and 1 case of EUR 5 million (CN 16); 
Denmark: 1 case of EUR 18 million (CN 84), Italy: 1 case of EUR 7 million (CN 08), Belgium: 1 case 
of EUR 6 million (CN 85), Czech Republic: 1 case of EUR 6 million (CN 85) and Germany: 1 case of 
EUR 6 million (CN 32).  
In 2006 the number of cases of belatedly discharged transit was 1 498, being 24% of the total number of 
cases registered and 19% of the total amount initially established. In 2007 there were 1 399 cases (22% 
of cases and 16% of the total amount) and in 2008 there were 1 150 cases (19% of cases and 14% of the 
amount),  in  2009  there  were  759  (15%  of  cases  and  13%  of  the  amount).  In  2010  the  figures  are 
respectively 908 (19% of cases and 18% of the amount initially established). 
See annex 3.  

EN 

29 

   EN 

 
                                                 
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 code35) the most affected by 
fraud and irregularities in 2010, as in previous years, are TVs/monitors etc. (CN 85). 
Furthermore, Machines (CN 84), Sugar (CN 17)36 and Vegetables (CN 08) increased 
in  importance  when  compared  to  2009.  Organic  chemicals  (CN  29)  and  Food  (CN 
16) decreased in importance and these goods were not listed anymore in 2010 in the 
TOP 10 Chapter Heading list.37 

Chart OR1: Fraud and irregularities breakdown by good in 2009 (in million EUR)38 

Fraud and Irregularities breakdown by goods in 2010 in Mio. €

Othe r 32  (8 %)

Anim als a nd produc ts the reof 
10  (2 %)

Shoes  1 6 (4 %)

Meta ls  18  (5 %)

 TV's, (compute r) monitors 
etc. 121 (31%) 

Ve hicle s etc. 2 3 (6 %)

Che mical products  27  (7 %)

Te xtile 29  (7 %)

Food/Drinks //Tobac co 88  (22 %)

Vegeta ble s 30 (8%)

Evaluation of the origin of goods subject to fraud and irregularity39 reveals that, just 
as in 2009, goods originating from China and the USA remain very much affected. 
The  number  of  cases  originating  from  Latin  America  in  particular  from  Ecuador, 
Brazil,  and  El  Salvador  has  increased.  Spain  communicated  4  cases  of  fraud 
involving  EUR  28  million  in  relation  to  sugar  levies  established  linked  to  the 
framework of the common organisation of the sugar market. Also goods originating 
from Ceuta were importantly involved in the fraud and irregularities detected during 
201040. Japan has decreased in importance as country of origin in comparison with 
the last year and goods from South Korea have been more affected.  

35 
36 
37 
38 

39 
40 

Combined nomenclature or CN — nomenclature of the Common Customs Tariff. 
Mainly sugar levies (irregularities in relation to the common organisation of the sugar market). 
See annexes 4 and 5. 
The product description in the chart is a generic description of the goods involved. See Annexes 4 and 5 
for detailed analysis.  
See annex 8. 
Information according to the subsequent amendments made in OWNRES on 22 March 2011 by Spain. 

EN 

30 

   EN 

 
 
 
                                                 
6.3.2.  TOR and cigarettes 

In  2010  there  were  190  cases  registered  of  seized  and  confiscated  cigarettes  (CN 
code 24 02 20 90) involving estimated TOR of around EUR 23.5 million. In 2009 the 
number  of  registered  cases  concerning  seized  and  confiscated  goods  was  217, 
totalling around EUR 26 million. The decrease of the number of cases is related to 
the  EU-15,  of  which  the  United  Kingdom  shows  the  most  significant  decrease  as 
regards the estimated amount of TOR in euro. As regards the EU-12, the established 
amount of seized and confiscated cigarettes increased significantly in Bulgaria and it 
decreased considerably in Romania.  

6.3.3.  Data main sectors TOR 

See Annexes 3-10. 

6.4. 

Detection of fraud and irregularity41 

Of  all  the  cases  registered  in  OWNRES  in  2010  19%  (883  out  of  4 744  registered 
cases) are categorised as fraud, which is the same proportion as in 2008 and 200942. 
However,  like  in  previous  years,  the  differences  between  Member  States  are 
relatively large. In 2010 most of the Member States categorised between 10-60% of 
all cases as fraud. However, nine Member States categorised less than 10%43 of the 
cases as fraud, whereas four Member States registered more than 60%44 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. 

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. 

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. 

6.4.1.  Member States' control systems – Method of detection expressed in cases 

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.  

41 
42 
43 

44 

For the definition of irregularity and fraud, see paragraph 4.1.1 and 4.1.2(b) respectively. 
See annex 9. 
Belgium  (5%),  France  (5%),  Netherlands  (5%),  United  Kingdom  (4%),  Czech  Republic  (1%)  and 
Hungary  (7%).  No  cases  were  categorised  as  fraud  in  Latvia,  Estonia  and  Slovakia.  Luxembourg 
reported no cases of fraud and irregularity in 2010.  
Greece (100%), Spain (71%), Bulgaria (92%) and Malta (100%). 

EN 

31 

   EN 

 
                                                 
A range of detection methods can reveal irregularity or fraud. Judging from the 2010 
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 30%. All in all, the vast majority of cases (74%) were detected in 
2010  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  2010.  The  relative  importance  of 
inspections by anti-fraud services was relatively stable with 8% in 2009 and 7% in 
2010.  Since  the  final  results  of  such  inspections  take  more  time  than  regular 
inspections, a (slight) increase in the percentage for 2010 may be expected in future 
registrations. 

CHART OR 2: Method of detection 2008-2010 

Method of de tection  2008-2010

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

3000

2500

2000

1500

1000

500

0

Audit of the
ac co unts

Co mmunity
ins pect ions

Inspection by anti-
fraud serv ices

Inspection v is it

National pos t-
clearanc e
ins pect ions

Primary natio nal
ins pec tio ns

Tax audit

Vo luntary
admiss io n

METHOD OF DETECTION

 2008

 2009

 2010

6.4.2.  Member States' control systems – Method of detection expressed in monetary terms 

The  map  below  illustrates  by  which  methods  OWNRES  cases  -  in  amounts  -  have 
been  discovered  by  the  Member  States45  in  2010.  For  reasons  of  presentation  the 
following methods are included in the term "ex-post controls": audit of the accounts, 
Union inspections, inspections by anti-fraud services, inspection visits, national post-
clearance audits and tax audits. In EUR – 27 around 18% of all cases – in amounts – 
have been discovered by primary inspections, whereas 78% of all cases – in amounts 
– have been detected via "ex-post controls". In the following six Member States more 
than  40  %  of  all  cases  –  in  amounts  –  have  been  detected  by  primary  inspections: 
Finland  (50%),  France  (50%),  Malta  (64%),  Poland  (52%),  Slovenia  (40%)  and 
Bulgaria (69%). More than 90% of all cases – in amounts – have been detected by 
"ex-post  controls"  in  Austria  (95%),  Belgium  (95%),  Denmark  (92%),  United 
Kingdom  (95%),  Cyprus  (96%),  Hungary  (92%)  and  Slovakia  (100  %).  In  four 

45 

For details see annex 10. Luxemburg did not register any OWNRES case in 2010. 

EN 

32 

   EN 

 
 
 
 
 
                                                 
Member  States  more  than  10  %  of  all  cases  –  in  amounts-  have  been  detected  by 
voluntary admission.46 

MAP OR 1: Visualising the method of detection 

6.4.3.  Customs procedures affected to fraud and irregularity in 2010 

In  2010,  the  majority  of  established  amounts  in  OWNRES  (81%)  in  EU-27  are 
related to the customs procedure "release for free circulation".47 9% of all established 
amounts of OWNRES cases in 2010 involve the transit procedures (3%), the customs 
warehousing (3%) and the inward processing (3%). Between the Member States are 
however  significant  differences.  In  Bulgaria  64  %  of  all  established  amounts  of 
OWNRES cases relate to the transit procedure48, whereas 36 % relate to the release 
for free circulation. Furthermore, transit was much affected, in amounts, in Slovenia 

46 
47 
48 

Germany (15%), Finland (26%), Ireland (12 %) and the Czech Republic (12%).  
See annex 11. 
All those cases from Bulgaria concern smuggling of cigarettes and other tobacco products.  

EN 

33 

   EN 

 
 
                                                 
(35%), Poland (25%) and Belgium (13%). In comparison to the other Member States, 
the Netherlands detected during transit procedures OWNRES cases with the highest 
total (EUR 2 950 732). Furthermore, Belgium (EUR 1 663 005) and Germany (EUR 
1 303 854) are ranked high.  

The  amounts  established  of  detected  cases  under  the  customs  warehousing  were 
relatively  high  in  the  following  Member  States:  Belgium  (19%),  Finland  (8%), 
Portugal (25%) and Sweden (12%). Germany established in comparison to the other 
Member States most amounts (EUR 5 956 757) related to the customs warehousing 
Belgium ranks second with an established sum of EUR 2 450 644 detected under the 
customs  warehousing.  From  the  EU-12  only  the  Czech  Republic  and  Lithuania 
reported  cases  detected  under  the  customs  warehousing.  Italy  reported  mainly 
detection  of  cigarette  smuggling  under  this  procedure.  Austria,  Greece  and  Ireland 
did not report any cases. Established amounts of fraud and irregularities related to the 
inward  processing  were  mainly  reported  by  the  United  Kingdom  (20%),  Sweden 
(11%), Lithuania (8%), and Italy (7%). The United Kingdom was also top ranked as 
regards established amounts (EUR 7 347 871) under the inward processing. From the 
EU-12  only  Poland  and  Lithuania  reported  cases  detected  under  the  inward 
processing.  Austria,  Belgium,  Ireland,  the  Netherlands  and  Portugal  neither  report 
cases of fraud and irregularity in relation to this procedure. 

Finally,  10%  of  all  established  amounts  in  EU-27  fall  under  the  category  "Other". 
This  category  combines,  among  others,  the  following  procedures  or  treatments: 
Processing  under  customs  control,  temporary  admission,  outward  processing  and 
standard  exchange  system,  exportation,  free  zone  or  free  warehousing,  re-
exportation, destruction and abandonment to the Exchequer. 

EN 

34 

   EN 

 
MAP OR 2: visualising the customs procedures affected to fraud and irregularity in 2010 

6.4.4.  Percentage of established or estimated amounts in OWNRES to collected TOR 

As  indicated  before  over  97%  of  all  amounts  of  TOR  established  are  recovered 
without  any  particular  problem  and  made  available  to  the  Commission  via  the  A-
account. For 2010 around EUR 20.9 billion TOR (gross) have been collected by the 
Member  States  and  thereafter  made  available  to  the  EU  budget  after  deduction  of 
25% collection costs. These amounts relate mainly to ‘normal’ import flows where 
goods are declared for a customs procedure (e.g. release for free circulation) giving 
rise to a customs debt. In comparison, according to the OWNRES communications, 
around EUR 418 million have been established or estimated by the Member States in 
connection  to  detected  cases  of  fraud  and  irregularities  where  the  amount  at  stake 
exceeds  EUR  10  000.  Usually,  this  report  refers  to  established  amounts  of  TOR 
reported in OWNRES with the exception of information about seized and confiscated 
cigarettes (Annex 7). However in this paragraph, for the purpose of this comparison, 
also estimated amounts in OWNRES have been taken into account and added to the 
established amounts. This is to take also into account the several cases of fraud and 

EN 

35 

   EN 

 
 
irregularities  reported  by  Member  States  where  the  unlawfully  imported  goods  had 
been seized and confiscated by the customs authorities and therefore, in accordance 
with the customs rules, no customs duties for these goods had been established.  

For  EU-27  the  established  and  estimated  amounts  reported  in  OWNRES  represent 
2.00%  of  the  collected  TOR  (gross).49  A  percentage  of  2.00%  reflects  that  out  of 
each  EUR  100  of  TOR  (gross)  collected  an  amount  of  irregularity  or  fraud  is 
registered  in  OWNRES  of  EUR  2.00.  Within  the  Member  States  there  are 
differences.  In  12  Member  States  the  percentage  is  equal  or  above  the  average  of 
2.00%.  The  highest  percentage  can  be  seen  in  Romania  with  7.13%.  In  9  Member 
States the percentage is between 1.00 % (half the average) and the average of 2.00%. 
In  5  Member  States  the  percentage  is  equal  or  below  1.00%.  Luxembourg  did  not 
report  any  OWNRES  cases  in  2010.  For  EU-15  the  established  and  estimated 
amounts  reported  in  OWNRES  represent  1.94%  of  the  collected  TOR,  whereas  in 
EU-12 the established and estimated amounts reported in OWNRES represent 2.93% 
of the collected TOR. 

On  the  basis  of  the  information  in  OWNRES  it  is  not  possible  to  provide  an 
explanation  for  the  variations  between  the  Member  States.  It  should  also  be  noted 
that the figures can vary a lot from year to year. Especially in Member States with a 
smaller share of TOR collection, individual bigger fraud cases detected in a certain 
year  may  affect  importantly  the  annual  percentage.  Several  factors  influence  this 
percentage, e.g. the type of traffic and trade, the level of compliance of the economic 
operators,  and,  the  location  of  a  Member  State.  Under  these  variable  factors  the 
percentage  is  also  affected  on  the  way  how  the  Member  State's  customs  control 
strategy  is  set  up  to  target  risky  imports  and  to  detect  TOR  related  fraud  and 
irregularity. 

In recent years the Commission has in its TOR inspections put a special emphasis on 
Member States' customs control strategies and is monitoring closely Member States' 
action in relation to the observations made during its inspections50. 

49 
50 

See annex 12. 
A  thematic  report  on  Member  States'  customs  control  strategy  synthesizing  the  results  on  the 
inspections  carried  out  in  2009  and  2010  in  all  Member  States  will  be  presented  in  the  Advisory 
Committee of Own Resources of July 2011.  

EN 

36 

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MAP OR 3: visualising the percentage of established or estimated amounts in OWNRES to collected TOR 

6.5. 

Recovery 

•  Member  States  have  to  recover  all  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. 

•  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  transit  this  may  reach  up  to  90%. 
As  a  consequence,  Belgium  and  the  Netherlands  show  more  corrections  than 
average, because establishments related to transit occur more frequently. This is due 
to the ports of Antwerp and Rotterdam. 

EN 

37 

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6.5.1.  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-
2010) is 47%51.  

The overall recovery rate for 2009 recorded in last year’s report was 44%, although it 
has  since  then  climbed  to  50%.  At  present  the  recovery  rate  for  2010  is  46%52.  In 
other  words,  of  every  EUR  10 000  of  duties  established  in  2010  in  OWNRES, 
approximately  EUR  4 600  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). 

There are big differences of the above short term recovery rate within the Member 
States.  The  highest  recovery  rate  was  in  Sweden  with  88%,  whereas  in  Malta  the 
recovery rate was zero %. In six Member States was the recovery rate above 70 %.53 
As  explained  before,  Member  States'  recocery  action  is  closely  monitored  by  the 
Commission and they are financially liable for the losses of TOR occurred because 
of the weaknesses observed in their recovery action. 

6.6. 

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 
denoted  as  frauds  or  irregularities  between  Member  States  point  this  out 
clearly. OWNRES can only be used for global analysis and monitoring.  

(2) 

The  goods  involved  in  irregularities  and  frauds  demanding  Member  States’ 
attention are very diverse. TVs, machines and monitors keep their relevance 
in 2010 and are like in previous years the most important goods involved in 
registered  cases  of  irregularity  or  fraud.  Vegetables  and  sugar  gained 

51 

52 
53 

This calculation is based on 62 743 cases, an established amount of EUR 4.67 billion (after corrections) 
and a recovered amount of EUR 2.2 billion.  
See annex 13. 
Belgium (71%), Germany (73%), Finland (80%), Portugal (75%), Sweden (88%) and Slovakia (84%).  

EN 

38 

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significance. The origin of the goods concerned is likewise varied, although 
some countries remain continuously at the top of the rankings (such as China 
and  the  USA).  Some  Central  and  South  American  countries  (e.g.  Brazil, 
Ecuador and Mexico) were of more importance in 2010. 

The  established  amounts  of  TOR  at  stake  in  irregularity  and  fraud  are, 
according  to  OWNRES,  up  to  EUR  393  million  in  2010.  Of  the  amounts 
initially established, approximately 44% is later cancelled and in the case of 
establishments related to transit up to 90% of the established amount may be 
cancelled  later.  Payment  is  then  required  only  for  the  part  which  is  not 
cancelled.  The  initial  recovery  figures  for  2010  are  comparable  to  those  of 
previous years. 

The  methods  of  detection  vary  between  Member  States,  however,  in  2010 
post-clearance  inspections  and  primary  controls  (during  the  clearance)  are 
creating 75 % of all OWNRES cases. Thereof, the shift from primary to post-
clearance inspections continued in 2010. 

The  customs  procedure  release  for  free  circulation  was  like  in  the  previous 
years  the  most  affected  to  fraud  and  irregularities.  81%  of  all  amounts 
reported  in  OWNRES  have  been  detected  under  the  release  for  free 
circulation.  However,  there  are  differences  between  the  Member  States.  In 
some  Member  States  most  cases  have  been  detected  during  the  transit 
procedure, customs warehousing, inward processing, free zone or destruction 
(of cigarettes). 

For  EU-27  the  established  and  estimated  amounts  in  OWNRES  represent 
2.00%  of  the  collected  TOR  (before  deduction  of  25%  collection  costs)  for 
2010.  The  percentage  varies  between  the  Member  States  and  between  the 
years. 

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. 

(3) 

(4) 

(5) 

(6) 

(7) 

EN 

39 

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PART III - EXPENDITURE 

7. 

AGRICULTURAL EXPENDITURE (ANNEXES 13-14) 

7.1. 

Introduction 

The  Common  Agricultural  Policy  (CAP)  has  been  one  of  the  most  important 
common  policies  over  the  years,  as  a  large  part54  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  2010  was  about  EUR  123  billion.  More  than  EUR  53 
billion  was  spent  in  the  agricultural  sector,  of  which  EAFRD  expenditure  accounts 
for  about  EUR  10.5  billion.  Annex  13A  provides  a  detailed  overview  of  the 
agricultural expenditure concerning the financial years 2006-2010. 

The  basic  rules  for  the  financial  management  of  the  Common  Agricultural  Policy 
(CAP) can be found in Council Regulation (EC) No 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.  

Module 1848 was introduced in 2008 and was directly used by all Member States. It 
is a web based application that can be accessed via internet. Access via internet led to 
an enormous increase of the number of users of Module 1848. The total number of 
users increased from less than 50 in 2008 to more than 1,000 in 2010.  

54 

Approximately 43% of the total 2010-budget was spent in the agricultural sector. 

EN 

40 

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The  data  provided  by  Member  States  via  Module  1848  is  used  for  performing  risk 
analysis as described in article 10 of Regulation No 1848/200655 and to inform the 
Advisory  Committee  for  the  Coordination  of  Fraud  Prevention  (COCOLAF)  as 
described in article 9 of Regulation No 1848/200656. 

The  agricultural  section  of  this  report  contains  three  parts:  financial  year  2010, 
financial years 2006-2010 and financial years 2004-2005. The first part contains an 
overview  of  new  cases  reported  during  2010,  Member  States  compliance  with  the 
reporting obligations and the recovery of unduly paid amounts. In the second part are 
the trends and developments in the agricultural sector described on basis of the data 
concerning the financial years 2006-2010. The third part contains definitive figures, 
based  on  the  analysis  of  the  financial  years  2004-2005  which  years,  from  an 
irregularity reporting point of view, are considered to be finalised. 

Four preliminary remarks need to be made concerning the outcomes of the analysis: 

1.  A  higher  number  of  cases  reported  does  not  necessarily  mean  that  more 
irregularities  are  committed  or  that  a  Member  State  is  more  vulnerable  for 
irregularities. A more developed audit strategy, tailor made audits, higher number 
of  performed  audits,  better  trained  or  instructed  auditors  and  so  forth  will 
normally lead to a higher number of detected irregularities. In other words, it is 
possible that Member States with a higher irregularity rate perform far better than 
Member States with a lower irregularity rate; 

2.  Audit  plans  and  programmes  are  still  running  for  the  period  2006-2010.  This 
means that cases of irregularities still can be detected and reported, which could 
have  a  direct  impact  on  the  figures.  The  figures  concerning  the  financial  years 
2006-2010, therefore, need to be seen as a half-time-result57. 

3.  Not all irregularities have to be reported. Member States must only inform OLAF 
of irregularities involving more than EUR 10 000. It is also good to bear in mind 
that 87% of the number of payments, representing 21% of the total expenditure, 
concern  amounts  below  EUR  10  000  which  implies  that  for  these  payments 
normally no irregularities will be reported58.  

4.  Analyses are based on data provided by Member States and are nothing more as 
descriptive analysis as they illustrate the main features of a collection of data in 
quantitative terms. 

55 

56 

57 

58 

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. 
Art. 9 Reg. 1848/2006: The Commission shall every year inform the Cocolaf, of the order of magnitude 
of the sums involved in the irregularities which have been discovered and of the various categories of 
irregularity, broken down by type and with a statement of the number of irregularities in each category. 
Checks  on  aid  applications  are  being  performed  pre-payment.  However,  irregularities  can  also  be 
detected ex-post and, in that case, recovery procedures can be launched for at least four years after the 
irregularity was committed (art. 3 Reg. 2988/95). 
In  the  context  of  the  clearance  mechanism  (see  also  point  7.2.3.)  Member  States  are  reporting  all 
irregular payments to be recovered to DG AGRI, without any de minimis threshold. 

EN 

41 

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7.2. 

Financial Year 2010 

7.2.1.  Financial Year 2010: cases reported 

Table AG1 provides an overview per Member State of the number of cases reported, 
the  amounts  affected  and  the  classification  of  the  irregularities  into  "irregularity", 
"suspected fraud" or "established fraud"59.  

Table AG1: cases reported during Financial Year 2010 

CLASSIFICATION OF IRREGULARITIES

total
amounts in €

no qualification
amounts in €

irregularity
amounts in €

cases

cases

established fraud
amounts in €

cases

1

1

1

cases

cases
31
24
94
4
38
81
10
12
42
413
2
119
116
64
342
53
2
7

452 705
4 233 255
4 439 991
477 448
1 177 815
3 769 191
141 053
829 027
1 388 370
17 166 788
43 309
10 438 611
26 163 772
1 596 823
39 748 896
1 748 398
51 221
113 903

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
financial year 2010: 16 October 2009 - 15 October 2010

3 032 925
3 687 786
4 170 688
1 160 145
11 253
674 685
785 697
3 011 241
130 514 995

38
106
138
22
1
20
13
33
1 825

1

1

5

19 628

17 381

46 230

15 989

12 318

111 546

26
18
1
3
37
73
9
7
40
412
2
118
46
64
174
50
2
7

36
65
137
21
1
13
13
31
1 406

383 216
478 846
13 968
210 650
1 161 575
3 032 592
128 866
105 061
1 330 337
17 091 301
43 309
10 422 622
5 029 293
1 596 823
6 576 846
1 350 963
51 221
113 903

1 380 237
1 692 470
4 133 918
1 136 783
11 253
224 873
785 697
2 950 273
61 436 893

suspected fraud
amounts in €
4
6
87
1
1
7
1
5
1
1

49 861
3 754 409
4 231 587
266 798
16 240
719 218
12 187
723 966
11 803
75 487

6

194 437

69

13 752 851

1

7 381 628

168
3

33 172 050
397 435

1
41
1
1

7

1 640 370
1 995 316
36 770
23 362

449 812

2
407

60 968
61 390 490

7

7 576 065

IMS Module 1848 download: 24 January 2011

Member  States  reported  1  825  new  cases  of  irregularities  with  a  total  amount 
affected  of  about  EUR  131  million.  These  cases  concern  expenditures  for  the 
financial years 1990-2010. Like last year, Spain reported the highest number of cases 
(413) as Italy reported again the highest amounts affected (EUR 39.7 million).  

The  number  of  cases  that  have  been  classified  as  "suspected  fraud"  or  "established 
fraud" is rather high: 414. This is 23% of the total number of cases reported and 47% 
of  the  total  amounts  affected.  The  "fraud  cases"  are  mainly  reported  by  Italy  and 
young Member States, especially Bulgaria, Hungary, Poland and Slovenia.  

France  reported  "no  fraud"  which  is  remarkable  now  France  spends  approximately 
20% of the total agricultural budget.  

Eye-catching  are  the  high  amounts  affected  by  irregularities  reported  by  Hungary. 
The Hungarian authorities informed the Commission that the high irregularity rate is 

59 

Established fraud means that it has been proven in Court that it was fraud while suspected fraud implies 
that a penal court still has to rule or that investigations are still on going. 

EN 

42 

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caused  by  a  special  situation  in  the  Hungarian  cereal  market  during  the  financial 
years 2006-201060.  

Only  five  cases  were  not  classified  as  irregularity,  suspected  or  established  fraud. 
This is less than 1% and a big step forward in comparison with previous years. 

7.2.2.  Financial Year 2010: reporting discipline 

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

Table  AG2  provides  an  overview  of  the  compliance  rate  per  reporting  obligation. 
Member States are ranked in order of their overall 2010 compliance rate, which can 
be found in the fourth column of the right hand side.  

Table AG2: compliance per Member State 

timely
reporting

MS

data
who

personal measure

COMPLIANCE RATE
practices
date
affected committed employed
when

financial sanctions
impact
why

what

how

art. 3(1)l

art. 3(1)a

art. 3(1)i,k

art. 3(1)e,f

art. 3(1)m,n

art. 5

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

100%
100%
96%
88%
99%
98%
100%
90%
75%
90%
99%
97%
99%
84%
98%
75%
100%
100%
71%
79%
70%
98%
87%
82%
50%
50%
94%
legal basis: art. 3(1)a-p  and art. 5 Reg. 1848/2006. Per column is indicated on which article the obligation is based.

100%
100%
100%
100%
100%
100%
100%
100%
100%
98%
100%
100%
100%
100%
100%
100%
100%
100%
98%
100%
98%
26%
83%
100%
93%
13%
95%

100%
100%
98%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
98%
100%
85%
100%
100%
100%
100%
100%
99%

100%
100%
99%
100%
99%
100%
100%
100%
100%
99%
100%
84%
100%
99%
100%
100%
100%
100%
98%
100%
98%
100%
93%
100%
96%
100%
96%

100%
100%
100%
100%
99%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
93%
100%
100%
100%
100%
98%
100%
85%
100%
97%
100%
100%

92%
100%
96%
100%
87%
84%
82%
92%
100%
86%
61%
55%
36%
48%
29%
71%
26%
6%
30%
100%
51%
39%
20%
6%
39%
50%
52%

100%
92%
100%
100%
100%
100%
100%
94%
100%
100%
100%
99%
100%
97%
100%
86%
100%
100%
95%
0%
79%
99%
70%
9%
0%
0%
94%

compliance rate

2010

2009

2008

2007

99%
99%
98%
98%
98%
97%
97%
97%
96%
96%
94%
91%
91%
90%
90%
89%
89%
87%
84%
83%
83%
80%
77%
71%
68%
59%
90%

85%
90%
99%
93%
92%
93%
98%
94%
99%
91%
93%
93%
98%
97%
81%
99%
100%
99%
93%

93%
85%
94%
79%
87%
70%
95%

100%
74%
95%
96%

96%
94%

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

83%
81%
74%
97%
90%
90%

81%
83%
73%
77%
49%
64%
85%
72%
85%

85%
96%

39%
83%
85%
88%
63%
67%
78%

table contains only key elements for (performing) risk analysis.

IMS Module 1848 download: 24 January 2011

The  compliance  rate  has  been  determined  on  basis  of  the  reporting  obligations  as 
stipulated in article 3, paragraph 1, letters a - p of Reg. 1848/2006. The focus is 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.  

60 

See for a more in dept explanation paragraph 7.3.1. 

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43 

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In  2010,  the  overall  compliance  rate61  decreased  from  95%  to  90%.  15  Member 
States  have  a  compliance  rate  above  90%.  These  Member  States  stabilized  their 
compliance rate during 2010 or even improved it. 11 Member States had a downfall. 
Especially the downfall of the Dutch and Finnish compliance rate is remarkable. The 
Netherlands went down from 87% to 68% as Finland went down from 70% to 59%. 
For both count that extra attention should be given to timely reporting, the reporting 
of the measures affected and the sanctions imposed. For Finland counts that also the 
reporting  of  personal  data  should  get  more  attention.  Almost  no  information  is 
provided concerning the persons that committed the irregularities. Poland scores also 
low on the reporting of personal data. The Polish compliance rate for the reporting of 
personal data is only 26%. 

Chart AG3: communications reported in 2010 by quarter 

As mentioned, timely reporting is still a problem for vast majority of Member States. 
Striking  is  that  some  Member  States  submit  at  the  beginning  of  the  year  a  small 
number of communications while at the end of the year a relatively high number is 
submitted. This could indicate that communications are not submitted at the earliest 
possible moment but that they are collected, processed and sent in one go at the end 
of the reporting year with the consequence of late reporting. Chart AG3 provides an 
overview of this end-year-rush. It gives an overview of the increase of the number of 
communications  sent  during  2010.  The  total  numbers  at  the  bottom  of  the  table 
demonstrate  best  how  the  number  of  communications  increases  towards  the  end  of 
the  year.  848  communications  were  sent  during  the  first  quarter  of  2010.  This 
number increased during the second and third quarter to approximately 1 770. During 
the last quarter, Member States submitted more than 2,700 communications which is 
an increase of more than 220% in comparison to the number of communications sent 
in the first quarter. 

61 

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.  

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44 

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7.2.3.  Financial Year 2010: financial follow up of irregularity cases 62 

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. 
Moreover, since 2008, Member States are required to off-set any outstanding debts 
against future payments to the debtor (compulsory compensation).  

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  2010,  the  50/50  mechanism  was  applied  by  the  financial  clearance 
decision for the financial year 200963 on all pending non-recovered cases dating from 
2005 or 2001 (cases that were four or eight years old respectively). EUR 22.8 million 
was charged to the Member States in this way and EUR 20.3 million was borne by 
the EU budget for reasons of irrecoverability (out of the EUR 63.8 million declared 
irrecoverable  by  the  Member  States,  EUR  43.5  EUR  million  had  already  been 
cleared  under  the  50/50  and,  therefore,  the  loss  is  shared  between  the  EU  and  the 
Member States). A further EUR 11.9 million has been charged to the Member States 
by subsequent decisions that cleared64 the accounts for financial year 2009 of those 
paying agencies that were disjoined in April 2010.  

During  financial  year  2010  Member  States  recovered  EUR  175.2  million  and  the 
outstanding  amount  still  to  be  recovered  from  the  beneficiaries  at  the  end  of  that 
financial  year  was  EUR  1  193.3  million.  Table  AG4  provides  an  overview  of  the 
recovered, irrecoverable and outstanding amounts at the level of beneficiaries at the 
end of financial year 2010.  

62 
63 
64 

The text, analysis and tables of this paragraph are provided by DG AGRI.  
Commission Decision 2010/258/EU (OJ L 112, 5.5.2010). 
Commission  Decision  2010/730/EU  (OJ  L  315,  1.12.2010)  and  Commission  Decision  2011/105/EU 
(OJ L 42, 16.2.2011). 

EN 

45 

   EN 

 
                                                 
Table AG4: financial information on recovery cases 

during FY2010

MS

recovered

declared

irrecoverable

at the end of FY2010
in %

outstanding

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

EUR

EUR

EUR

9 762 718
2 028 446
331 121

1 001 392
1 545 449

12 469 014
2 055 688

574 497
1 218 146

32 294 305
1 142 090

37 466 053
4 075 008
6 510 939

31 057 076
746 795

27 184
899 394

482 638
4 035 184

8 677 511
7 910 271

1 043 340
1 545 774
1 817 430

52 493
81 603
0

0
0

379 897
550

16
0

26 805 357
0

8 035 181
486 179
269 266

10 822 112
370

263
15 312

221 544
557 817

63 875
503 558

0
23 474
89

5 294 217
75 477 538
220 885

273 727
657 586

60 059 615
13 696 557

475 217
59 948 625

126 207 566
864 656

135 035 051
10 817 400
11 608 713

580 386 673
2 984 623

117 717
1 117 420

237 064
14 003 865

9 473 058
58 809 957

6 613 532
1 823 110
1 049 943

819 482
3 676 417
175 213 363

0
2 382 371
50 701 327

6 828 605
9 241 699
1 193 324 618

of total

EUR

0.4%
6.3%
0.0%

0.0%
0.1%

5.0%
1.1%

0.0%
5.0%

10.6%
0.1%

11.3%
0.9%
1.0%

48.6%
0.3%

0.0%
0.1%

0.0%
1.2%

0.8%
4.9%

0.6%
0.2%
0.1%

0.6%
0.8%
100.0%

The financial consequences of non recovery for cases dating from 2006 or 2002 was 
determined  in  accordance  with  the  50/50  rule  mentioned  above  by  charging  EUR 
27.8 million to the Member States concerned65 and a further EUR 0.6 million will be 
charged subsequently. Moreover, EUR 29.2 million was borne by the EU budget for 
cases reported irrecoverable during financial year 2010.  

Due the application of the 50/50 mechanism since its introduction in 2006 important 
non-recovered  sums  have  already  been  charged  to  the  Member  States  for  EAGF 
expenditure (EUR 446 million). Consequently, out of the EUR 1 193.3 million to be 
recovered from the final beneficiaries at the end of financial year 2010 the amount 
outstanding towards the EU budget is limited to EUR 888.8 million. As regards the 
recovery  of  undue  payments  financed  by  the  EAFRD,  it  has  to  be  noted  that  the 
50/50  rule  will  only  commence  being  applied  after  the  closure  of  the  rural 
development programmes.  

65 

Commission Implementing Decision 2011/272/EU (OJ L 119, 7.5.2011). 

EN 

46 

   EN 

 
 
                                                 
The  new  clearance  mechanism  (50/50  rule)  referred  to  above  provides  a  strong 
incentive  for  Member  States  to  recover  undue  payments  from  the  beneficiaries  as 
quickly as possible. As a result, by the end of financial year 2010, 42% of the new 
EAGF  debts  from  2007  and  thereafter  had  already  been  recovered,  which  is  a 
significant improvement compared to the past (see table AG5).  

Table AG5: recoveries for cases detected since 2007 

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

new cases
since 2007

EUR

adjustments

recoveries

EUR

EUR

recovery
rate

EUR

17 366 133
70 891 949
120 942
1 021 797
1 185 916
47 748 638
25 708 238
2 141 947
24 824 666
164 723 601
5 080 018
130 801 590

5 088 032
16 218 148
154 845 871
5 026 705
642 645
760 971
215 314
18 988 578
5 555 253
45 631 526
4 469 727
8 124 763
2 771 726
1 938 198
30 691 454
792 584 347

-2 178 544
-1 851 453
11 665
-18 861
-156 101
8 793 331
6 061 853
-1 056 059
-1 752 468
-13 171 086
71 455
-4 445 151

10 201 402
-1 550 528
75 192 968
-934 170
-374 512
-29 821
2 274
-1 556 062
1 001 842
-4 677 400
903 863
-663 564
21 824
-809 337
-5 158 159
61 879 201

-14 783 530
-11 237 000
-30 541
-729 203
-986 465
-42 388 565
-17 456 826
-1 049 965
-4 408 720
-78 198 627
-4 543 744
-45 170 654

-6 306 407
-11 674 083
-48 255 563
-2 446 887
-178 598
-673 840
-103 417
-16 913 855
-5 034 022
-16 338 660
-1 337 969
-6 591 084
-2 427 080
-301 612
-15 936 755
-355 503 670

97.3%
16.3%
23.0%
72.7%
95.8%
75.0%
54.9%
96.7%
19.1%
51.6%
88.2%
35.7%

41.2%
79.6%
21.0%
59.8%
66.6%
92.2%
47.5%
97.0%
76.8%
39.9%
24.9%
88.3%
86.9%
26.7%
62.4%
41.6%

During the years 2008-2010 the Commission was auditing the correct application of 
the  new  clearance  mechanism  through  15  on  the  spot  controls  covering  16  paying 
agencies in 12 Member States covering 89% of the total outstanding debt at the end 
of  financial  year  2010.  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.  The  diligence  of  the  Member  States' 
authorities in the recovery of the most significant irregularity cases is assessed in the 
context of further 9 conformity clearance procedures. 

EN 

47 

   EN 

 
 
7.3. 

General trends 

This  paragraph  provides  an  overview  of  trends  and  developments  concerning  the 
financial years 2006-2010. The outcomes of the descriptive analysis should be seen 
as a half-time-result.  

Important to reiterate is that a higher number of cases reported not necessarily means 
that more irregularities are committed. It is even possible that Member States with a 
higher irregularity rate perform better than Member States with a lower irregularity 
rate. 

7.3.1.  Financial Years 2006-2010: impact on the budget 

Table  AG6  provides  an  overview  of  the  total  expenditure  for  the  financial  years 
2006–2010 and cases of irregularities and fraud related to this expenditure.  

Table AG6:expenditure, irregularity and fraud rates financial years 2006-201066 

MS

expenditure 1)

EUR

share of total 
expenditure
%

N

5 064 363 778
1 138 611 399
4 154 289 447
2 046 049 984
46 918 765
271 379 756
549 984 431
1 902 295 709
4 902 048 754
3 051 868 572
27 235 740 367
918 284 024
31 657 845 912
3 519 245 588
970 156 673
13 085 492 818
5 383 780 563
8 492 933 457
49 199 970 808
14 357 002 909
31 740 578 991
19 167 293 488
4 664 974 219
5 593 347 683
4 078 122 804
5 808 182 103
237 161 690
249 237 924 695

HU
BG
BE
SK
MT
CY
EE
LT
PT
RO
IT
SI
ES
CZ
LV
PL
NL
IE
FR
EL
DE
UK
SE
DK
FI
AT
LU
TOTAL
1) expenditures are based on CATS-data
2) Bulgaria, Hungary and Poland reported respectively  6, 1 and 3 cases of "established fraud"
IMS Module 1848 download: 24 January 2011

2.03%
0.46%
1.67%
0.82%
0.02%
0.11%
0.22%
0.76%
1.97%
1.22%
10.93%
0.37%
12.70%
1.41%
0.39%
5.25%
2.16%
3.41%
19.74%
5.76%
12.74%
7.69%
1.87%
2.24%
1.64%
2.33%
0.10%
100.00%

irregularities
EUR
28 989 384
5 904 924
15 670 589
7 668 900
163 981
834 383
1 457 834
3 099 744
6 533 620
3 322 855
27 853 681
824 562
28 210 577
2 537 234
648 937
8 112 559
3 168 873
3 728 661
15 732 408
3 874 047
8 019 681
3 678 277
628 029
554 729
349 002
496 616
14 132
182 078 219

148
147
64
66
8
13
28
127
251
104
355
22
728
97
35
289
99
184
345
49
289
89
25
28
18
35
1
3 644

cases of irregularities reported

IrR
%
0.57%
0.52%
0.38%
0.37%
0.35%
0.31%
0.27%
0.16%
0.13%
0.11%
0.10%
0.09%
0.09%
0.07%
0.07%
0.06%
0.06%
0.04%
0.03%
0.03%
0.03%
0.02%
0.01%
0.01%
0.01%
0.01%
0.01%
0.07%

of which suspected fraud 2)

N

70
139
8
0
0
2
7
3
3
76
72
7
5
2
2
180
1
0
14
2
13
1
1
1
0
2
0
611

EUR
21 134 479
5 653 863
1 161 105
0
0
305 923
1 217 853
397 435
219 153
2 090 888
9 985 044
449 812
144 482
79 331
33 168
5 448 144
12 479
0
3 581 867
67 794
826 785
14 140
32 605
12 187
0
28 558
0
52 897 096

FrR
%
0.42%
0.50%
0.03%
0.00%
0.00%
0.11%
0.22%
0.02%
0.00%
0.07%
0.04%
0.05%
0.00%
0.00%
0.00%
0.04%
0.00%
0.00%
0.01%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.02%

Member  States  are  ranked  on  basis  of  their  irregularity  rate  (IrR).  The  irregularity 
rate is the relation between irregular amount and total expenditure67. The irregularity 
rate can be found in the fourth column of the right hand side.  

66 

67 

Table  AG6  shows  irregularities  notified  for  the  financial  years  2006-2010  only,  whereas  table  AG1 
provides an overview of irregularities reported in 2010 but concerning financial years 1990-2010. 
See equation 4-1 in paragraph 4.2.1. 

EN 

48 

   EN 

 
 
                                                 
The total expenditure in the period 2006-2010 was approximately EUR 249 billion. 
France  had  the  highest  expenditure.  It  spent  about  EUR  49  billion  which  is  almost 
20% of the total agricultural budget.  

Member States reported 3 644 cases with a total amount affected of more than EUR 
182 million, which implies an EU-27 irregularity rate of 0.07%. Spain reported with 
728  cases  the  highest  number  of  irregularities,  followed  by  Italy  and  France  with 
respectively 355 and 345 cases.  

Hungary  reported  the  highest  amount  affected  by  irregularities.  Almost  EUR  29 
million was affected by irregularities which concern the sector cereals68. As already 
indicated, these cases should be considered separately. Leaving aside the Hungarian 
cases,  this  would  mean  that  Spain  and  Italy  have  the  highest  amounts  affected  by 
irregularities  with  about  EUR  28  million,  which  is  in  line  with  figures  of  previous 
years. 

Hungary  has  the  highest  irregularity  rate  (0.57%)  now  it  reported  the  highest 
amounts  affected  by  irregularities  (EUR  29  million)  and  has  a  relatively  low 
expenditure.  Bulgaria  has  the  second  highest  irregularity  rate:  0.52%.  Luxembourg 
has the lowest IrR (0.01%), thus, can be found at the bottom of the list.  

Big  spenders  as  France,  Germany,  United  Kingdom,  Greece  and  Poland  have  an 
irregularity  rate  that  is  below  the  EU-27  average  of  0.07%.  The  other  two  big 
spenders,  Spain  and  Italy,  have  an  irregularity  rate  above  the  EU-27  average, 
respectively 0.09% and 0.10%.  

The  3  Scandinavian  countries  (Denmark,  Finland  and  Sweden)  have  a  comparable 
and  low  irregularity  rate:  0.01%.  The  expenditure  in  these  3  Member  States  is  in 
amounts more or less comparable with the Portuguese expenditure. The Portuguese 
irregularity rate differs however strongly: 0.14%. Portugal reported 251 cases and a 
total  amount  affected  of  about  EUR  6.5  million  as  the  3  Scandinavian  countries 
together reported 61 cases with a total amount affected of about EUR 1.5 million. 

Remarkable is that the majority of the younger Member States can be found on top of 
the table and that the majority of older Member States can be found in the tail.  

Remarkable  is  also  that  Member  States  with  a  relatively  low  expenditure  have  a 
rather high irregularity rate. This could indicate a higher audit rate, more tailor-made 
audit  strategies  and  plans,  better  functioning  irregularity  reporting  system  and  so 

68 

The  irregularity  concerns  "intervention  measures  in  the  form  of  public  storage"  as  described  in  Reg. 
884/2006. Cereals were stored on date A. On date B appeared that x tonnes were missing due to theft 
and  deterioration.  The  average  market  price  for  the  standard  quality  in  Hungary  was  on  date  B 
significantly  higher  than  the  basic  intervention  price.  In  such  cases,  Reg.  884/2006  requires  that  the 
market price has to be reimbursed, increased by 5%. The differences between the amounts collected by 
applying the market price and the amounts booked to the EAGF by applying the intervention price has 
then to be credited to the EAGF at the end of the accounting year among the other elements of credit. 
Hungary included the costs of intervention, which also had to be paid back, in the amount to recover. 
The total amount to recover (EUR 25 million), therefore, is substantially higher than the total EAGF-
expenditure and led to a different calculation of the Hungarian irregularity rate. The latter explains the 
rather high Hungarian irregularity rate which cannot be compared with the rates of the other Member 
States. 

EN 

49 

   EN 

 
                                                 
forth.  A  similar  trend  can  be  seen  within  Member  States.  Provinces,  regions  or 
departments  with  a  relatively  low  expenditure  have  in  general  a  higher  irregularity 
rate than the regions with a higher expenditure.  

Chart AG7: expenditure and irregularity rate 

s
n
o

i
l
l
i

B

e
r
u
t
i

d
n
e
p
x
e

60

50

40

30

20

10

0

0.70%

0.60%

0.50%

0.40%

0.30%

R
r
I

0.20%

0.10%

0.00%

R
F

E
D

T
S I
E

K
U

L
E

L
P

E

I

T
A

K
D

L
N

U
H

T
P

E
S

I

E F
B

Z
C

O
R

K
S

T
L

G
B

I

V S
L

E
E

Y
C

U
L

T
M

expenditure

IrR

Linear (IrR)

Linear (expenditure)

Chart AG7 brings per Member State together the expenditures and irregularity rates. 
The  green  lines  concern  the  expenditures  as  the  red  lines  concern  the  irregularity 
rates. 

Member  States  are  ranked  on  basis  of  the  total  expenditure.  France,  the  Member 
State with the highest expenditure, can be found on the left hand side while Malta, as 
the smallest spender, can be found on the right hand side. The precise figures can be 
found in table AG6.  

The thin red line indicates the irregularity rate. The thick red line is a linear trend line 
which  shows  an  increase  of  the  irregularity  rate  from  left  to  right.  Member  States 
with  a  higher  expenditure  have,  in  general,  a  lower  irregularity  rate  than  Member 
States with a lower expenditure. In last years Art. 325 Report was already mentioned 
that this trend can also be spotted in Member States. Regions that have a relatively 
low expenditure report more cases than regions with a higher expenditure. Last years' 
report contained examples for Austria, Spain and France.  

It is however good to recall that the above shown figures should be seen as half-time-
result. Audits are still ongoing, therefore, more irregularities will be reported which 
could turn the figures completely. 

EN 

50 

   EN 

 
 
7.3.2.  Financial Years 2006-2010: cases classified as suspected fraud 

Table  AG8  is  an  extract  from  table  AG6  and  contains  only  the  figures  concerning 
suspected fraud. Member States are ranked on basis of the fraud rate69. Bulgaria has 
the highest fraud rate, therefore, can be found on top of the table. 

Table AG8: fraud rates 

MS

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

Expenditure
EUR
1 138 611 399
5 064 363 778
549 984 431
271 379 756
3 051 868 572
918 284 024
13 085 492 818
27 235 740 367
4 154 289 447
1 902 295 709
49 199 970 808
4 902 048 754
970 156 673
31 740 578 991
3 519 245 588
4 664 974 219
5 808 182 103
14 357 002 909
31 657 845 912
5 383 780 563
5 593 347 683
19 167 293 488
8 492 933 457
4 078 122 804
2 046 049 984
237 161 690
46 918 765
249 237 924 695

of which suspected fraud

N

EUR

139
70
7
2
76
7
180
72
8
3
14
3
2
13
2
1
2
2
5
1
1
1
0
0
0
0
0
611

5 653 863
21 134 479
1 217 853
305 923
2 090 888
449 812
5 448 144
9 985 044
1 161 105
397 435
3 581 867
219 153
33 168
826 785
79 331
32 605
28 558
67 794
144 482
12 479
12 187
14 140
0
0
0
0
0
52 897 096

FrR
%
0.50%
0.42%
0.22%
0.11%
0.07%
0.05%
0.04%
0.04%
0.03%
0.02%
0.01%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.02%

1) expenditures are based on CATS-data. 
3) BG, HU and PL reported respectively  6, 1 and 3 cases of "established fraud"
IMS Module 1848 download: 24 January 2011

Member  States  classified  611  cases  (out  of  3 644  cases)  as  "suspected  fraud".  The 
total financial impact of these cases is about EUR 53 million which leads to an EU-
27 fraud rate of 0.02%.  

Eye-catching  is  that  the  vast  majority  of  the  cases  is  reported  by  young  Member 
States. Almost 80% (488 cases) of the suspected fraud cases is reported by them. If 
also is taken into account that Italy is responsible for another 12% of the cases (72 

69 

The Fraud Rate (FrR) is defined by equation 4-2 in paragraph 4.2.2. 

EN 

51 

   EN 

 
 
                                                 
cases), then one can only conclude that almost no fraud is reported by old Member 
States.  The  United  Kingdom,  for  instance,  reported  for  a  period  of  5  years,  with  a 
total  expenditure  of  more  than  EUR  19  billion,  1  suspected  fraud  case  with  a  total 
amount  affected  of  about  EUR  14 140.  Other  big  spenders  that  have  an  extremely 
low fraud rate are Greece, Spain, Germany and France. Table AG9 provides a more 
simple  and  clear  view  on  the  number  of  suspected  fraud  cases  reported,  the 
expenditure,  the  amount  affected  by  the  suspected  fraud  cases  and  the  fraud  rate. 
Bear in mind that it concerns a period of 5 years: 2006-2010.  

Table AG9: fraud cases big spenders 

UK

EL

ES

DE

FR

fraud cases
expenditure
fraudulent amount
fraud rate (6 digits)
fraud rate (1 digit)

1

2

14
19 167 293 488 14 357 002 909 31 657 845 912 31 740 578 991 49 199 970 808
3 581 867
0.007280%
0.0%  

826 785
0.002605%
0.0%

144 485
0.000456%
0.0%

67 794
0.000472%
0.0%

14 140
0.000074%
0.0%

13

5

The  number  of  fraud  cases  and  the  amounts  affected  are  so  low  that  the  fraud  rate 
needs  to  be  indicated  in  6  digits  behind  the  dot.  However,  a  level  of  3,  4  or  more 
digits behind the dot is not desirable now it would give the false impression of a very 
high level of precision. Presenting the fraud rates with only 1 digit would mean that 
the fraud rates for all these Member States would be zero.  

EN 

52 

   EN 

 
7.3.3.  Financial Years 2006-2010: overview per budget post 

Table AG10 provides an overview per budget post of the expenditures, irregularities 
and suspected frauds cases. The totals are the same as in table AG6.  

Table AG10: irregularity and fraud rates 

expenditure

irregular

EUR

N

Eur

cases of irregularities reported

of which suspected fraud 2)

N

EUR

B-050215 Pigmeat, eggs and poultry, bee-keeping and other

849 960 032

budget 
post

description

B-050201 Cereals
B-050304 Ancillary direct aids

B-110203 Fisheries programme for the outermost regions
B-050205 Sugar

B-050401 Rural development - period 2000-2006 (EAGF)
B-050208 Fruit and vegetables
B-050211 Other plant products/measures
B-050210 Promotion

B-050404

Rural development - transitional instrument new 
MS

B-050203 Non-Annex 1 products
B-050209 Products of the wine-growing sector

B-050213 Beef and veal
B-050212 Milk and milk products
B-050405 Rural development - period 2007-2013 (EAFRD)
B-050206 Olive oil

B-050303 Additional amounts of aid
B-050301 Decoupled direct aids
B-050302 Other direct aid
B-050204 Food programmes

B-050207 Textile plants
B-050216 Sugar restructuring fund

419 316 004
3 438 816

13 184 824
2 601 941 881

6 102 696 333
5 342 841 406
1 758 711 434
224 412 795

718 562 284
6 334 333 616

484 328 884
2 534 045 877
27 142 306 205
235 345 250

1 798 058 470
142 473 560 126
40 938 294 479
1 215 482 698

1 025 965 715
5 174 545 677

IrR

%

6.19%
1.26%

0.94%
0.74%

25 939 210
43 320

123 889
19 290 320

4 549 367

0.54%

29 085 618
22 531 405
5 423 831
681 821

0.48%
0.42%
0.31%
0.30%

124
3

3
35

103

669
250
61
24

26
230

29
81
480
6

29
1 140
234
7

3
1

1

981 859
7 899 097

573 276
2 977 124
21 028 058
117 875

796 941
28 721 449
7 429 572
189 317

93 267
19 822

87 775

0.14%
0.12%

0.12%
0.12%
0.08%
0.05%

0.04%
0.02%
0.02%
0.02%

0.01%
0.00%

B-170405

Food safety, animal health/welfare and plant health 
- other 3)

B-110201 Intervention in fishery products

11 950 824

other
TOTAL

?

?

?

249 237 924 695

3 644 182 078 219

0.07%

0.00%

?

?

4 998 889 741

356

11 216 844

0.22%

FrR

%

4.98%
0.00%

0.00%
0.02%

20 861 401
0

0
397 435

139 571

0.02%

9 518 014
1 765 241
880 418
80 176

0.16%
0.03%
0.05%
0.04%

3 743 218

0.07%

0
449 896

10 712
560 383
9 411 859
0

16 976
8 490 649
1 663 315
0

0
19 822

0.00%
0.01%

0.00%
0.02%
0.03%
0.00%

0.00%
0.01%
0.00%
0.00%

0.00%
0.00%

0

0.00%

0.00%

?

52 897 096

0.02%

68
0

0
3

3

49
8
3
1

147

0
10

1
2
193
0

1
246
16
0

0
1

0

?

611

1) expenditures are based on CATS-data
2) Bulgaria, Hungary and Poland reported respectively  6, 1 and 3 cases of "established fraud"
3) Ireland reported 1 case for budget post B-170405 although no expenditure was made for this post
IMS Module 1848 download: 24 January 2011

The budget posts are ranked on basis of the irregularity rate (IrR). The budget post 
with the highest irregularity rate can be found on the top of the list, which is budget 
post B-050201 for cereals. The high rates for cereals are mainly caused by Hungary. 
Hungary  reported  104  cases,  of  which  67  cases  were  classified  as  suspected  fraud 
and 1 case as established fraud. It was already mentioned in paragraph 7.2.2. that the 
Hungarian  cases  concern  a  special  situation  and  should  be  considered separately  to 
avoid that these cases would distort the general picture. 

The  two  budget  posts  with  the  highest  expenditures,  e.g.  decoupled  direct  aids  (B-
050301) and other direct aid (B-050302), can be found at the tail of the list now they 
have  an  irregularity  rate  of  0.02%  and  a  fraud  rate  smaller  than  0.01%.  These  two 
sectors  together  cover  more  than  70%  of  the  total  expenditure  which  implies  that 
these rates have a high and decreasing impact on the overall rates. 

Table  AG11  provides  a  simple  overview  how  often  a  budget  post  occurred  in  an 
irregularity  and  what  the  financial  impact  was.  Only  the  budget  posts  with  a 
relatively high number and/or amounts affected are displayed.  

EN 

53 

   EN 

 
 
Table AG11: irregularities per budget post 

budget post

description

B-050301
B-050401
B-050405

B-050404
B-050208

B-050302
B-050209
B-050201

Decoupled direct aids
Rural development - period 2000 - 2006 (EAGF)
Rural development - period 2007 - 2013 (EAFRD)

Rural development - transitional instrument new MS
Fruits and vegetables

Other direct aids
Products of the wine-growing sector
Cereals

Pigmeat, eggs and poultry, bee-keeping and other

B-050215
B-050212 Milk and milk products
B-050211
B-050205

Other plant products/measures
Sugar

irregularities

N

1 140
669
480
356
250
234
230

124
103

81
61
35

EU R

28 721 449
29 085 618
21 028 058
11 216 844
22 531 405
7 429 572
7 899 097

25 939 210
4 549 367

2 977 124
5 423 831
19 290 320

Clear  is  that  a  rather  high  number  of  cases  (1  505)  is  reported  for  expenditures 
concerning  rural  development  measures  in  case  the  3  budget  posts  for  rural 
development are taken together (B-050401, B-050404 and B-050405).  

The  following  types  of  irregularities  occurred  most  frequently  in  the  sector  rural 
development: 

●  actions not carried out, not implemented or not finalised
●  overdeclaration
●  documents missing or not provided
●  documents false or falsified

511
186
158
98

cases
cases
cases
cases

Beneficiaries seem to have problems with carrying out all necessary actions to fulfil 
the conditions under which the support is granted. By not handing over documents or 
handing  over  of  false  or  falsified  documents,  beneficiaries  try  to  cover  the 
irregularity of not carrying out of all necessary actions. 

The  number  of  cases  and  the  amounts  affected  for  the  sector  decoupled  direct  aids 
(050301)  is  also  high  but  that  is  not  surprising  since  more  than  55%  of  the  total 
agricultural  expenditure  concerns  decoupled  direct  aids.  The  types  of  irregularities 
that occur most frequently for decoupled direct aids (050301) are: 

●  incorrect or incomplete request for aid
●  overdeclaration
●  other, to be specified by Member States

311
268
81

cases
cases
cases

Member States did not indicate the type of irregularity or applied modus operandi for 
81 cases.  

For  decoupled  direct  aids  as  well  as  rural  development  counts  that  Member  States 
classify  the  majority  of  "overdeclaration-cases"  as  "suspected  fraud".  However,  it 
should be noted that the fraud rates for these sectors are low with respectively 0.01% 
and 0.06% (see table AG10).   

EN 

54 

   EN 

 
 
 
 
7.3.3.1.  Financial Years 2006-2010: decoupled direct aids (B-050301) 

A  sector  that  "consumed"  more  than  57%  of  the  total  agricultural  budget  for  the 
financial years 2006-2010, deserves some special attention. Table AG12 provides per 
Member  State  an  overview  of  the  expenditure  and  the  cases  of  irregularities  and 
suspected fraud.  

Table AG12: decoupled direct aids – irregularity and fraud rates 

cases of irregularities reported

of which suspected fraud 1)

EUR

FrR

%

expenditure

irregular

EUR

N

EUR

25 538 990 730
22 933 597 122

16 568 014 087
15 434 900 595
13 067 266 659
7 974 123 624
6 418 336 075

6 199 076 815
4 558 261 429

3 151 633 474
2 857 301 029

2 826 025 651
2 329 228 720

2 134 198 908
1 997 753 251

1 971 098 575
1 669 428 504
1 566 190 838
831 630 308
808 751 847

646 851 219
313 115 876

127
1

20
146
268
3
91

148
13

3
13

25
41

14
3

5
10
82
6
38

74
1

3 153 332
22 133

212 812
4 665 828
6 107 950
78 422
2 590 670

3 076 016
219 428

83 034
263 468

378 476
1 190 946

265 704
45 807

93 715
186 127
2 145 659
528 159
734 451

2 355 074
12 467

IrR

%

0.01%
0.00%

0.00%
0.03%
0.05%
0.00%
0.04%

0.05%
0.00%

0.00%
0.01%

0.01%
0.05%

0.01%
0.00%

0.00%
0.01%
0.14%
0.06%
0.09%

0.36%
0.00%

N

8

10

82

1
1

1
1

64

74

MS

DE
FR
UK

IT
ES

EL
PL

IE
DK

SE
HU
AT
NL
BE
CZ
FI

PT
RO

SK
LT

BG
LV
EE

214 669 459
182 043 553

8

311 771

169 800 451
103 578 293

SI
LU
CY
MT
total
1) Bulgaria, Hungary and Poland reported respectively  6, 1 and 3 cases of "established fraud"

7 693 036
142 473 560 126

28 721 449

0.17%

0.02%

1 140

246

4

475 898

0.00%

1 284 212

0.01%

2 350 538

0.04%

17 770
12 479

12 654
9 705

0.00%
0.00%

0.00%
0.00%

1 823 277

0.12%

2 355 074

0.36%

149 042

0.08%

8 490 649

0.01%

IMS Module 1848 download: 24 January 2011

Member States reported 1 140 cases of irregularities with a total amount affected of 
almost EUR 29 million. The EU-27 irregularity rate is approximately 0.02%.  

Spain  reported  the  highest  number  and  the  highest  amounts:  268  cases  and  a  total 
amount affected of more than EUR 6.1 million.  

As  already  mentioned,  the  irregularity  rate  for  the  sector  decoupled  direct  aids  is 
rather low. It differs however strongly per Member State. A comparison between the 

EN 

55 

   EN 

 
 
 
top  five  spenders  makes  that  clear.  France  reported  1  case  as  Spain  reported  268 
cases. Remarkable is also that only 2 of the 5 big spenders reported suspected fraud. 
A comparison between big spenders and small spenders is also interesting. Take for 
instance France and Bulgaria. The following table gives an interesting overview. 

expenditure in EUR
irregular in EUR
Irregularity Rate (IrR)

France

22 933 957 122        
22 133        
0.00%

Bulgaria

646 851 219        
2 355 074        
0.36%  

EN 

56 

   EN 

 
7.4. 

Specific analysis 

Last year's Commission Staff Working Paper “Statistical Evaluation of Irregularities” 
introduced  key-figures  as  Irregularity  Rate  (IrR),  Fraud  Rate  (FrR),  Fraud  Amount 
Level and Fraud Frequence Level (FFL)70. 

To  present  reliable  rates  and  levels,  a  time  frame  should  be  used  that  can  be 
considered, from an irregularity reporting point of view, as "finalised". The financial 
year  2010  cannot  yet  be  used  to  calculate  rates  and  levels  as  a  large  number  of 
irregularities concerning the financial year 2010 will be reported in the coming years. 
The same counts for the period 2006-2010. 

The financial years 2004-2005 can be considered as finalised71. 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.  The  course  of  the  number  of  cases  of  irregularities  reported 
concerning  the  expenditures  of  the  financial  years  2004-2005  enforces  the 
assumption  that  all  or  almost  all  cases  have  been  reported  for  the  financial  years 
2004-2005.  Chart  AG1372  demonstrates  the  course  of  the  reported  cases  for  the 
expenditure of the financial years 2004-2005.  

Chart AG13: course of irregularities – FY2004-2005 

1,600

1,400

1,200

1,000

800

600

400

200

0

-200

2004

2005

2006

2007

2008

2009

2010

2011

cases

cases - if timely reported

Linear (cases - if timely reported)

The  green  line  indicates  the  real  course  of  the  number  of  cases  reported.  Timely 
reporting is still a problem for a rather large number of Member States, this counts 
especially  for  the  past  such  as  the  financial  years  2004-2005.  The  orange  line 

70 
71 
72 

IrR, FrR, FAL and FLL are explained in paragraphs 4.2.1 and 4.2.2. 
In next years report, the financial year 2006 will be used to determine the different rates and levels. 
Annex 14 contains similar charts for 6 specific sectors. 

EN 

57 

   EN 

 
 
                                                 
indicates the course in case all cases were reported timely. Both lines show a clear 
peak in the number of cases reported for the year 2005 and then a decrease for the 
period  2006-2007.  The  rather  strong  downfall  for  2007  can  be  explained  by  the 
introduction  of  a  new  threshold  under  which  no  irregularities  have  to  be  reported. 
Reg. 1848/2006 introduced a new threshold of EUR 10,000. The old threshold was 
EUR  4  000.  A  revival  can  be  spotted  for  the  years  2008-2009.  This  revival  can  be 
explained  by  the  coming  operational  of  Module  1848.  The  new  reporting  module 
made it far more easier to process communications by a far larger number of users 
which  led  to  an  increase  of  the  number  of  cases  reported.  From  2008  onwards,  a 
decrease can be seen from 11% via 8% to 3%. It can be expected that the number of 
cases  will  decrease  to  zero  or  almost  zero in  2011.  The  thin  orange  line  is  a  linear 
trend line and indicates the downfall to zero. In other words, it can be assumed that 
almost  all  cases  of  irregularities  have  been  reported  for  the  financial  years  2004-
2005.  

7.4.1.  Financial Years 2004-2005: expenditures and cases reported per Member State 

Table  AG15  provides  per  Member  State  an  overview  of  the  expenditures,  cases  of 
irregularities  and  amounts  affected  by  irregularities.  The  Member  State  with  the 
highest expenditure has been put on top of the table.  

Table AG15: irregularity and fraud rates 

share of total 
expenditure
%

N

cases of irregularities reported

of which suspected fraud 2)

N

EUR

MS

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

expenditure 1)

EUR
19 640 472 904
12 951 237 879
12 104 623 812
11 103 761 410
8 312 656 177
5 537 481 907
3 631 871 464
2 508 105 731
2 437 065 641
2 367 167 168
2 031 972 022
1 812 513 725
1 774 505 513
1 752 265 206
1 352 716 064
410 897 913
384 116 076
230 564 121
197 900 243
106 734 616
96 223 202
82 875 684
66 126 002
38 853 010
5 893 827
90 938 601 314

21.60%
14.24%
13.31%
12.21%
9.14%
6.09%
3.99%
2.76%
2.68%
2.60%
2.23%
1.99%
1.95%
1.93%
1.49%
0.45%
0.42%
0.25%
0.22%
0.12%
0.11%
0.09%
0.07%
0.04%
0.01%
100.00%

IrR
%

irregularities
EUR
14 350 179 0.07%
43 739 857 0.34%
7 295 887 0.06%
86 258 218 0.78%
6 968 243 0.08%
3 556 837 0.06%
1 276 319 0.04%
6 805 152 0.27%
15 418 705 0.63%
697 245 0.03%
4 097 473 0.20%
1 289 529 0.07%
336 453 0.02%
7 777 051 0.44%
3 800 765 0.28%
264 103 0.06%
562 835 0.15%
858 223 0.37%
3 882 073 1.96%
3 115 959 2.92%
152 710 0.16%
17 571 0.02%
1 000 280 1.51%
324 494 0.84%

736
942
399
480
246
123
129
188
71
62
81
119
23
439
161
8
20
58
45
10
11
2
39
10

6
8
2
164
1
11

3

1
3

3
137

1

5

2
2

FrR
%
0.01%
0.01%
0.00%
0.49%
0.00%
0.02%

1 237 975
1 091 715
57 725
54 342 356
68 140
1 221 746

59 607

0.00%

33 050
2 679 031

0.00%
0.13%

59 740
2 782 815

0.00%
0.21%

16 240

0.00%

54 601

0.06%

632 920
274 675

0.96%
0.71%

4 402

213 846 159 0.24%

349

64 426 662

0.07%

1) expenditures 2004 - 2005 are based on CATS-data.
2) Germany, Italy and Poland reported respectively  1, 2 and 5 cases of "established fraud" with a total amount affected of about €185,000
IMS Module 1848 download: 24 January 2011

The total expenditure for the financial years 2004-2005 was almost EUR 91 billion. 
France was the Member State with the highest expenditure. France spent about EUR 
19.6 billion which was almost 22% of the total agricultural expenditure (EU-25).  

EN 

58 

   EN 

 
 
Member  States  reported  4  402  cases  of  irregularities.  The  total amount  affected  by 
these irregularities is almost EUR 214 million, which implies an irregularity rate of 
0.24% (IrR). 

Member States classified 349 cases out of 4 402 as suspected fraud. The total amount 
affected by these suspected fraud cases is almost EUR 65 million. The fraud rate is 
0.07% (FrR).  

Striking  are  the  sometimes  huge  differences  between  Member  States.  Spain  and 
Germany, for instance, have in amounts a comparable expenditure, EUR 12.9 billion 
and  EUR  12.1  billion  respectively.  Spain  reported  942  cases  as  Germany  reported 
399. A same difference can be seen for the amounts affected. Spain reported a total 
amount  affected  by  irregularities  of  about  EUR  43.7  million  as  Germany  reported 
EUR 7.3 million.  

A  similar  comparison  can  be  made  between  Finland  and  Portugal.  Both  spent 
approximately 1.9% of the total agricultural budget. Portugal reported 439 cases with 
a total amount affected of almost EUR 7.8 million as Finland reported 23 cases with 
a total amount affected of about EUR 0.3 million. As stated, the differences are huge. 
One could argue that Portugal and Finland have different types of expenditures due 
to, for instance, their natural location. However, a huge difference can also be spotted 
between Finland and Sweden. Sweden spent approximately 2.0% of the budget and 
reported  119  cases  with  a  total  amount  affected  of  about  EUR  1.3  million.  Table 
AG16 provides an overview of these 3 Member States.  

Table AG16: detailed overview of Sweden, Finland and Portugal 

Member 
State

SE
FI
PT

expenditure

irregular

EUR

N

1 812 513 725
1 774 505 513
1 752 265 206

119
23
439

EUR
1 289 529
336 453
7 777 051

IrR

%
0.07%
0.02%
0.44%

Eye-catching  are  also  the  figures  of  the  top  three  (France,  Spain  and  Germany) 
especially  where  it  concerns  the  number  of  suspected  fraud  cases  and  fraud  rates. 
These  three  Member  States  are  together  responsible  for  almost  50%  of  the  total 
agricultural  expenditure.  The  number  of  suspected  fraud  cases  and  the  amounts 
affected by these cases are remarkably low.  

Table AG17: fraud rates top 3 spenders (France, Spain and Germany) 

FR

ES

DE

fraud cases
expenditure
fraudulent amount
fraud rate

6        
19 640 472 904        
1 237 975        
0.01%

8        
12 951 237 879        
1 091 715        
0.01%

2        
12 104 623 812        
57 725        
0.00%  

France  had  an  expenditure  of  almost  EUR  20  billion  and  reported  6  cases  of 
suspected fraud with a total amount affected of EUR 1.2 million. This means a fraud 
rate of 0.0063% which is almost zero. The same can be seen for Germany. The total 

EN 

59 

   EN 

 
 
German expenditure was a bit more than EUR 12 billion. Germany reported 2 cases 
of suspected fraud with a total amount affected of EUR 57,725 which leads to a fraud 
rate of 0.0005% which is also almost zero. Spain had an expenditure of almost EUR 
13  billion  and  reported  8  cases  of  suspected  fraud.  The  amounts  affected  by  these 
suspected  fraud  cases  were  almost  EUR  1.1  million  which  implies  a  fraud  rate  of 
0.0084% which is again almost zero.  

In  addition  has  to  be  mentioned  that  the  French  and  German  suspected  fraud  cases 
were  reported  for  only  one  sector:  B-050401  rural  development.  As  already 
mentioned, a level of detail of 3, 4 or more digits behind the dot is not desirable. It 
gives  the  false  impression  of  a  very  high  level  of  precision.  The  rates  should  be 
indicated with only 1 digit behind the dot. This would means that the fraud rates for 
these  Member  States  are  zero.  A  fraud  rate  of  zero  means  that  none  of  the 
irregularities was committed intentionally or deliberately.  

Some other eye-catching facts in bullet points:  

• 

• 

• 

• 

• 

• 

• 

• 

• 

Spain reported the highest number of cases: 942 cases; 

Italy reported the highest amounts affected by irregularities: EUR 86 million; 

Italy reported the highest number of suspected fraud cases: 164 cases; 

Slovenia has the highest irregularity rate: 2.92%; 

Estonia has the highest fraud rate: 0.96%; 

no suspicion of fraud in 10 Member States; 

5 Member States have a fraud rate of 0.1% or higher; 

EU-25 irregularity rate (IrR) = 0.24%;  

EU-25 fraud rate (FrR) = 0.07%. 

EN 

60 

   EN 

 
7.4.2.  Financial Years 2004-2005: expenditures and cases reported per budget post 

Table AG18 provides per budget post an overview of the expenditures, irregularities 
and suspected frauds. The budget posts are ranked on basis of the expenditure. The 
budget  post  with  the  highest  expenditure  can  be  found  on  the  top  of  the  list.  It 
concerns budget post B-050203 direct payments for arable crops.  

Table AG18: irregularity and fraud rates 

budget 
post

description

expenditure 1)

share of 
total

EUR

%

B-050203
B-050302

direct payments for arable crops
beef and veal

34 140 762 401
15 936 024 995

rural development - EAGF

B-050401
B-050301 milk and milk products
olive oil
B-050206
fruits and vegetables
B-050208
sheepmeat and goatmeat
B-050303

B-050205
B-050209

B-050210
B-050207

B-050212
B-050211

B-050404
B-050202

B-050201
B-050304

B-050204
B-050399

blank

sugar
products of the wine-growing sector

tobacco
textile plants

direct aids of a horizontal nature
other plant products/measures

transitional instrument new MS
rice

cereals
pigmeat, eggs and poultry, etc.

food programmes
recoveries
no information provided by Member 
States

9 684 830 249
5 574 260 654
4 682 317 951
3 325 249 841
3 315 963 834

2 981 376 843
2 219 244 751

1 848 927 988
1 823 986 897

1 455 925 971
1 316 620 234

1 090 794 089
615 907 062

466 634 876
322 884 324

262 056 413
-21 156 824

other
total
1) expenditures 2004 - 2005 are based on CATS-data.

~
90 938 601 314

38%
18%

11%
6%
5%
4%
4%

3%
2%

2%
2%

2%
1%

1%
1%

1%
0%

0%
0%

~

N

454
402

1 687
234
97
297
86

89
637

12
11

117
73

255
2

72
74

6
0

21

~
4 402

cases of irregularities reported

irregular

EUR

16 381 553
23 224 672

45 587 559
6 583 427
5 559 354
69 289 950
1 792 984

19 408 055
12 064 559

191 650
229 727

2 010 801
3 990 131

7 454 030
21 182

1 769 064
1 085 870

409 876
0

702 019

IrR

%

of which suspected fraud 

N

EUR

0.05%
0.15%

0.47%
0.12%
0.12%
2.08%
0.05%

0.65%
0.54%

0.01%
0.01%

0.14%
0.30%

0.68%
0.00%

0.38%
0.34%

0.16%
0.00%

37
29

74
8
3
26
21

1
8

0
0

108
1

133
0

0
3

4
0

1

11 930 736
8 756 371

7 362 426
708 521
863 710
28 195 312
521 154

2 670 914
374 386

0
0

1 869 171
312 177

2 726 940
0

0
46 949

42 042
0

200 000

FrR

%

0.03%
0.05%

0.08%
0.01%
0.02%
0.85%
0.02%

0.09%
0.02%

0.00%
0.00%

0.13%
0.02%

0.25%
0.00%

0.00%
0.01%

0.02%
0.00%

~
213 846 159 0.24% 349

~

~

~
~
64 612 337 0.07%

2) Germany, Italy and Poland reported respectively  1, 2 and 5 cases of "established fraud" with a total amount affected of about €185,000

IMS Module 1848 download: 24 January 2011

The budget posts with a rather low amount and no irregularities have been left out to 
avoid that the table would become less readable. These budget posts are summarized 
by "other". The column budget post contains also the term blank. As indicated by the 
description,  it  concerns  21  cases  of  irregularities  for  which  Member  States  did  not 
indicate  the  budget  post  affected  by  the  irregularity.  These  cases  were  reported  by 
Cyprus  (1x),  Germany  (11x),  Greece  (1x), Italy  (1x),  Slovakia  (2x)  and  the  United 
Kingdom (5x). The Italian case was classified as suspected fraud.  

The  total  expenditure  for  post  B-050203  was  more  than  EUR  34  billion,  which  is 
about  38%  of  the  total  expenditure.  Member  States  reported  in  454  cases  that  the 
irregularity concerned post B-050203. In 37 cases, the irregularity was classified as 
suspected  fraud.  The  irregularity  rate  and  fraud  rate  are  0.05%  and  0.03% 
respectively.  

Sectors with a rather high irregularity and/or fraud rate are: 

budget post
B-050208
B-050404
B-050205
B-050209

description

fruits and vegetables
transitional instrument new MS
sugar
products of the wine growing sector

expenditure
EUR 3.3 billion
EUR 1.1 billion
EUR 3.0 billion
EUR 2.2 billion

IrR

FrR

2.08% 0.85%
0.68% 0.25%
0.65% 0.09%
0.54% 0.02%  

EN 

61 

   EN 

 
 
Especially  sector  B-050208  has  a  rather  high  irregularity  and  fraud  rate.  The  next 
paragraph will have the focus on this sector. After that, the focus will be on the top 
five budget posts. The total expenditure for these five budget posts covers more than 
75% of the budget while the total expenditure per post is more than EUR 4 billion. It 
concerns: 

description

budget post
B-050203 
B-050302 
B-0504xx 
B-050301  milk and milk products
olive oil
B-050206 

direct payment for arable crops
beef and veal
rural development

expenditure
EUR 34.1 billion
EUR 15.9 billion
EUR   9.7 billion
EUR   5.6 billion
EUR   4.7 billion

IrR

FrR

0.05% 0.03%
0.15% 0.05%
0.47% 0.08%
0.12% 0.01%
0.12% 0.02%  

Starting  point  will  be  a  table  in  which  elements  as  expenditure,  irregular  amount, 
irregularity  rate,  cases  of  irregularity,  fraudulent  amount,  fraud  rate,  cases  of 
suspected  fraud  and  years  in  which  the  cases  of  irregularities  were  reported  can  be 
found. 

Per budget post will be indicated if the reporting of irregularities can be considered 
as  finalised  in  order  to  use  the  different  rates  as  definitive  figures.  This  indication 
will  be  on  basis  of  the  course  of  the  number  of  reported  cases  taking  also  into 
account  the  non-timely  reporting  by  some  Member  States.  This  course  will  be 
visualised by a chart that is indicating the course of the cases over the years on basis 
of the reporting by Member States (green line) and the course in case Member States 
would  have  reported  timely  (orange  line).  These  charts  can  be  found  in  annex  15 
except the chart for the sector B050208 fruits and vegetables. That chart is directly 
discussed in paragraph 7.4.2. in order to explain that chart more in depth. 

All charts will show a strong decrease of the number of cases in 2007 and an increase 
in 2008. This phenomenon can be explained by: 

• 

Reg. 1848/2006 introduced in 2007 a higher threshold under which no cases of 
irregularities have to be reported. The threshold increased from EUR 4 000 to 
EUR 10 000; 

•  Module  1848  became  operational  in  2008.  Module  1848  is  a  web  based 
application with a cascaded reporting structure which led to an increase of the 
number of users of the irregularity reporting system from less than 50 to more 
than 1 000 in the period 2008-2010. 

In  last  years  Art.  325  report,  values  as  IFL  (Irregularity  Frequency  Level),  FAL 
(Fraud  Amount  Level)  and  FFL  (Fraud  Frequency  Level)  were  introduced.  These 
values will not be displayed now the added value will be rather low: only Italy and 
every now and then one or two other Member States reported suspected fraud cases.  

EN 

62 

   EN 

 
7.4.2.1.  Financial Years 2004-2005: fruits and vegetables (B-050208) 

The total expenditure for budget post B-050208 was about EUR 3.3 billion. Member 
States reported 297 cases of irregularities with a total amount affected of about EUR 
69 million. 4 Member States classified 26 cases as suspected fraud.  

Table AG19:irregularity and fraud rates 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

IrR

%

of which suspected fraud

N

EUR

FrR

%

cases of irregularity reported in year

2004

2005

2006

2007

2008

2009

2010

AT
BE
CY
CZ
DE
DK
EE

EL
ES

FI
FR

HU
IE

IT
LT

LU
LV

6 758 429
77 130 369
1 868 512
1 458 426
48 601 023
4 903 692

413 297 071
948 584 962

360 696
532 109 745

4 948 386
11 230 415

957 050 643

2
2
1
0
5
2

67 817 1.00%
139 578 0.18%
266 798 14.28%
0 0.00%
125 681 0.26%
227 910 4.65%

4

1 140 020 0.28%
172 13 772 532 1.45%

0
16

2
0

0 0.00%
2 612 684 0.49%

162 107 3.28%
0 0.00%

1

1

266 798 14.28%

1 108 875 0.27%

2

41 45 266 867 4.73%

23

26 803 757 2.80%

722

0

0 0.00%

1

1

1
12

1

6

2

2

1
1

1

16

11

1

4

1

1

1
1

2
1

15

1

89

2

5

1

1

2
1

35

1

1

6

1

1
17

2

11

2

2

MT
NL
PL
PT
SE
SI
SK
UK
total

340 416
132 795 421
6 925 736
103 880 779
6 549 131
115 112
1 058 648
65 281 508
3 325 249 841
1) expenditures 2004 - 2005 are based on CATS-data.

0
6
0
14
0
0
0
30

0 0.00%
602 569 0.45%
0 0.00%
272 482 0.26%
0 0.00%
0 0.00%
0 0.00%
4 632 904 7.10%
297 69 289 950 2.08%

1

15 881 0.02%

1

26

28 195 312 0.85%

7
10

7
33

11
57

3
39

2
39

98

21

IMS Module 1848 download: 24 January 2011

The right hand part of the table "cases of irregularities reported in year" provides an 
overview of the years in which the irregularities have been reported.  

Chart AG20: course of cases 

160

140

120

100

80

60

40

20

0

2004

2005

2006

2007

2008

2009

2010

cases

cases - if timely reported

EN 

63 

   EN 

 
 
 
Table  AG19  has  been  visualised  in  chart  AG20.  The  chart  contains  two  lines.  The 
green line is based on the figures indicated in the right hand side part of table AG19 
and  reflects  reality.  The  orange  line  indicates  the  number  of  cases  per  year  in  case 
Spain and Italy would have reported their cases timely.The green line shows a peak 
for 2009. That peak is caused by Spain that reported 89 cases in 2009. 50 of these 
cases concern FY2004 as 39 cases concern FY2005. The information that led to the 
discovery of the irregularity was in most cases already available in 2007, therefore, 
these cases should have been reported in 2007 or 2008. In other words, late reporting 
caused a peak in 2009 and a trough in 2007 and 2008. Spain reported 1 case in 2010 
which  should  also  have  been  reported  in  2007  or  2008.  In  other  words,  if  Spain 
would have reported all cases timely, a more normal course of the line would have 
been the result with a peak in 2007 (see orange line). The same can be said for the 15 
Italian  cases  that  were  reported  in  2010.  Almost  all  these  irregularities  started  and 
ended  in  2004.  Only  one  case  started  in  2005  and  ended  in  2007.  Based  on  the 
PACA73,  most  of  these  cases  should  have  been  reported  in  2005  and  2008.  Italy 
classified all these cases as "suspected fraud" and started penal procedures. The latter 
explains  most  likely  the  late  reporting:  waiting  for  a  Court  (re)action.  The  chart 
supports  the  assumption  that  the  financial  years  2004-2005  can  be  considered  as 
finalised.  The  orange  line  makes  clear  that  a  timely  reporting  by  Spain  and  Italy 
would have meant that the financial years 2004-2005 could have been considered as 
"finalised" at the end of 2009. 

Spain  reported  the  highest  number  of  cases  of  irregularities:  172.  Unfortunately,  it 
described the applied modus operandi in the vast majority of the cases vaguely or in 
very general terms. For the 89 cases reported in 2009 counts that in 91% of the cases 
the  modus  operandi  was  described  as  "incumplimiento  Art.  15  R(CE)  2111/2003". 
This  implies  that  the  producer  organisations  did  not  sent  the  competent  authorities 
the  information  as  requested  by  art.  15  Reg.  2111/2003.  Spain  did  not  provide  any 
further  information  which  makes  it  rather  difficult  to  determine  what  exactly  went 
wrong in these cases.  

45 Spanish provinces benefitted from the support measures of budget post B-050208. 
Irregularities were detected in 18 provinces. Table AG21 provides an overview per 
province of the expenditure, the irregular amount and the irregularity rate (IrR). Only 
provinces with an expenditure of EUR 1 million and more are displayed. Provinces 
are  ranked  on  basis  of  the  expenditure.  Province  Santa  Cruz  de  Tenerife  had  with 
almost  EUR  155  million  the  highest  expenditure  and  can  be  found  on  top  of  the 
table. 

The  irregularity  rates  vary  enormously.  Allicante  had  the  highest  with  11.34% 
followed by Navarra (5.64%) and Castellon (5.15%).  

Eye-catching  is  that  not  in  all  provinces  with  a  high  expenditure  irregularities 
occurred.  No  cases  have  been  reported  for  provinces  as  Badajoz  and  Las  Palmas 
which had an expenditure of EUR 92 million and EUR 43 million respectively. 

73 

PACA = premier acte de constat administrative ou judiciaire (see art. 2(3) Reg. 1848/2006) 

EN 

64 

   EN 

 
                                                 
Table AG21: Spain – irregularity and fraud rates by province 

Province

expenditure

irregular

EUR

EUR

Santa Cruz de Tenerife
Murcia
Valencia
Badajoz
Almeria
Taaragona
Alicante
Las Palmas
Castellon

Sevilla
Lleida

Huelva
Zaragoza
Cordoba

Malaga
Navarra

Caceres
Albacete
Balearic Islands
Huesca
Teruel
La Rioja
Granada
Cádiz
Girona
Toledo
other
total

154 223 637
124 718 462
100 720 825
92 294 253
67 482 743
60 481 593
48 291 901
43 148 646
42 220 193

41 631 693
34 775 397

23 930 845
22 679 727
11 487 678

10 639 246
8 816 277

8 723 875
7 968 887
7 847 030
6 666 148
5 211 592
4 805 562
4 556 554
3 205 027
2 163 430
1 944 199
7 949 542
948 584 962

537 433
1 728 503
1 757 219
0
408 674
519 277
5 478 260
0
2 173 173

194 814
31 787

232 419
2 137
0

23 194
497 057

0
0
124 485
42 573
0
4 140
4 866
0
12 521
0
0
13 772 532

IrR

%

0.35%
1.39%
1.74%
0.00%
0.61%
0.86%
11.34%
0.00%
5.15%

0.47%
0.09%

0.97%
0.01%
0.00%

0.22%
5.64%

0.00%
0.00%
1.59%
0.64%
0.00%
0.09%
0.11%
0.00%
0.58%
0.00%
0.00%
1.45%

fraudulent

EUR

FrR

%

0
0
0
0
0
0
0
0
0

0
0

0
0
0

0
0

0
0
0
0
0
0
0
0
0
0
0
0

0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%

0.00%
0.00%

0.00%
0.00%
0.00%

0.00%
0.00%

0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%

Member States classified 26 cases as suspected fraud, of which Italy was responsible 
for the vast majority of these cases: 23. Cyprus, Greece and Portugal classified each 
one  case  as  suspected  fraud.  For  all  other  Member  States  counts  that  none  of  the 
cases was classified as suspected fraud. In other words, none of the other cases was 
committed  intentionally.  These  figures  make  once  again  clear  that  it  is  not  wise  to 
speak about an EU-25 fraud rate. The fraud rate needs to be determined at Member 
States' level or at an even lower level as for instance regions or provinces.  

Italy had expenditures in 92 out of 109 provinces. Irregularities were discovered in 
11  provinces.  The  23  cases  of  suspected  fraud  were  discovered  in  6  provinces  of 
which 16 in the province Reggio di Calabria. The other suspected fraud cases were 
discovered in Palermo (3), Messina (1), Cantazaro (1), Crotone (1) and Milano (1).  

Above was already mentioned that the Spanish irregularity rates differ rather strongly 
per province. The same can be said for Italy. The irregularity and fraud rates differ 
also  here  rather  strongly  per  province.  Table  AG22  provides  an  overview.  Only 
provinces with expenditures above EUR 5.5 million are displayed. The table makes 
once again clear that it is better to speak about rates of the different provinces than 
about a national rate now the rates differ rather strongly per province. 

EN 

65 

   EN 

 
 
Table AG22: Italy – irregularity and fraud rate by province 

Province

expenditure

irregular

EUR

EU R

IrR

%

fraudulent

EUR

FrR

%

Reggio Calabria

118 243 333

17 647 929 14.93%

14 987 951 12.68%

Parma
Bologna

Salerno
Foggia

Bolzano/Bozen
Messina
Palermo
Catania
Forlì-Cesena
Ferrara
Trento

Catanzaro
Sondrio

Napoli
Cosenza

Viterbo
Caserta
Piacenza
Campobasso
Siracusa
Cuneo
Crotone

Cremona
Grosseto

Matera
Potenza

Treviso
Verona
Latina
Livorno
Ragusa
Brindisi
Milano

other
total

95 825 142
95 011 966

93 189 175
65 608 025

35 503 411
33 792 612
31 372 668
30 921 905
28 131 275
26 054 483
21 747 905

18 226 397
17 739 118

16 847 857
16 846 018

15 423 051
15 093 577
14 271 192
14 222 665
13 731 441
11 347 856
10 831 639

10 092 697
9 020 704

8 897 394
8 226 856

7 995 450
6 945 673
6 788 095
6 424 559
6 369 053
5 697 695
5 531 145

0
0

0
634 476

0.00%
0.00%

0.00%
0.97%

0
1 521 766

0.00%
4.50%
13 996 384 44.61%
2.10%
0.00%
0.02%
0.00%

649 643
0
4 142
0

1 566 680
0

0
144 284

8.60%
0.00%

0.00%
0.86%

0.00%
0
0.00%
0
0.00%
0
0.00%
0
5.48%
752 909
0
0.00%
6 808 425 62.86%

0
0

0
0

0.00%
0.00%

0.00%
0.00%

0.00%
0
0.00%
0
0.00%
0
0.00%
0
0.00%
0
0
0.00%
1 540 229 27.85%

0
0

0
0

0
543 034
2 037 975
0
0
0
0

886 143
0

0
0

0.00%
0.00%

0.00%
0.00%

0.00%
1.61%
6.50%
0.00%
0.00%
0.00%
0.00%

4.86%
0.00%

0.00%
0.00%

0.00%
0
0.00%
0
0.00%
0
0.00%
0
0.00%
0
0.00%
0
6 808 425 62.86%

0
0

0
0

0.00%
0.00%

0.00%
0.00%

0.00%
0
0.00%
0
0.00%
0
0.00%
0
0.00%
0
0.00%
0
1 540 229 27.85%

35 078 611
957 050 643

0
45 266 867

0.00%
4.73%

0
26 803 757

0.00%
2.80%

Remarkable is that also here no irregularities have been reported for provinces with 
rather high expenditures such as Parma, Bologna and Salerno.  

7.4.2.2.  Financial Years 2004-2005: direct payment for arable crops (B-050203) 

The  total  expenditure  for  the  sector  B-050203  is  about  EUR  34.1  billion,  which  is 
about  38%  of  the  total  expenditure  for  the  financial  years  2004-2005.  The  EU-25 

EN 

66 

   EN 

 
 
irregularity  rate  is  0.05%  (IrR)  as  the  fraud  rate  is  0.03%  (FrR).  Table  AG23 
provides an overview. 

Table AG23: irregularity and fraud rates 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

IrR

%

of which suspected fraud

N

EUR

FrR

FrR

cases of irregularity reported in year

2003

2004

2005

2006

2007

2008

2009

2010

728 525 753
337 427 671

7 156 754 511
1 341 586 117

1 002 763 677
3 654 872 475

706 959 773
10 317 107 152

263 166 335

3 744 981 302

21 633 584

135 485
388 170 737

359 952 368
891 752 833

9 851 808

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

0
7

0
0

50
2
0

22
4

0.00%
64 804 0.02%

960 494 0.01%
26 767 0.00%

150 737 0.02%
153 903 0.00%

8
129

67 593 0.01%
1 283 598 0.01%

8

52 089 0.01%

284 586 0.11%

12 033 026 0.32%

29

11 877 927 0.32%

224 395

0 0.00%

0 0.00%
463 400 0.12%

160 157 0.04%
268 972 0.03%

0 0.00%

0
37

33
20

0
0

0
77
0

18
26

0
0
21
454

7

28

16

1

1

14

69

36

1
8

1

56

19

1
9

10

6

7

6
60

3
8

1

16
6

2

1

3
4

1

1

4

1

1

24

1

3 215 120 823
34 140 762 401
1) expenditures 2004 - 2005 are based on CATS-data.

239 121 0.01%
16 381 553 0.05%

37

11 930 016 0.03%

1

10
106

10
190

113

1
12

5

2

25

IMS Module 1848 download: 24 January 2011

The  financial  years  2004-2005  can  be  considered  as  finalised  now  90%  of  the 
irregularities were reported before 2007. A large number of Member States reported 
only a limited number of cases after 2006. Only Italy reported 24 new cases in 2010 
but for all these cases count that the PACA74 was in 2006. If these cases would have 
been  reported  timely,  they  would  all  have  been  reported  in  2006.  Chart  AG24  (see 
annex 14) visualises that the number of new cases is neglectable from 2007 onwards. 
In other words, the financial years 2004-2005 can be considered as finalised.  

France  is  the  Member  State  with  the  highest  expenditure.  It  spent  about  EUR  10.3 
billion which is more than 30% of the total expenditure for this sector. The number 
of  payments  was  about  2.2  million.  France  reported  129  cases  of  irregularities 
(IFL<0.01%) which were all reported in the period 2005-2006. No new cases were 
reported after 2006. 

Germany had the second highest expenditure. It spent about EUR 7.1 billion which is 
more than 20% of the total expenditure for this sector. Germany reported 50 cases of 
irregularities in the period 2004-2006. The total number of payments was more than 
1.3 million (IFL<0.01%).  

France  and  Germany  were  together  responsible  for  more  than  50%  of  the  total 
expenditure  for  this  budget  post.  For  both  Member  States  counts,  that  none  of  the 
cases was classified as suspected fraud.  

74 

PACA = premier acte de constat administrative ou judiciaire (see art. 2(3) Reg. 1848/2006) 

EN 

67 

   EN 

 
 
                                                 
Remarkable is that Lithuania reported 20 cases of irregularities with a total amount 
affected  of  EUR  224 395.  Remarkable  now  Lithuania  had  no  expenditure  for  this 
sector  concerning  financial  years  2004-2005:  Lithuania  indicated  a  wrong  year  in 
Module 1848. Such mistakes occur more often and are not only made by Lithuania 
but also by other Member States.  

Mistakes as mentioned above make the figures less reliable and imply that the figures 
need to be read with the necessary caution.  

Important  to  know  is  the  answer  on  the  question  how  the  irregularities  were 
committed. What was the applied modus operandi? France is the Member State with 
the highest expenditure (EUR 10.3 billion) and reported the highest number of cases 
(129),  therefore,  a  closer  look  at  the  French  cases  could  serve  the  interest  of  all 
Member States. Unfortunately, France did not provide any information on the modus 
operandi applied. It only indicated the type of irregularity by selecting a code of the 
drop down list. France selected in more than half of the cases the code 1500: over- or 
underproduction.  It  also  did  not  indicate  if  it  concerned  overproduction  or 
underproduction.  For  almost  all  other  cases  selected  France  the  code  1610:  other 
actions not carried out in accordance with Regulation. Also for these cases count that 
no  further  explanation  was  given.  Not  providing  any  information  on  the  applied 
modus  operandi  makes  the  reporting  of  the  irregularity  almost  redundant.  The  data 
cannot  be  used  for  any  in  depth  analysis.  The  data  can  only  be  used  for  basic 
statistics  as  for  instance  the  most  frequently  occurring  types  of  irregularity  as 
displayed in the table on the right hand side. Table AG25 concerns all 454 cases and 
not only the French cases. 

Table AG25: most frequently occuring MO 

type

description

1610 actions not carried out in accordance with regulations, rules, contract conditions, etc.
1100 incorrect or incomplete request for aid
1400 documents missing and/or not provided
1500 over or under production
1514 overdeclaration and/or declaration of ficticious product, species and/or land

irregular

N

EU R

150
94
69
69
47

6 593 096
680 343
499 098
640 272
7 400 158

Table  AG23  indicates  per  Member  State  irregularity  and  fraud  rates.  As  already 
mentioned  above,  these  rates  need  to  be  interpreted  cautiously.  France  for  instance 
had  expenditures  in  all  96  metropolitan  departments.  France  detected  in  54 
departments  129  cases  of  irregularities  which  implies  that  no  irregularities  were 
detected in 42 departments. The number of cases per department is also rather low. 
29  Departmens  reported  1  case  and  11  departments  reported  2  cases  which  makes 
again clear that only a limited number of departments reported a substantial number 
of cases. Only 2 departments reported more than 10 cases: Nord and Hérault reported 
both 12 cases.  

EN 

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In general can be said, that the departments with a relatively low expenditure have a 
relatively high irregularity rate. Take for instance the departments Hérault and Eure 
et  Loir.  Hérault,  with  a  total  expenditure  of  about  EUR  19.5  million,  reported  the 
highest number (12) and highest amount affected (EUR 135 000) while Eure et Loir, 
with an expenditure of almost EUR 330 million, reported 1 case with a total amount 
affected of about EUR 10 000.  

Table AG26: irregularity and fraud rates by department 

expenditure

cases of irregularities

EUR

N

EUR

IrR

%

of which fraud

N

EUR

FrR

%

Departements

Eure et Loir
Marne
Somme
Aisne
Gers
Vienne
Yonne
Pas de Calais
Aube
Seine et Marne
Loiret
Charente Maritime
Oise
Eure
Cher
Indre
Cote d'Or
Haute Garonne
Indre et Loire
Cotes d'Armor
Seine Maritime
Loire et Cher
Deux Sèvres
Vendée
Ille et Vilaine
Landes
Sarthe
Maine et Loire
Nord
Charente
Gironde
Hérault

328 813 340
322 216 618
280 471 283
271 150 003
260 575 734
252 346 198
249 884 433
241 951 552
240 902 205
238 606 438
234 694 677
231 012 172
230 712 858
224 248 617
215 442 311
199 406 550
196 088 452
195 589 432
190 086 522
188 246 934
185 856 085
183 240 624
182 146 796
181 647 062
171 459 840
171 412 275
160 367 014
157 137 161
155 834 849
154 831 213
48 481 376
19 448 161

1
3
1
1
4
2
0
2
1
2
1
4
0
1
0
2
0
6
1
4
2
0
0
8
1
1
0
0
12
4
6
12

10 211 0.00%
28 193 0.01%
5 129 0.00%
63 009 0.02%
31 871 0.01%
34 421 0.01%
0 0.00%
12 881 0.01%
4 480 0.00%
10 110 0.00%
10 354 0.00%
33 912 0.01%
0 0.00%
9 680 0.00%
0 0.00%
9 474 0.00%
0 0.00%
52 860 0.03%
12 947 0.01%
83 987 0.04%
19 447 0.01%
0 0.00%
0 0.00%
79 551 0.04%
15 039 0.01%
6 032 0.00%
0 0.00%
0 0.00%
94 433 0.06%
40 360 0.03%
34 013 0.07%
134 366 0.69%

other
total

3 752 798 371
10 317 107 152

47
129

446 838 0.01%
1 283 598 0.01%

0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

0
0

0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%
0 0.00%

0 0.00%
0 0.00%

Table  AG26  provides  per  department  an  overview  of  the  expenditure,  irregular 
amount, irregularity rate, fraud rate and number of cases. The departments are ranked 
on basis of the expenditure. The déparement Eure et Loir had with almost EUR 330 
million  the  highest  expenditure  and  can  be  found  on  top  of  the  table.  Only 
departments  with  an  expenditure  above  EUR  150  million  and  the  departments 
Gironde and Hérault are displayed in the table. All other departments are summarised 

EN 

69 

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under  "other".  The  departments  with  a  higher  irregularity  rate  can  be  found  in  the 
south of France. 

Map AG27: irregularity rates by department 

The  map  is  based  on  the  irregularity  rate  (IrR)  from  Table  AG26.  The  higher  the 
irregularity rate, the darker the colour. Departments in which no irregularities were 
detected  are  coloured  grey/beige.  The  names  of  these  departments  are  also  not 
displayed. It concerns 42 departments (44%).  

The  overall  number  of  (suspected)  fraud  cases  for  the  sector  B-05023  direct 
payments for arable crops is low. Only 2 Member States reported such cases: Greece 
and  Italy.  No  suspected  fraud  occurred  in  all  other  23  Member  States.  On  a  total 
expenditure  of  more  than  EUR  34  billion,  only  37  cases  of  irregularities  were 
committed intentionally in 2 Member States. The modus operandi of these cases can 
be  summarised  with  the  keywords  "overdeclaration"  and  "falsified  documents".  By 
handing  over  falsified  documents,  beneficiaries  made  it  look  as  if  they  had  more 
land.  

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7.4.2.3.  Financial Years 2004-2005: beef and veal (B-050302) 

The  total  expenditure  for  sector  B-050302  was  almost  EUR  16  billion.  Member 
States reported 402 cases of irregularities with a total amount affected of about EUR 
23.2 million, which implies an irregularity rate of 0.15% as detailed in Table AG28.  

Table AG28: irregularity and fraud rates 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

cases of irregularity reported in year

IrR

%

of which suspected fraud

N

EUR

FrR

%

2003

2004

2005

2006

2007

2008

2009

2010

N

N

N

N

N

N

N

N

AT
BE

CY
CZ

DE
DK
EE
EL
ES
FI
FR
HU
IE
IT
LT
LU
LV
MT
NL
PL

PT
SE

SI
SK

489 320 846
484 757 633

104 304
514 238

1 984 892 681
296 147 495

188 335 374
1 660 058 567
181 999 713
3 661 915 092
877 860
1 882 090 680
1 100 883 717
7 382 637
25 910 390
8 933
196 916
349 308 102
12 378 016

370 222 108
330 813 436

12 770 562

22
35

0
0

62
6

0
35
3
5
0
3
84
0
0
0
0
18
7

13
34

1

UK
total

2 895 135 696
15 936 024 995
1) expenditures 2004 - 2005 are based on CATS-data.

74
402

197 230 0.04%
319 774 0.07%

474 965 0.02%
80 875 0.03%

6 652 224 0.40%
20 385 0.01%
79 964 0.00%

50 369 0.00%
11 012 939 1.00%

324 552 0.09%
68 539 0.55%

215 251 0.06%
316 462 0.10%

2 839 372 22.23%

571 770 0.02%
23 224 672 0.15%

1

845 286 0.05%

28

7 911 085 0.72%

29

8 756 371 0.05%

2

2

4

12

17
1

10

1

1

9
25

41
4

10
1
1

2

6
4

2
29

1
10

2
1

7
1
1

6

6
3

5
5

1

2

1

1
1
1

42

14

17

2

1

5

1

5

3

3

32
74

25
159

17
66

17

47

18

17

IMS Module 1848 download: 24 January 2011

The  financial  years  2004-2005  can  be  considered  as  finalised.  For  most  Member 
States counts, that there is a strong downfall of cases after 2006. Only Italy reported 
a  rather  high  number  in  the  period  2008-2010.  Some  of  the  2009  and  2010  cases 
should, on basis of the PACA, already have been reported in 2007. The vast majority 
concerns  "suspected  fraud  cases"  and  the  impression  is  that  Italy  waited  with 
reporting till there was a Court (re-)action. Chart AG29 (see annex 14) visualises the 
downfall of the number of reported cases over the years. 

France  had  with  almost  EUR  3.7  billion  the  highest  expenditure.  It  reported  in  5 
consecutive  years  5  cases  of  irregularities  with  at  total  amount  affected  of  almost 
EUR 80 000.  

Germany had also here the second highest expenditure. It spent almost EUR 2 billion 
and reported 62 cases with a total amount affected of almost EUR 475 000. Germany 
reported its cases in the period 2003-2006. The German irregularity rate is 0.02%. 

Member States with a rather high irregularity rate are Italy, Poland and Spain with 
respectively 1.00%, 0.55% and 0.40%. 

The  Slovenian  irregularity  rate  is  extremely  high  (22%)  but  it  should  be  taken  into 
account that the total Slovenian expenditure is relatively low which implies that one 
case with a rather high financial impact immediately leads to a high irregularity rate. 
In other words, this rate needs to be put in perspective. 

Member States reported 29 cases of suspected fraud. Almost all cases were reported 
by Italy. Spain completed the list of suspected fraud cases by reporting 1 case. This 

EN 

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makes once again clear that it is difficult to talk about an EU-25 fraud rate. Only 2 
Member States reported suspected fraud cases, therefore, the fraud rate needs to be 
determined  on  Member  States'  level  or,  even  better,  lower  level  such  as  regions  or 
provinces.  

Italy  consists  out  of  109  provinces.  Expenditure  took  place  in  all  provinces. 
Irregularities were reported for 17 provinces. Remarkable is that no cases have been 
reported  for  provinces  with  a  rather  high  expenditure  such  as  Modena,  Brescia, 
Torino and Mantua. The 28 Italian suspected fraud cases were discovered in 6 Italian 
provinces. 14 cases were discovered in Treviso, 9 in Reggio di Calabria, 2 in Padova 
and  1  in  the  provinces  Enna,  Genova  and  Potenza.  The  modus  operandi  can  be 
summarised  with  submitting  a  request  for  aid  by  handing  over  false  or  falsified 
documents in which fictitious products are declared.  

Map AG30: Italy – cases of irregularities and suspected fraud 

Map  AG30  provides  an  overview  for  which  provinces  cases  of  irregularities  and 
suspected  fraud  were  reported.  The  left  map  indicates  the  cases  of  irregularities  as 
the  right  map  indicates  the  suspected  fraud  cases.  The  maps  are  based  on  the 
irregularity and fraud rates displayed in Table AG31.  

As  already  mentioned  above,  expenditure  took  place  in  all  provinces.  Both  maps 
show  that  only  for  a  limited  number  of  provinces  cases  were  reported.  The  maps 
show also clearly that irregularity and fraud rates differ strongly per province.  

Table AG31 provides a more detailed overview of the irregularity and fraud rates per 
province.  Only  the  provinces  with  a  total  expenditure  above  EUR  15  million  are 
displayed.  

EN 

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Table AG31: Italy - irregularities and fraud rates by province 

Province

expenditure

irregular

EU R

EUR

IrR

%

of which fraud

EUR

FrR

%

Treviso
Padova
Calabria

Genova
Potenza

Enna
Verona
Avellino
Trento
Udine

58 228 521
68 495 047
6 183 484

704 942
12 600 418

18 682 807
69 997 773
6 855 532
6 234 450
7 326 167

Cuneo
Pordenone

113 458 175
2 590 668

35 835 623
9 211 266

1 287 180
7 900 612

25 743 740
68 649 029

53 233 457
52 176 275
50 817 810

18 139 127
15 201 602

Messina
Catania

Trapani
Siracusa

Vicenza
Modena

Brescia
Torino
Mantova

Asti
Palermo

Rovigo
other
total

7 949 798 13.65%
1.94%
1 327 993
4.96%
306 402

162 842 23.10%
0.23%

29 552

6 202 213 10.65%
1.85%
1 268 143
3.76%
232 641

162 842 23.10%
0.23%

29 552

15 694
315 197
254 638
173 925
143 254

114 852
64 281

51 060
39 173

28 926
23 559

11 793
0

0
0
0

0
0

0.08%
0.45%
3.71%
2.79%
1.96%

0.10%
2.48%

0.14%
0.43%

2.25%
0.30%

0.05%
0.00%

0.00%
0.00%
0.00%

0.00%
0.00%

0.00%
0.00%
1.00%

15 694
0
0
0
0

0
0

0
0

0
0

0
0

0
0
0

0
0

0
0
7 911 085

0.08%
0.00%
0.00%
0.00%
0.00%

0.00%
0.00%

0.00%
0.00%

0.00%
0.00%

0.00%
0.00%

0.00%
0.00%
0.00%

0.00%
0.00%

0.00%
0.00%
0.72%

15 076 659
376 253 354  

1 100 883 717

0
0
11 012 939

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7.4.2.4.  Financial Years 2004-2005: rural development (B-0504xx) 

Table  AG32  combines  budget  posts  B-050401  and  B-050404.  Both  concern  rural 
development  but  B-050401  was  meant  for  EU-15  as  B-050404  was  meant  for  new 
Member States. Combining these two budget posts makes it possible to provide one 
overview  for  the  sector  rural  development.  The  description  B-0504xx  is  used  to 
indicate that it concerns the combination B-050401 and B-050404. 

Table AG32: irregularity and fraud rate 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

cases of irregularity reported in year

IrR

%

of which suspected fraud

N

amounts in €

FrR

%

2003

2004

2005

2006

2007

2008

2009

2010

N

N

N

N

N

N

N

N

1

2

2

6

62

1

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

947 238 027
105 090 818
5 135 770
130 689 558
1 621 135 460
85 770 655
40 256 476
282 858 504
1 048 181 353
667 053 795
1 719 336 612
38 376 945
710 221 299
1 315 069 242
108 795 237
32 287 411
70 040 684
4 849 893
137 371 040
524 530 621
372 022 415
335 951 727
73 721 615
94 397 289
305 241 891
10 775 624 338
1) expenditures 2004 - 2005 are based on CATS-data.

9
3
0
19
161
47
37
83
125
9
495
1
75
220
37
1
7
0
43
137
270
56
0
43
64
1 942

230 221 0.02%
134 193 0.13%
0 0.00%
546 595 0.42%
2 821 532 0.17%
605 937 0.71%
367 360 0.91%
1 991 968 0.70%
8 929 267 0.85%
178 966 0.03%
7 828 516 0.46%
3 980 0.01%
728 477 0.10%
11 579 285 0.88%
625 221 0.57%
13 375 0.04%
110 668 0.16%
0 0.00%
4 322 848 3.15%
2 845 325 0.54%
4 144 579 1.11%
652 532 0.19%
0 0.00%
3 575 501 3.79%
805 245 0.26%
53 041 589 0.49%

33 050 0.00%

57 725 0.00%

60 062 0.02%

20
23

10

1 237 975 0.07%

163

5 905 474 0.45%

12 559 0.02%

132

2 714 381 0.52%

55
11
7
6
22
3
125
1
25
33
20

1

5
65
78

17

5

4
4
7

4

4
1

2
55
6
9
35
16

110

9
50
1

1

18
19
101

29
11
18
495

4

14
2
5
1
4
2
35

4
17
2

2

12
11
5

1
1

5
7
2
10
7
38

25

15
24
6
1
1

1
14
42

1

3
4
2
1
24
11

13

6
72
6

1
9
22

9
6
1
5
10
24
4
24

16
19
2

2

2
15
15

4
3
7
134

1
2
1
204

1
23
1
179

4
1
180

1
207

68 140 0.02%
10 089 366 0.09%

17
257

19
493

0

IMS Module 1848 download: 24 January 2011

The  total  expenditure  for  rural  development  was  almost  EUR  10.8  billion.  This 
sector  has  with  1  942  irregularities  the  highest  number  of  reported  cases.  Member 
States as France, Portugal, Italy and Germany reported a relatively high number of 
cases  for  this  sector.  The  total  amount  affected  is  about  EUR  53  million,  which 
implies an irregularity rate of 0.49%.  

Chart AG33 (see annex 14) visualises the right hand side part of the table. The green 
line  reflects  the  course  of  the  number  of  cases  reported  per  year.  The  orange  line 
reflects  the  situation  in  case  Member  States  would  have  reported  all  cases  timely. 
The course of the two lines is more or less the same. The orange line is only quicker 
at its peaks and troughs than the green line. If Member States would have reported all 
cases  timely,  the  number  of  cases  reported  in  2010  would  be  92  and  not  180.  This 
explains also why the orange line bends in 2010 stronger down than the green line. It 
can be expected that still some cases will be reported during 2011. It will not be that 
many now the almost traditional final sprint of some Member States already can be 
spotted  in  the  table.  The  vast  majority  of  the  Italian  2010-cases  concern  suspected 
fraud cases of which already has been concluded that Italy report such cases at the 
end of the cycle.  

The  biggest  amounts  were  spent  in  France:  EUR  1.7  billion.  France  reported  495 
cases  with  a  total  amount  affected  of  about  EUR  7.8  million  which  implies  an 
irregularity rate of 0.46%. The course of the French cases is almost by the book: the 

EN 

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highest  number  of  cases  reported  in  the  years  of  expenditure  and  a  gradually 
decreasing  number  of  cases  in  the  years  afterwards.  The  French  irregularity  rate  is 
just below the EU-25 of 0.49%.  

Germany  had  the  second  highest  expenditure:  EUR  1.6  billon.  The  German 
expenditure is in amounts comparable with the French expenditure. That cannot be 
said about the number of cases reported and the amounts affected. Germany reported 
161 cases with a total amount affected of about EUR 2.8 million which is far smaller 
than  the  French  figures.  France  reported  495  cases  with  a  total  amount  affected  of 
about  €7.8  million.  The  German  irregularity  rate  is  0.17%  whereas  the  French 
irregularity rate is 0.46%.  

Portugal  reported  the  highest  number  of  cases:  270.  That  is  rather  remarkable 
considering the fact that the Portuguese expenditure is relatively small in comparison 
with  the  expenditures  of  for  instance  France  and  Germany.  The  Portuguese 
expenditure was EUR 372 million for which 270 cases of irregularities were reported 
with  a  total  amount  affected  of  about  EUR  4.1  million.  The  irregularity  rate  for 
Portugal is 1.11%. 

Italy  reported  the  highest  amounts  affected  by  irregularities:  EUR  11.6  million.  It 
concerns 220 cases of which 62 cases were classified as suspected fraud with a total 
amount affected of EUR 5.9 million. The Italian irregularity and fraud rate are 0.88% 
and 0.45% respectively. 

The Netherlands and Slovakia have both an irregularity rate above 3% which is far 
above  the  EU-25  average  of  0.49%.  The  Dutch  expenditure  was  about  EUR  137 
million  as  the  Slovakian  expenditure  was  about  EUR  94  million.  Both  reported  43 
cases  with  a  total  amount  affected  of  EUR  4.3  million  and  EUR  3.6  million 
respectively. 

8  Member  States  reported  together  207  suspected  fraud  cases.  This  is  remarkable. 
The general picture is that Italy reports the vast majority of suspected fraud cases and 
that one, two or three other Member States complete that by submitting one or two 
suspected fraud cases. That is different for the sector rural development: 8 Member 
States reported suspected fraud cases and Poland reported the highest number. 

Poland  reported  132  cases  with  a  total  amount  affected  of  EUR  2.7  million  on  an 
expenditure of EUR 524.5 million. The Polish fraud rate is 0.52%. 

Although 8 Member States reported suspected fraud cases, it is still not wise to talk 
about an EU-25 fraud rate.  

EN 

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7.4.2.5.  Financial Years 2004-2005: milk and milk products (B-050301) 

The  total  expenditure  for  this  sector  is  about  EUR  5.6  billion.  Member  States 
reported 234 cases of irregularities with a total amount affected of almost EUR 6.6 
million.  4  Member  States  classified  8  cases  as  suspected  fraud.  The  fraudulent 
amount is about EUR 700 000 as detailed in Table AG34. 

Table AG34: irregularity and fraud rate 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

cases of irregularity reported in year

IrR

%

of which suspected fraud

N

amounts in €

FrR

%

2003

2004

2005

2006

2007

2008

2009

2010

N

N

N

N

N

N

N

N

AT
BE

CY
CZ
DE
DK
EE

EL
ES
FI
FR
HU
IE
IT
LT
LU
LV

MT
NL
PL
PT
SE

11 975 555
526 807 921

259 745
31 487 272
593 751 761
358 309 363
4 602 321

4 942 030
168 525 396
147 643 641
1 143 150 051
9 131 735
515 769 031
255 781 184
12 831 120
2 266 036
509 098

1 107 480 001
38 443 004
48 787 095
132 958 853

4
28

8
0
70
11
2

0
1
0
33
0
4
6
0
0
0

34
3
2
4

SI
SK
UK
total

5 040 655
1 180 762
452 627 023
5 574 260 654
1) expenditures 2004 - 2005 are based on CATS-data.

1
0
23
234

76 153 0.64%
649 233 0.12%

50 791 19.55%
0 0.00%
1 531 434 0.26%
242 368 0.07%
632 920 13.75%

0 0.00%
8 400 0.00%
0 0.00%
1 388 874 0.12%
0 0.00%
123 106 0.02%
526 572 0.21%
0 0.00%
0 0.00%
0 0.00%

778 140 0.07%
33 512 0.09%
96 932 0.20%
69 110 0.05%

139 682 2.77%
0 0.00%
236 199 0.05%
6 583 427 0.12%

2

1

2

3

8

8 117 0.00%

7 877 3.03%

632 920 13.75%

59 607 0.01%

1
1

9
1

1

1
2

3

1
7

7

18
5

1

2

1

1
1
1
1

708 521 0.01%

0

2
21

10
56

2
10

1

30
2

10

1

18
1

1

9
85

2

6

1

8

4

6
3

5

2

9

3

1

1

3

1

1

7

3

1

2

1

2
31

20

19

2

IMS Module 1848 download: 24 January 2011

The financial years 2004-2005 can be considered as finalised. Table AG34 and Chart 
AG35 (see annex 14) make clear that the reporting peak was in 2006 and that from 
2006 onwards the number of new cases decreased to almost zero in 2010.  

France was again the Member State with the highest expenditure. It spent EUR 1.1 
billion and reported 33 cases with a total amount affected of about EUR 1.4 million. 
The irregularity rate is 0.12%. None of the French cases was classified as suspected 
fraud. 

Germany reported the highest number of cases and the highest amounts affected by 
irregularities:  70  cases  and  a  total  amount  affected  of  about  EUR  1.5  million.  The 
German expenditure was EUR 0.6 billion. The German irregularity rate is 0.26%. 

EN 

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7.4.2.6.  Financial Years 2004-2005: olive oil (B-050206) 

The sector B-050206 is the sector with the fifth highest expenditure: EUR 4.7 billion. 
This  is  already  a  relatively  small  amount  considering  the  fact  that  the  total 
expenditure  was  almost  EUR  91  billion.  Also  important  to  know  is  that  only  7 
Member States had expenditures for this budget post as detailed in table AG36.  

Table AG36: irregularity and fraud rate 

Member 
State

expenditure1)

irregular

EUR

N

EUR

cases of irregularities reported

cases of irregularity reported in year

IrR

%

of which suspected fraud

N

amounts in €

FrR

%

2003

2004

2005

2006

2007

2008

2009

2010

N

N

N

N

N

N

N

N

-23 593
155 557

1 022 470 939
2 049 145 756

10 596 142

1 514 312 517

0
0

6
85

0

6

0 0.00%
0 0.00%

77 195 0.01%
2 942 161 0.14%

0 0.00%

5
41

1
6

11

24

2

1

2 539 998 0.17%

3

863 710 0.06%

2

1

3

85 660 634

0

0 0.00%

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

4 682 317 951
1) expenditures 2004 - 2005 are based on CATS-data.

97

5 559 354 0.12%

3

863 710 0.02%

0

0

46

7

11

26

3

4

IMS Module 1848 download: 24 January 2011

The Member States with the highest expenditures were Spain, Italy and Greece with 
EUR 2,0 billion, EUR 1,5 billion and EUR 1,0 billion respectively. It were also only 
these 3 Member States that reported irregularities. The financial years 2004-2005 can 
be considered as finalised. Table AG36 as well as chart AG37 (see annex 14) make 
clear that the reporting of cases had a peak in 2005, a strong downfall in 2006, again 
a peak in 2008 and then a gradual downfall to almost zero in 2010. The reasons for 
this  wave  have  already  been  mentioned:  the  introduction  of  a  higher  threshold,  the 
introduction of Module 1848 and the late reporting of 3 Italian suspected fraud cases. 

The  most  frequently  occurring  modus  operandi  can  be  summarized  with  incorrect 
reporting  of  produced  quantities  which  was  done  by  mistake  or  intentionally  by 
handing over falsified documents. 

Remarkable  is  that  Spain  used  in  27  cases  words  as  "daclaraciones  falsas", 
"falsificación"  and  "fals"  to  describe  the  modus  operandi.  None  of  these  cases  was 
classified as suspected fraud although these descriptions give the impression that the 
irregularities were committed intentionally. 

EN 

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7.5.  Conclusions 

(1) 

A  higher  number  of  cases  of  irregularities  reported  does  not  necessarily  mean  that 
more  irregularities  are  committed  or  that  a  Member  State  is  more  vulnerable  for 
irregularities. A more developed audit strategy, tailor made audits, higher number of 
performed  audits  will  normally  lead  to  a  higher  number  of  detected  irregularities. 
Therefore,  it  is  possible  that  Member  States  with  a  higher  irregularity  rate  perform 
better,  either  in  substance  or  in  their  reporting,  than  Member  States  with  a  lower 
irregularity rate. 

(2) 

The number of cases of irregularities and the amounts affected are not equally spread 
over and within Member States. 

7.5.1.  Financial Year 2010 

(3) 

(4) 

The  EU-27-compliance-rate-2010  decreased  from  95%  to  90%.  Member  States  that 
should  pay  extra  attention  to  issues  as  timely  reporting,  personal  data  and  measures 
affected are Finland, the Netherlands and Poland. Slovakia has the highest compliance 
rate as Finland has the lowest. 

During  financial  year  2010,  Member  States  reported  1  825  new  cases  with  a  total 
amount affected of about EUR 131 million. These cases concern expenditures for the 
financial years 1990-2010. Spain reported the highest number of cases (413) as Italy 
reported the highest amounts affected (EUR 40 million). 18 cases had a total amount 
affected of more than EUR 1 million. 

(5)  Member  States  classified  414  out  of  1  825  cases  as  suspected  fraud  or  established 
fraud,  which  is  23%  of  the  total  number  of  reported  cases  and  47%  of  the  total 
amounts affected. These cases are mainly reported by Italy and young Member States 
as  Bulgaria,  Hungary,  Poland  and  Slovenia.  France  did  not  classify  any  of  its  119 
cases as suspected fraud. 

(6)  Member States recovered during the financial year 2010 about EUR 175 million and 
declared  irrecoverable  about  EUR  51  million.  The  overall  outstanding  amount  at  the 
end of Financial Year 2010 is about EUR 1.2 billion. 

(7) 

The  new  clearance  mechanism  (50/50  rule)  provides  a  strong  incentive  for  Member 
States to recover undue payments from the beneficiaries as quickly as possible. As a 
result, by the end of financial year 2010, 42% of the new EAGF debts from 2007 and 
thereafter had already been recovered, which is a significant improvement compared 
to the past. 

EN 

78 

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7.5.2.  Financial Years 2006-2010 

(8) 

(9) 

(10) 

The figures concerning the financial years 2006-2010 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  2006-2010  was  about  EUR  249  billion. 
The highest expenditure was made by France (20%) and the lowest by Malta (< 0.1%). 
Member  States  reported  for  these  financial  years  3  644  cases  with  a  total  amount 
affected  of  about  EUR  182  million  which  means  a  provisional  irregularity  rate  of 
0.07%.  The  highest  number  of  cases  was  reported  by  Spain  (728)  as  the  highest 
amounts affected by irregularities were reported by Hungary (EUR 29 million).  

57%  of  the  total  2006-2010  expenditure  concerns  the  sector  "decoupled  direct  aids". 
Member  States  reported  for  this  sector  1  140  cases  with  a  total  amount  affected  of 
almost  EUR  29  million.  The  provisional  irregularity  rate  for  this  sector  is  0.02%. 
Sectors  with  a  rather  high  irregularity  rate  are  cereals  (6.19%,  essentially  due  to  the 
situation  in  Hungary),  ancillary  direct  aids  (1.26%),  fisheries  outermost  regions 
(0.94%), sugar (0.74%) and pigmeat (0.54%). 

(11) 

80% of suspected fraud cases concerning the financial years 2006-2010 is reported by 
young Member States. Italy is responsible for another 12% of the reported suspected 
fraud cases. Almost no fraud is reported by other old Member States.  

7.5.3.  Financial Years 2004-2005 

(12)  The  financial  years  2004-2005  can  be  considered  as  finalised  now  audit  plans  have 
been  executed,  recovery  procedures  have  been  started  and  irregularities  have  been 
reported.  

(13)  The  total  expenditure  for  the  financial  years  2004-2005  was  about  EUR  91  billion. 
Member States reported in total 4 402 cases with a total amount affected of about EUR 
214 million, which implies an EU-25 irregularity rate of 0.24%.  

(14)  Member States classified 349 of the 4 402 cases as suspected-fraud. 301 cases (86%) 
were reported by 2 Member States: Italy and Poland. The other 48 cases were reported 
by 13 Member States. 9 Member States did not classify any of their cases as fraud or 
suspected-fraud. Malta did not report any irregularities.  

(15)  An  EU-25  fraud  rate  (FrR)  cannot  be  determined  for  the  financial  years  2004-2005 
now  only  a  limited  number  of  suspected-fraud-cases  were  reported  by  a  limited 
number  (of  regions)  of  Member  States.  Almost  no  fraud  was  reported  by  Member 
States as France, Spain and Germany. 

EN 

79 

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8. 

EUROPEAN FISHERIES FUND 

Commission Regulation (EC) No 498/2007 of 26 March 200775 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  EU 
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. 

As  indicated  in  Chapter  5  of  this  document,  the  reporting  module  for  the  EFF 
irregularities  is  currently  under  development  and  will  be  released  at  the  end  of 
September 2011. Member States were asked to withhold the irregularity reports until 
then. 

75 

OJ L120, 10.05.2007. 

EN 

80 

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9. 

COHESION POLICY (ANNEXES 15-20) 

In  line  with  the  approach  followed  for  the  Annual  Report  for  2009,  the  focus  on 
yearly developments is further diminished and the analysis concentrates more on the 
Programming  Period  developments  in  order  to  reflect  the  real  functioning  and 
implementation of the Cohesion Policy measures. 

The  legal  provisions  setting  the  reporting  obligation  for  the  Cohesion  Policy  are 
contained  in  three  different  regulations.  Regulation  (EC)  No  1681/94  which  covers 
the  four  Structural  Funds76  for  all  programming  periods  until  2000-2006  included; 
Regulation (EC) No 1831/94 on the Cohesion Fund, with the exception of the period 
2007-2013);  and  Regulation  No  1828/2006,  which  covers  the  programming  period 
2007-2013. Annexes 17 to 19 provide details about the irregularities reported under 
the different regulations. 

While  Regulations  Nos  1681/94  and  1831/94  are  almost  identical  in  content,  rules 
have  changed  for  the  programming  period  2007-2013,  for  which  derogations  have 
been  widened  and  reporting  requirements  simplified,  in  particular  in  relation  to  the 
updates of the information concerning recovery. 

In  the  following  paragraphs,  when  referring  to  irregularities  reported  in  2010,  it 
should be kept in mind that, conformly to the reporting obligations, Member States 
shall  notify  irregularities  within  two  months  folliwing  the  end  of  each  quarter. 
Therefore the “reporting period” goes, in fact, from 1st March 2010 until 28 February 
2011. 

9.1. 

Reporting Discipline 

During  2010  the  deployment  and  implementation  of  IMS  progressed.  During  the 
year, almost all Member States completed or integrated their reporting organisation 
and  reporting  workflow.  Table  5-1  in  paragraph  5.1  gives  an  idea  of  the  effort 
performed by Member States and OLAF for this task.  

In  relation  to  the  problematic  situations  reported  in  2009,  progresses  have  been 
achieved  in  particular  in  relation  to  the  Czech  Republic,  which  is  now  fully 
operational and Spain, whose organisation has been set up in the beginning of May 
2011. France has proposed a direct link between its national system PRESAGE and 
IMS, but this technical solution has not been finalised yet.  

76 

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 

81 

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The  only  country  which  has  showed  a  worsening  situation  is  Ireland,  for  which 
identified  users  are  active  exclusively  for  the  ESF.  Also  in  relation  to  this  fund, 
however, the use of IMS has been decreased during 2010.  

As  long  as  module  1828  is  not  deployed77,  module  1681  has  been  designed  to 
temporarily accept irregularities concerning the programming period 2007-2013. 

In terms of reporting discipline, all Member States having adopted IMS are showing 
remarkable  progresses  both  in  the  use  of  the  system  and  in  compliance  with  the 
reporting  obligations,  which  is  facilitated  by  the  tool.  Without  diminishing  the 
achievements of other Member States, whose spirit of constructive cooperation needs 
to be stressed, the efforts of one country are worth being mentioned in this context: 
the  Czech  Republic,  which  has  managed  to  complete  the  reporting  and  successful 
migration of all new and previously reported irregularities in a very limited period, 
following the delays (due exclusively to technical reasons) of last year. 

Despite progresses, some inconsistencies are still noticed in the qualification of the 
irregularities,  as  already  explained  in  paragraph  5.2,  and  in  the  use  of  dates.  It  still 
happens, for instance, that the date of establishment of the irregularity is indicated as 
happening  before  the  dates  related  to  the  committing  of  the  irregularity;  or  that  an 
irregularity,  whose  described  modus  operandi  is  ‘false  or  falsified  supporting 
documents’ is qualified as ‘irregularity’ instead of ‘suspected fraud’.  

From  a  quantitative  point  of  view,  however,  these  inconsistencies  involve  no  more 
than 3% of the reported irregularities. 

Lastly,  still  a  significant  number  of  irregularities  (also  those  reported  in  previous 
years), lacks the indication of the period in which the irregularity took place and the 
date  of  establishment  of  the  irregularity.  All  Member  States  are  requested  to  pay 
more attention to these elements. 

9.2. 

General Trends 

9.2.1.  Yearly trends 

Annex 15 shows the overall trend of the reported irregularities by year. In 2010 the 
number of reported irregularities and related financial amounts involved increased in 
relation  to  2009  and  represent  the  highest  peak  registered  so  far  in  the  Cohesion 
Policy.  7 062  irregularities  were  received  throughout  the  year,  involving  an  overall 
amount of EUR 1.55 billion, the highest ever. The number of irregularities increased 
by 49%, while the irregular amounts increased by 31%.  

77 

The finalisation and deployment of module 1828 are foreseen for the end of September 2011. 

EN 

82 

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

8.000

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

1.800.000.000

1.600.000.000

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

2010

Financial amounts

N° of irregularities

Some concurring elements contribute to explain this further increase: 

(1) 

(2) 

(3) 

The number of irregularities reported for the programming period 2007-2013 
has now reached a significant level and it also implies that 27 Member States 
are now reporting irregularities rather than 25; 

The  increasing  number  of  irregularities  linked  to  the  programming  period 
2000-2006 is probably still due to the closure of these programmes; 

The introduction and growing use of IMS has accelerated the whole reporting 
procedure resulting in more irregularities reported in the same period of time 
(for more explanations see paragraph 5.1.2).  

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  2009-2010,  as 
showed  in  Chart  SF  2.  The  increase  across  time  is  due  to  a  number  of  factors,  of 
which the most significant seem: 

(4) 

The increase of the financial resources allocated to this policy; 

(5) 

(6) 

A  better  overall  understanding  and  implementation  of  the  reporting 
obligation, also resulting from the different simplifications occurred in recent 
years; 

Improved tools put at disposal of Member States to comply with the reporting 
obligation; 

EN 

83 

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(7) 

Increased attention and improved controls also following the remarks of the 
European  Court  of  Auditors  and  the  audit  activity  performed  by  the 
Commission services. 

Chart SF 2: Impact of irregularities on the Cohesion Policy budget – 2000-2010 

t
e
g
d
u
b
f
o
%

3,00%

2,50%

2,00%

1,50%

1,00%

0,50%

0,00%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Impact on budget 0,38% 0,71% 1,89% 1,44% 1,73% 1,56% 1,69% 1,44% 1,09% 2,44% 3,15%

Year

However, it should be kept in mind that reported irregularities refer to programmes 
and  projects  that  are  of  a  multi-annual  nature  and  they  refer  to  three  different 
programming  periods.  Furthermore,  the  budget  for  the  year  2010,  on  which  the 
impact  of  irregularities  reported  by  the  Member  States  has  been  calculated,  is 
indicating the resources allocated to the fourth year of the programming period 2007-
2013, while only a part of the reported irregularities is 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 9.3 deals 
with these specific issues. 

The distribution among the Funds of the irregularities reported in 2010 confirms the 
patterns emerged in previous years, with the ERDF showing the highest number of 
irregularities and related irregular amounts, as showed in Chart SF 3 below. 

EN 

84 

   EN 

 
 
 
 
Chart SF 3: Distribution of irregularities by Fund - 2010 

The countries having reported the highest number of irregularities in 2010 were the 
United  Kingdom,  Italy,  Portugal,  Spain,  Greece  and  Ireland  (all  having  reported 
more  than  600  irregularities).  The  highest  irregular  amounts  were  reported  by  the 
Czech Republic, Italy, Greece, the United Kingdom, Spain, Slovakia and Ireland (all 
above  EUR  100  million).  Annexes  17.1,  17.2,  18  and  19  detail  the  number  of 
irregularities  and  related  amounts  reported  by  Member  State  under  the  different 
programming periods and funds. 

9.2.2.  Detection of irregularities 

In 2010 the detection of irregularities resulted from checks and controls which are in 
line  with  previous  years.  ‘National  administrative  or  financial  controls’  remain  the 
most frequently reported (in more than 27% of the cases), while other relevant shares 
refer  to  ‘Control  of  documents’  (15%)  and  ‘On-the-spot  checks’  (12%).  Table  SF1 
shows how the different types of controls that resulted the most “effective” in 2009 
performed in 2010.  

Table SF1: detection methods – comparison 2009-2010 

CODE

DESCRIPTION

FREQUENCY 
2009
N

SHARE OF 
TOTAL 2009
%

FREQUENCY 
2010
N

SHARE OF 
TOTAL 2010
%

VARIATION

%

National administrative or 
financial control
101
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

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%

2.8%
2.6%
2.5%
1.9%
75.8%
100.0%

1 928
235
587
853
1 033
505

226
456
147
31
6 001
7 062

27.3%
3.3%
8.3%
12.1%
14.6%
7.2%

3.2%
6.5%
2.1%
0.4%
85.0%
100.0%

87%
-61%
4%
84%
185%
120%

65%
253%
20%
-68%
61%
43%

The  same  methods  showed  an  increase  by  61%  with  decreases  only  for 
‘‘Documentary check’ and ‘Informant’. 

The  most  “productive”  method  of  detection  (meaning  the  method  which  has 
contributed to identify the highest irregular amounts) was in 2010 ‘Control by police’ 

EN 

85 

   EN 

 
 
 
through  which  more  than  EUR  250  million  of  irregular  amounts  were  identified 
(representing about 18% of the total). 

9.2.3.  Types of irregularity 

The vast 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”.  

However,  the  second  most  important  “source”  of  irregularities  is  ‘Infringement  of 
Rules  concerned  with  Public  Procurement’,  which  is  also  resulting  in  the  most 
“costly” typology, as it involves the highest involved irregular amounts. 

This element would suggest that provisions related to Public Procurement require a 
review and a fine tuning to decrease the impact of resulting irregularities. 

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

614

325 Not eligible expenditure
Infringement of rules 
concerned with public 
procurement
Missing or incomplete 
supporting documents

210
999 Other irregularities
Failure to fulfill 
commitments entered into
Missing or incomplete 
documents
Failure to respect other 
regulations / contracts 
provisions

612
324 Expenditure not legitimate

741

201

Action not carried out in 
accordance with rules

812

601 Failure to respect deadlines

Sub-Total TOP 10
TOTAL

FREQUENCY

N

SHARE OF 
TOTAL
%

INVOLVED 
AMOUNTS
EUR

SHARE OF 
TOTAL
%

1.745

24,7%

244.766.736

20,0%

AVERAGE 
AMOUNTS
EUR
140.267

1.005

14,2%

262.973.678

21,5%

261.665

554
484

451

446

281
211

167

7,8%
6,9%

67.103.855
266.573.504

5,5%
21,8%

121.126
550.772

6,4%

23.714.167

1,9%

52.581

6,3%

23.963.212

2,0%

53.729

4,0%
3,0%

25.306.377
44.200.982

2,1%
3,6%

90.058
209.483

2,4%

20.205.732

1,7%

120.992

162
5.506
7.062

2,3%
78,0%

20.121.055
998.929.297
100,0% 1.550.157.698

1,6%
81,6%
100,0%

124.204
181.426
219.507

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 a smaller part refers to the “Selection / Procurement Stage”. 

9.2.4. 

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 

EN 

86 

   EN 

 
 
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.. 

Since  January  1st  2006,  Member  States  have  to  “qualify”  the  reported  irregularity, 
indicating whether it 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 court78.  

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) 87% of the reported 
irregularities.  It  is  a  further  encouraging  progress  in  relation  to  the  previous  year, 
when  85%  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 and are the only countries which do not use IMS yet. 

By  applying  the  method  explained  in  paragraph  5.1.2,  to  the  entire  data  set,  some 
minor  inconsistencies  appear  which  bring  OLAF  to  consider  the  proposed 
classification  of  Member  States  somehow  questionable.  These  inconsistencies 
concern only 2% of the cases. 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  also  be  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 Commission79. 

Chart  SF480  presents  the  trend  of  FFL81  and  FAL82  in  the  last  ten  years  calculated 
according to the Commission’s estimations. 

78 
79 

80 

81 
82 

The definition of suspected fraud is explained in Paragraph 4.1.3. 
The descriptions provided by the Member States of the modus operandi linked to these communications 
of irregularity show that falsified documents or false declarations of certificates were used. Under these 
circumstances, the Commission believes that those communications of irregularities should have been 
classified as “suspicion of fraud”. 
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  69  and  70  for  more  details  about  data 
showed on this chart. 
FFL is defined in paragraph 4.2.2. 
FAL is defined in paragraph 4.2.2. 

EN 

87 

   EN 

 
                                                 
Chart SF 4: 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

Year

2006

2007

2008

2009

2010

FFL

FAL

Table SF3: FFL and FAL from 2000 to 2009 

INDICATOR

Fraud Frequency 
Level (FFL)
Fraud Amount Level 
(FAL)

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

YEAR

8,9%

7,5%

3,2%

7,0%

12,9%

14,3%

19,9%

14,5%

9,8%

10,4%

6,6%

20,1%

12,8%

4,1%

13,6%

20,5%

28,5%

32,2%

21,3%

15,3%

9,6%

23,5%

FFL has reached the lowest point since 2002, while FAL presents the first increase 
after three years of continuous decrease. The decrease of FFL may be linked to the 
closure  of  the  programming  period  2000-2006  which  would  reveal  a  growing 
tendency  of  reporting  of  administrative  irregularities  in  order  to  align  the  reporting 
obligation with the expenditure claims. The increase of the FAL, instead, is linked to 
a  very  limited  number  of  cases  with  an  extremely  high  estimated  financial  impact. 
This “outliers” need to be taken into account for a correct assessment of the figures83. 

On the basis of this estimation, the FrR84 for the annual budget 2010 of the Cohesion 
Policy is 0.74%. 

However, this projection on the EU budget  does not imply that these amounts turn 
out into a loss. 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 

83 

84 

It is worth underlying that the two lowest points in the FFL (2002 and 2010) coincide with the closure 
of two programming periods. 
The definition of FrR is in paragraph 4.2.1. 

EN 

88 

   EN 

 
 
 
 
 
 
                                                 
“suspected  fraud”  concern  payments  which  impact  on  0.31%  of  the  EU  budget  for 
2010. 

9.3. 

Specific analysis – Analysis by Programming Period: 2000-2006 and 2007-2013 

9.3.1. 

Irregularities related to the programming period 2000-2006 – Structural Funds 

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 2010. 
In  order  to  improve  the  comparability  among  the  different  Member  States,  the 
irregularities referred to the Cohesion Fund are not included and a specific paragraph 
is dedicated to it (see par. 9.3.3). 

Table  SF4  summarises  the  main  figures  and  indicators  related  to  irregularities  and 
suspected and established fraud cases in relation to projects and operations financed 
under the programming period 2000-2006. 

Table SF 4: Programming Period 2000-2006 – overall situation and main indicators 

N° of 
irregularities

of which 
suspected 
fraud

A
N

B
N

FFL

C=B/A
%

Irregular 
amounts

D
EUR

TOTAL 

25 518

2 539

9.9% 4 026 110 377

of which related 
to suspected 
fraud

FAL

Payments

IrR

FrR

E
EUR
541 586 545

F=E/D
%
13.5% 210 048 325 392

G
EUR

H=D/G
%
1.9%

I=E/G
%
0.26%  

The  more  information  become  available,  the  clearer  the  overall  picture  becomes, 
with  Irregularity  and  Fraud  rates  that  are  more  realistic.  The  indicators  presented 
suggest that: 

(1) 

(2) 

(3) 

in general, every 10 irregularities detected, one is seemingly a potential case 
of fraud; 

for  every  EUR  100  detected  as  irregular,  about  13  are  linked  to  cases  of 
suspected fraud; 

detections  of  irregularities  concern  a  financial  volume  that  corresponds  to 
almost 2% of the overall payments. 

Table  SF5  summarises,  in  relation  to  each  of  the  Structural  Funds,  the  same 
information presented in Table SF 4.  

Table SF5: Programming Period 2000-2006 – overall situation and main indicators by Fund  

FUND

N° of 
irregularities

ERDF
ESF
EAGGF-G
FIFG
TOTAL 

A
N

12 955
8 761
3 398
404
25 518

of which 
suspected 
fraud
B
N

FFL

C=B/A
%

Irregular 
amounts

D
EUR

934
1 063
475
67
2 539

12.1%
14.0%
16.6%

7.2% 3 015 564 930
690 588 414
261 121 008
58 836 026
9.9% 4 026 110 377

of which related 
to suspected 
fraud
E
EUR
334 142 083
149 872 571
47 111 820
10 460 070
541 586 545

FAL

Payments

IrR

FrR

G
EUR

F=E/D
%
11.1% 121 443 076 413
21.7% 63 795 358 611
18.0% 21 180 473 978
17.8%
3 629 416 390
13.5% 210 048 325 392

H=D/G
%
2.5%
1.1%
1.2%
1.6%
1.9%

I=E/G
%
0.28%
0.23%
0.22%
0.29%
0.26%

FIFG is the fund for which the FrR is the highest, followed by the ERDF and it is 
also the fund with the highest FFL. However, ESF is the fund for which the highest 
number of cases of suspected fraud were detected and reported.  

EN 

89 

   EN 

 
 
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 objective85.  

Table  SF6  summarises,  in  relation  to  each  of  the  Objective,  the  same  information 
presented  in  Tables  SF  4  and  SF  5.  The  Initiative  “PEACE”86  has  been  grouped 
together with the INTERREG programmes. 

Table  SF6:  Programming  Period  2000-2006  –  overall  situation  and  main  indicators  by 
Objective 

OBJECTIVE

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

N° of 
irregularities

A
N

of which 
suspected 
fraud
B
N

16 054
4 254
3 334
972
294
283
127
175
25
25 518

1 727
245
431
48
36
37
11
4
0
2 539

FFL

Irregular 
amounts

D
EUR

C=B/A
%
10.8% 2 956 915 544
5.8%
636 674 341
12.9%
269 447 318
4.9%
111 172 134
12.2%
24 194 010
13.1%
10 572 049
8.7%
6 584 017
2.3%
9 319 524
1 231 439
0.0%
9.9% 4 026 110 377

of which related 
to suspected 
fraud
E
EUR
461 270 047
26 941 870
42 849 649
3 686 112
3 381 260
1 167 685
2 081 503
208 419
0
541 586 545

FAL

Payments

IrR

FrR

G
EUR

F=E/D
%
15.6% 151 369 020 388
4.2% 22 743 788 486
15.9% 24 247 005 059
5 208 992 564
2 910 119 486
1 948 917 861
934 706 075
685 775 471

3.3%
14.0%
11.0%
31.6%
2.2%
0.0% N/A

H=D/G
%
2.0%
2.8%
1.1%
2.1%
0.8%
0.5%
0.7%
1.4%

I=E/G
%
0.30%
0.12%
0.18%
0.07%
0.12%
0.06%
0.22%
0.03%

N/A

N/A

13.5% 210 048 325 390

1.9%

0.26%

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

Furthermore,  the  IrR  for  the  Objective  2  programmes  is  the  highest  (2.8%  of  the 
payments). The IrR for the Objective 1 equals the overall IrR (1.9%), while that for 
Objective  3  programmes,  the  Equal  initiative,  Fisheries  out  of  Objective  1  regions, 
and  Leader+  are  lower  or  significantly  lower  (respectively  1.1%,  0.8%,  0.7%  and 
0.5%). 

These  elements  may  imply  some  under-reporting  in  relation  to  programmes  / 
initiatives  presenting  a  very  low  IrR.  The  interpretation  of  the  irregularity  rate  of 

85 

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. 

86 

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).  
The  PEACE  II  programme  is  designed  to  consolidate  the  peace  process  in  Northern  Ireland  by 
channelling  finance  under  Objective  1  of  the  Structural  Funds  in  the  2000-06  period.  Like  its 
forerunner, PEACE I (1995-99), the programme seeks to encourage progress towards a peaceful, stable 
society  and  promote  reconciliation  in  the  region.  The  beneficiary  areas  are  Northern  Ireland  and  the 
border regions of Ireland. 

EN 

90 

   EN 

 
 
                                                 
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  their  implementation.  Information  currently  available 
does not allow solving this dilemma. 

Table  SF7  summarises,  in  relation  to  each  Member  State,  the  same  information 
presented  in  Tables  SF4,  SF5  and  SF6.  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  together  with  the 
INTERREG programmes. 

Table  SF7:  Programming  Period  2000-2006  –  overall  situation  and  main  indicators  by 
Member State 

MEMBER STATE

N° of 
irregularities

A
N

of which 
suspected 
fraud
B
N

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

264
272
11
302
4 050
82
118
1 032
3 088
235
853
344
573
4 014
84
29
89
11
840
1 216
3 147
622
25
187
3 058
972
25 518

10
4
3
19
402
2
24
33
132
19
13
26
2
1 172
11
8
16
0
4
269
150
10
4
8
150
48
2 421

FFL

Irregular 
amounts

C=B/A
%

D
EUR
33 673 522
3.8%
21 887 437
1.5%
590 906
27.3%
73 978 226
6.3%
385 524 451
9.9%
4 358 738
2.4%
6 110 724
20.3%
389 316 692
3.2%
697 764 418
4.3%
10 058 987
8.1%
41 423 138
1.5%
47 369 805
7.6%
109 823 633
0.3%
879 729 327
29.2%
8 066 477
13.1%
4 113 714
27.6%
9 276 007
18.0%
1 728 514
0.0%
104 459 959
0.5%
177 417 475
22.1%
314 542 775
4.8%
14 403 677
1.6%
9 651 449
16.0%
53 987 779
4.3%
515 680 411
4.9%
4.9%
111 172 134
9.5% 4 026 110 377

of which related 
to suspected 
fraud
E
EUR

596 686
171 000
18 986
4 618 144
57 317 486
242 206
850 508
10 417 520
8 838 552
941 806
378 073
1 895 526
0
347 619 458
1 225 832
292 071
3 725 223
0
104 858
62 047 584
19 419 387
250 705
50 801
2 366 322
14 511 700
3 686 112
529 878 561

FAL

Payments

IrR

FrR

F=E/D
%

G
EUR

5.6%
13.9%

1.8%
0.8%
3.2%
6.2%

1 702 661 450
1 933 684 111
52 436 077
1 535 632 697
14.9% 29 604 565 775
706 191 858
356 488 895
2.7% 21 834 733 635
1.3% 44 738 634 478
9.4%
2 011 004 334
0.9% 15 487 658 548
1 907 061 151
4.0%
3 090 675 422
0.0%
39.5% 28 217 042 730
861 687 124
15.2%
73 332 652
7.1%
601 914 879
40.2%
61 212 112
0.0%
2 571 095 397
0.1%
7 975 310 919
35.0%
6.2% 19 675 703 749
2 062 489 376
1.7%
230 630 890
0.5%
1 077 631 944
4.4%
2.8% 15 875 026 600
5 208 992 564
3.3%
13.2% 210 048 325 391

H=D/G
%
2.0%
1.1%
1.1%
4.8%
1.3%
0.6%
1.7%
1.8%
1.6%
0.5%
0.3%
2.5%
3.6%
3.1%
0.9%
5.6%
1.5%
2.8%
4.1%
2.2%
1.6%
0.7%
4.2%
5.0%
3.2%
2.1%
1.9%

I=E/G
%
0.04%
0.01%
0.04%
0.30%
0.19%
0.03%
0.24%
0.05%
0.02%
0.05%
0.00%
0.10%
0.00%
1.23%
0.14%
0.40%
0.62%
0.00%
0.00%
0.78%
0.10%
0.01%
0.02%
0.22%
0.09%
0.07%
0.25%

Map  SF1  displays  the  IrR  by  Member  State  highlighting  the  high  values  of 
Luxembourg,  Slovakia,  the  Czech  Republic,  Slovenia  and  the  Netherlands,  with  a 
value  above  4%.  Low  values  are  displayed  for  France,  Finland,  Sweden,  Denmark 
and Lithuania. These countries may represent examples of very best practises or may 
indicate, on the contrary, under-reporting or low irregularity detection capability. 

EN 

91 

   EN 

 
 
Map SF1: IR by Member State 

The high IrR of the mentioned countries could also have its explanation in a higher 
percentage  of  the  expenditure  audited  in  these  countries. 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. 

Map SF2 displays the FrR by Member State as displayed in the last column of Table 
SF7,  highlighting  the  high  values,  in  particular,  of  Italy,  Poland,  Latvia  and 
Luxembourg. The high FrR of these two countries should be interpreted in a positive 
way, rather than negative. 

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. 

EN 

92 

   EN 

 
 
Map SF2: FrR by Member State 

Looking  at  the  low  values,  among  these  are  Malta,  Ireland,  France  and  the 
Netherlands  (0%);  Belgium  and  Sweden  (0.01%),  Slovenia  (0.02%);  Spain  and 
Denmark  (0.03%).  If  very  low  values  are  explainable  especially  in  small  countries 
like Malta, 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. 9.2.5). 

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

EN 

93 

   EN 

 
 
Table SF8 shows the irregular amounts reported by each Member State on the whole 
programming  period  2000-2006  (column  A);  the  part  of  these  irregular  amounts 
which has been decommitted (column B) and that for which payments were made to 
beneficiary (column C); the balance that still remains to be recovered87 (column D); 
the percentage of the irregular amounts which was not paid to beneficiary (column E 
–  prevention  rate);  and  the  percentage  of  the  paid  irregular  amounts  that  has  been 
recovered (column F – recovery rate). 

Table  SF  8:  Irregular  amounts,  prevention  rate  and  recovery  rate  by  Member  State  – 
Programming Period 2000-2006 

OF WHICH 
PAID

C
EUR

BALANCE TO 
BE 
RECOVERED
D
EUR

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

IRREGULAR 
AMOUNTS

A
EUR
39 238 609
22 425 634
590 906
74 036 929
401 807 477
5 397 991
6 196 520
424 808 661
711 303 778
10 386 200
42 398 760
47 913 383
112 617 456
881 066 761
8 078 553
4 113 714
9 295 705
1 748 285
105 495 326
180 070 259
315 232 297
15 666 129
10 206 023
54 528 712
541 486 308
4 026 110 377

IRREGULAR 
EXCLUDING 
DECOMMITTED
B
EUR
33 654 816
20 653 730
273
65 615 778
360 154 447
4 327 187
6 110 724
338 891 320
697 764 418
5 895 403
41 423 138
46 207 002
109 823 633
730 939 048
8 066 477
4 113 714
9 276 007
1 728 514
104 459 959
177 417 475
312 426 748
14 355 506
7 637 412
53 987 779
440 104 839

29 849 556
17 804 247
0
56 495 559
292 696 605
3 976 343
4 548 310
315 687 663
692 642 768
3 851 634
36 715 161
11 720 129
103 697 166
495 050 099
4 102 642
4 113 714
7 790 564
1 728 514
17 669 642
99 282 467
264 197 470
4 838 834
7 630 379
53 741 170
405 939 449
3 595 035 349 2 935 770 086

PREVENTION 
RATE

RECOVERY 
RATE

E=(B-C)/A
%

F=(C-D)/D
%

9.7%
12.7%

46.9%
74.7%

0.0% #DIV/0!

12.3%
16.8%
6.5%
25.2%
5.5%
0.7%
19.7%
11.1%
72.0%
5.4%
26.8%
49.1%
0.0%
16.0%
0.0%
82.3%
43.4%
15.3%
60.7%
0.1%
0.5%
6.3%
16.4%

13.9%
22.6%
52.6%
42.9%
99.5%
76.2%
87.2%
48.0%
17.0%
97.8%
54.3%
46.2%
100.0%
48.9%
100.0%
57.1%
81.9%
81.7%
67.3%
2.3%
85.5%
65.3%
67.2%

15 853 357
4 509 423
0
48 670 247
226 522 191
1 886 403
2 597 571
1 612 056
164 922 325
491 959
19 094 036
9 725 634
2 295 445
226 450 450
2 205 347
0
3 980 640
0
7 580 105
17 965 795
48 431 984
1 580 124
7 454 965
7 771 944
140 817 187
962 419 187

Looking  at  column  E,  very  high  prevention  rates  emerge  especially  in  the 
Netherlands,  Hungary,  Sweden,  Lithuania  and  Poland  (all  between  82  and  43%). 
Some  caution  is  needed  on  these  data,  because  some  Member  States  may  have  not 
reported the irregularities they detected before payment. 

Looking at column F, very high recovery rates are those of Luxembourg and Cyprus 
(100%), Ireland, Finland, Belgium, Spain, Poland, Portugal and Greece. Also in this 
case some caution is due. In many Member States is a common practise to exclude 

87 

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. 

EN 

94 

   EN 

 
 
 
                                                 
projects  found  as  irregular  from  the  expenditure  declaration  to  the  Commission88. 
This implies that EU 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.  

As  a  general  conclusion,  anyhow,  recovery  has  showed  important  progresses  since 
2009, as now more than 67% of the paid amounts have been recovered or deducted. 
Recovery remains low for Hungary, the Czech Republic and Slovenia (below 20%), 
which should put more attention to this aspect. 

9.3.2.  Established fraud – Structural Funds 

The prosecution and adequate sanctioning of fraudsters is one of the cornerstones of 
fraud  prevention,  without  which  no  deterrence  can  be  exercised  against  those  who 
are guilty of such crime. 

In relation to the programming period 2000-2006, Member States communicated the 
establishment of fraud in 162 cases. 

Table SF9 shows the number of cases of established fraud per Member State and per 
fund. 

Table  SF9:  N°  of  cases  of  established  fraud  by  Member  State  and  Fund  – 
Programming Period 2000-2006 

MEMBER 
STATE

ERDF

N

FUNDS

ESF

N

EAGGF - Guid.

TOTAL

N

N

CY
DE
EE
ES
FR
HU
IT
PL
UK
TOTAL

12

1
1

4
9
1
28

1
88
2

1
9
6
6
113

1
100
2
1
1
1
14
35
7
162

1
20

21

The  highest  number  of  cases  of  established  fraud  concerns  the  ESF,  and  Germany 
has  been  the  State  the  most  successful  in  completing  the  related  procedures  (100 
decisions), followed by Poland (35) and Italy (14). 

88 

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 

95 

   EN 

 
 
                                                 
Case study SF1: Established fraud against the ESF 

Five  photocopies  of  the  original  attendance  register  for  a  particular  training  course 
were  made  and  the  date,  topic  and  trainer`s  name  were  modified  in  order  to  match 
the details of five other training courses that took place. The registers were submitted 
from the participating partner to the leading partner as supporting documentation and 
subsequently included in the expenditure report submitted. 

The falsification was detected in the course of routine checks of monthly expenditure 
reports  carried  out  by  the  Intermediate  Body,  in  order  to  proceed  to  approval  and 
payment of the eligible amounts. 

The sanction imposed was the loss of European subsidies. 

In  113  cases  penal  sanctions  were  imposed,  of  which  75  were  specified  as 
‘Imprisonment’. 

Case study SF2: established fraud against the ERDF 

The beneficiary company included in the accounts costs for acquisition of materials 
and of services for an amount of about EUR 500 thousand. Through a check at the 
premises of the company and on third parties involved it was established that part of 
those  costs  were  in  fact  fictitious,  resulting  from  their  overstatement  in  the  related 
invoice.  

Further checks led to discover that other claimed costs were introduced for realised 
works, which were not pertinent to the co-financed project. 

The sanction imposed was the loss of subsidies. 

In the greatest majority of cases, the use of falsified supporting documents was the 
modus operandi adopted for committing fraud.  

The  average  amount  affected  by  established  fraud  cases  is  about  EUR  250 000  for 
the cases related to ERDF, about EUR 50 000 for ESF and EUR 25 000 for EAGGF 
– Guidance. 

9.3.3. 

Irregularities related to the programming period 2000-2006 – Cohesion Fund 

A total of 541 cases were reported since 2003, concerning the Cohesion Fund for the 
programming period 2000-2006. A total amount of EUR 297 million was reported of 
which EUR 65 million remain to be recovered. 

Table SF10 details the information by Member State benefitting from this Fund. 

EN 

96 

   EN 

 
Table  SF10:  N°  of  irregularities,  related  irregular  amounts  and  amounts  to  be  recovered  – 
Cohesion Fund 2000-2006 

MEMBER STATE

N° of 
irregularities

N

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

32
6
193
68
26
15
18
14
1
65
95
1
7
541

Irregular 
financial 
amounts
EUR

11 979 126
843 326
92 655 071
53 881 135
22 285 536
32 993 203
12 061 305
268 095
39 133
5 004 336
60 726 802
2 552 398
2 348 875
297 638 342

Balance to be 
recovered

EUR

1 373 248
32 040
41 337 726
8 203 639
3 094 686
0
664 123
5 469
0
165 866
7 867 544
0
2 296 427
65 040 768

The 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 SF11, 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 SF11: Programming Period 2000-2006 – overall situation and main indicators by type 
of project – Cohesion Fund 2000-2006 

TYPE OF PROJECTS

Environment
Transport
Technical Assistance
Mixed
TOTAL

N° of 
irregularities

A
N

of which 
suspected 
fraud
B
N

412
109
19
1
541

9

9

FFL

Irregular 
amounts

of which related to 
suspected fraud

FAL

Payments

IrR

FrR

D
EUR

C=B/A
%
2.2% 169 084 028
0.0% 124 993 307
2 440 011
0.0%
0.0%
1 120 996
1.7% 297 638 342

E
EUR

1 760 526

1 760 526

G
EUR

F=E/D
%
1.0% 12 862 733 004
0.0% 14 112 656 840
180 504 555
0.0%
0.0%
243 746 086
0.6% 27 399 640 485

H =D/G
%
1.3%
0.9%
1.4%
0.5%
1.1%

I=E/G
%
0.01%
0.00%
0.00%
0.00%
0.01%

Table  SF  11  shows  irregularities  and  cases  of  suspected  fraud  per  typology  of 
project. The table also presents the relevant indicators used throughout the document. 
While  it  is  difficult  to  make  any  assessment  of  the  FrR,  due  to  the  very  limited 
number  of  cases,  which  affect  exclusively  the  ‘Environment’  projects,  the  IrR 
provides more information. Reporting about the Cohesion Fund remains at levels that 
are  lower  than  the  other  funds,  but  ‘Environment’  projects  (also  in  relation  to  the 
disbursed amounts) seem to present more problems than ‘Transport’ projects.  

EN 

97 

   EN 

 
 
 
9.3.4. 

Irregularities related to the programming period 2007-2013 

For  the  first  time,  a  descriptive  analysis  of  irregularities  and  suspected  fraud  cases 
related to the programming period 2007-2013 is presented. 

In  general,  the  quality  of  the  received  information  is  higher  than  for  the  previous 
periods and, for instance, the “requalification” of the irregularities interested only 10 
cases on 1 281 (less than 1%). 

Interestingly, the reporting trend is following almost exactly that of the programming 
period  2000-2006  as  showed  in  Chart  SF  4,  despite  the  wider  derogations89  but 
including a higher number of reporting countries. 

Chart SF4: Comparison of reporting trends between the programming period 2000-2006 and 
2007-2013 

1.200

1.000

800

600

400

200

0

Y1

Y2

Y3

Y4

2000-2006

2007-2013

Table  SF  12  shows  the  reported  irregularities  by  Fund,  together  with  the  general 
indicators used throughout the document. 

Table  SF12:  Programming  Period  2007-2013  –  overall  situation  and  main  indicators  by 
Fund 

FUND

N° of 
irregularities

ERDF
ESF
COHESION FUND
TOTAL 

A
N

814
375
94
1 283

of which 
suspected 
fraud
B
N

74
68
5
147

89 

See paragraph 3.1.2. 

FFL

Irregular 
amounts

of which related to 
suspected fraud

FAL

Payments

IrR

FrR

D
EUR

C=B/A
%
9.1% 555 777 579
18.1% 22 692 039
5.3% 60 027 957
11.5% 638 497 575

G
EUR

F=E/D
%

E
EUR
423 692 448 76.2% 49 089 728 394
3 628 124 16.0% 18 546 599 742
10 025 084 16.7% 14 925 359 667
437 345 655 68.5% 210 048 325 392

H=D/G
%
1.1%
0.1%
0.4%
0.3%

I=E/G
%
0.86%
0.02%
0.07%
0.21%

EN 

98 

   EN 

 
 
 
                                                 
The  overall  irregularity  and  fraud  rates  are,  at  this  stage  of  implementation  of  the 
programming  period  rather  high.  This  situation  is,  however,  explained  with  two 
suspected  fraud  cases  reported  from  the  Czech  Republic  and  related  to  the  ERDF, 
which display huge involved amounts. This explains the high values for the overall 
FAL, IrR and FrR and for the same indicators related to the ERDF. 

Besides this, the other indicators prove a certain consistency with those showed for 
the programming period 2000-2006. 

9.4. 

Conclusions 

9.4.1. 

Structural Actions 

(1) 

(2) 

(3) 

(4) 

The  completeness  and  accuracy  of  irregularity  reporting  keep  on  improving 
and the introduction of IMS is playing an important role both on the quality 
and quantity of the reported irregularities. The Commission is grateful to all 
countries  having  successfully  implemented  the  system  and  recommends  to 
those, which have so far failed to do so (France and Ireland), to speed up their 
access to IMS. 

In  2010,  Member  States  have  detected  and  reported  7 062  irregularities, 
involving an overall amount of EUR 1.55 billion. Reported irregularities and 
related  financial  amounts  have  been  increasing  in  relation  to  2009  with 
significantly (49% by number of cases and 31% in financial volume). Three 
main  reasons  could  explain  these  increases: the closure  of  the  programming 
period 2000-2006; the advanced phase of implementation of the programming 
period 2007-2013; the wide implementation of the new reporting system IMS, 
which  has  expanded  the  number  of  users  submitting  irregularity  reports  and 
reduced the time necessary to transmit these reports. 

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. 

Checks  and  controls  seem  to  become  more  effective,  as  the  same  detection 
methods  showed  the  capability  of  detecting  more  irregularities  of  higher 
financial volume. 

9.4.2.  Programming Period 2000-2006 

(5) 

Throughout 
the  Programming  Period  2000-2006,  for  which  closure 
procedures have been initiated in 2010, the overall Irregularity Rate is about 
1.9%, while the Fraud Rate is about 0.26%. 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 cases (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  of  national 
competent  authorities  and  no  extrapolation  is  allowed  unless  the  size  of  the 
audited and checked sample would be known. 

EN 

99 

   EN 

 
(6) 

(7) 

(8) 

(9) 

The  highest  Irregularity  Rates  concern  the  ERDF  (2.5%)  and  Objective  2 
programmes (2.8%). For the ERDF the most plausible explanation is that this 
Fund finances projects of a higher value and therefore irregularities tend also 
to be of greater amount.  

In terms of Fraud Rate, looking at the funds, FIFG shows the highest rate of 
suspected fraud (0.29%), followed by the ERDF (0.28%); from the objectives 
perspective,  Objective  1  programmes  present  the  highest  rate  (0.30%), 
followed  by  the  Fisheries  out  of  Objective  1  programmes  (0.22%)  and 
Objective 3 (0.18%).  

Italy, Poland, Latvia and Luxembourg present the highest Fraud Rates among 
Member  States.  A  higher  number  of  reported  cases  of  irregularities  or 
suspected fraud does not necessarily mean that more irregularities or fraud are 
committed  or  that  a  Member  State  is  more  vulnerable  to  them.  A  more 
developed  audit  or  anti-fraud  strategy,  tailor  made  audits,  higher  number  of 
performed audits or investigations will normally lead to a higher number of 
detected irregularities and fraud. Therefore, it is possible that Member States 
with a higher irregularity or fraud rate perform better tan Member States with 
a lower irregularity or fraud rate. 

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  detected  fraud  may  remain 
unreported. 

(10)  Germany is the most successful Member State in completing procedures for 
the establishment of fraud in relation to the programming period 2000-2006, 
followed by Poland and Italy. 

(11)  Recovery  rates  throughout  the  Programming  Period  2000-2006  are  good 
(almost  70%),  though  they  may  be  influenced  by  the  practise  of  excluding 
projects  found  to  be  irregular  from  the  expenditure  declaration  to  the 
Commission.  

9.4.3.  Cohesion Fund 

(12)  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 introduction of IMS has already 
played a positive impact on the quality and reliability for the Cohesion Fund, 
showing  for  the  first  time  also  cases  of  suspected  fraud.  All  these  cases  are 
related to Environmental projects.  

EN 

100 

   EN 

 
10. 

PRE-ACCESSION FUNDS (ANNEXES 21-22) 

The 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  EU  legislation.  It  mainly  covers  the 
programming  period  2000-2006,  though  some  information  is  also  referred  to  the 
financial perspectives 2007-2013. 

Agenda  200090  set  up  two  financial  mechanisms,  ISPA91  and  SAPARD92,  to 
complement  the  actions  of  the  PHARE93  programme,  which  has  been  the  EU  aid 
programme for the EU-1294 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 CARDS95 irregularities since 200696. 

Turkey  has  been  receiving  pre-accession  assistance  since  200297.  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. 

90 

91 

92 
93 

94 

95 

96 

97 

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.  
The following abbreviations are used to describe groups of countries: 
a) EU-12 designates all Member States having acceded the EU since 2004; 
b) EU-10 indicates Member States having acceded in 2004; 
c) EU-2 refers to Member States having acceded in 2007; 
d) CAND identifies candidate countries. 
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 
European financial contribution in the framework of pre-accession strategy was first granted to Turkey 
under Council Regulation 2500/2001. 

EN 

101 

   EN 

 
                                                 
 
 
 
 
Since  1  January  2007  EU  pre-accession  assistance  has  been  channeled  through  a 
single  Instrument  for  Pre-accession  Assistance  (IPA)98  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 2010 – EUR 1.6 
billion). 

In  the  following  paragraphs,  when  referring  to  irregularities  reported  in  2010,  it 
should be kept in mind that, conformly to the reporting obligations, Member States 
shall  notify  irregularities  within  two  months  folliwing  the  end  of  each  quarter. 
Therefore the “reporting period” goes, in fact, from 1st March 2010 until 28 February 
2011. 

10.1.  Reporting discipline 

As specified in paragraph 5.1, specific modules for Pre-Accession Assistance (PAA 
Module)  and  for  the  Instrument  for  Pre-Accession  Assistance  (IPA  module) 
irregularity reporting have been developed.  

In general, reporting countries have showed further progress in reporting compliance. 
The  introduction  of  IMS  has  produced  improvements  in  terms  of  data  quality  and, 
especially,  completeness  and 
in  further 
the  process 
improvements with the full implementation of the two modules (see par 5.1.2). 

is  expected 

to  result 

In  general  the  communications  are  very  complete.  Some  mistakes  can  be  still 
encountered  in  relation  to  the  financial  aspects  of  the  reports,  but  the  level  of 
completeness of the reported information is close to 100% for all countries. In terms 
of timeliness of the reporting of the newly detected irregularities, 73% are reported 
within  the  deadlines  set  in  the  regulation.  Another  22%  are  reported  within  12 
months from detection leaving only 5% of the irregularities reported later than 1 year 
from detection, which is a positive result. In this context, special attention should be 
paid  by  Croatia  (50%  of  irregularities  are  reported  later  than  12  months  after 
detection) and Poland (35%). Some improvements may still be achieved by Hungary 
and Turkey (8%). 

The improved completeness of the information allows now for some assessment of 
the data quality. Here some inconsistencies are still detected, as, for instance, in 44 
cases on 424 some beneficiary countries indicate a date of first information leading 
to  the  detection  of  the  irregularity  which  is  posterior  to  the  date  of  the  primary 
administrative  or  judicial  finding99.  In  a  limited  number  of  cases  (11  on  424)  the 
qualification of the irregularity is in contradiction with other information provided in 
the communication, as explained in paragraph 5.2. 

98 
99 

Council Regulation (EC) No 1085/2006 
According  to  article  27(b)  of  Regulation  (EC)  No  1828/2006,  ‘primary  administrative  or  judicial 
finding’  means  a  first  written  assessment  by  a  competent  authority,  either  administrative  or  judicial, 
concluding on the basis of specific facts that an irregularity has been committed, without prejudice to 
the  possibility  that  this  conclusion  may  subsequently  have  to  be  revised  or  withdrawn  as  a  result  of 
developments in the course of the administrative or judicial procedure. 

EN 

102 

   EN 

 
                                                 
10.2.  General Trends 

The following analysis intends to provide an overview of the reported irregularities 
in 2010 and to compare the reporting trends observed during the period 2002 -2010.  

In  2010  European  Anti-Fraud  Office  (OLAF)  received  1 362  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  424  new  cases  detected  by  the 
national  authorities  in  2010  and  939  follow-up  reports  on  the  previously  reported 
cases.  

The  total  European  contribution  amount  affected  by  irregularities  in  2010 
(programming  period  2000-2006)  was  EUR  83 741 577.  For  the  2007-2013  period, 
in 2010 2 irregularities were reported involving EUR 1 002 475. 

Annex 21 provides more details about the information above, distinguishing also by 
Fund. 

10.2.1.  Overall trend 

A word of caution before presenting the general trends is necessary, considering that 
a wider variety of pre-accession instruments is covered due to different programming 
periods;  that  the  ongoing  enlargement  process  now  addresses  different  beneficiary 
countries;  and  that  Member  states  and  Candidate  countries  do  not  necessarily  have 
the same approach towards reporting.  

In fact, reporting countries happen to be at different stages of the project cycle. The 
EU-10  group  has  finalized  the  projects  and  reports  very  few  new  cases,  the  focus, 
however, remains on administrative and judicial follow-up. The EU-2 group reports a 
significant  number  of  newly  detected  cases  which  certainly  affect  the  overall 
tendency.  Croatia  and  Turkey  have  become  more  active  in  reporting,  though,  in 
comparison  to  2009  they  show  a  decrease  of  newly  detected  and  reported  cases; 
increasing tendencies are, however, expected in the coming years100.  

The  number  of  new  cases  received  on  pre-accession  assistance  has  decreased  by 
40%, while the total number of communications has decreased by 48% comparing to 
2009 figures. 

Chart  PA1  shows  an  important  decrease  of  the  reported  number  of  cases  of 
irregularities and suspected fraud and the related EU irregular amounts. It seems to 
be  the  first  significant  signal  of  the  “phasing-out”  effect  of  the  EU-2  group  and 
confirms the decreasing trend of EU-10. 

100 

Similarly  to  the  Cohesion  Policy,  however,  derogations  to  the  reporting  obligations  have  also  been 
widened. 

EN 

103 

   EN 

 
                                                 
Chart PA 1: Irregularities communicated by reporting countries (2002-2010) 

s
e
s
a
c

f
o

°
N

800

700

600

500

400

300

200

100

0

120.000.000

100.000.000

80.000.000

60.000.000

40.000.000

20.000.000

0

r
a
l

u
g
e
r
r
i

t
n
u
o
m
a
U
E

2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

N° of cases

EU amount irregular

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. 

In 2010 EU-10 account for 15%, Bulgaria and Romania for 81%, Croatia and Turkey 
for 4% of the total number of cases. Talking about the total EU affected amount as 
reported, EU-10 make 4%, Bulgaria and Romania 89%, Croatia and Turkey 7%. 

EN 

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Chart PA 2: Distribution of reported cases in 2010 by groups of countries - number of cases 
(left) and related irregular amounts (right) 

4%

15%

7%

4%

81%

89%

CAND

EU-10

EU-2

CAND

EU-10

EU-2

Chart  PA2  shows  that  the  greater  part  of  the  analysed  data  set  (irregularity  reports 
received  in  2010)  still  originates  from  Romania  and  Bulgaria.  Consequently,  the 
trends are highly influenced by their reporting patterns.  

Comparing  2009  and  2010  only  Hungary  shows  an  increase  in  the  number  of 
reported  irregularities  (18%).  For  the  reported  EU  affected  amounts  increases  are 
evident  for  Croatia  (956%),  Latvia  (1 037%)  and  Romania  (59%).  The  remaining 
countries all disclose a falling tendency. 

Summary details for all irregularities received since 2002 are presented in Annex 22. 

10.2.2.  Irregularities affecting different funds 

All funds concerned show important decreases, with the only exception of PHARE, 
for  which  the  reported  number  of  cases  has  remained  stable,  while  the  related 
irregular  EU  amounts  have  also  decreased  (by  42%).  The  biggest  and  most 
remarkable change concerns the funds specifically related to the Candidate Countries 
group,  with  the  Pre-Accession  Assistance  for  Turkey  decreasing  by  50%  for  the 
number  of  irregularities  reported  and  by  65%  for  the  related  irregular  EU  amounts 
and for CARDS (the assistance to HR for reconstruction and development) for which 
no  irregularities  have  been  reported.  Important  decreases  were  also  observed  for 
SAPARD and ISPA (around 45% in the number of reported cases and 26% for the 
related financial volume).  

As demonstrated by Chart PA 3 SAPARD maintains the first place for both the cases 
reported in numbers (60%) and amounts (80%).  

EN 

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Chart  PA  3:  Distribution  of  communications  per  fund  in  2010  -  number  of  cases  (left)  and 
related irregular amounts (right) 

3%

7%

30%

1%

10%

9%

60%

80%

ISPA PHARE

SAPARD

TPA

ISPA PHARE

SAPARD

TPA

10.2.3.  Amounts involved and impact on budget 

The  irregularity  rate  on  the  budget  for  2010  is  5.75%  (down  from  9.75%  of  the 
previous  year)  if  calculated  on  the  payment  appropriations  (EUR  93  million 
irregular,  including  prevented  irregularities,  on  EUR  1.6  billion  of  payment 
appropriations).  However,  this  figure  should  be  taken  with  great  caution  as 
irregularities  are  not  necessarily  related  to  that  financial  year.  In  most  cases 
irregularities have occurred earlier, but were only traced (or reported) in 2010.  

It would be more precise to calculate the impact of irregularities (irregularity rate) on 
the  whole  programming  period  (2002-2006)  and  the  'actual'  beneficiary  countries. 
Thus the result is 1.6% (EUR 305 million total irregular amount reported so far on 
the overall budget of roughly EUR 19 billion). Data are still preliminary to provide a 
similar rate for the period 2007-2013. 

10.2.4.  Detection of irregularities  

Most of the irregularities in 2010 were detected by means of ‘Control of documents’. 
The  second  most  frequent  method  is  ‘Ex-post  controls’.  Control  of  documents  and 
audit  make  key  responsibilities  of  the  national  authorities  implementing  EU  funds 
under  decentralised  and  shared  management  modes.  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. 

The most “productive” method of detection is the ‘Control by Commission services’, 
which was particularly significant in relation to Romania and appeared, though in a 
limited  number  of  cases,  also  in  Bulgaria  and  Hungary.  Through  these  controls,  in 
conjunction  also  with  associated  controls  with  national  services,  more  than  42%  of 
the  total  reported  irregular  amounts  were  detected.  This  finding  is  once  more 
underlining the importance of audits performed by responsible Commission services 
and investigations run by OLAF. 

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On  the  spot  controls  account  for  7%  of  the  detected  irregular  amount  and  were 
effectively used in Bulgaria, Czech Republic, Poland and Romania.  

In  average,  it  takes  about  34  months  to  detect  an  irregularity,  with  Croatia  and 
Turkey  showing  the  shortest  delay  (respectively  5  and  14  months)  and  Poland  and 
Slovakia  the  longest  (47  and  49  months  respectively).  This  analysis  is  possible  for 
the first time, considering the completeness of the reported information. 

10.2.5.  Detected types of irregularities / modus operandi 

The most common type of irregularity by the number of received cases and amounts 
affected in 2010 was ‘Failure to respect other regulations/contract conditions' (20% 
of  amounts),  followed  by  'Falsified  supporting  documents'  (17%)  and  ‘Failure  to 
respect deadlines' (12%).  

The use of ‘Falsified supporting documents’ clearly refers to cases of suspected fraud 
and consequently will be dealt with more in detail in paragraph 10.3. It is however 
important to highlight that, consistently with their ‘nature’ they represent the greatest 
threat  to  the  EU  financial  interests,  as  cases  implying  such  modus  operandi  cover 
40% of the total irregular amounts reported. 19% of the total irregular amounts were 
interested by ‘Failure to respect other regulations/contract conditions'. 

10.3. 

Specific analysis 

10.3.1.  Suspected and established fraud 

In 2010 cases classified as suspected fraud (FFL) made 24% (101) of irregularities 
and  50%  of  the  EU  affected  amount  (FAL)  (EUR  117  million).  For  the  sake  of 
transparency  it  is  worth  mentioning  that  OLAF  reclassified  2.6%  of  cases  into 
'suspected fraud' according to the method and conditions explained in paragraph 5.2. 
These figures are quite stable in relation to 2009 as showed in Chart PA 5. 

EN 

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Chart PA 5: Share of suspected fraud and established fraud in reported cases 

l
a
t
o
t

f
o
%

60,0%

50,0%

40,0%

30,0%

20,0%

10,0%

0,0%

2003

2004

2005

2006

2007

2008

2009

2010

Year

FFL

FAL

Meanwhile, it is important to note that the analysed cases are just 'suspected fraud' 
and  are  undergoing  investigation  by  the  relevant  national  authorities.  The  final 
precise  figures  can  only  be  presented  on  'established  fraud'  cases,  when  the  court 
rulings  are  made.  In  2010  only  one  case  of  established  fraud  was  reported  by 
Hungary  in  relation  to  PHARE.  Up  to  now,  only  other  three  cases  in  total  were 
defined as established fraud: one by Poland (SAPARD) and 2 by Romania (PHARE). 

80% of the cases of suspected fraud were detected in relation to SAPARD and 17% 
in relation to PHARE.  

Case study: multiple funding of costs - SAPARD 

During  the  on-spot-check  it  has  been  found  that  the  same  premises  were  used 
together  with  other  beneficiaries  of  financial  support  from  SAPARD  for  other 
projects.  Administrative  costs  are  supported  only  in  the  implementation  of  one 
project, but are presented as eligible costs also in all other projects, and those claims 
are supported with falsified documents. 

6  out  of  the  10  countries,  which  reported  irregularities  in  2010,  notified  cases  of 
suspected or established fraud. Romania communicated the highest number of cases 
(56,  representing  56%  of  the  total  cases  of  suspected  fraud)  followed  by  Bulgaria 
(35, representing 35%). Clearly these figures are influenced by the fact that EU2 is 
still the group of countries that reports the highest number of irregularities. 

What  needs  to  be  pointed  out  is  that  the  greatest  share  of  the  cases  reported  by 
Bulgaria has been the result of detection by national authorities, which is a signal of 
discontinuity with the past, when most cases were detected on initiative or on request 
by  European  bodies  or  institutions.  In  the  case  of  Romania,  on  the  contrary,  the 

EN 

108 

   EN 

 
 
 
 
trigger  for  detection  of  cases  of  suspected  fraud  is  ‘controls  by  European  services’ 
alone or in association with national services.  

As  it  could  be  expected,  cases  of  suspected  fraud  take  longer  in  average  to  be 
detected than administrative irregularities: 53 months is the average gap between the 
beginning of the possible fraud and detection (the minimum value is 21 months for 
Turkey and the maximum is 60 months for Latvia and Romania). 

As  already  pointed  out,  the  most  recurrent  modus  operandi  is  the  use  of  ‘Falsified 
supporting documents’. 

Case study PA 2: fictitious purchase – PHARE 

A fictitious purchase of equipment was fraudulently registered in the accounts of a 
company  benefitting  from  PHARE  support.  In  reality,  the  equipment  stayed  in  the 
same  premises,  because  the  seller  and  buyer  of  the  equipment  have  the  same 
ownership. 

10.3.2.  Cases of suspected fraud related to the programming period 2002-2006 

In order to establish a meaningful fraud rate it is necessary to abandon the approach 
of the reported cases per year and analyse a financial period as a whole. This can be 
done in relation to the three funds SAPARD, PHARE and ISPA implemented in the 
period 2002-2006. 

The first observation looking at these cases is that their distribution across the funds 
is not balanced. The numbers of cases received since 2002 manifest predominance of 
SAPARD with 436 cases out of which 80 for 2010. PHARE counts 174 for all years 
of which 17 in 2010, while ISPA only 8.  

10.3.3.  Fraud rates related to SAPARD – programming period 2002-2006 

Being  SAPARD  the  fund  presenting  the  most  important  exposure  to  cases  of 
suspected fraud, it seems interesting to update the analysis already conducted for the 
reporting year 2009. 

The total fraud rate for the whole programming period of SAPARD is at the level of 
3.5%.  However,  looking  at  the  individual  reporting  countries  in  Table  PA  1,  it 
becomes obvious that the rate is highly affected by a particular situation in Bulgaria. 
Bulgarian fraud rate for SAPARD is 15.2%, which is the highest rate seen in all the 
funds analyzed (see chapters 8 and 9). Meanwhile, the Czech Republic, Latvia, and 
Slovakia have zero fraud rate. 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  the  Commission.  However,  as 
already indicated in the paragraph dedicated to general trends, reporting of new cases 
is highly unlikely, due to the phasing-out from pre-accession assistance. 

EN 

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Map PA 1. Fraud rate for SAPARD by reporting country 

Table PA 1: Fraud rates by reporting country – period 2002-2006 SAPARD 

Beneficiary 
Country

Committments 
AFA

N° of 
suspected 
fraud cases

EU amount 
affected by 
suspected fraud

FrR

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

EUR

371 409 686
92 787 704
51 043 119
25 000 000
160 039 127
125 448 234
91 883 502
709 409 786
1 159 785 692
26 650 758
76 915 845
2 890 373 453

N

274
1
2
2
7
6
6
36
97
6
0
437

110 

EUR
56 476 832
807
2 206 970
659 549
835 359
120 049
0
471 963
40 701 728
331 000
0
101 804 256

%
15.2%
0.0%
4.3%
2.6%
0.5%
0.1%
0.0%
0.1%
3.5%
1.2%
0.0%
3.5%

EN 

   EN 

 
 
 
Almost  25%  of  SAPARD  projects  affected  by  suspected  fraud  present  a  public 
contribution  (national  and  EU  support)  between  EUR  100 000  and  250 000. 
However,  also  project  with  a  value  up  to  EUR  5  million  are  interested  by  cases  of 
suspected  fraud.  The  tendency  for  projects  with  higher  value  to  be  affected  by 
suspected fraud has increased with the reports received in 2010 especially due to the 
cases received from Romania.  

10.3.4.  Estimated Fraud Rate for the Programming Period 2002-2006 – all funds 

The percentage of the sum of suspected fraud in the total allocated amount (FrR) for 
period  2002-2006  is  0.65%.  It  represents  the  highest  rate  among  all  the  policies 
examined  in  this  document  and  for  this  reason  stresses  the  need  for  continuous 
monitoring of beneficiary countries of pre-accession assistance, which are faced with 
challenges  and  risks  that  they  learn  to  manage  only  through  experience  and 
confrontation with these problems. 

10.3.5.  Recovery 

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.  

Once  more,  it  is  interesting  to  analyse  the  reporting  issue  in  relation  to  a  whole 
programming  period  rather  than  on  yearly  basis,  as  more  recent  years  will  always 
present recovery rates which are far lower.  

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  on  the  irregular  amounts  effectively 
disbursed.  Malta  has  the  highest  recovery  rate,  followed  by  Estonia  and  Poland. 
Apart from these three countries, which show a recovery rate above 50%, the others 
present  a  situation  that  raises  some  elements  of  concern.  The  average  of  the 
beneficiary  countries  is  30%  and  the  situation  appears  particularly  serious  in 
Bulgaria,  Turkey,  Lithuania,  Latvia  and  Slovenia  (with  a  recovery  rate  from  8.2  to 
17.4%). 

The recovery rate is much lower for the cases of suspected fraud and is around 14% 
(increasing  from  2009  when  it  was  just  4.6%).  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  2  also  shows  the  ‘prevention  rate’,  which  represents  the  part  of  the 
irregular amounts for which detection has prevented a part of the undue payment to 
happen.  Prevention  rate  is  low  in  Lithuania,  Romania  and  Turkey  (ranging  from 
3.5% to 23%) and high in Croatia, Slovenia and Cyprus (all above 90%). Latvia and 
Bulgaria present prevention rates above 60%. 

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Table PA 2: Recovery by reporting country 

BENEFICIARY 
COUNTRY

Irregular amounts

A

Recovered 
Amounts
B

Amounts to be 
recovered
C

Recovery 
rate
D=B/(B+C)

Prevention 
Rate
E=[A-(B+C)]/A

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

114 745 230
23 807
2 918 167
6 649 147
10 226 714
8 820 491
4 871 083
2 700 897
112 620
7 607 360
146 133 104
1 598 263
8 343 845
2 974 289
317 725 016

3 516 723
0
743 912
3 084 469
562 611
1 777 803
512 508
173 805
112 620
2 217 780
45 127 476
13 473
1 792 898
245 039
59 881 116

39 116 221
0
1 424 438
639 654
314 618
3 435 775
4 185 695
900 122
0
1 897 786
82 487 033
64 011
3 249 330
2 044 414
139 759 097

%

%

8.2%

#DIV/0!

34.3%
82.8%
64.1%
34.1%
10.9%
16.2%
100.0%
53.9%
35.4%
17.4%
35.6%
10.7%
30.0%

62.8%
100.0%
25.7%
44.0%
91.4%
40.9%
3.5%
60.2%
0.0%
45.9%
12.7%
95.2%
39.6%
23.0%
37.2%

However,  these  figures  reflect  only  the  information  provided  in  the  irregularity 
reports, but do not take into account the recoveries and financial corrections made by 
the Commission. 

10.4.  Conclusions 

(1) 

(2) 

(3) 

(4) 

(5) 

In  2010  reported  irregularities  and  related  irregular  amounts  showed  for  the 
first time an important decrease. This could be a clear signal of the impact of 
the phasing out of EU-10 and EU-2 from the pre-accession assistance phase.  

This  decrease  is  not  compensated,  until  now,  by  a  significant  increase  of 
reported  irregularities  from  Candidate  countries.  Next  years  will  indicate  if 
the experience acquired in managing the great enlargements of 2004 and 2007 
has paid off in correcting the problems encountered in the previous phase of 
the pre-accession assistance. 

The decrease is visible for all funds and almost for all countries. The majority 
of the new detected and reported cases are still related to the SAPARD fund 
in Romania and Bulgaria. 

An important development is confirmed in Bulgaria, where irregularities and 
suspected  fraud  cases  are  now  mainly  detected  by  national  services  rather 
than  on  request  or  on  action  by  European  institutions  and  bodies.  On  the 
contrary,  the  situation  in  Romania  appears  the  opposite,  with  an  increasing 
“weight”  of  irregularities  and  suspected  fraud  cases  detected  following  a 
control by European services or on their request. 

The total fraud rate for the whole programming period of SAPARD is at the 
level of 3.5%. Bulgarian fraud rate for SAPARD is around 15%, which is the 
highest  rate  seen  in  all  analysed  funds  (Cohesion  Policy  and  Agriculture). 
Meanwhile  the  Czech  Republic,  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. Considering the advanced stage of 

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€
€
€
 
(6) 

phasing-out  from  pre-accession  assistance  for  these  countries,  it  is  very 
unlikely to see any variation for their fraud rate in the future. 

The issue of more performing recovery procedures still needs to be addressed. 
The  overall  recovery  rate  is  about  30%  and  is  the  lowest  among  all  policy 
areas  examined  in  this  document.  Action  is  recommended  especially  for 
Bulgaria,  Turkey,  Lithuania,  Latvia  and  Slovenia.  In  presence  of  cases  of 
suspected  fraud,  the  recovery  rate  is  even  lower  and  is  around  14%  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)  or  recovery  procedures  should  be 
carried out regardless of the finalisation of the judiciary proceedings. 

(7) 

The  high  Fraud  Rate  showed  by  this  policy  underlines  the  importance  of 
continuous monitoring and attention by the implementing services in relation 
to the new Beneficiary Countries which  are likely to reproduce  some  of  the 
problems  encountered  in  the  management  of  the  first  and,  so  far,  most 
important pre-accession assistance. 

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11. 

DIRECT EXPENDITURE – CENTRALISED DIRECT MANAGEMENT  

11.1.  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’101,  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, as described in paragraph 5.1.3. Because of the limitations explained 
therein,  the  analysis  presented  in  the  following  paragraphs  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; 

•  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. 

11.2.  General analysis 

In  2010,  the  Commission  services  registered  1021  recovery  orders  in  ABAC  that 
were  qualified  as  irregularities  or  suspected  fraud.  The  committed  budget  for  these 
1 021 recoveries was EUR 6.6 billion, of which EUR 43.1 million was identified as 
irregular102. 

11.2.1.  Financial amounts involved 

The  financial  impact  of  the  1 021  recoveries  registered  in  2010  was  EUR  43.1 
million, which includes an amount of EUR 3.6 million for the 21 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 

101 

102 

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’). 
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. 

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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 2010. 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 for which recoveries were issued in 2010 (number and amounts) 
by policy domain. 

Commitments 

Recoveries 

€ 1,000 

% 

Average 
€ 1 000 

N 

% 

€ 1,000 

% 

Average 
€ 1 000 

Recoveries as 
% of 
commitments 

6,261,174 

95.5 

6,850 

914 

89.5 

34,510 

80.0 

37.8 

295,639 

4.5 

2,763 

107 

10.5 

8,610 

20.0 

Total 

6,556,813 

6,422 

1,021 

43,120 

80.5 

42.2 

0.6%

2.9%

0.7%

Area 

Internal 
policies 

External 
actions 

The table shows that the irregular amounts only represent 0.7% of the value of the 
commitments  for  which  recovery  orders  were  issued.  More  recovery  orders  were 
issued  for  commitments  made  under  the  internal  policies  domain  than  the  external 
assistance  actions,  but  the  relative  share  of  recoveries  in  commitments  is  higher  in 
the external actions area. 

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  five  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 the budget title "Regional Policy" refers to an irregular amount for which 
there is no link to a specific recovery order. 

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Table DE 2:  Recoveries (number and amounts) by qualification and budget title, 2010. 

Budget Title 

Economic and financial affairs 
Enterprise 
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 
TOTAL 

Commitments

€1 000 

660
683 916
25 016
381
436 598
32 696
2 479 649
2 493 859
650
721
43 528
68
200
57 071
188 049
214

N 

3
59
7
1
65
21
226
319
1
0
134
2
1
59
49
4

91 668
14 070
1 637
5 549
611
6 556 813

26
17
1
3
2
1000

Recoveries 

Irregularity 
€1 000 
% 

Suspected 
Fraud 

% 

N 

€1 000 

0.3
5.9
0.7
0.1
6.5
2.1
22.6
31.9
0.1
0.0
13.4
0.2
0.1
5.9
4.9
0.4

2.6
1.7
0.1
0.3
0.2
100

11 
918 
175 
8 
4 196 
1 705 
7 269 
12 152 
21 
5 
3 779 
5 
90 
2 573 
3 439 
1 

1 798 
590 
0.2 
671 
72 
39 482 

0.03 
0.2 
0.5 
0.02 
10.9 
4.4 
18.8 
31.4 
0.1 
0.01 
9.8 
0.01 
0.2 
6.7 
8.9 
0.0 

4.7 
1.5 
0.0 
1.7 
0.2 
100 

1

462

5
5

313
82

6

2 514

3
1

262
5

21

3 638

11.2.2.  Financial amounts involved by geographical area and Member State 

Table  DE3  summarizes  the  recoveries  per  geographical  area,  where  the  beneficiary 
of  the  EU  funding  resided.  The  column  'average'  indicates  the  average  amount  (in 
EUR 1 000) per recovery. 

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Table DE 3:  Recoveries  (number  and  amounts)  by  region  of  residence  and  qualification, 
2010. 

Commitments  

Contractor 
place of 
residence 

Recoveries 

Irregularity 

Suspected Fraud 

€1 000 

N 

% 

€1 000 

% 

Average 

N 

€1 000 

% 

Average 

ACP 

Africa 

America 

314 472 

22 711 

26 584 

6 

2 

8 

0.6 

0.2 

58 

0.1 

9.7 

48 

0.1 

23.9 

0.8 

452 

1.1 

56.5 

Asia & Pacific 

80 317 

11 

1.1 

1 493 

3.8 

135.7 

2 

1 

2 

1 

523 

14.4 

261

8 

0.5 

8

2 235 

61.4 

1 118

166 

4.6 

166

EFTA 

EU 

162 207 

22 

2.2 

1 299 

3.3 

59.1 

5 875 452 

917 

91.7  34 998 

88.6 

38.2 

16 

715 

19.6 

45

NEP & PA 

75 069 

34 

3.4 

1 133 

2.9 

33.3 

TOTAL 

6 556 813 

1 000  100.0  39 482  100.0 

39.5 

21 

3 638  100.0 

106

Most of the legal entities concerned have their residence in the European Union: 933 
recovery  orders  (91.4%  of  1 021)  were  issued  for  an  amount  of  EUR  35.7  million 
(82.8%  of  EUR  43.1  million).  88  recovery  orders  (8.6%)  were  issued  to  entities 
residing outside the EU, for a total amount of EUR 7.4 million (17.2%). In the latter 
category,  36%  of  the  amount  of  recoveries  relates  to  entities  residing  on  the 
American continent; with total value of irregular amount EUR 2.6 million, followed 
by beneficiaries residing in the Asian and Pacific region (EUR 1.7 million). 

There  were  five  cases  qualified  as  suspected  fraud  involving  beneficiaries  residing 
outside  the  EU.  The  biggest  one  concerned  beneficiary  registered  in  Paraguay,  for 
which a recovery order was issued amounting to EUR 2.2 million.  

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 

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Table DE 4:  Recoveries (number and amounts) by Member State and qualification, 2010. 

Contractor 
place of 
origin 

Commitments 
€ 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  
TOTAL EU 

160 463 
219 538 
33 
6 014 
40 944 
899 950 
79 284 
7 669 
224 625.3 
625 551.7 
20 733.7 
1 154 097.1 
132 249.1 
42 128.4 
709 395.3 
43 956.5 
24 343.1 
30.2 
12 912.3 
366 265.6 
70 825.8 
97 882.9 
4 235.2 
1 727.1 
108 578 
39 320.4 
782 699.3 
5 875 452 

N 
39 
72 
1 
3 
16 
84 
11 
4 
45 
80 
14 
131 
23 
8 
135 
5 
9 
1 
5 
55 
11 
16 
3 
3 
7 
19 
117 
917 

% 
4.3 
7.9 
0.1 
0.3 
1.7 
9.2 
1.2 
0.4 
4.9 
8.7 
1.5 
14.3 
2.5 
0.9 
14.7 
0.5 
1.0 
0.1 
0.5 
6.0 
1.2 
1.7 
0.3 
0.3 
0.8 
2.1 
12.8 
100.0 

€ 1 000 
831 
3 418 
14 
334 
747 
2 449 
663 
20 
1 030 
1 936 
631 
4 889 
525 
1 004 
5 377 
665 
195 
3 
253 
2 467 
162 
518 
156 
75 
671 
681 
5 283 
34 998 

% 
2.4 
9.8 
0.0 
1.0 
2.1 
7.0 
1.9 
0.1 
2.9 
5.5 
1.8 
14.0 
1.5 
2.9 
15.4 
1.9 
0.6 
0.0 
0.7 
7.1 
0.5 
1.5 
0.4 
0.2 
1.9 
1.9 
15.1 
100.0 

Average 
21.3 
47.5 
14.4 
111.5 
46.7 
29.2 
60.3 
5.0 
22.9 
24.2 
45.0 
37.3 
22.8 
125.6 
39.8 
133.1 
21.7 
2.8 
50.6 
44.9 
14.7 
32.4 
52.0 
25.2 
95.9 
35.9 
45.2 
38.2 

Suspected 
Fraud 

N 

€ 1 000

1 

1 

1 
5 

2 

4 
1 

8 

5 

225 
82 

82 

276 
12 

1 
16 

25 
715 

Most  of  the  recoveries  (for  irregularities  and  fraud)  were  made  from  beneficiaries 
residing  in  5  Member  States:  Italy  (14.6%),  France  (14.0%),  the  United  Kingdom 
(12.6%),  Germany  (9.1%)  and  Spain  (8.8%).  Entities  from  which  the  highest 
aggregated  amounts  have  to  be  recovered  are  residing  in  Italy  (15.1%,  EUR  5.4 
million),  the  United  Kingdom  (14.9%,  EUR  5.3  million),  France  (13.7%,  EUR  4.9 
million), Belgium (9.6%, EUR 3.4 million) and Germany (7.5%, EUR 2.7 million). 
These five Member States account for 60% of the amounts of recoveries. The high 
rates of Belgium can be explained by the fact that most of the European Institutions 
have their seats in this Member State: this leads to the conclusion of a relative higher 
number of contracts and grant agreements with entities residing in this country. 

In  2010  three  quarters  of  recovery  orders  involving  cases  of  suspected  fraud  were 
reported  to  involve  beneficiaries  residing  in  the  EU.  However  the  biggest  amount 
was linked to one fraud case perpetrated by a beneficiary residing in Paraguay, this 
single case involved EUR 2.2 million defrauded in a development project. The full 
amount  has  been  already  recovered.  This  one  recovery  represents  60%  of  all 

EN 

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recovered  amounts  qualified  as  suspected  fraud.  The  highest  number  of  recoveries 
with suspected fraud qualifications concerned beneficiaries registered in Denmark (5 
recoveries) and Ireland (4 recoveries). The highest amounts involved per project in 
cases qualified as suspected fraud were recorded for a Tanzanian beneficiary (EUR 
462 404) and a German one (EUR 225 260). In each of the two countries there was 
only one case of suspected fraud but of a considerable amount. 

11.2.3.  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, 2010.  

Method of detection 

Community control103 / 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 
525
258
6
7
189
5
31
1 021

% 
51.4
25.3
0.6
0.7
18.5
0.5
3.0
100

€ 1 000 
15 504 
11 220 
780 
204 
11 906 
617 
2 889 

% 
36.0 
26.0 
1.8 
0.5 
27.6 
1.4 
6.7 
43 120  100.0 

Average 
€ 1000 

29.5
43.5
130.0
29.2
63.0
123.4
93.2
42.2

Most of the irregularities or suspected fraud for which a recovery order was issued, 
were  detected  on  the  basis  of  ‘Community  controls’:  783  recoveries  (77.0%) 
accounting  for  EUR  26.7  million  (63.1%).  Within  the  ‘Community  controls’ 
category,  on-the-spot  checks  generated  twice  as  many  recoveries  as  document 
checks.  The  average  amount  for  recoveries  is  EUR  42 233.  Recoveries  detected  by 
OLAF  and  National  authorities  have  a  substantially  higher  average.  Recoveries 
issued  on  the  basis  of  OLAF  activities  had  the  value  per  recovery  equal  to  EUR 
123 379 but only account for 1.4% of the total amount to be recovered. 

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. 

103 

The term “Community control” represents one of the options foreseen in the ‘Recovery context’ of the 
ABAC system and for this reason it has been reproduced here and in the following pages literally. 

EN 

119 

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Table DE 6:  Recoveries  (number  and  amount)  by  method  of  detection  and  by 
qualification, 2010.  

Qualification 

Irregularity 

/  Desk  check 

Method of detection 
Community  control  /  Check  on  the 
spot 
Community  control 
documents 
Control by national authorities 
European Court of Auditors 
Independent 
engineers, auditors) 
Other 

(supervising 

control 

Total of Irregularity 

Suspected 
fraud 

/  Desk  check 

Community  control  /  Check  on  the 
spot 
Community  control 
documents 
Independent 
engineers, auditors) 
OLAF 
Other 

(supervising 

control 

Total of Suspected fraud 

Total 

N 

% 

€ 1 000 

% 

Av. € 
1000 

524 

52.4 

15 467 

39.2 

29.5 

255 
6 
7 

187 
21 
1 000

25.5 
0.6 
0.7 

18.7 
2.1 

100 

10 982 
780 
204 

9 542 
2 507 

39 482 

1 

3 

4.8 

37 

14.3 

238 

9.5 
23.8 
47.6 
100.0

2 
5 
10 
21 
1 021

2 364 
617 
382 
3 638 

43 120 

27.8 
2.0 
0.5 

24.2 
6.3 

100 

1.0 

6.5 

65.0 
17.0 
10.5 
100.0 

43.1 
130.0 
29.2 

51.0 
119.4 

39.5 

37.3 

79.4 

1181.9 
123.4 
38.2 
173.3 

42.2 

Table  DE6  shows  the  differences  in  the  method  of  detection  between  irregularities 
and suspected fraud. 'Checks on the spot’ are 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  almost  40%  of  the 
amounts.  The  ‘Community  controls’  (both  on-the-spot  checks  as  well  as  document 
controls)  are  the  most  important  method  of  detection  for  recoveries  classified  as 
irregularity; they account for almost 80% of the recoveries and 67% of the amounts 
involved. The other important detection method is 'Independent control' which leads 
to detection of quarter of irregularities by amounts involved. 

'Community controls' only account for a modest percentage of the recoveries where 
fraud was suspected. . The biggest category however consists of the "Other" controls, 
which  does  not  provide  a  satisfactory  explanation  for  the  method  of  detection.  A 
further analysis of the method of detection assigned by the financial officer has been 
carried  out  by  examining  the  information  gathered  during  OLAF's  investigation, 
opened  on  the  basis  of  the  information  provided  by  the  financial  officer.  This 
examination  revealed  that  'Independent  control'  account  for  6  (29%)  recoveries 
where fraud is suspected. 'Independent controls' remained the most effective method 
of  detection  as  they  detected  67.4%  of  the  amounts  in  suspected  fraud  recoveries 
with the highest averages per recovery. This was mostly due to one big case worth 
EUR 2.2 million in which this method of detection was declared. As in the previous 
year  'Independent  control'  seems  to  be  the  best  way  to  identify  big  cases  involving 
fraudulent actions. 

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11.2.4.  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. 

Table DE 7: Recoveries (number and amount) by type of irregularity, 2010 

Type of irregularity 

Action not implemented 
Action not in accordance with the rules 
Action not used for intended purposes 
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 
Total 

N 
28 
389 
1 
1 
6 
71 
26 
44 
168 
8 
3 
24 
87 
3 
102 
15 
8 
20 
17 
1 021 

% 
2.7 
38.1
0.1 
0.1 
0.6 
7.0 
2.5 
4.3 
16.5
0.8 
0.3 
2.4 
8.5 
0.3 
10.0
1.5 
0.8 
2.0 
1.7 
100 

€ 1 000 
2 518 
13 703 
91 
901 
175 
1 669 
317 
901 
5 212 
1 278 
111 
536 
3 657 
63 
7 259 
412 
193 
3 854 
269 
43 120 

% 
5.8 
31.8 
0.2 
2.1 
0.4 
3.9 
0.7 
2.1 
12.1 
3.0 
0.3 
1.2 
8.5 
0.1 
16.8 
1.0 
0.4 
8.9 
0.6 
100 

Average 
€1 000 
89.9 
35.2 
90.7 
900.7 
29.2 
23.5 
12.2 
20.5 
31.0 
159.8 
36.9 
22.3 
42.0 
21.2 
71.2 
27.5 
24.1 
192.7 
15.8 
42.2 

The  most  common  type  of  recoveries  qualified  as  irregularities  is  ‘Action  not  in 
accordance with the rules’ (389 recoveries or 38.1%). The qualification 'Expenditure 
not  covered  by  legal  base’  follows  with  168  recoveries  (16.5%).  The  third  most 
common  type  is  ‘Missing  documents’  (102  recoveries  or  10.0%).  The  fourth  most 
common  type  of  irregularity  is  ‘Incorrect  rates  used  in  calculating  the  claim’  (87 
recoveries or 8.5%). The four most frequent types of irregularity amount to around 
70% both by number and irregular amount. 

For  155  recoveries,  more  than  one  type  of  irregularity  was  indicated.  The  most 
frequent pair of identified irregularities was ‘Recoverable VAT, interest received not 
correctly  reflected'  combined  with  ‘Incorrect  rates  used  in  calculating  the  claim’. 
This  pair  of  irregularities  occurred  in  37  recoveries.  The  second  pair  consisted  of 
‘Calculation error’ and ‘Incorrect rates used in calculating the claim’, which occurred 
in  28  recoveries.  The  pair  ’Recoverable  VAT,  interest  received  not  correctly 
reflected’  and  ’  Calculation  error’  occurred  in  20  recoveries.  The  following  table 

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presents  the  four  types  of  irregularity  which  most  frequently  appeared  in  cases 
involving more than one type of irregularity. 

Table DE 8:  The most frequently indicated pairs of irregularity types, 2010 

Type of irregularity 

Missing 
Documents 

Action not implemented 
Action not in accordance with the rules 
Calculation error 
Copy documents rather than originals 
Deadline not respected 
Expenditure declared not related to the action 
Expenditure not covered by legal base 
Inappropriate accumulation of aid 
Incomplete Documents 
Incorrect rates used in calculating the claim 
Missing Documents 
Public procurement procedures not respected 
Recoverable VAT, interest received not correctly 
reflected 

4 
16 
8 
9 
5 
16 
14 
2 
23 
18 
N/A 
5 

11 

Incorrect 
rates used 
in 
calculating 
the claim 

Calculation 
error 

0 
9 
28 
2 
0 
5 
18 
1 
5 
N/A 
18 
3 

37 

0 
3 
N/A 
3 
2 
8 
4 
1 
4 
28 
8 
1 

20 

Recoverable 
VAT, 
interest 
received not 
correctly 
reflected 
0 
4 
20 
1 
1 
3 
7 
1 
3 
37 
11 
1 

N/A 

The most common modus operandi identified in parallel with other modus operandi 
is ‘Missing documents’. It is indicated in 136 recoveries, which represent 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 126 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. 

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Table DE 9:  Recoveries (number and amount) by type of irregularity and by qualification, 
2010 

Qualification 

Type of irregularity 

Action not implemented 

Action not in accordance with the rules 

Action not used for intended purposes 

Advances not correctly reflected 

Beneficiary ineligible 

Calculation error 

Deadline not respected 

N 

388 

1 

1 

6 

71 

26 

44 

% 

38.8 

0.1 

0.1 

0.6 

7.1 

2.6 

4.4 

13 688 

34.7 

91 

901 

175 

1 669 

317 

901 

0.2 

2.3 

0.4 

4.2 

0.8 

2.3 

Expenditure declared not related to the action 

167 

16.7 

5 208 

13.2 

€ 1 000 

% 

Average 

Expenditure not covered by legal base 

Irregularity 

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 

Action not implemented 

Action not in accordance with the rules 

Expenditure not covered by legal base 

Suspected 
fraud 

Falsified documents 

Missing Documents 

Not Applicable 

Public procurement procedures not respected 

Quality of action inadequate 

5 

3 

24 

87 

3 

94 

10 

7 

19 

17 

0.5 

0.3 

2.4 

8.7 

0.3 

9.4 

1.0 

0.7 

1.9 

1.7 

642 

111 

536 

3 657 

63 

1.6 

0.3 

1.4 

9.3 

0.2 

6 795 

17.2 

330 

180 

1 656 

269 

0.8 

0.5 

4.2 

0.7 

388 
1 000 

38.8 

13 688 

34.7 

100.0 

39 482 

100.0 

1 

1 

1 

3 

8 

5 

1 

1 

4.8 

4.8 

4.8 

14.3 

38.1 

23.8 

4.8 

4.8 

225.3 

15.5 

4.9 

636.4 

464.1 

82.2 

12.5 

6.2 

0.4 

0.1 

17.5 

12.8 

2.3 

0.3 

35.3 

90.7 

900.7 

29.2 

23.5 

12.2 

20.5 

31.2 

128.4 

36.9 

22.3 

42.0 

21.2 

72.3 

33.0 

25.7 

87.2 

15.8 

35.3 

39.5 

225.3 

15.5 

4.9 

212.1 

58.0 

16.4 

12.5 

2 197.7 

60.4 

2,197.7 

Total of Suspected fraud 

Total  

21 
1 021 

100.0 

3 638 

100.0 

173.3 

43 120 

42.2 

Among the recoveries qualified as irregularities ‘Action not in accordance with the 
rules’ was the most frequent identified category (388 recoveries). The next category 
was  ‘Expenditure  not  covered  by  legal  base’  (167  recoveries).  The  four  most 
frequent  categories  account  for  73.6%  of  the  recoveries  qualified  as  irregularity, 
which shows rather limited variety in modus operandi used in irregular transactions. 
It should be observed that the share of these categories is very similar (74.3%) if the 
amounts involved in the recovery are taken into account. 

Among the recoveries qualified as suspected fraud, ‘Missing documents’ is the most 
frequent types of irregularity (8 recoveries or 38.1%). Second most frequent type of 
irregularity  was  qualified  as  'Not  applicable',  however  if  one  reclassifies  the  cases 
depending  on  the  outcome  of  the  OLAF  investigation,  the  equally  frequent  modus 
operandi will be 'Falsified documents' (8 recoveries or 38.1%). In such a case modus 

EN 

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operandi involving documents constitute 76.2% of all modus operandi by number of 
irregularities. 

11.3. 

Specific analysis 

11.3.1.  Irregularity versus Suspected Fraud 

Only  2.1%  of  the  1021  issued  recovery  orders  were  qualified  by  the  Commission 
services as suspected fraud, but they account for 8.4% of the amounts involved in the 
recoveries. Table DE10 provides an overview of these findings.  

Table DE 10:  Recoveries (number and amounts) by qualification, 2010 

Commitments  

Recoveries 

Qualification 

€ 1 000 

% 

Average

N 

% 

€1 000 

% 

Average

Irregularity  

6 187 321 

94.4 

6 187 

1000 

97.9 

39 482 

91.6 

39.5 

Suspected fraud 

369 492 

5.6 

17 595 

21 

2.1 

3 638 

8.4 

173.3 

Total 

6 556 813 

100.0 

6 422 

1021 

100.0

43 120 

100.0 

42.2 

The average irregular amount per recovery is almost four and a half times higher in 
suspected  fraud  recoveries  than  in  recoveries  qualified  as  irregularity.  The  average 
for recoveries qualified as irregularity is EUR 39 482 compared to EUR 173 258 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. 

11.3.2.  Time delay 

Almost  half  of  the  irregularities  for  which  a  recovery  order  was  issued  in  2010 
occurred 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 
15 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 one year. 

For  the  recovery  orders  issued  in  2010,  the  average  delay  between  the  irregularity 
and its detection is 3 years and 2 months. There are a limited number of irregularities 
that are detected almost immediately: 6.1% of the irregularities for which a recovery 
orders  were  issued,  were  detected  during  the  first  year  after  the  irregularity  was 
perpetrated.  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 

EN 

124 

   EN 

 
its  detection.  Taking  account  of  the  amounts  involved  in  the  weighted  average  of 
time delay it takes 2 years and 10 months, from the moment an irregularity starts to 
the moment it is detected. 

The  chart  below  presents  the  recoveries  registered  in  2010  by  number  (line)  and 
amounts (bars) of commitments by a year in which the commitment was made (e.g.: 
in  2010,  207  recoveries  were  registered  in  ABAC  that  were  made  in  2006.  The 
corresponding  amount  to  be  recovered  is  EUR  7.6  million).  For  recovery  orders 
issued in 2010 for direct expenditures commitments, most commitments were made 
in 2006. During a period between 2004 and 2008 more than 100 commitments were 
made annually for which a recovery order was issued in 2010. More than 90% of the 
recovery orders concerned commitments which were made between 2003 and 2009. 
The corresponding amounts account for almost 85%. 

Chart DE 1:  Recoveries in 2010 (number and amounts) by year of commitment 

8,000,000

7,000,000

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0

1998

1999

2000

2001

2002

11.3.3.  Trends 

250

200

150

100

N
u
m
b
e
r

50

0

Irregular amount

Number

2007

2008

2009

2010

2005

2004

2006
2003
Commitment Year

Following  the  decrease  in  number  of  recoveries  and  amounts  to  be  recovered 
observed in last year's report, recoveries in 2010 came back to the level of 2008. The 
total  number  of  recorded  recoveries  increased  in  2010  in  comparison  to  2009  by 
44.8%.  The  number  of  recoveries  qualified  as  suspected  fraud  rose  by  40%.  The 
irregular  amounts  increased  by  56.6%.  The  main  reason  for  such  a  sharp  increase 
both  in  the  number  of  recoveries  and  amounts  to  be  recovered  is  the  fact  that  a 
backlog of data encoding and data entry into the ABAC system has been removed. 
Half of the recovery orders detected in 2009 were only introduced in 2010. This has 
distorted  the  reporting:  If  at  least  half  of  these  recoveries  had  been  introduced  in 
ABAC in the year of detection, the trend line would have displayed a smoother slope 
and a comparable number of recoveries in three consecutive years could have been 
observed. 

EN 

125 

   EN 

 
 
€
 
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  tend  to  follow  the  same  pattern  as  in  the 
previous year. However, the number of irregularities in the area of external actions 
slightly decreased in 2010 while the corresponding amounts increased, bringing both 
numbers in line with the shares of 2008. The ratio between an average amount of an 
irregularity  in  external  actions  and  internal  policies  went  back  to  the  2008  level 
where irregularities in the external action sector were two times higher than the one 
in internal policies.  

In  line  with  the  previous  years,  the  most  frequent  method  of  detection  remains 
'Community controls', which account for more than 70% of the number of recoveries. 
However, the corresponding amounts decreased in 2010 to 60% of the total. Within 
the 'Community controls' category, the 'on-the-spot' checks became more important: 
in  detecting  irregularities:  51%  of  recovery  orders  were  generated  by  this  type  of 
controls  and  36%  of  amount  to  be  recovered.  'Independent  controls'  became  more 
important  and  turned  out  to  be  an  efficient  method  of  irregularity  detection, 
especially among cases qualified as suspected fraud.  

The average delay between the first payment to a beneficiary and the detection of an 
irregularity for recovery orders issued in 2010 remained at the same level as in 2009. 
The  average  duration  for  the  detection  of  an  irregularity  was  4  years  and  1  month 
after the irregularity occurred. The weighted average duration, which takes accounts 
of  the  corresponding  amounts,  was  with  a  period  of  2  years  and  4  months 
substantially lower. 

11.4.  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 or the amount is offset from remaining payments. For 
the recovery orders issued in 2010, full or partial recovery was recorded in 791 cases 
(77.5%  of  the  1 021  recovery  orders),  which  represents  an  amount  of  almost  EUR 
25.2 million (58.5% of the amounts to be recovered). In 784 recovery orders (76.8%) 
the  full  amount  has  already  been  recovered.  However  there  are  still  237  (23.2%) 
outstanding recovery orders which account for EUR 17.1 million (39.6%). 

Table DE 11:  Recoveries in 2010 (number and amount) by payment status and qualification. 

Qualification 

Irregularity  

Suspected fraud 

Total 

N 

780 

11 

791 

Recovered 

To be Recovered 

Cashed Amount 

Open Amount 

€ 1 000 

N 

(€ 1 000) 

22 242

226

2 997

11

25 239

237

16 453

642

17 095

EN 

126 

   EN 

 
The recovery rate for recoveries qualified as irregularity is 56.3% and is lower than 
for cases qualified as suspected fraud (82.4%). The high rate of the recovery among 
cases  qualified  as  suspected  fraud  is  due  to  the  possibility  to  offset  the  irregular 
amount in the biggest case qualified as suspected fraud. In that case EUR 2.2 million 
was deducted from the payments due to the beneficiary. 

11.5.  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 
Commission's  financial  system  ABAC,  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 2010 

Rates in % 

2010 

2009 

2008 

Total 2008-10 

Irregularity rate - IrR 

0.27 

0.17 

0.17 

Fraud rate – FrR 

0.02 

0.01 

0.02 

Fraud frequency level - FFL 

2.06 

2.13 

2.04 

Fraud amounts level - FAL 

8.44 

5.39 

9.31 

0.20 

0.02 

2.07 

7.93 

(1) 

(2) 

Only  a  small  part  of  the  Commission  expenditures  is  concerned  by 
irregularities.  The  recovery  orders  issued  in  2010  relate  to  0.27%  of  the 
overall amounts paid by the Commission, despite the increase of this rate in 
comparison to 2009, the rate remains low. The recovery orders classified as 
suspected  fraud  are  lower  and  affect  0.02%  of  those  payments.  The 
aggregated amount of the recovery orders issued in 2010 represents 0.6% of 
the commitments made by the Commission for internal policies and external 
actions.  

The  number  of  recovery  orders  issued  in  2010  increased  by  44.8%  in 
comparison  to  the  previous  year.  The  increase  is  sharp  but  it  could  be 
explained  by  the  delayed  input  of  the  recovery  orders  detected  in  2009. 
Without this backlog, the results for 2010 would hardly differ from those for 
2009. The number of cases qualified as suspected fraud increased from 15 in 
2009 (2.1% of all recovery orders) to 21 in 2010 (2.1%). The corresponding 
amounts increased more rapidly: from EUR 1.5 million in 2009 to EUR 3.6 
million in 2010, but can be explained by an outlier value of EUR 2.2 million 
for one suspected fraud recovery. 

(3) 

The majority of the irregularities were committed by a beneficiary residing in 
one of the Member States. The beneficiaries registered in the EU committed 

EN 

127 

   EN 

 
(4) 

(5) 

91.7% of irregularities, which corresponds to 88.6% of the irregular amounts. 
For  recovery  orders  qualified  as  suspected  fraud  in  2010,  the  share  of 
beneficiaries residing in the EU is smaller: 16 out of 21 beneficiaries had one 
of the Member States as their place of residence. 

The  most  successful  method  of  detection  is  'Communities  controls':  almost 
76%  of  the  irregularities  by  numbers  and  62%  by  corresponding  amounts 
were  identified  on  the  basis  of  'On-the-spot  checks'  and  'Desk  checks  of 
documents'. 'Independent controls' carried out by e.g. engineers and external 
auditors  detected  18.5%  of  the  cases  but  they  involved  higher  amounts  and 
constitute 27.6% of the amounts to be recovered. This underlines the need to 
increase such controls of EU financed projects. 

The types of irregularity show a large variance. In recovery orders qualified 
as  irregularity,  ‘Action  not  in  accordance  with  the  rules’  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 ‘Missing documents’. However if the irregular amounts are 
compared the most frequent type of irregularity among suspected fraud cases 
is ' Quality of action inadequate ' (60.4%). 

(6) 

The  Commission  has  already  recovered  or  offset  58.5%  of  value  of  the 
recovery  orders  issued  in  2010.  76.8%  recovery  orders  issued  in  2010  have 
already been fully recovered. 

EN 

128 

   EN 

 
ANNEXES 

EN 

129 

   EN 

 
ANNEX 1 – SUMMARY OF FINANCING OF THE GENERAL BUDGET BY CLASS OF OWN RESOURCE AND BY MEMBER 
STATE, IN MILLION EUR 

VAT own resource

GNI own resource

UK correction

Reduction in GNI for NL and SE

Total 'national contributions'

BE
BG
CZ
DK
DE
EE
IE
EL
ES
FR
IT
CY
LV
LT
LU
HU
MT
NL
AT
PL
PT
RO
SI
SK
FI
SE
UK
EU-27

431.8
47.3
185.6
279.6
1 591.4
19.4
192.1
324.6
1 171.4
2 601.8
1 813.8
25.2
20.3
39.4
41.3
123.5
8.2
257.1
286.4
498.1
239.9
134.1
51.7
75.8
232.2
138.9
2 446.2
13 277.3

2 621.1
147.2
983.9
1 768.7
18 636.9
98.3
958.9
1 731.9
7 710.5
14 810.2
11 451.2
125.7
130.2
196.8
206.0
697.4
41.2
4 358.4
2 095.2
2 486.5
1 197.6
877.9
258.1
485.6
1 315.1
2 352.0
12 430.6
90 273.5

168.4
14.7
64.3
95.3
249.6
5.6
56.1
168.5
496.2
897.6
615.7
7.7
9.5
10.2
10.7
34.9
2.6
54.9
22.7
164.5
77.2
51.4
16.6
31.7
80.6
34.5
-3 442.0

23.6
2.2
8.9
15.9
167.8
0.9
8.6
15.6
69.4
133.4
103.1
1.1
1.2
1.8
1.8
6.3
0.4
-612.1
18.9
22.4
10.8
7.9
2.3
4.4
11.8
-140.3
111.9

0

3 244.9
311.4
1 242.7
2 159.5
20 645.8
124.2
1 215.7
2 240.7
9447.5
18 443.1
13 983.8
159.8
161.2
248.3
259.8
862.1
52.4
4 058.2
2 423.2
3 171.5
1 525.6
1 071.3
328.7
597.6
1 639.8
2 385.1
11 546.8
0 103 550.8

Sugar levies
Customs duties
Surplus from previous year
Surplus aid guarantee fund
Other revenue
Total revenue

123.4
14 079.7
2 253.6
0.0
1 432.3
122 955.9

Note 1: For simplicity of the presentation, the GNI-based own resource includes the JHA adjustment
Note 2: DUp-to-date data based on amending budgets 2010.

EN 

130 

EN 

 
  
 
ANNEX 2 - EVOLUTION OF BUDGET PAYMENT APPROPRIATIONS BY HEADING IN 2010 (IN MILLION EUR) 

2.Preservation and Management of Natural Resources

59 499

58 136

Heading

1a.Comptetitiveness

1b.Cohesion

3a.Freedom, security, justice

3b.Citizenship

4.The EU as a global player

5.Administration

6.Compensation

Total

Note: budget without margins

Initial budget voted

Final budget voted

CA

PA

CA

PA

14 862

11 342

49 388

36 385

1 006

668

739

659

8 141

7 788

7 889

7 889

0

0

14 862

49 388

59 499

1 006

748

8 141

7 908

0

11 275

36 372

58 136

736

739

7 788

7 907

0

141 453

122 937

141 552

122 956

EN 

131 

EN 

 
  
 
ANNEX 3 – NUMBER OF CASES OWNRES AND AMOUNTS – PERIOD 2007-2010 PER MEMBER STATE 

2007

2008

2009

2010

Member State

Cases
N

Amount €
EUR

Cases

N

Amount €
EUR

Cases
N

Amount €
EUR

Cases

Amount €

N

EUR

Change cases  
2009- 2010
%

Change amount  
2009-2010
%

AT
BE
DE
DK
ES
FI
FR
EL
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

0

57

34

468

59
35

23
44

94 36 532 901
9 418 956
1 707 104 350 043
7 249 418
468 20 772 636
1 820 185
327 28 808 080
3 023 508
2 482 972
289 23 007 859
0
1 145 26 804 672
1 562 049
2 620 160
1 161 108 740 301
5 911 377 193 740
750 964
2 217 848
362 193
6 268 717
1 071 857
2 256 847
404 949
8 407 284
1 577 642
462 927
441 23 781 228
308 192
3 578 749
3 886 941
6 404 404 861 909

11
50
12
69
41
41
10
159
27
21

15
37
52

1

21

59

29
71

38
54

104 15 462 527
374 13 662 799
1 759 92 239 683
4 379 957
487 23 650 089
1 035 615
316 15 442 282
1 774 415
1 908 762
321 32 787 207
109 902
913 45 116 885
1 901 045
6 056 584
1 079 90 022 310
5 626 345 550 062
787 523
4 925 847
700 607
6 045 083
1 486 188
916 787
279 533
5 294 443
883 519
434 217
444 21 753 747
380.84
7 145 840
7 526 680
6 164 374 830 489

14
65
17
71
64
25
3
142
26
17

19
75
94

168
305
1 292
48
496
30
284
34
55
315
0
746
23
67
801

21 516 412
7 831 344
87 082 809
9 345 292
27 234 138
1 710 974
19 747 828
1 966 378
3 622 352
39 848 248
0
29 558 254
910.02
5 433 255
65 737 214
4 664 321 544 518
718 211
4 350 877
235 755
6 622 381
1 820 206
1 006 416
1 762 703
5 345 748
2 665 857
1 955 201
26 483 355
1 171 645
8 270 039
9 441 684
5 204 357 469 557

11
68
11
67
47
19
7
144
51
22
447
34
59
93

161
201
1 031
50
340
32
248
43
37
350
0
858
25
57
790

9 583 091
13 018 547
76 450 386
24 092 404
73 239 617
1 419 298
24 455 970
2 528 574
1 880 921
45 458 660
0
39 575 864
736 154
4 911 511
36 580 488
4 223 353 931 485
521 143
9 538 150
366 076
8 123 679
2 020 355
1 252 926
495 717
3 026 036
1 297 962
1 121 908
27 763 952
1 477 979
9 588 424
11 066 403
4 744 392 761 840

11
72
5
68
39
12
2
103
44
14
370
50
101
151

-4.17%
-34.10%
-20.20%
4.17%
-31.45%
6.67%
-12.68%
26.47%
-32.73%
11.11%
0.00%
15.01%
8.70%
-14.93%
-1.37%
-9.46%
0.00%
5.88%
-54.55%
1.49%
-17.02%
-36.84%
-71.43%
-28.47%
-13.73%
-36.36%
-17.23%
47.06%
71.19%
62.37%
-8.84%

-55.46%
66.24%
-12.21%
157.80%
168.93%
-17.05%
23.84%
28.59%
-48.07%
14.08%
0.00%
33.89%
-19.11%
-9.60%
-44.35%
10.07%
-27.44%
119.22%
55.28%
22.67%
11.00%
24.49%
-71.88%
-43.39%
-51.31%
-42.62%
4.84%
26.15%
15.94%
17.21%
9.87%

EN 

132 

EN 

 
  
ANNEX 4 – OWNRES CASES PER MEMBER STATE 

OWNRES CASES BY MEMBER STATE

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

2.000

1.800

1.600

1.400

1.200

1.000

800

600

400

200

0

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

MEMBER STATE

2007

2008

2009

2010

EN 

133 

EN 

 
  
 
 
 
ANNEX 5 – IMPACT ON CUSTOM PROCEDURE FREE CIRCULATION 

YEAR  CASES 

IMPACT CASES % 
OF TOTAL 

AMOUNTS 
ESTABLISHED 

IMPACT AMOUNTS 
ESTABLISHED % OF 
TOTAL 

2006 

2007 

2008 

2009 

2010 

3945

4235

4223

3860

3338

64,15%

66,13%

68,51%

74,17%

70,36%

248.396.645

338.898.382

310.764.932

299.238.143

316.216.749

70,04%

83,71%

82,91%

83,71%

80,51%

EN 

134 

EN 

 
  
ANNEX 6 – TOP 10 CHAPTER HEADINGS 

2008 

2009 

2010 

CN 

PRODUCT 

Amount 
EUR  

Cases

  CN

PRODUCT 

Amount 
EUR  

Cases

  CN

PRODUCT 

Amount 
EUR  

Cases 

85 

TVs and parts etc. 

104.817.207 

988 

   85 

TVs and parts etc. 

75.990.712 

802 

   85 

TVs and parts etc. 

80.346.014  

731 

24 

Tobacco / cigarettes 

32.818.790 

462 

   61 

Clothing 

36.164.933 

286 

   84  Machines 

40.311.988  

315 

61 

Clothing 

30.943.594 

424 

   87 

(Parts of) cars / motors  

23.648.795 

295 

   17 

Sugar 

35.053.914  

44 

62 

Clothing 

17.705.596 

464 

   24 

Tobacco / cigarettes 

23.514.707 

384 

   87 

(Parts of) cars / motors  

19.953.600  

323 

87 

(Parts of) cars / motors  

16.342.994 

389 

   84  Machines 

15.909.393 

366 

   08 

Vegetables 

18.351.359  

48 

84  Machines 

15.381.951 

418 

   62 

Clothing 

15.835.027 

347 

   24 

Tobacco / cigarettes 

17.645.856  

331 

64 

Footwear 

12.579.298 

260 

   73 

Articles of iron and steel 

14.616.492 

252 

   64 

Footwear 

15.064.661  

188 

02  Meat 

11.842.608 

149 

   29 

Organic chemicals 

14.490.783 

174 

   61 

Clothing 

13.761.873  

238 

39 

Plastics 

10.540.617 

255 

   64 

Footwear 

13.409.429 

192 

   73 

Articles of iron and steel 

12.901.328  

170 

07 

Vegetables 

9.449.676 

158 

   16 

Food 

12.028.580 

79 

   32 

Paints, lacks etc. 

10.258.646  

35 

EN 

135 

EN 

 
  
 
 
ANNEX 7 – GOOD AFFECTED BY FRAUD AND IRREGULARITY – PERIOD 2008-2010 

TARIFF 
CODES 
85219000 
24022090 
85282190 
85393190 
61046300 
02071410 
07032000 
85366990 
28046900 
96131000 
61103099 
24012010 
85287220 
61101190 
39232100 
85285990 
83112000 
87031018 
17019999 
02023090 
84099100 
85269120 
15119019 
85281294 
62046231 

2008 

CASES

125 
397 
26 
101 
3 
60 
116 
22 
6 
21 
60 
11 
6 
12 
69 
49 
1 
20 
2 
22 
5 
20 
3 
18 
27 

AMOUNTS 
EUR  
30.517.558 
28.340.776 
18.318.566 
10.605.694 
9.674.750 
7.520.984 
7.411.816 
6.156.652 
5.565.548 
4.803.557 
4.428.704 
3.766.811 
3.613.262 
3.512.930 
3.040.146 
3.016.322 
2.765.919 
2.564.623 
2.376.061 
2.216.134 
2.214.657 
2.137.754 
2.130.303 
2.089.484 
2.027.343 

TARIFF 
CODES 
   85219000 
   24022090 
   61091000 
   16041416 
   61046300 
   07032000 
   87032410 
   85393190 
   85365080 
   85287119 
   85285990 
   29310095 
   38249091 
   04021019 
   84279000 
   55032000 
   87032319 
   87120030 
   29371200 
   63022100 
   61159399 
   39232100 
   64041990 
   08030019 
   85299092 

2009 

CASES

94 
309 
48 
28 
1 
80 
20 
44 
4 
41 
64 
3 
3 
4 
38 
17 
16 
37 
1 
8 
2 
79 
16 
5 
31 

AMOUNTS 
EUR  
21.491.555 
20.242.796 
12.599.243 
9.677.039 
9.500.000 
9.454.102 
8.558.340 
8.214.566 
5.427.349 
5.067.445 
4.264.182 
3.962.877 
3.918.718 
3.914.753 
3.610.700 
3.591.001 
3.567.730 
3.421.543 
3.356.160 
2.920.612 
2.860.760 
2.649.569 
2.549.098 
2.495.501 
2.202.341 

TARIFF 
CODES 
   17019910 
   85219000 
   84148022 
   08030019 
   24022090 
   85393190 
   85287119 
   18061090 
   85285990 
   16041416 
   21069098 
   32159080 
   85258019 
   87120030 
   17019100 
   07032000 
   64029996 
   64039113 
   02071410 
   32041100 
   87032210 
   19059055 
   61091000 
   73079990 
   10061094 

2010 

CASES

11 
105 
41 
26 
244 
47 
79 
12 
50 
7 
24 
10 
15 
82 
10 
115 
5 
6 
18 
10 
4 
12 
46 
7 
1 

AMOUNTS 
EUR  
28.551.379 
27.246.826 
24.231.414 
17.935.013 
12.269.099 
9.634.096 
9.320.466 
8.829.524 
8.687.023 
8.242.276 
6.832.415 
6.476.899 
5.069.401 
4.901.804 
4.747.327 
4.705.225 
3.518.319 
3.283.434 
3.003.694 
2.680.551 
2.609.780 
2.399.480 
2.318.260 
2.216.282 
2.187.300 

EN 

136 

EN 

 
  
 
  
 
  
ANNEX 8 – FRAUD AND IRREGULARITIES: BREAKDOWN BY ORIGIN OF GOODS 

2008 

2009 

2010 

COUNTRY 

EUR  

CASES 

   COUNTRY 

EUR  

CASES 

COUNTRY 

EUR  

CASES 

China 

USA 

Japan 

157.814.570 

1.963

  China 

147.435.783 

1.923

  China 

155.359.915

1.779 

39.556.170 

19.648.993 

707

262

USA 

Japan 

18.505.673 

223

  Spain 

36.717.222 

550

USA 

40.069.576

537 

South Korea 

14.943.633 

110

  Hong Kong 

17.293.266 

80

  Ecuador 

Brazil 

14.943.626 

169

  Vietnam 

10.720.948 

40

  Ceuta 

Bangladesh 

14.383.113 

187

  Bangladesh 

10.610.987 

132

  Brazil 

Not specified 

9.730.756 

608

  Argentina 

9.742.266 

39

  Not specified 

9.024.754

Switzerland 

7.691.009 

102

  Not specified 

9.574.139 

454

Japan 

8.686.977

27.607.308

17.020.920

15.409.302

14.775.460

4 

26 

31 

72 

466 

150 

Malaysia 

7.218.153 

65

Seychelles  and 
dependencies 

8.255.834 

2

  South Korea 

8.601.164

115 

Russia 

6.833.471 

133

  South Korea 

7.073.751 

94

  El Salvador 

7.000.732

12 

EN 

137 

EN 

 
  
  
  
  
 
 
 
ANNEX 8.1: RECOVERY RATE (RR) BREAKDOWN BY ORIGIN OF GOODS 2008-2010 

Country 

China 

USA 

Japan 

2008 

Recovered 
EUR  

RR  

Country 

2009 

Recovered 
EUR  

2010 

RR  

Country 

Recovered 
EUR  

RR  

75.751.332 

48%   China 

66.813.255 

45%   China 

28.992.951 

73%   USA 

27.286.860 

74%   USA 

53.480.287

30.440.824

34% 

76% 

18.683.440 

95%  

Japan 

17.145.471 

93%   Spain 

27.677.131

100% 

South Korea 

10.748.763 

72%   Hong Kong 

2.944.101 

17%   Ecuador 

Brazil 

6.681.465 

45%   Vietnam 

1.851.307 

17%   Ceuta 

19.687

69.823

Bangladesh 

9.360.750 

65%   Bangladesh 

3.007.036 

28%   Brazil 

4.633.567

Not specified 

2.720.644 

28%   Argentina 

9.577.499 

98%   Not specified 

5.572.569

Switzerland 

1.248.901 

16%   Not specified 

5.048.257 

53%  

Japan 

6.530.660

0% 

1% 

31% 

62% 

75% 

Malaysia 

2.104.157 

29%  

Seychelles 
dependencies 

and 

0 

0%   South Korea 

4.425.565

51% 

Russia 

1.920.521 

28%   South Korea 

6.497.550 

92%   El Salvador 

137.427

2% 

EN 

138 

EN 

 
  
 
 
 
 
 
MEMBER 
STATES 

CASES 

AT 
BE 
DE 
DK 
ES 
EL 
FI 
FR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EU-15 
BG 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
EU-12 
EU-27 

2 
5 
6 
0 
0 
10 
6 
33 
13 
13 
0 
0 
0 
3 
153 
244 
2 
0 
1 
0 
4 
3 
4 
0 
37 
16 
4 
0 
71 
315 

ANNEX 9 – SEIZED AND CONFISCATED GOODS (cigarette CN 2402 2090) 

2008 

ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR 
EUR  
48.255 € 
550.656 € 
286.010 € 
0 € 
0 € 
1.206.270 € 
236.367 € 
2.304.549 € 
2.540.368 € 
1.694.276 € 
0 € 
0 € 
0 € 
116.014 € 
13.140.803 € 
22.123.568 € 
52.543 € 
0 € 
204.578 € 
0 € 
860.456 € 
78.624 € 
365.572 € 
0 € 
1.116.197 € 
1.134.311 € 
261.035 € 
0 € 
4.073.316 € 
26.196.884 € 

CASES 

1 
4 
5 
0 
0 
11 
4 
20 
11 
16 
0 
0 
0 
3 
82 
157 
0 
0 
0 
0 
4 
2 
9 
1 
31 
11 
2 
0 
60 
217 

2009 
ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR 
EUR  
20.227 € 
534.665 € 
91.420 € 
0 € 
0 € 
2.007.421 € 
88.151 € 
989.920 € 
6.822.040 € 
2.426.867 € 
0 € 
0 € 
0 € 
80.105 € 
5.846.358 € 
18.907.174 € 
0 € 
0 € 
0 € 
0 € 
416.536 € 
115.057 € 
490.369 € 
60.912 € 
859.859 € 
4.807.318 € 
96.818 € 
0 € 
6.846.869 € 
25.754.043 € 

2010 
ESTIMATED OR 
ESTABLISHED 
AMOUNT OF TOR 
EUR  
72.756 € 
44.014 € 
257.634 € 
0 € 
0 € 
2.693.790 € 
63.244 € 
1.118.612 € 
5.642.987 € 
4.287.095 € 
0 € 
741.601 € 
61.062 € 
611.337 € 
1.563.384 € 
17.157.516 € 
1.557.571 € 
0 € 
0 € 
0 € 
138.743 € 
320.617 € 
499.166 € 
0 € 
1.025.753 € 
2.673.233 € 
96.297 € 
0 € 
6.311.380 € 
23.468.896 € 

CASES 

1 
2 
1 
0 
0 
16 
1 
13 
21 
23 

10 
2 
5 
32 
127 
17 
0 
0 
0 
1 
8 
6 
0 
22 
8 
1 
0 
63 
190 

EN 

139 

EN 

 
  
  
ANNEX 10 – PERCENTAGE CLASSIFICATION FRAUD PER MEMBER STATE 

PERCENTAGE CLASSIFICATION OF FRAUD PER MEMBER STATE 
2008-2010

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

EL

IE

IT

LU NL

PT SE UK BG CY CZ EE HU LT

LV MT PL RO SI

SK

MEMBER STATE

2008

2009

2010

EN 

140 

EN 

 
  
 
 
ANNEX 11 – AMOUNTS INVOLVED IN FRAUD PER MEMBER STATE PERIOD 2008-2010 

2008 

2009 

2010 

CASES 

FRAUD 
CASES 

FRAUD IN 
EUR  

CASES 

FRAUD 
CASES 

FRAUD IN 
EUR  

CASES 

FRAUD 
CASES 

FRAUD IN 
EUR  

Member 
State 

AT 
BE 
DE 
DK 
ES 
FI 
FR 
GR 
IE 
IT 
LU 
NL 
PT 
SE 
UK 
EU-15  
BG 
CY 
CZ 
EE 
HU 
LT 
LV 
MT 
PL 
RO 
SI 
SK 
EU-12 
EU-27 

EN 

104 
374 
1.759 
59 
487 
21 
316 
38 
54 
321 
1 
913 
29 
71 
1.079 
5.626 
19 
14 
65 
17 
71 
64 
25 
3 
142 
75 
26 
17 

538 
6.164 

25 
47 
230 
6 
218 
11 
122 
38 
13 
179 
0 
101 
4 
3 
145 
1.142 
15 
3 
5 
1 
26 
15 
0  
2 
50 
27 
5 
4 

153 
1.295 

11.300.245 
3.143.778 
21.214.111 
671.103 
14.900.293 
651.465 
4.173.648 
1.774.415 
0 
18.701.048 
0 
2.455.234 
1.388.431 
0 
12.728.307 
93.102.078 
326.188 
378.947 
79.088 
100.592 
2.425.654 
468.648 
0 
259.214 
1.835.965 
1.500.753 
277.754 
126.413 

7.779.216 
100.881.294 

168 
305 
1.292 
48 
496 
30 
284 
34 
55 
315 
0 
746 
23 
67 
801 
4.664 
34 
11 
68 
11 
67 
47 
19 
7 
144 
59 
51 
22 

540 
5.204 

161 
201 
1.031 
50 
340 
32 
248 
43 
37 
350 
0 
858 
25 
57 
790 
4.223 
50 
11 
72 
5 
68 
39 
12 
2 
103 
101 
44 
14 

521 
4.744 

23 
10 
103 
11 
240 
5 
13 
43 
21 
199 
0 
43 
10 
9 
34 
764 
46 
3 
1 
0 
5 
4 
0 
2 
25 
13 
20 
0 

119 
883 

4.721.588 
6.248.081 
11.693.786 
20.134.048 
64.397.917 
183.111 
139.330 
2.528.574 
995.680 
15.179.075 
0  
2.450.873 
33.600 
571.904 
1.674.684 
130.952.251 
1.452.171 
183.816 
13.042 
0 
211.087 
214.829 
0  
495.717 
1.117.366 
3.327.675 
563.520 
0 

7.579.223 
138.531.474 

63 
48 
84 
10 
234 
12 
22 
32 
11 
182 
0 
76 
4 
4 
80 
862 
22 
2 
3 
0  
8 
14 
1 
7 
39 
15 
23 
11 

13.548.224 
2.256.765 
14.540.766 
2.895.392 
17.618.297 
441.108 
23.659 
1.966.378 
0 
21.806.962 
0  
6.566.523 
0 
51.724 
6.001.044 
87.716.842 
838.087 
237.313 
771.746 
 0 
1.710.502 
549.890 
170.476 
1.762.703 
962.973 
6.324.604 
1.201.407 
851.270 

145 
1.007 

15.380.971 
103.097.813 

141 

EN 

 
  
  
  
 
 
 
 
 
Annex 12-Methods of detection of OWNRES cases – Year 2010 

Member 
State 

Recovery 
Rate 

% 

Primary 
inspections 

Ex-post controls 

Voluntary 
admission 

AT 

BE 

DE 

DK 

ES 

FI 

FR 

EL 

IE 

IT 

NL 

PT 

SE 

UK 

CY 

CZ 

EE 

HU 

LT 

LV 

MT 

PL 

SI 

SK 

BG 

RO 

EU-27 

16,05 % 

71,27 % 

73,00 % 

13,36 % 

54,55 % 

80,27 % 

48,28 % 

3,08 % 

26,37 % 

11,38 % 

34,25 % 

74,80 % 

88,36 % 

58,12 % 

59,89 % 

27,40 % 

44,04 % 

39,51 % 

32,79 % 

1,74 % 

0,00 % 

37,46 % 

31,46 % 

83,95 % 

37,33 % 

17,88 % 

45,81 % 

1,44% 

4,41% 

8,64% 

6,32% 

19,56% 

49,93% 

49,54% 

35,31% 

0,00% 

27,23% 

27,35% 

7,67% 

11,64% 

4,83% 

3,57% 

0,46% 

16,84% 

7,78% 

20,84% 

39,84% 

63,61% 

52,36% 

40,46% 

0,00% 

69,44% 

28,66% 

17,91% 

94,56% 

95,47% 

76,70% 

92,49% 

79,20% 

24,12% 

50,46% 

64,69% 

88,35% 

72,57% 

72,65% 

88,95% 

84,42% 

94,67% 

96,43% 

87,21% 

83,16% 

92,22% 

79,16% 

59,23% 

36,39% 

47,64% 

59,54% 

100,00% 

30,56% 

71,34% 

78,25% 

3,99% 

0,12% 

14,67% 

1,19% 

1,24% 

25,96% 

0,00% 

0,00% 

11,65% 

0,20% 

0,00% 

3,38% 

3,94% 

0,50% 

0,00% 

12,32% 

0,00% 

0,00% 

0,00% 

0,93% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

0,00% 

3,84% 

EN 

142 

   EN 

 
ANNEX 13A: AGRICULTURAL EXPENDITURE FINANCIAL YEARS 2006-2010 

EAGF & EAFRD
EXPENDITURE FINANCIAL YEARS 2006-2010
amounts in €

total expenditure

FY2010
9,417,935,621
6,687,226,139
6,838,110,436
5,491,190,339
3,822,523,521
2,900,594,263
3,354,794,964
1,595,848,060
1,294,985,511
1,054,127,689
960,766,053
1,334,879,387
1,181,703,040
995,695,846
711,352,369
844,086,272
995,421,429
1,422,139,312
625,349,090
486,448,913
559,188,979
252,069,148
206,116,497
155,835,691
59,266,997
50,688,281
21,759,716
53,320,103,562

FY2009

10,205,032,985
6,237,069,241
5,916,667,073
5,418,841,139
3,135,425,010
2,806,663,687
2,905,593,827
1,634,318,812
1,275,685,883
1,171,902,741
1,026,199,569
1,421,778,737
949,575,760
841,580,077
853,390,412
788,159,582
836,205,381
1,148,045,800
536,035,947
471,893,782
347,797,566
218,813,174
205,276,934
150,964,270
62,782,374
47,312,681
12,340,166
50,625,352,610

FY2008
9,715,529,160
6,344,224,320
6,261,663,422
5,603,988,857
3,565,614,301
2,687,254,393
2,414,751,681
1,786,625,512
1,114,613,971
1,123,719,453
1,035,364,976
900,016,606
974,366,033
941,831,232
756,952,211
787,088,826
688,544,920
474,789,773
332,392,068
313,730,455
231,447,678
197,702,985
182,119,725
89,853,642
55,603,003
43,844,738
4,973,044
48,628,606,986

FY2007
9,735,649,588
5,974,923,975
5,918,501,718
5,222,263,584
4,341,392,612
2,879,299,650
2,297,395,215
1,723,322,002
826,654,840
1,086,244,832
1,144,013,906
651,132,609
821,932,364
950,822,180
853,634,814
808,532,115
539,853,347
6,893,688
302,271,528
324,411,585
177,176
165,727,510
168,520,479
79,073,910
45,447,412
46,742,889
6,136,125
46,920,971,655

FY2006

10,125,823,455
6,497,135,317
6,722,903,262
5,499,456,447
4,302,338,043
3,083,190,916
2,112,957,132
1,752,819,071
1,296,241,898
1,157,352,968
1,217,436,058
756,556,440
974,471,557
935,044,883
978,959,642
850,256,009
459,220,511

250,001,352
305,810,974

135,843,856
156,250,389
74,256,919
48,279,969
48,573,101
1,709,713
49,742,889,882

amounts in €
49,199,970,808
31,740,578,991
31,657,845,912
27,235,740,367
19,167,293,488
14,357,002,909
13,085,492,818
8,492,933,457
5,808,182,103
5,593,347,683
5,383,780,563
5,064,363,778
4,902,048,754
4,664,974,219
4,154,289,447
4,078,122,804
3,519,245,588
3,051,868,572
2,046,049,984
1,902,295,709
1,138,611,399
970,156,673
918,284,024
549,984,431
271,379,756
237,161,690
46,918,765
249,237,924,695

in % of total

19.7%
12.7%
12.7%
10.9%
7.7%
5.8%
5.3%
3.4%
2.3%
2.2%
2.2%
2.0%
2.0%
1.9%
1.7%
1.6%
1.4%
1.2%
0.8%
0.8%
0.5%
0.4%
0.4%
0.2%
0.1%
0.1%
0.0%
100.0%

MS

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

EN 

143 

EN 

 
  
 
ANNEX 13B: IRREGULARITIES REPORTED DURING FINANCIAL YEARS 2006-2010 

EAGF & EAFRD
FINANCIAL YEARS 2006 - 2010
irregularities reported during financial years 2006 - 2010 and concerning expenditure financial years 1990 - 2010

2010

452,705
4,233,255
4,439,991
477,448
1,177,815
3,769,191
141,053
829,027
1,388,370
17,166,788
43,309
10,438,611
26,163,772
1,596,823
39,748,896
1,748,398
51,221
113,903

3,032,925
3,687,786
4,170,688
1,160,145
11,253
674,685
785,697
3,011,241
130,514,995

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

2010

2009

2008

2007

2006

cases

31
24
94
4
38
81
10
12
42
413
2
119
116
64
342
53
2
7

38
106
138
22
1
20
13
33
1,825

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

EN 

144 

EN 

 
  
 
ANNEX 14: COURSE OF CASES IRREGULARITIES REPORTED CONCERNING FINANCIAL YEARS 2004-2005 

Chart AG20: B-050208 fruits and vegetables

2004

2005

2006

2007

2008

2009

2010

cases

cases - if timely reported

Chart AG33: B-0504xx rural developm ent

160

140

120

100

80

60

40

20

0

700

600

500

400

300

200

100

0

Chart AG24: B-050203 direct paym ent for arable crops 

2003

2004

2005

2006

2007

2008

2009

2010

cases

cases - if timely reported

Chart AG35: B-050301 m ilk and m ilk products

200

180

160

140

120

100

80

60

40

20

0

90

80

70

60

50

40

30

20

10

0

Chart AG29: B-050302 beef and veal

2003

2004

2005

2006

2007

2008

2009

2010

cases

cases - if timely reported

Chart AG37: B-050206 olive oil

180

160

140

120

100

80

60

40

20

0

60

50

40

30

20

10

0

2003

2004

2005

2006

2007

2008

2009

2010

2003

2004

2005

2006

2007

2008

2009

2010

2003

2004

2005

2006

2007

2008

2009

2010

cases

cases - if timely reported

cases

cases - if timely reported

cases

cases - if timely reported

The green line reflects reality. It indicates in which year Member States reported the cases of irregularities concerning the financial years 2004-2005. 
The orange line indicates per year the number of cases of irregularities in case Member States would have reported their cases timely.

EN 

145 

EN 

 
  
 
ANNEX 15 

COHESION POLICY* 

IRREGULARITIES** COMMUNICATED BY MEMBER STATES 2000-2010*** 

YEAR

N° OF 
IRREGULARITIES
N°

2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000

7 062
4 737
3 961
3 619
3 047
3 417
3 123
2 323
4 607
1 337
1 109

FINANCIAL 
AMOUNTS
EUR
1 550 157 698
1 183 127 610
512 871 553
652 092 147
647 773 952
581 214 090
617 099 163
444 278 642
579 010 650
210 329 680
97 160 006

TOTAL BUDGET

Million EUR

IMPACT ON 
BUDGET
%

49 144
48 400
46 889
45 327
38 430
37 192
35 665
30 764
30 556
29 823
25 556

3.15%
2.44%
1.09%
1.44%
1.69%
1.56%
1.73%
1.44%
1.89%
0.71%
0.38%

1.800.000.000

1.600.000.000

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

8.000

7.000

6.000

5.000

4.000

3.000

2.000

1.000

0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Financial amounts

N° of irregularities

* The table includes also irregularities affecting the Cohesion Fund 

**The concept of irregularity includes also cases of suspected and established 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 2009 report in order to take 
into account the updates sent by Member States during the reporting year 2010. Modified 
values concern the Years 2007-2009. 

EN 

146 

   EN 

 
 
 
ANNEX 16 

COHESION FUND* 

IRREGULARITIES** COMMUNICATED BY MEMBER STATES 2000-2010 

YEAR

N° OF IRREGULARITIES
N

IRREGULAR AMOUNTS
EUR

2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000

76
109
140
86
219
208
291
48
4
3
2

34 564 487
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

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

2010

Irregular amounts

N° of irregularities

* The table does not include irregularities related to the programming period 2007-2013 

**The concept of irregularity includes fraud. The qualification as fraud, meaning criminal 
behaviour, can only be made following a penal procedure. 

EN 

147 

   EN 

 
 
 
ANNEX 17.1 

STRUCTURAL FUNDS 

REGULATION No 1681/94 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 1994-1999 
REPORTED IN 2010 

a) N° OF IRREGULARITIES BY FUND AND BY MEMBER STATE 

MEMBER 
STATE

DE
EL
FI
IT
PT
UK
TOTAL

ERDF

EAGGF - Guid.

TOTAL

N

N

N

1

2
1
1
5

1

2

3

1
1
2
2
1
1
8

b) FINANCIAL VOLUME OF IRREGULARITIES BY FUND AND BY MEMBER 
STATES 

MEMBER 
STATE

DE
EL
FI
IT
PT
UK
TOTAL

ERDF

EAGGF - Guid.

TOTAL

EUR

1 114 521

31 202
1 674 339
325 771
3 145 833

EUR

24 786

48 152

EUR
48 152
1 114 521
24 786
31 202
1 674 339
325 771
72 938 3 218 771

EN 

148 

   EN 

 
 
 
ANNEX 17.2 

STRUCTURAL FUNDS 

REGULATION No 1681/1994 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 2000-2006 
REPORTED IN 2010 

a) N° OF IRREGULARITIES BY FUND AND BY MEMBER STATE 

MEMBER 
STATE

ERDF
N

ESF
N

EAGGF-G
N

FIFG
N

TOTAL
N

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

62
52

55
183
4
16
344
314
8
76
30
405
346
6

9
2
65
56
135

2
53
829
3 052

1
57
5
23
94

2
52
257
5
84
29
129
326
5

27
257

40
134
1 527

1
3

2
13

3
51
133
9
5
25
26
274
8

3

30
494

3
11
86
1 180

1

4
1

5
24
3
1

54

1
1

1
4
2

22
124

64
113
5
84
291
4
21
452
728
25
166
84
560
1 000
19
0
13
3
65
114
890
2
5
104
1 071
5 883

EN 

149 

   EN 

 
 
b) FINANCIAL VOLUME OF IRREGULARITIES BY FUND AND BY MEMBER 
STATES 

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

12 825

ESF
EUR

FIFG
EUR

ERDF
EUR

19 500
75 170

8 034 619
5 364 330

4 757 027
67 380

218 468
1 012 859

44 405
2 750 174

EAGGF-G
EUR

429 290
6 559 096
109 549
71 870

22 110
6 524 357
324 852
6 243 376
3 646 010

25 566 667
47 016 154
274 869
741 519
146 029 735
67 854 629
915 045
5 633 030
27 620 536
92 400 237
125 302 660
142 230

165 556
5 891 888
28 356 504 21 446 984
252 208
128 086
1 643 757
830 784
29 296 524 26 876 413
1 191 047

TOTAL
EUR
8 076 229
11 976 683
324 852
36 785 539
51 742 402
274 869
951 480
155 101 087
124 217 213
1 343 375
9 125 174
30 846 544
102 580 900
190 195 530
1 518 331
0
2 152 666
41 715
6 607 087
21 701 442
57 637 270
51 366
1 177 372
1 078 735
48 348 776
45 815 124
176 810 927
134 685 702
775 687 578 141 572 461 99 510 813 22 817 977 1 039 588 829

98 637
981 288
21 205 681 19 493 585

1 461 438
31 009
6 607 087
14 466 983
18 645 241

932 888
20 844 785 17 952 327

66 573
3 292 188
1 582 251
9 349 879

16 197
194 917
51 366

391 861
10 706

6 285 374

1 552 364

1 425 959

8 719 933

185 054

299 367

EN 

150 

   EN 

 
 
ANNEX 18 

STRUCTURAL FUNDS 

REGULATION No 1828/2006 

IRREGULARITIES RELATED TO THE PROGRAMMING PERIOD 2007-2013 
REPORTED IN 2010 

a) N° OF IRREGULARITIES BY FUND AND BY MEMBER STATE 

MEMBER 
STATE

ERDF

N

ESF

N

COHESION 
FUND
N

TOTAL

N

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

5
26
73
44
25
207

7
5

7
7

18
9
217
16
1
9
6
29
24
735

5
18
38
18
3

2
3
20
58
5
1
3
2
1
53
5
15
2
8
16
8
284

22
8

1
4

7

18

2
4

10

76

10
66
119
62
29
211
2
10
32
58
12
26
3
20
10
270
23
20
11
14
55
32
1 095

EN 

151 

   EN 

 
 
b) FINANCIAL VOLUME OF IRREGULARITIES BY FUND AND BY MEMBER 
STATES 

MEMBER 
STATE

ERDF

ESF

COHESION 
FUND

TOTAL

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

EUR
148 229
6 235 882
282 700 424
6 548 614
2 517 289
6 712 608

EUR
255 177
1 611 621
2 649 744
549 587
38 294

106 437
317 766

1 676 327
2 112 420

146 967
33 790
1 702 291
1 703 665
562 564
12 225
121 720
39 793
105 819
1 756 942
185 486
1 007 224
70 669
205 193
4 155 147
211 884
399 381 627 17 125 801

1 070 323
311 633
47 091 709
1 252 076
75 279
957 682
1 733 169
36 624 757
1 189 004

EUR

956 732

107 401
9 003 097

EUR
403 406
13 514 112
21 361 615
10 017 718 295 367 886
7 098 201
2 662 984
15 715 705
146 967
140 226
2 976 789
1 703 665
2 238 891
5 831 298
121 720
1 110 116
417 452
48 848 652
1 674 817
2 463 289
1 028 352
1 938 362
58 134 333
1 400 888
56 278 182 472 785 611

237 255
1 380 786

17 354 429

3 706 653

EN 

152 

   EN 

 
 
ANNEX 19 

COHESION FUND 

IRREGULARITIES COMMUNICATED BY MEMBER STATES UNDER 
REGULATION N. 1831/94 IN 2010 

MEMBER 
STATE

N° OF 
IRREGULARITIES
N

CZ
EL
ES
HU
IE
LT
LV
PL
PT
SK
TOTAL

10
16
8
3
3
7
2
15
11
1
76

IRREGULAR 
AMOUNTS
EUR
5 900 612
8 011 028
6 661 294
1 748 494
1 627 701
5 055 374
120 155
939 617
4 372 226
127 985
34 564 486

AMOUNTS TO BE 
RECOVERED
EUR

467 210
18 046
5 779 950
1 748 494
0
626 036
0
0
321 775
127 985
9 089 496

EN 

153 

   EN 

 
 
ANNEX 20 

CORRECTIONS104 TO ANNEXES 18.2, 19 AND 20 OF COMMISSION STAFF 
WORKING PAPER “STATISTICAL EVALUATION OF IRREGULARITIES” TO 
THE PIF REPORT 2009 

(1) 

CORRECTIONS TO ANNEX 18.2 

(a) 

N° OF IRREGULARITIES BY FUND AND BY MEMBER STATE105 

MEMBER 
STATE

ERDF

N

ESF

N

EAGGF-G

FIFG

TOTAL

N

N

N

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

46
215
10
11
38
167
10
139
9
1
519
11
4
10
2
26
256
263
2
12
33
549
2 474

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
80
546
10
22
75
449
15
173
90
16
884
28
12
38
4
128
330
612
12
13
82
857
4 633

104 

105 

Modified values are showed in yellow or red and are related to the Czech Republic (and consequently to 
the Totals) 
Modified values concern ERDF and TOTAL on the rows ‘CZ’ and ‘TOTAL’ 

EN 

154 

   EN 

 
 
                                                 
(b) 

FINANCIAL  VOLUME  OF  IRREGULARITIES  BY  FUND  AND  BY 
MEMBER STATES106 

MEMBER 
STATE

ERDF

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
TOTAL

9 917 733
4 252 993

2 635 410
29 013 886
605 634
989 680
39 742 531
124 216 835
238 573
10 611 538
234 424
61 543
290 713 648
1 774 905
1 748 257
963 724
568 769
2 345 613
43 549 842
82 888 629
31 782
5 103 131
21 670 887
239 552 129
913 432 097

ESF

EUR

22 110
893 887
63 594
3 573 431
13 870 084

107 228
3 212 171
5 750 803
66 573
853 197
1 947 006
866 612
14 007 223
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
133 825 660

EAGGF-G

FIFG

TOTAL

EUR

EUR

19 609

21 393

173 864

993 270

1 908 577

8 690 736

104 883
550 789

119 086
3 967 140
8 294 430

EUR
9 939 843
5 187 882
63 594
6 313 724
44 428 029
605 634
1 389 858
46 921 842
146 952 804
305 146
11 464 735
4 090 007
928 155
328 367 077
4 400 905
3 331 038
3 070 298
589 916
19 318 683
48 360 036
110 258 042
714 212
5 130 098
23 583 422
279 611 768
117 021
44 025 281 14 043 712 1 105 326 749

205 362
671 986
115 264

21 836 267
1 247 076

1 598 658
3 477 375

1 809 939
1 226 192

17 656
687 993

9 763
10 706

193 958

(2) 

CORRECTIONS TO ANNEX 19 

(a) 

N° OF IRREGULARITIES BY FUND AND BY MEMBER STATE107 

MEMBER 
STATE

CF

N

ERDF

N

ESF

N

TOTAL

N

BG
CZ
DE
EE
FI
FR
HU
IE
LV
PL
RO
SI
SK
UK
TOTAL

17

17

13
8
7
3
1

10

1
24

8
10
1
86

9
5
35
1

1
24
6
1
11
2

1

96

39
13
42
4
1
1
34
6
2
35
2
8
11
1
199

106 
107 

Modified values concern columns ERDF, ESF and TOTAL on the rows CZ and TOTAL. 
Modified values concern columns ERDF, ESF and TOTAL on the rows CZ and TOTAL. 

EN 

155 

   EN 

 
 
 
                                                 
(b) 

FINANCIAL  VOLUME  OF  IRREGULARITIES  BY  FUND  AND  BY 
MEMBER STATES108 

MEMBER 
STATE

CF

EUR

BG
CZ
DE
EE
FI
FR
HU
IE
LV
PL
RO
SI
SK
UK
TOTAL

3 578 740

3 578 740

ERDF

EUR

0
926 514
759 655
248 828
17 741

22 399 400

29 134
3 087 294

2 978 489
7 332 464
12 699
37 792 218

ESF

TOTAL

EUR

53 680

0
961 442
959 148
10 737

EUR
3 578 740
1 887 956
1 718 803
259 565
17 741
53 680
1 399 243 23 798 643
232 860
101 530
4 343 574
45 806
2 978 489
7 343 033
12 699
5 002 161 46 373 119

232 860
72 396
1 256 280
45 806

10 569

(3) 

CORRECTIONS TO ANNEX 20109 

MS

CZ
EL
ES
HU
LT
MT
PL
PT
SI
SK
TOTAL

N° OF 
IRREGULARITIES
N

9
14
20
4
2
1
19
27
1
1
98

FINANCIAL 
AMOUNTS
EUR
7 276 760
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
69 078 051

AMOUNTS TO 
BE RECOVERED
EUR

0
1 684 211
3 622 443
40 387
0
39 133
49 542
1 332 009
0
284 983
7 052 708

108 
109 

Modified values concern columns ERDF, ESF and TOTAL on the rows CZ and TOTAL. 
Modified values concern columns N° OF IRREGULARITIES and FINANCIAL AMOUNTS on rows 
CZ and TOTAL. 

EN 

156 

   EN 

 
 
 
                                                 
ANNEX 21 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED IN 2010 

ALL PROGRAMMES 

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

BG
CZ
HR
HU
LV
PL
RO
SI
SK
TR
TOTAL

a) PHARE 

N

139
1
4
13
2
43
205
1
3
13
424

EUR
29 453 513
67 490
4 776 541
15 267 468
2 024 537
1 480 266
336 608 918
10 637
53 637
4 429 618
394 172 625

EUR
20 189 128
67 490
4 707 606
882 053
1 600 366
1 076 840
54 380 767
10 637
4 094
822 595
83 741 577

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

BG
CZ
HR
HU
LV
PL
RO
SK
TOTAL

b) SAPARD 

N

66
1
2
1
1
1
50
3
125

EUR

8 005 265
67 490
172 338
13 600 000
1 999 641
10 565
7 863 995
53 637
31 772 932

EUR
2 174 064
67 490
103 403
515 955
1 576 011
10 565
3 314 857
4 094
7 766 439

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

BG
HU
LV
PL
RO
SI
TOTAL

N

72
12
1
42
126
1
254

EUR
19 739 179
1 667 468
24 895
1 469 701
62 147 211
10 637
85 059 091

EUR
18 015 064
366 098
24 356
1 066 275
46 058 011
10 637
65 540 441

EU AMOUNT 
IRREG. 
PREVENTED
EUR

2 115 686
50 618
103 403
295 071
0
0
4 676 279
2 547 539
5 643
252 822
10 047 059

EU AMOUNT TO 
BE RECOVERED

EUR
17 463 481
67 490
103 403
481 052
0
784 224
46 620 213
10 637
0
603 105
66 133 605

EU AMOUNT 
IRREG. 
PREVENTED
EUR

EU AMOUNT TO 
BE RECOVERED

EUR

144 761
50 618
103 403
295 071
0
0
2 675 374
5 643
3 274 868

1 556 923
67 490
103 403
154 685
0
10 565
1 647 316
0
3 540 383

EU AMOUNT 
IRREG. 
PREVENTED
EUR

1 712 775
0
0
0
0
2 547 539
4 260 314

EU AMOUNT TO 
BE RECOVERED

EUR
15 906 558
326 367
0
773 659
41 973 037
10 637
58 990 257

EN 

157 

   EN 

 
 
 
 
c) ISPA 

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

BG
HR
RO
TOTAL

N

1
1
29
31

EUR

1 709 069
3 613 203
266 597 712
271 919 984

EUR

0
3 613 203
5 007 899
8 621 102

EU AMOUNT 
IRREG. 
PREVENTED
EUR

258 150
0
2 000 905
2 259 055

EU AMOUNT TO 
BE RECOVERED

EUR

0
0
2 999 860
2 999 860

d) PRE-ACCESSION ASSISTANCE TO TURKEY 

BENEFICIARY 
COUNTRY

TR
TOTAL

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

N

13
13

EUR

4 429 618
4 429 618

EUR

822 595
822 595

EU AMOUNT 
IRREG. 
PREVENTED
EUR

252 822
252 822

EU AMOUNT TO 
BE RECOVERED

EUR

603 105
603 105

e) INSTRUMENT FOR PRE-ACCESSION 

BENEFICIARY 
COUNTRY

N° OF 
CASES
N

EU AMOUNT 
ELIGIBLE
EUR

EU AMOUNT 
IRREGULAR
EUR

HR
TR
TOTAL

1
1
2

991 000
216 245
1 207 245

991 000
11 475
1 002 475

EN 

158 

   EN 

 
 
 
 
ANNEX 22 

PRE-ACCESSION ASSISTANCE 

IRREGULARITIES REPORTED – 2002-2010 

ALL PROGRAMMES  

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

N

EUR

EUR

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

a) PHARE  

798
5
55
42
52
130
48
42
8
391
1 257
40
121
73
3 062

192 102 705
5 624 616
24 515 109
28 360 519
72 738 907
32 972 486
107 189 620
5 477 128
4 913 491
794 566 356
4 874 419 751
4 078 275
52 124 742
27 443 170
6 226 526 875

114 745 230
23 807
2 918 167
6 649 147
10 281 464
8 820 491
4 871 083
2 700 897
112 620
7 645 746
146 133 104
1 598 263
8 343 845
2 974 289
317 818 152

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

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

N

272
5
36
17
20
46
21
20
8
115
336
6
105
1 007

EUR
67 732 093
5 624 616
3 185 324
11 069 315
5 891 590
26 160 823
1 581 361
3 157 230
4 913 491
353 200 373
346 974 118
2 116 279
22 479 151
854 085 763

EUR
28 713 722
23 807
1 143 505
3 212 191
2 424 059
4 642 733
811 458
1 790 093
112 620
3 266 638
32 644 056
189 009
6 240 836
85 214 727

EU AMOUNT 
IRREG. 
PREVENTED
EUR
53 431 434
177 633
2 373 342
2 865 384
4 261 095
670 946 982
7 164 482
1 470 304
0
2 310 715
12 493 268 746
312 598 560
5 996 239
1 126 678
13 557 991 594

EU AMOUNT 
IRREG. 
PREVENTED
EUR
15 325 867
177 633
520 121
340 567
2 205 943
2 316 816
967 201
226 065
0
835 269
12 469 952 307
1 355 375
5 913 828
12 500 136 992

EU AMOUNT TO 
BE RECOVERED

EUR
39 116 221
0
1 424 438
639 654
314 618
3 435 775
4 185 695
900 122
0
1 897 786
82 487 033
64 011
3 249 330
2 044 414
139 759 097

EU AMOUNT TO 
BE RECOVERED

EUR

8 934 250
0
659 946
0
182 341
803 732
614 335
41 294
0
199 642
10 959 127
36 079
2 108 928
24 539 674

EN 

159 

   EN 

 
 
 
b) SAPARD  

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

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

c) ISPA  

N

EUR

494
18
21
4
84
18
21
262
616
33
15
1 586

101 212 371
1 107 597
4 067 712
1 222 218
6 811 663
7 604 845
2 230 150
14 763 448
295 941 371
1 581 996
2 496 391
439 039 761

EUR
80 168 337
921 130
3 266 179
932 569
4 177 758
2 902 459
871 117
4 250 235
84 184 444
1 349 253
2 053 955
185 077 436

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

BG
CZ
EE
HR
LT
PL
RO
SK
TOTAL

N

31
1
4
5
7
12
305
1
366

EUR
22 918 242
20 222 189
13 223 492
13 789 146
96 848 580
426 556 734
4 231 504 263
27 149 200
4 852 211 845

EUR
5 623 171
853 532
170 777
5 051 294
2 332
83 073
29 304 604
49 054
41 137 837

EU AMOUNT 
IRREG. 
PREVENTED
EUR
33 784 155
0
2 524 817
467 558
668 630 166
5 154 417
1 204 553
1 415 782
9 838 216
311 190 162
33 356
1 034 243 183

EU AMOUNT 
IRREG. 
PREVENTED
EUR

4 081 412
1 853 221
0
1 438 091
94 164
53 124
13 478 223
49 054
21 047 290

d) TRANSITION FACILITY 

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

N

EUR

EUR

EU AMOUNT 
IRREG. 
PREVENTED
EUR

BG
LT
LV
PL
SI
TOTAL

e) CARDS 

1
2
1
2
1
7

240 000
1 154 834
89 748
45 800
380 000
1 910 382

240 000
1 154 834
39 687
45 800
60 000
1 540 321

240 000
948 699
39 687
6 540
53 023
1 287 949

EU AMOUNT TO 
BE RECOVERED

EUR
30 181 971
764 493
639 654
0
2 632 043
2 622 184
819 141
1 660 628
62 248 677
27 932
1 140 402
102 737 125

EU AMOUNT TO 
BE RECOVERED

EUR

0
0
0
0
476
5 456
9 279 229
0
9 285 161

EU AMOUNT TO 
BE RECOVERED

EUR

0
948 699
39 687
32 060
0
1 020 446

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

HR
TOTAL

N

22
22

EUR
50 844 953
50 844 953

EUR

882 542
882 542

EU AMOUNT 
IRREG. 
PREVENTED
EUR

149 502
149 502

EU AMOUNT TO 
BE RECOVERED

EUR

132 277
132 277

EN 

160 

   EN 

 
 
 
 
 
f) PRE-ACCESSION ASSISTANCE TO TURKEY 

BENEFICIARY 
COUNTRY

N° OF 
CASES

EU AMOUNT 
ELIGIBLE

EU AMOUNT 
IRREGULAR

TR
TOTAL

N

73
73

EUR
27 443 170
27 443 170

EUR
2 974 289
2 974 289

EU AMOUNT 
IRREG. 
PREVENTED
EUR

1 126 678
1 126 678

EU AMOUNT TO 
BE RECOVERED

EUR

2 044 414
2 044 414

EN 

161 

   EN 

 
 
IRREGULARITIES REPORTED BY MEMBER STATES IN 2010 – AGRICULTURE, COHESION POLICY, OWN RESOURCES 

ANNEX 23 

MEMBER 
STATES

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

AGRICULTURE

COHESION POLICY

OWN RESOURCES

TOTAL

Irregularities Irregular amounts Irregularities Irregular amounts Irregularities Irregular amounts Irregularities Irregular amounts

N

31
24
94
4
38
81
10
12
42
413
2
119
116
64
342
53
2
7
0
38
106
138
22
1
20
13
33
1 825

EUR

452 705
4 233 255
4 439 991
477 448
1 177 815
3 769 191
141 053
829 027
1 388 370
17 166 788
43 309
10 438 611
26 163 772
1 596 823
39 748 896
1 748 398
51 221
113 903
0
3 032 925
3 687 786
4 170 688
1 160 145
11 253
674 685
785 697
3 011 241
130 514 995

161
201
50
11
72
1 031
50
5
43
340
32
248
68
37
350
39
0
12
2
858
103
25
101
57
44
14
790
4 744

EUR

9 583 091
13 018 547
1 477 979
521 143
9 538 150
76 450 386
24 092 404
366 076
2 528 574
73 239 617
1 419 298
24 455 970
8 123 679
1 880 921
45 458 660
2 020 355
0
1 252 926
495 717
39 575 864
3 026 036
736 154
9 588 424
4 911 511
1 297 962
1 121 908
36 580 488
392 761 840

N

256
348
210
20
323
1 466
64
67
765
1 491
71
533
303
722
1 706
144
5
54
5
971
608
1 088
143
71
83
187
1 927
13 631

EUR
18 112 025
29 631 891
27 279 585
1 323 443
348 770 002
139 108 332
24 508 327
4 809 567
183 859 285
221 431 879
2 970 994
44 019 755
69 859 278
109 390 010
277 673 179
16 173 756
172 940
4 749 766
537 432
49 633 328
78 203 532
70 265 494
13 211 858
6 002 481
5 088 381
108 518 698
218 129 315
2 073 434 532

N

EUR

N

64
123
66
5
213
354
4
50
680
738
37
166
119
621
1 014
52
3
35
3
75
399
925
20
13
19
160
1 104
7 062

8 076 229
12 380 089
21 361 615
324 852
338 054 037
58 888 755
274 869
3 614 464
179 942 341
131 025 474
1 508 388
9 125 174
35 571 827
105 912 266
192 465 623
12 405 003
121 720
3 382 938
41 715
7 024 539
71 489 710
65 358 652
2 463 289
1 079 718
3 115 734
106 611 093
178 537 587
1 550 157 697

162 

EN 

EN