COMMISSION STAFF WORKING DOCUMENT Follow-up of recommendations to the Commission report on the protection of the EU's financial interests - fight against fraud, 2010 Accompanying the document Report from the Commission to the European Parliament and to the Council Protection of the European Union's financial interests - Fight against fraud Annual Report 2011
Date: 2012-07-19
Institutions: European Commission
Subjects: EU statistics, European Anti-fraud Office, common agricultural policy, data recording, economic and social cohesion, financial control, fraud against the EU, fund (EU), prevention of delinquency

EUROPEAN COMMISSION 

Brussels, 19.7.2012  
SWD(2012) 228 final 

COMMISSION STAFF WORKING DOCUMENT 

Follow-up of recommendations to the Commission report on the protection of the EU's 
financial interests - fight against fraud, 2010 

Accompanying the document 

Report from the Commission to the European Parliament and to the Council 

Protection of the European Union's financial interests - Fight against fraud 
Annual Report 2011 

{COM(2012) 408 final} 
{SWD(2012) 227 final} 
{SWD(2012) 229 final} 
{SWD(2012) 230 final} 

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COMMISSION STAFF WORKING DOCUMENT 

Follow-up of recommendations to the Commission report on the protection of the EU's 
financial interests - fight against fraud, 2010 

Accompanying the document 

Report from the Commission to the European Parliament and to the Council 

Protection of the European Union's financial interests - Fight against fraud 
Annual Report 2011 

SUMMARY 

In  the  2010  Report  on  the  protection  of  the  European  Union's  financial  interests,  the 
Commission  made  certain  recommendations  to  the  Member  States.  The  Commission  has 
followed up the implementation of these recommendations by the Member States  as part of 
the  2010  reporting  exercise.  The  complete  answers  of  the  Member  States  to  the 
recommendations are included in the Fourth Accompanying Staff Working Document to this 
report.  

The  Commission  and  the  Member  States  are  also  giving  follow-up  to  the  recommendations 
formulated  by  the  European  Parliament  in  its  annual  resolution  on  the  protection  of  the  EU 
financial interests.  

FOLLOW-UP  RECOMMENDATIONS  TO  THE  COMMISSION  REPORT  ON  THE 
PROTECTION  OF  THE  EU'S  FINANCIAL  INTERESTS-FIGHT  AGAINST  FRAUD-YEAR 
2010 

1. 

REPORTED CASES ON FRAUD AND OTHER IRREGULARITIES 

1.1. 

Revenues 

Traditional own resources (TOR) In recent years the Commission has laid special emphasis 
on  Member  States'  customs  control  strategies  in  its  TOR  inspections.  The  Commission  is 
closely  monitoring  Member  States'  action  in  response  to  the  observations  made  during 
Commission  inspections  .  The  Commission  called  Member  States  via  custom  control 
strategies to continue to target high risk imports, thus further improving the detection 
rate of irregularities and of suspected fraud cases in the area of TOR. 

Most  of  the  Member  States1  confirmed  that  their  national  strategies  in  place  consistently 
assess the risks in the entire sphere of customs duties and necessary proactive and preventive 
measures will be taken to combat the potential frauds. The rest of Member States did not reply 
to the recommendation. 

1 

BG, EE, IE, EL, CY, LV, LU, HU, MT, NL, PT, RO, SK, FI,  

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1.2. 

Expenditure  

Agriculture: In 2010, Italy and EU-12 Member States have qualified more than 90% of the 
reported  cases  as  "suspected  fraud".  Certain  big  spending  Member  States  such  as  France, 
Germany,  Spain  and  United  Kingdom  continue  to  report  a  very  low  number  of  suspected 
fraud cases. France did not classify any of its 2010-cases as suspected fraud. This raises the 
question whether the reporting of a low number of cases of suspected fraud is due to the non-
respect of reporting principles or to the ability of the control systems in place to detect fraud 
in  the  Member  States.  The  Commission  called  upon  France,  Germany,  Spain  and  United 
Kingdom  to  explain  the  low  number  of  reported  suspected  fraud  cases,  and  to  report 
about  the  way  in  which  the  control  systems  are  adapted  to  target  areas  with  a  higher 
risk of fraud and irregularities.  

Compliance  with  rules  for  reporting  fraud  and  suspected  fraud  in  the  above  mentioned  big 
spending  Member  States  seems  questionable  given  their  low  rate  of  reporting  of  suspected 
fraud. 

Germany replied that until now no fraud cases have been reported by the regional and central 
authorities. France replied that, in their view, there is no relationship between the amount of 
aid  granted  by  the  Member  State  and  notified  number  of  cases  of  fraud  or  suspected  fraud 
without taking into account the framework of controls and its implementation, which France 
claims to be complying with Union regulatory framework. France is also pointing at national 
regulatory  issues  (proof  of  intent  for  fraud  and  suspected  fraud)  which  they  claim  to  be 
preventing  a  systematic  notification  of  irregularities  related  to  fraud  or  suspected  fraud. 
Spain’s reply is referring to the complexity of the agricultural sector, which calls for a wide 
variety  of  controls  and  claims  that  this  close  network  of  controls  makes  it  difficult  to 
perpetrate fraud. It stresses that fraud is being prosecuted. United Kingdom did not reply to 
the recommendation. 

Bulgaria and Portugal also sent replies to the recommendation. Bulgaria replied in referring to 
improvements in the organization of responsible bodies, mainly paying agencies, with the aim 
of  shortening  reporting  delays  for  fraud  and  suspected  fraud  to  less  than  a  week.  Portugal 
replied with a general statement that it will continue with its previous efforts at all levels and 
in all fields in order to identify irregularities and to recover undue payments. 

Cohesion  policy:  The  Commission  called  upon  Spain  and  France  to  complete  the 
implementation  of  IMS  by  the  end  of  2011  and  invites  Ireland  to  fully  implement  the 
system.  France  replied  that  it  encountered  certain  implementing  difficulties  in  entering 
Cohesion  policy  related  data  in  IMS  but  that  it  is  currently  working  at  solving  this  issue. 
Spain stressed in its reply that it is using the application since the 3rd quarter of 2011. Ireland 
confirmed its full implementation.  

2. 

RECOVERY OF IRREGULAR AMOUNTS IN 2010 

Cohesion policy: Cohesion policy shows the highest recovery rate in the expenditure area in 
2010. The success improved procedures put in place for the programming period 2000-2006 
is  demonstrated  by  the  fact  that,  only  one  year  after  the  submission  of  the  closure 
documentation  by  Member  States  to  the  Commission,  70%  of  unduly  paid  EU  contribution 
has  been  recovered  (or  withdrawn  from  expenditure  claims,)  The  Commission  invited 
Hungary, the Czech Republic and Slovenia with a recovery rates around or below 20% 
to explain the reasons and to increase their efforts. 

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Improvements in procedures introduced last year resulted in a dramatic increase of the rate of 
recovery of irregular amounts to about 70%. Slovenia reported a recovery rate of 95%. The 
Chech Republic replied to the recommendation and pointed at the introduction of the single 
document for enforcement measures while Hungary reported as reasons of low recovery the 
economic crisis and the delays of detection in previous years. 

Pre-accession  funds:  The  analysis  of  recoveries  throughout  the  programming  period  2002-
2006  confirms  the  need  for  improvements  in  this  area.  The  pre-accession  funds  show  the 
lowest recovery rates for expenditure. Recovery rate for the year 2010 is a lot lower than in 
the previous year. Even if the recoveries for the past years are taken into account, the recovery 
rate remains low and especially low for Bulgaria, Lithuania, Latvia and Slovenia. In cases of 
suspected fraud, procedures are becoming even lengthier and more complex, as showed by the 
lower  recovery  rate.  Apart  from  the  lengthy  procedures  linked  to  suspected  fraud  cases, 
another explanation for the low rates could be the failure by Beneficiary Countries to update 
the  recovery  information  about  irregularities.  The  Commission  called  Bulgaria,  Lithuania, 
Latvia  and  Slovenia  to  explain  the  reasons  for  low  recovery  rates,  to  improve  their 
recovery  performances  and  to  update  the  missing  information  on  completed  recovery 
proceduret.  Those  Member  States  confirmed  their  commitment  to  improve  the  recovery 
process. 

Bulgaria reported as reasons of the low recovery rate the prolonged administrative and penal 
procedures  where  voluntary  recovery  was  not  possible.  Other  reasons  are  insufficient 
financial stability of the beneficiaries due to the financial and economic crisis, ceasing of their 
economic activity and lack of property to be seized. 

Lithuania  reported  as  main  reasons  why  it  takes  a  long  time  to  recover  EU  assistance  paid 
and/or  used  in  breach  of  EU  and  Lithuanian  legislation  or  international  agreements  the 
difficult  financial  situation  in  which  project  implementers  find  themselves  and  protracted 
court proceedings. 

Latvia  reported  as  reasons  of  the  slow  recovery  rate,  the  lengthy  and  complex  recovery 
procedures,  including  administrative  procedures  and  criminal  procedures,  which  mostly  do 
not  go  hand  in  hand.  In  addition,  Latvia  replied  recoveries  and  reimbursements  to  the 
Commission related to the undue paid amounts. Slovenia reported that all amounts have been 
recovered and reimbursed to the Commission. 

3. 

RESULTS  OF  THE  QUESTIONNAIRE  ABOUT  COOPERATION  WITH  THE  MEMBER 
STATES CONCERNING THE RISK OF DOUBLE FINANCING OF PROJECTS IN THE AREA 
OF  COHESION  POLICY  –  RECOMMENDATION  ON  SETTING  UP  THE  CENTRAL 
EXCLUSION DATABASE (CED)  

In  the  framework  of  the  questionnaire  of  2011  about  cooperation  with  the  Member  States 
concerning the risk of double financing of projects in the area of cohesion policy, on the use 
of the Central Exclusion Database (CED) under Article 95 of the Financial Regulation, only 5 
Member States declared that are using it2. The Commission called 10 Members States3 as well 
as those Members States4 who are using other kinds of national exclusion databases, to set the 

2 
3 
4 

BG, CZ, MT, AT, PL 
BE, DE, EE, EL, IT, CY, LU, NL, FI, UK 
DK, IE, ES, HU, SI, SE 

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CED up, and to report on the progress made, whereas invited 6 Member States to report on 
the progress made regarding the full implementation of the CED. 

As regards the follow-up of this recommendation , Germany, Estonia, Greece, Spain, Hungary 
and the Netherlands replied on measures taken to implement the CED. Cyprus, Ireland, Italy 
and Romania replied that they appointed the liaison point. Danemark and Sueden replied on 
the measures they are taking to make their existing systems comply with CED requirements. 
France,  Portugal  and  Roumania  provided  a  progress  report  on  their  way  to  full 
implementation of CED. Finland replied that, the added value provided by the CED database 
is  not  considered  to  be  sufficiently  significant  nationally  for  us  to  introduce  the  database 
during the present programming period. Instead, resources should be used for the maintenance 
of  the  existing  databases  and  for  the  preparation  of  the  new  programming  period.  Finally, 
Slovenia  reported  that  according  to  the  Public  Procurement  Act,  the  Ministry  of  Finance 
keeps  the  register  of  suppliers  with  negative  references,  indicating  the  full  name  and 
registration  number  of  the  entity  date  of  entry  in  to  the  register,  date  of  abolishment.  The 
register is published on the web page of the Ministry of Finance. 

The  Commission  would  like  to  point  out  that,  to  this  date,  no  cases  were  reported  to  the 
Commission to this respect. 

The  table  below  reflects  the  current  state  of  play  according  to  the  available  information  at 
Commission level. 

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ANNEX – REPLIES OF MEMBER STATES 

1. 

REPORTED CASES ON FRAUD AND OTHER IRREGULARITIES 

1.1. 

Revenues - Traditional own resources (TOR) 

In recent years the Commission has laid special emphasis on Member States' customs control 
strategies  in  its  TOR  inspections.  The  Commission  is  closely  monitoring  Member  States' 
action in response to the observations made during Commission inspections . 

RECOMMENDATION 1 

Member  States'  custom  control  strategies  should  continue  to  target  high  risk  imports, 
thus further improving the detection rate of irregularities and of suspected fraud cases 
in the area of TOR. 

BE 

BG 

CZ 

DK 

DE 

EE 

No comments. 

Fraud/irregularities reporting with regard to the TOR done by the Customs Agency 
is  carried  out  in  due  time  and  in  accordance  with  the  deadlines  stipulated  in 
Regulation EURATOM 1150/2000. The reported cases concern mainly fraud related 
to  the  infringement  of  the  Customs  legislation  as  well  as  illegal  traffic  of  tobacoo 
products. 
The Customs Agency Action Plan for 2010 includes a number of customs control 
measure of strategic caracter and the emphasisi is on the checks of import goods 
with a high level of risk. A a result of the planned and undertaken measures in 2010 
more cases of fraud and irregularities in the field of TOR have been revealed in 
comparison to 2009. 

No comments. 

No comments. 

No comments. 

The working group dealing with customs duties and consisting of the representatives 
of  all  relevant  departments  of  ETCB  consistently  assesses  the  risks  in  the  entire 
sphere  of  customs  duties  and  necessary  proactive  and  preventive  measures  will  be 
taken to combat the potential frauds. 

Exhaustive ex-post checks are carried out in case of a high risk. Effective but not so 
expensive  measures  are  applied  in  case  of  medium  and  low  risks.  The  following 
measures are applied: necessary information is provided to traders through the press, 
sending  notification  letters  to  traders,  communicating  with  the  traders  by  phone, 
declarations  monitoring,  direction  of  documents  and  goods  into  the  selectivity 
channels (yellow or red channel), and examination of individual cases. 

New  declarations  lodged  by  the  traders,  who  have  not  replied  to  the  notification 
letters sent to them or who have not improved their behaviour, will be directed to the 
selectivity channels for further checks to be performed. According to the results of 

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FR 

ES 

IE 

FI 

IT 

CY 

controls  performed  in  the  selectivity  channels  it  will  be  decided  which  additional 
control  measures  should  be  applied,  including  ex-post  examinations  of  individual 
cases or full audits. Comprehensive risk analysis methods described in the Customs 
Audit Guide enable us to focus on non-compliance traders. 

The  Ministry  of  Finance's  competent  Directorate  D33  sent  us  the  following  more 
recent  information  in  its  letter  ref.  D33Α5007240  ΕX2012  of  17  February  2012 
concerning the risk analysis which the customs control services incorporate into their 
control strategy: 
On 22 March 2011, the Ministry of Finance's competent Directorate D33 department 
issued new explanatory instructions on applying risk analysis, replacing those issued 
in 2010. 

These instructions are intended to achieve more effective implementation of targeted 
checks  and  to  prevent  and  combat  smuggling,  safeguard  the  financial  interests  of 
Greece  and  the  EU  etc.  On  17 February  2011,  the  above  department  also  issued 
specific instructions to the customs control services to carry out physical checks on a 
percentage of customs declarations over and above that indicated by the information 
system (MIS). The aim of this practice is to cover the risk of illegal operations not 
yet recorded in the strategic risk analysis and catch potential offenders unawares. 

No comments. 

No comments. 

Ireland's customs control strategy continues to target high risk imports, thus further 
improving the detection rate of irregularities and of suspected fraud cases in the area 
of TOR. To achieve this, we have established a programme of on-going 
development of our technology (including risk analysis systems) and our customs 
staff. 

In Finland, customs supervision is based on risk analysis. The EU common priority 
control areas and the Community risk management system database are used in risk-
based monitoring for the exchange of information. Finnish Customs’ National Risk 
Analysis Centre analyses the risks and sets national or EU-level risk criteria for the 
electronic customs system. Clearance cases selected for processing will be processed 
at an electronic service centre, which issues rules concerning the inspection of goods 
if necessary. 

No comments. 

The Department of Customs and Excise, of the Republic of Cyprus continued to 
target high risk imports, thus further improving the detection rate of irregularities 
and of suspected fraud cases in the area of TOR. 

The Department of Customs and Excise, through the Intelligence and Risk Analysis 
Section, supported by the Information Systems available, has significantly enhanced 
the results of intelligence based risk analysis, profiling and targeting, while at the 
same time, making the most effective use of limited resources. Controls are based 
both on analyzing the available information with the assistance of analysis systems 
as well as documentary information. 

Customs controls exercised rely on risk analysis techniques that enable us to focus 
the controls on high-risk consignments, supported by random controls as necessary. 

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LT 

LU 

LV 

Through the Risk Analysis Module of our electronic import system “THESEAS”, 
the Department of Customs and Excise is able to concentrate the control efforts on 
those shipments posing the highest risk while providing those with low level of risk 
as unhindered passage as possible. 

The Commission carried out an inspection of the customs control strategy in the 
Member States in 2009-10 and drew up a thematic report on the customs control 
strategy in the Member States (hereinafter ‘the report’). The report contains 
systematic information on the irregularities found during the inspection in the 
Member States and on progress made by Member States in 2011. The report 
identifies six irregularities that were detected in the Lithuanian customs service 
(based on Report No 09-20-1 on the inspection of traditional own resources carried 
out by the Commission in Lithuania on 15-19 June 2009). Five irregularities were 
remedied, i.e. procedures were amended or anomalies corrected, during the time that 
the report was being drawn up. One irregularity detected in the Lithuanian customs 
service was identified in the report as still not having been remedied, and additional 
information was requested in this connection. Lithuania submitted the information 
requested and the Commission informed the Lithuanian customs service by letter of 
4 April 2011 (BUDG/B/03/K2/bh D(2011)368379) that the issue was considered 
closed. 

In  the  field  of  Traditional  Own  Resources  (TOR),  the  Luxembourg  Customs  and 
Excise  Agency  Administration  applies,  in  addition  to  an  automated  risk  analysis, 
control methods targeting high-risk imports in order to increase the rate of detection 
of  irregularities  and  fraud.  The  Commission  (DG  Budget)  verifies  this  each  year 
during  its  visits  to  Luxembourg  to  carry  out  joint  inspections  of  the  Communities' 
own  resources  under  Article  18 (2)  of  Council  Regulation  (EEC,  Euratom) 
No 1150/2000 of May 2000. 

Regarding  customs  controls  in  the  field  of  own  resources,  according  to  Procedure 
No 45 “Procedure for drafting reports on identified fraud and violations or cases of 
cigarette  smuggling,  register  information  about  reports  in  OWNRES  system  and 
receives OWNRES user’s rights”, adopted by the State Revenue Service of Republic 
of Latvia (SRS) on November 4, 2008, the Customs Criminal Board is responsible 
for  drafting  reports  on  identified  cases  of  cigarette  smuggling,  i.e.  drafting  report 
“Report on identified fraud or violation” and sending the report to the SRS Customs 
Board  Payment  Accounting  Section  Traditional  Own  Resources  Administration 
Division. 

SRS Customs Board Payment Accounting Section according to Council Regulation 
(EC,  Euratom)  No  1150/2000  of  22  May  2000  implementing  Decision  94/728/EC, 
Euratom on the system of the Communities’ own resources, Title II “Accounts for 
own  resources”  Article  6  informs  the  European  Commission  about  fraud  or 
violations  of  customs  regulations  exceeding  EUR  10  000.  Namely,  it  provides 
information but does not perform actions to eliminate and/or reduce possible fraud 
risks  (Recommendation  1  –  “Member  States’  custom  control  strategies  should 
continue  to  target  high  risk  imports,  thus  further  improving  the  detection  rate  of 
irregularities and of suspected fraud cases in the area of TOR”). 

In  addition  we  would  like  to  inform  that  the  following  have  been  developed:  an 
action  plan  for  the  introduction  of  the  SRS  customs  clearance  standard,  SRS  tax 
liabilities implementation strategy for 2010-2013, and SRS operations development 

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strategy  for  2011-2013,  respective  action  plans  including  tasks  for  elimination  of 
fiscal risks ensuring effective implementation of control functions and identification 
and preventions of crimes. 

1. Checks built in to customs procedures 
An  important  element  of  customs  control  after  goods  have  been  presented  to  the 
customs  authorities  is  to  inspect  the  relevant  documents  and  goods,  and  control 
methods  have  been  developed  for  normal,  paper-based  procedures,  simplified 
customs  procedures,  electronic  customs  procedures  and  facilitated  procedures.  The 
goods inspection measures are determined by the type of data to be inspected, e.g. 
quantity,  quality,  tariff  classification,  origin,  customs  value,  etc.  The  risk  analysis 
module  of  the  customs  data  processing  system,  known  as  the  ‘central  e-reviewer’ 
(abbreviated to ‘risk analysis’), makes a recommendation regarding the goods and/or 
documents for inspection. 
Based  on  the  data  of  the  customs  declaration  produced,  goods  can  be  selected  for 
inspection automatically using the mechanism built in to the computerised customs 
data  processing  systems  (CDPS,  NCTS  (MCC),  ÁRUREG  (ICS,  EVT),  the  E-FO 
system, ECN+, and the system that checks the documentary evidence produced for 
the customs procedure or activity, known as EBIR) or on the basis of a decision by 
the excise official carrying out the customs procedure.  
Processing  procedures  carried  out  in  car  parks  allow  the  items  of  goods  for 
inspection  to  be  selected  either  automatically  or  on  the  basis  of  a  decision  by  the 
relevant  official.  The  risk  analysis  module  of  the  customs  data  processing  system, 
known  as  the  ‘central  e-reviewer’,  makes  a  recommendation  regarding  the  goods 
and/or  documents  for  inspection,  and  the  official  takes  the  necessary  measures  on 
that basis. 
In addition to their risk-management and risk-analysis activities, and with due regard 
to  local  risks,  the  customs  and  excise  directorates  carrying  out  the  base  customs 
procedures must review the legality and professionalism of at least 0.5% of customs 
procedures each month, taking account of the customs body’s turnover and including 
paper-based  and  electronic  customs  procedures.  To  achieve  this  objective,  the 
review  must  cover  not  only  an  inspection  of  the  customs  declaration  and  any 
annexes, but also a collation of the data contained in the relevant customs databases.  

2. Post-clearance checks 
For  preventive  reasons  and  on  account  of  the  large  number  of  traders  involved  in 
foreign-trade activities subject to customs control, at least 5% of such traders must 
undergo  post-clearance  checks  based  on  a  risk  analysis  selection.  This  level  of 
inspection  is  achieved  by  ex-post  checks  aimed  at  inspecting  the  foreign-trade 
activity subject to customs control (in-depth audits) and by individual ex-post checks 
of customs declarations on the basis of Article 78 of the Community Customs Code. 

2.1.  Ex-post  controls  aimed  at  inspecting  the  foreign-trade  activity  subject  to 
customs control (in-depth audits) 

The primary objective of ex-post control is preventive, to bring traders into line with 
the  law  and  to  ensure  that  as  much  revenue  accrues  to  the  EU  and  Hungarian 
budgets  as  they  are  due.  The  need  for  and  frequency  of  ex-post  controls  are  laid 
down in an annual control plan. The control plan lays down the use of audit capacity 
by  the  customs  authorities  in  the  light  of  current  economic  trends,  forms  of 
behaviour posing the greatest threat to budgetary revenue, and  customs procedures 

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presenting  the  highest  risk  to  revenue  from  customs  duties.  To  achieve  the  stated 
objectives,  at  least  5%  of  traders  engaged  in  foreign-trade  activities  subject  to 
customs control must be inspected each year based on a risk analysis selection.  
The primary basis for determining the minimum number of checks is the limitation 
period  for  notification  of  the  customs  debt  (generally  three  years),  focusing  on 
Hungarian-based  traders  whose  foreign-trade  activities  are  subject  to  customs 
control, especially where a large part of their trade involves imports. The minimum 
rate of ex-post audits of foreign-trade activities subject to customs control is 5% of 
the  abovementioned  traders.  Given  the  rate  of  ex-post  controls  that  cannot  be 
planned,  some  60-65%  of  these  checks  are  included  in  the  control  plan.  The 
remainder cover control tasks (risks) arising during the course of the year.  
In line with the customs audit guide the ex-post customs control plan is compiled in 
such  a  way  that  the  traders  and  transactions  likely  to  pose  the  greatest  risk  are 
targeted,  though  to  a  certain  degree  it  also  covers  traders  presenting  a  medium  or 
occasionally  even  low  risk.  A  small  number  of  the  planned  checks  are  selected  on 
the basis of a random sample, i.e. they are selected regardless of the individual risks. 
When compiling the annual ex-post customs control plan, traders posing the greatest 
risk  account  for  90%,  traders  presenting  a  medium  and  low  risk  5%  and  traders 
selected at random regardless of risk another 5% of all checks. 

Ex-post customs controls are focusing on the following areas in 2012: 

– 

– 

– 

– 

– 

checking the legality of goods classifications; 

checking  the  accuracy  and  thoroughness  of  antidumping  or  countervailing 
measures; 

checking the accuracy and calculation of customs values (focusing on factors 
increasing customs values); 

stepping up checks on imports of textiles, clothing and footwear; 

checking traders declaring their goods under the simplified procedure. 

The low level of built-in checks in the case of local simplified customs procedures is 
offset by an increase in the number of post-clearance checks.  
For  that  reason,  as  in  previous  years,  the  annual  control  plan  places  particular 
emphasis on checking traders declaring their goods under the simplified procedure. 
To ensure that traders are checked within the limitation period for notification of the 
customs  debt  (generally  three  years),  the  basic  concept  of  the  2012  annual  control 
plan was that one third of these traders should be covered by the control plan. 

2.2. Individual checks aimed at inspecting customs declarations on the basis of 
Article 78 of the Community Customs CodeOne of the tasks of the customs 
authorities is to ensure, for preventive reasons and on account of the large number of 
traders involved in foreign-trade activities subject to customs control, that at least 
1 000 such traders undergo post-clearance checks each year. Roughly two thirds of 
these checks are carried out on the basis of Article 78 of the Community Customs 
Code, with an ex-post check of their customs declarations.  

This type of check can be based on the risk analysis of either the central or 

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local/regional authority. This system helps to identify traders whose risk level 
justifies conducting a check under Article 78 of the Community Customs Code. The 
regional/local authorities are also responsible for carrying out risk searches and risk 
analyses throughout the course of the year, which may lead to checks being 
conducted. 3. Checks relating to authorised activities 

The depth and frequency of inspections of authorisations are determined on the basis 
of a risk analysis by the authorising customs authority. For authorisations considered 
to pose a high risk, the authorising customs authority is expected to check at least 
once per year that the conditions for the authorisation are met or that the conditions 
laid down in the authorisation are complied with in full. After the authorisation has 
been issued, the abovementioned built-in checks can be carried out on the goods to 
be notified for sale by the holder in accordance with the rules laid down by the 
authorising customs authority. We check the sales data electronically to see whether 
there is a match between the risk profile and the sales data. In addition to the 
automatic risk analysis, the competent customs officials may decide to carry out a 
physical/document check. Outside the working hours of the competent customs 
authority, this option is available to a central group operating at the airport customs 
authority on behalf of all competent customs offices. To ensure the authorised 
activity is suitably monitored, the authorising customs office has to draw up a 
written control plan for the following year by 15 December of the previous year. The 
control plan must state the planned time and method of inspection of the 
authorisations and authorisation holders as well as the type of goods to be inspected. 

Greater  emphasis  is  being  made  by  the  Malta  Customs  Department  on  high-risk 
imports  through  the  constant  maintenance  and  updating  of  risk-profiles,  thus 
allowing  targeting  to  be  improved.  The  number  of  containers  scanned  by  the 
Department  has  also  been  augmented.  This  is  being  complemented  by  increased 
documentary  checks  and  post-verification  controls.  All  the  Customs  Department’s 
efforts  are  geared  towards  ensuring  that  security  is  maximised  without  the 
imposition of undue burdens on legitimate traders. Scanning guided by risk rofiling 
has proved itself to be an invaluable tool in this regard. 

It  is  The  Dutch  customs  authority  has  an  Enforcement  Plan  for  2012  which 
underpins  the  choices  it  makes  with  regard  to  its  control  strategy.  As  regards  the 
prioritisation of enforcement areas, the following applies. 

Prioritisation of enforcement areas 

Risk management means making choices. Not all enforcement areas need equal 
attention; the customs authority focuses on those that are subject to the highest risks. 
In important enforcement areas, NL focuses on deploying a mix of enforcement 
tools that are designed to maximise impact. Less intensive attention is given to the 
other, less relevant enforcement areas. The relevant Enforcement Plan translates this 
into obligations, areas of social and/or political importance, priorities and risk 
detection. 

No comments. 

N/A. 

During 2011, a new system for declaring imports came on stream, which will allow 
an interface with the Automatic Selection System (SSA) and under which a fully 
automated risk analysis and assessment will be performed. This will enable customs 

MT 

NL 

AT 

PL 

PT 

EN 

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controls to focus more efficiently on high risk consignments and at the same time 
speed up customs clearance of regular consignments of goods. 

RO 

The control strategy for traditional own resources includes checks carried out at the 
time when goods are assigned an approved customs use or destination and ex-post 
checks on customs declarations. 

Customs  checks  carried  out  at  the  time  of  the  customs  clearance  are  based  on  a 
centralised  national  risk  management  system  administered  by  the  Customs 
Information  Centre  of  the  Directorate  for  Monitoring  Excise  Duties  and  Customs 
Operations.  

The analysis and management of risks at the customs clearance stage is facilitated by 
the  national  risk  analysis  and  management  system,  i.e.  the  Risk  Management 
Framework (‘RMF’), implemented on 1 August 2010. The national risk analysis and 
management system provides a range of facilities in terms of: 

– 

– 

– 

setting national and/or EU risk profiles; 

generating reports on the application of risk profiles (evaluation of risk 
profiles); 

generating reports on customs operations carried out. 

Risk profiles 

RMF allows for the creation of appropriate automatic risk profiles by setting risk 
criteria  for  multiple  indicators  (combined  criteria)  that  cover  almost  all  of  the 
headings of the customs declaration, so that customs declarations assigned to a 
particular customs inspection channel are subject to risks that are as specific as 
possible. 

Automatic risk profiles also contain the following information:  

the procedure to be followed (clear instructions for the customs official to 
follow); 

the risk factor (from 1-9); 

the type of minimum inspection to be carried out;  

the risk(s) targeted; 

scenarios; 

attached  documents,  photographs,  regulations  (identified  by  the  customs 
official); 

recommended inspection channel, including percentages; 

application level (national, regional, local). 

– 

– 

– 

– 

– 

– 

– 

– 

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Risk profile reports 

The  new  risk  analysis  and  management  system  RMF  has  a  section  for  risk 
profile reports which makes it possible to generate reports for a set risk profile. 
The  reports  provide  useful  information  for  evaluating  risks,  specifically:  the 
customs declarations assigned to the inspection channel corresponding to the risk 
profile in question, the measure applied, the result of applying that measure, the 
date,  the  customs  office  and  the  customs  official  who  applied  the  measure.  In 
accordance with the internal procedures of the National Customs Authority, all 
risk profiles are evaluated at the end of the period of validity and the results are 
published in a written report approved by the senior management of the National 
Customs Authority.  

Reports on customs operations carried out  

The national risk analysis and management system makes it possible to generate 
reports  on  the  customs  operations  carried  out,  on  the  basis  of  customs 
declarations. 

Note:  The  automatic  risk  analysis  implemented  through  the  RMF  applies  to  all 
customs declarations submitted in electronic format under the normal or simplified 
customs  procedure  using  the  electronic  document  ‘import  arrival  notification’  for 
documentary  and/or  physical  checks  and  the  electronic  document  ‘Z-procedure 
customs declaration’ for documentary checks.  

We  would  point  out  that  these  aspects  were  presented  by  a  representative  of  the 
National Customs Authority  on  7 July 2011, at  the 152nd meeting of the Advisory 
Committee  on  Own  Resources  -  Traditional  Own  Resources  (ACOR-TOR),  held 
pursuant  to  Article 21  of  Council  Regulation  (EC,  EURATOM)  No 1150/2000 
implementing  Decision 94/728/EC,  Euratom  on  the  system  of  the  European 
Communities’ own resources. 

As regards ex-post checks on customs declarations, they are scheduled quarterly and 
the  declarations  are  selected  taking  into  account  the  availability  of  specific 
information regarding the violation of customs rules, as determined on the basis of a 
prior  risk  analysis  (based  mainly  on  the  following  parameters:  tariff  classification, 
origin,  customs  value,  terms  and  conditions  applying  to  customs  operations  under 
customs suspensive arrangements). 
Ex-post checks target, at least every three years, businesses which do not comply in 
full with the rules and present high risk, in order to prevent situations where the debt 
can no longer be notified to the debtor in accordance with Article 221 of the 
Community Customs Code. 

No comments. 

Customs  Directorate  Internal  Control  Department  developed  Customs  Control 
Strategy  in  year  2010.  This  strategy  is  in  compliance  with  Traditional  Own 
Resources control  recommendations,  which  has  been  carried  out  by  European 
Commission  Control  Group.  This  strategy  is  based  on  recommendations  of 
European  Commission  concerning  customs  control.  All  import  and  export  hazard 
aspects have been taken into consideration. The strategy has involved different high-

SI 

SK 

EN 

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risk goods, for example the following: 

PCA (priority control area) - international action focusing on goods undercharging 

Medicaments and pharmaceuticals (counterfeits import) 

Fasteners, welded tubes and pipes 

Protection of Intellectual Property Rights - power-balance bands, textile 

According  to  this  strategy,  a  control  plan  for  year  2011  has  been  developed.  This 
plan was reviewed by European Commission Control Group during Traditional Own 
Recourses  control  which  was  carried  out  in  September  2011.  Due  to  Customs  and 
Tax  Administration  inclusion,  Department  of  goods  control  after  release  has  been 
created. It is in charge of controls after goods release methodical administration as 
well  as  inspection  plans  preparation.  This  department  has  incorporated  comments 
made  by  European  Commission  Control  Group  to  the  plan  of  inspections  for  year 
2012 which is in process of authorization.  

Control plan will be sent to European Commission after authorization by Financial 
Directorate of Slovak Republic. 

SE 

UK 

No comments. 

At the time of the Customs Control Strategy audit in 2009, the UK were achieving a 
hit rate of 27% in its targeting of importations. In 2011/12 the UK has improved its 
targeting of high risk importations and is now achieving a detection rate of 32%. 

1.2. 

Expenditure  

Agricultural expenditure 

In 2010, Italy and EU-12 Member States have qualified more than 90% of the reported cases 
as  "suspected  fraud".  Certain  big  spending  Member  States  such  as  France,  Germany,  Spain 
and United Kingdom continue to report a very low number of suspected fraud cases. France 
did not classify any of its 2010-cases as suspected fraud. This raises the question whether the 
reporting of a low number of cases of suspected fraud is due to the non-respect of reporting 
principles  or  to  the  ability  of  the  control  systems  in  place  to  detect  fraud  in  the  Member 
States. 
RECOMMENDATION 2 
France, Germany, Spain and United Kingdom are invited to explain the low number of 
reported  suspected  fraud  cases,  and  to  report  about  the  way  in  which  the  control 
systems are adapted to target areas with a higher risk of fraud and irregularities. 
Finland,  the  Netherlands  and  Poland  should  report  more  consistently,  in  particular  in 
relation to personal data on individuals who have committed irregularities and fraud.  
In general, Member States should further improve the quality of reporting, given that in 
2010  Member  States  took  a  step  backwards  in  relation  to  the  timely  reporting  of 
irregularities.  

BG 

The Executive Director of State Fund Agriculture has issued an order concerning the 
necessity to shorten the time gap between the detection of the irregularities and their 
reporting  to  OLAF.  The  adoption  of  this  order  resulted  in  an  improved  internal 
organization  aimed  at  prevention  of  the  undue  delay  when  carrying  out  checks  of 
cases  of  irregularities  and  suspected  frauds  under  the  schemes  and  measures  of 
responsibility  of  the  Paying  Agency.  When  an  irregularity  or  suspected  fraud  is 

EN 

14 

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detected  by  the  internal  control  bodies  they  are  obliged  to  implement  the  procedure 
for reporting of irregularities within three working days of detection, verification and 
completion  of  the  case.  When  irregularity  or  suspected  fraud  is  established  by  the 
authorization  units  of  the  Paying  Agency,  the  implementation  of  the  reporting 
procedure  should  be  carried  out  within  seven  working  days  after  detection, 
verification and completion of the case. 

DE 

Until now no fraud cases have been reported by the regional and central authorities. 

FR  We should first remark that the framework for the agricultural funds was created by 
various  Community  regulations  providing  for  various  types  and  levels  of  controls, 
especially second-level controls, a minimum number of spot checks, depending on the 
measure concerned, and risk analysis. 

The  control  systems  put  in  place  by  France  fully  comply  with  the  Community 
regulatory framework. For all types of aid, the aid is calculated directly by the paying 
agency on the basis of data reported by the beneficiaries; payment is not made until 
the case has been thoroughly examined and all the required checks on the spot have 
been carried out. 

The number of irregularities that may be qualified as fraud or suspected fraud is not 
predictable  or  pertinent  unless  we  are  talking  about  a  control  programme  pre-
established  on  the  basis  of  risk  analysis,  which  applies  to  485/2008  controls  and 
controls provided for in various sectoral regulations. Note that for over 90% of direct 
aid  the  system  is  highly  regulated  and  highly  computerised,  with  many  embedded 
controls  in  order  to  meet  the  obligation  incumbent  on  Member  States  to  set  up  an 
integrated administration and control system (IACS ).  

We might stress that there is a much greater likelihood of detecting cases of fraud or 
suspected fraud in market interventions than in direct aid. But market aid accounts for 
only  a  small  share  of  total  aid  (less  than  10%).  And  although  no  cases  of  suspected 
fraud were declared in 2010, three cases were notified in 2011 (for all quarters of the 
year) and four in 2009. 

We  shall  cite  France’s  answer  to  the  2008  questionnaire  for  the  Article 280  (now 
Article 325) report: ‘The procedure for applying the term "fraud" or "suspected fraud" 
is  based  on  the  definition  given  in  the  Council  Act  of  26  July  1995  drawing  up  the 
Convention on the protection of the financial interests of the European Communities 
(95/C 316/03). In practice, an irregularity is classified as ‘fraud’ or ‘suspected fraud’ 
if the actions could constitute criminal offences.’ 

So, in order to classify cases as ‘suspected fraud’ or ‘fraud’, intent must be established 
by the inspection bodies on the basis of material facts. 

In countries with long-standing, well-structured judicial, administrative and land-
registration systems, it is more difficult to perpetrate fraud. There is no justification 
for trying to establish a relationship between the amount of aid granted by a Member 
State and the number of cases of suspected fraud or notified fraud without taking 
account of the framework of controls laid down by Community law and their 
implementation at the national level. 

EE 

The  compliance  rate  of  EAGF  and  EAFRD  irregularities  reports  submitted  by 

EN 

15 

   EN 

 
Estonian authorities has been close to the maximum in recent years. In 2010 the EE 
compliance  rate  was  99%,  2009  –  99%  and  2008  –  95%  exceeding  the  EU  average 
compliance rate. The Estonian authorities responsible for fulfilling the obligations of 
the irregularity reports have considered the importance of keeping up with the quality 
of  notifications  in  the  process  of  reporting.  The  authorities  have  contributed  to  the 
maintaining  of  the  quality  of  reports  by  amending  the  guidelines  and  providing 
relevant training courses for the officials responsible for the irregularities area. 

ES 

– 

The  Spanish  agricultural  sector  is  extremely  varied  and  complex,  and  it 
involves  aid  applications  relating  to  a  wide  variety  of  measures.  These 
include  market-related  measures,  which  are  difficult  to  administer  and 
subject to relatively high rates of error. 

– 

– 

Owing  to  difficulties  with  the  interpretation  and  application  of  this 
complicated and wide-ranging system of aid, recipients of aid make mistakes 
which are clearly unintentional irregularities, not fraud.  

The  sector's  very  complexity  calls  for  a  more  highly-developed  auditing 
strategy,  with  commensurate  human  and  material  resources.  The  very 
number  and  intensity  of  the  necessary  inspections  provide  a  guarantee  that 
irregularities  and,  where  applicable,  cases  of  suspected  fraud,  will  be 
detected. 

It may be seen from the above that the fact that Spain does not report many cases of 
suspected fraud does not mean that fraud is not prosecuted. Rather, it means that there 
are not many cases of fraud in relation to the total number of irregularities. Where a 
possible case of fraud is detected, the legal services attached to the units responsible 
for  inspections  are  required  to  refer  that  case  to  the  judicial  authorities  for 
confirmation,  so  that  they  can  impose  the  appropriate  penalties  under  criminal  law 
where appropriate. 

At  the  COCOLAF  meeting  on  26  May  2011  and  the  presentation  of  statistics  for 
2010,  Greece  was  not  one  of  the  Member  States  mentioned  which  had  delayed  the 
reporting of irregularities. The fact that there were no delays had been confirmed by 
direct contact with the competent department.  

MAVI,  the  Finnish  Agency  for  Rural  Affairs,  has  requested  and  received  from  the 
Commission replies concerning the use of personal data to be provided together with 
the  irregularity  report.  The  effect  of  data  disclosure  on  the  rights  and  obligations  of 
Finnish  natural  persons  however,  will  require  further  clarification  with  regard  to 
national  data  protection  legislation  and  coherent  national  interpretation.  MAVI  has 
been  in  contact  with  the  other  Finnish  authorities  producing  irregularity  reports  to 
check that the most coherent practice possible is followed among the different Funds 
in Finland. As this matter concerns the legal situation of individual citizens, we wish 
to ensure that there are well-founded reasons for the solution chosen. MAVI aims to 
complete  its  investigation  as  soon  as  possible.  Last  year  there  was  one  case 
concerning a private individual, for which previous reporting practice was followed. 

EL 

FI 

In general, it can be stated that the situation regarding identification has improved as a 
result of guidance concerning legal persons and clarification of practices. 

HU  According  to  the  Commission’s  statistical  report  for  2010  Hungary’s  agricultural 

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irregularity  reports  had  a  deadline-compliance  rate  of  6%  compared  with  a  100% 
compliance rate for all other indicators. Hungary reported irregularities arising during 
intervention  storage  (104  out  of  116  reported  cases)  in  one  go  in  2010,  including 
retroactively for previous years (2006-2008). (Since 2008 the competent authority has 
reported  intervention  irregularities  on  time.  Due  to  a  lack  of  clarity  regarding  the 
statistical  method,  however,  these  data  were  temporarily  omitted  from  OLAF’s 
irregularity figures, and were only restored in 2010.) This one-off event had an impact 
on  the  deadline  compliance  rate  for  reporting  irregularities  in  2010.  By  comparison, 
during  the  2007-2010  period  Hungary’s  deadline  compliance  rate  stood  at  80-
90%.The  procedure  for  drawing  up  agricultural  irregularity  reports  and  forwarding 
them  to  OLAF  is  governed  by  internal  administrative  arrangements,  and  in  practice 
the competent authorities act accordingly. 

It  is  up  to  the  certifying  authority,  the  Regulations  Service  (Dienst  Regelingen),  to 
promote timely reporting. There are discussions under way between this service, the 
Inspectorate  of  the  Dutch  Food  and  Goods  Authority  (Nederlandse  Voedsel  en 
Warenautoriteit) and the delegated bodies concerning the establishment of a register 
of irregularities which would definitely include timely reporting. The deadlines to be 
met will also be laid down in the new plan. Since the strenuous efforts made in 2007 
and  2008  to  update  all  reports  of  irregularities  filed  in  2004,  details  of  names, 
addresses and places of residence have been included in all Article 3 reports. 

Poland  has  never  opposed  passing  the  data  concerning  the  economic  operators 
(including  the  individuals)  to  EC.  Before  the  introduction  of  the  IMS  system,  such 
data  was  sent  on  paper  by  regular  mail  in  order  to  deal  with  the  existing  doubts  as 
regards data protection related issues and the information system. The clarification of 
non-inclusion  of  this  data  in  the  irregularity  reports  submitted  to  the  EC  by  IMS 
system  was  presented  by  Poland  in  the  letter  No  DO8/9013/1/JYB/10/3740  sent  to 
OLAF on 22 July 2010. Another request concerning the same aspects was directed to 
OLAF  by  the  letter  No  DO8/9013/2/AKQ/12/350  of  27  January  2012.  Poland  asks 
OLAF  to  analyze  it  and  present  a  binding  opinion  of  OLAF  in  relation  to  the 
conditions  that  would  enable  processing  of  personal  data  within  IMS  by  the 
institutions of a Member State. Poland also informed OLAF that until the solution is 
proposed by OLAF such information may not be processed in the IMS system by the 
Polish authorities. 

As  regards  detecting  irregularities  and  the  subsequent  recovery  of  undue  payments, 
the  competent  national  authorities  will  continue  in  2011  –  as  in  previous  years  -  to 
take  all  appropriate  action  and  measures  of  an  administrative,  judicial  and/or 
enforcement nature to protect the EU's financial interests and to fight against fraud. 

To  clarify  the  position,  the  introduction  of  the  web-based  reporting  mechanism 
resulted in significant technical difficulties for the UK that prevented the transfer of 
electronic data between the Rural Payments Agency and OLAF. Therefore, although 
it  may  appear  that  the  UK  had  failed  to  report  suspected  irregularities,  there  is  no 
suggestion  that  the  reporting  procedure  operated  within  the  UK  had  failed. Upon 
discovery, OLAF was made aware of the problem and attempts were made to resolve 
the matter. Unfortunately a solution took longer than expected and, in the meantime, a 
considerable backlog of Irregularity Reports accrued in the UK and the situation was 
further  compounded  by  the  re-organisation  of  OLAF. Being  the  subject  of  on-going 
communication,  the  position  was  well-known  to  OLAF  and  was  discussed  at  the  6-

NL 

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UK 

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monthly Irregularity and Mutual Assistance Experts Group held in Brussels.  

Cohesion Policy 

RECOMMENDATION 3 

The  Commission  supports  Spain  and  France  in  their  efforts  to  complete  the 
implementation  of  IMS  by  the  end  of  2011  and  invites  Ireland  to  fully  implement  the 
system.  

ES 

FR 

IE 

Spain already started to use the application in late 2011; indeed, it used it in its 
reporting on the third quarter of 2011. 

France is having technical difficulties in extracting the data. Entries in the IMS base 
are therefore being done manually. The agricultural data is complete and the rest is 
under way. 

The IMS is fully implemented in Ireland. 

Addition information supplied for the ERDF and Cohesion Funds states that  

2007-13 ERDF Fund 
Quarter 3 2011 - report submitted on 30/09/2011 
Quarter 4 2011 - irregularities will be reported by deadline of 29/02/2012 

2000-06 ERDF Fund 
The ERDF irregularities in respect of two of the 2000-06 Operational Programmes 
(Urban II and Technical Assistance) are now on the OLAF IMS database. 

2000-06 Cohesion Fund 

The  Cohesion  Fund  irregularities  are  now  all  on  the  OLAF  IMS  database.  This 
includes the irregularities identified in the Winding up Report for Dublin Solid Waste 
submitted on 31/01/2012. 

2. 

RECOVERY OF IRREGULAR AMOUNTS IN 2010 

2.1. 

Cohesion policy 

Cohesion policy shows the highest recovery rate in the expenditure area in 2010. 

The  success  improved  procedures  put  in  place  for  the  programming  period  2000-2006  is 
demonstrated by the fact that, only one year after the submission of the closure documentation 
by  Member  States  to  the  Commission,  70%  of  unduly  paid  EU  contribution  has  been 
recovered (or withdrawn from expenditure claims).  

RECOMMENDATION 4 

Hungary, the Czech Republic and Slovenia have recovery rates around or below 20%. 
These Member States are invited to explain the reasons and to increase their efforts.  

EN 

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CZ 

HU 

The Czech comments: In order to strengthen the protection of EU financial interests 
on 18 March 2010, Council Directive 2010/24/EU on mutual assistance for the 
recovery of claims resulting from taxes, duties and other measures with effect from 1 
January 2012 replaces Council Directive 2008/55/EC .. The new directive emphasizes 
the adoption of a single document that will be used for enforcement measures 

Firstly  it  should  be  noted  that  the  institutional  system  has  all  the  legal  and  other 
resources  necessary  for  recovery,  and  these  resources  are  used  consistently  and 
adapted  to  changing  circumstances.  In  many  cases,  however,  circumstances  arise 
which  even  an  efficient  system  such  as  this  has  difficulty  handling.  The  low  rate  of 
recovery  for  cases  covered  by  the  irregularity  reporting  obligation  may  therefore  be 
due to the following factors:  
The  economic  crisis  has  had  a  negative  impact  on  the  beneficiaries  of  EU 
- 
funds,  e.g.  small,  not-for-profit  or  civil-society  firms.  Inability  to  implement  or 
continue projects has led to the recovery of subsidies, yet due to insolvency most of 
the  firms  concerned  by  these  recoveries  have  gone  into  liquidation,  making  it 
impossible  to  recover  the  sums  due  despite  many  ongoing  debt  claims  procedures. 
During liquidation, due to the order of priority for the settlement of creditors’ debts, 
the  assets  of  the  liquidated  firm  do  not  even  cover  the  costs  of  the  liquidation.The 
situation  is  aggravated  by  the  fact  that  applicants  for  ESF  projects  do  not  have  any 
reserves or other liquid assets to pay back debts, and since they were not obliged to 
provide security, the non-recovery rate for these projects is very high. 
- 
Delays  in  detection  in  previous  years  with  regard  to  agricultural  subsidies 
should  also  be  mentioned.  These  delays  meant  that  most  claims  arose  during  the 
monitoring  period,  and  the  irregularities  leading  to  withdrawals  or  recoveries  often 
occurred  when  beneficiaries  no  longer  had  the  means  to  repay  the  subsidies,  the 
subsidies  had  been  used  up  or  the  assets  that  could  be  sold  during  recovery  had 
already been removed from the firm. Generally speaking, therefore, the low recovery 
rate is attributable to the fact that during insolvency proceedings, beneficiaries simply 
do not have the assets necessary to settle claims. 

SI 

The  Cohesion  Policy  in  Slovenia  demonstrates  a  considerable  high  recovery  rate  of 
95,02%  as  per  table  below,  according  to  the  reports  of  the  Slovenian  Paying 
Authority. This information is also reported to the EC.  

Updated  EU Co-financing due 

Recovery status 

EU Co-financing recovered
Recovery Rate in % 

25.1.2012  16.322.994,28 

15.510.787,41  Closed

95,02 

812.202,05 

Open 

4,98 

2.2. 

Pre-accession funds 

The analysis of recoveries throughout the programming period 2002-2006 confirms the need 
for  improvements  in  this  area.  The  pre-accession  funds  show  the  lowest  recovery  rates  for 
expenditure. Recovery rate for the year 2010 is a lot lower than in the previous year. Even if 
the  recoveries  for  the  past  years  are  taken  into  account,  the  recovery  rate  remains  low  and 
especially  low  for  Bulgaria,  Lithuania,  Latvia  and  Slovenia.  In  cases  of  suspected  fraud, 

EN 

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procedures are becoming even lengthier and more complex, as showed by the lower recovery 
rate. Apart from the lengthy procedures linked to suspected fraud cases, another explanation 
for  the  low  rates  could  be  the  failure  by  Beneficiary  Countries  to  update  the  recovery 
information about irregularities. 

RECOMMENDATION 5 

Bulgaria,  Lithuania,  Latvia  and  Slovenia  are  invited  to  explain  the  reasons  for  low 
recovery  rates,  to  improve  their  recovery  performances  and  to  update  the  missing 
information on completed recovery procedures. 

BG 

Phare Programme 

One  of  the  main  reasons  for  the  low  rate  of  recovery  of  the  amounts  unduly  paid  is 
that most beneficiaries of the programs managed by the Phare Implementing Agencies 
have insufficient financial stability due to the financial and economical crisis. 

Providing a complete collection of receivables is hampered precisely as in most of the 
case the funded entities are mainly NGOs, educational and scientific institutions and 
organizations, socio-economic partners and other organizations. 

Another  main  reason  for  the  low  recovery  rates  for  2010  is  the  contractors’ 
disagreement  with  the  recoverable  amounts  initially  established  by  the  Phare 
Implementing  Agencies.  A  serious  reason  is  also  the  contractors’  financial  shortage 
and in some cases the ceasing of their economic activity. 

The assistance of the Economic Police and the respective local courts is requested by 
the  responsible  Phare  Implementing  Agencies  when  attempting  to  contact  the 
contractors  with  ceased  economic  activities  in  order  to  collect  the  outstanding 
recoveries. 

In  the  case  of  twinning  contracts  the  outstanding  amounts  are  not  result  of 
irregularities but due to the lack of established mechanism for coercive collection of 
debts (advances unused). In these cases the responsible Phare Implementing Agency 
/CFCU/  regularly  sends  reminders  to  the  twinning  partners  from  the  EU  member 
states. 

All  the  responsible  Phare  Implementing  Agencies  undertake  actions  for  coercive 
collection  of  debts  in  accordance  with  the  rules  set  in  the  Tax  and  Social  Insurance 
Procedure Code of the Republic of Bulgaria. 

Following  the  national  legislation  the  procedures  for  recovery  are  launched  in  close 
cooperation with the competent national authorities in the field of public prosecution 
and  state  revenue  collection.  Some  of  the  recovery  procedures  are  prolonged  due  to 
the  appeals  from  the  economic  operators  that  committed  irregularities  before  the 
respective courts. 

Information about two recovery procedures with Phare funding completed in 2010: 

Irregularity case No BG/09/036/PH under contract BG 919.04.01.0003 was closed in 
September 2010 due to the finalization of the OLAF investigation. 

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Irregularity case No BG/08/090/PH under contract BG 815-01-05-0001 was closed in 
second quarter of 2011 due to closure of the pretrial proceedings. 

In both cases the outstanding amounts were recovered/deducted. 

ISPA Programme 

Most  of  the  financial  corections/irregularities  (2010  and  2011)  under  ISPA/CF 
(Regulation 1164/94), sector “environment” were imposed for violation of the public 
procurement  rules.  With  minor  exceptions  the  calculation  of  the  financial  corections 
was based on the contract value (25 % of the contract value). The financial corrections 
were recovered through deduction from the respective payment certificates wich were 
submitted by the Paying Authority to the EC in 2011. In this respect the recovery rate 
of 100 % was performed to the EC. Most of the contracts were not completed when 
the recovery to the EC occurred (25 % of the contract value). The  irregularity cases 
(2010 and 2011) were updated during the first quarter of 2012.  

SAPARD Programme 

In view of the Bulgarian SAPARD Agency the low level of the recovered amounts is 
a result of suspected fraud casess, which were reported to the European Commission, 
and it is not due to omissions in the reporting obligations according to sub points 7.3, 
7.3.1. and 7.5 of Section Е in the Annex of the Multi-Annual Financing Agreement. 
All received  and  processed information  in relation  to the signals received as well as 
the  stages  of  the  judicial  and  administrative  procedures  for  recorded  irregularities  is 
reported regularly and timely to OLAF. 

The  SAPARD  Agency  made  a  detailed  analysis  and  a  review  of  the  reasons  for  the 
low  level  of  recovery  of  the recorded  irregularities  due  to  suspicion  of  fraud,  taking 
into account all the factors affecting the recovery of the debts. 

The SAPARD Agency identified two main factors for the recovery issue. The first one 
is the amendment of 2009 of the procedure for recording of irregularities by SAPARD 
Agency aiming to prevent the fraud cases with European funding. As a result of this 
change  all  the  projects  for  which  State  Fund  Agriculture  has  received  a  signal  for 
suspected fraudulent actions made by the final beneficiaries under the programme are 
entered  in  the  Debtors  ledger  with  the  total  amount  of  the  paid  financial  aid. 
According to the procedure when the signal is not supported by documents verifying 
the irregularity and not allowing the calculation of the irregular amount by the experts, 
the  SAPARD  Agency  does  not  undertake  actions  for  recovery  of  the  debts  in  the 
Debtors  ledger,  until  the  investigation  by  the  competent  authorities  is  not  fully 
completed by issuing a final act. After the implementation of the procedure in 2009 a 
large number of debts were recorded in the Debtors ledger with the entire amount of 
the corresponding projects, which debts the SAPARD Agency was unable to recover. 
At  the  same  time,  under  the  rules  of  MAFA  in  relation  to  such  debts,  the  term  for 
recovery  of  the  funds  to  EC  cannot  be  suspended.  After  writing  off  of  the  recorded 
debts  under  art.14.2.8  of  section  А  of  the  Annex  to  MAFA,  SAPARD  Agency 
suspends the reporting of irregularities to EC, but continues the actions for recovery of 
the funds and follows up the judicial proceedings.  

In order to increase the recovery rate of the recorded debts in 2011, SAPRD Agency 

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started negotiations with EC regarding the possibility for correct and exact calculation 
of the irregular amount according to the suspected damages caused by the irregularity 
for  debts  recorded  based  on  a  suspicion  of  fraud.  In  December  2011  in  SFA  was 
received  an  official  opinion  signed  by  the  general  directors  of  DG  Agriculture  and 
Rural Development and OLAF, in which the EC states its favorable position about the 
possibility to calculate and recover only the expenses affected by the irregularity.  

SAPARD Agency will closely monitor the judicial and administrative proceedings for 
all  recorded  debts  in  the  Debtors  ledger  and  in  case  of  specific  circumstances  or 
receiving  of  additional  information  about  any  irregularity  will  proceed  to  immediate 
registration of the irregular amount. 

SAPARD  Agency  believes  that  the  proper  definition  of  the  established  irregularities 
and  the  correct  calculation  of  the  affected  amounts  will  lead  to  higher  levels  of 
recovery of the debts recorded in the Debtors ledger based on suspicion of fraud. 

Measures concerning all the Pre-Accession Programmes 

In compliance with its liabilities stipulated in the Bulgarian Tax and Social Security 
Procedure  Code,  the  Civil  Code  of  Procedures,  the  National  Budget  Act  and  the 
Council of Ministers’ Decree No. 18/2003 the National Revenue Agency /NRA/ takes 
proper actions for priority recovery of state’s receivables as well as for providing the 
national  authorities  administering  the  EU  funds  with  feedback  information  on  the 
amounts  recovered.  Also  the  NRA  systemizes  the  information  on  the  actions 
undertaken  and  provides  it  to  the  “Coordination  of  the  fight  against  infringements 
affecting the financial interests of the EU (AFCOS)” Directorate on a monthly basis. 

In  the  process  of  recovery  of  the  unduly  paid  amounts  under  EU  funds  and 
programmes the NRA provides the last phase of public enforcement by exercising its 
powers for enforced recovery of “public” or “state’s private receivables” emerged as a 
result  of  errors  and  omissions  made  by  the  “administering  authorities”  during  the 
general process of funding, managing and controlling EU funds in Bulgaria. 

The actions required from the Member States by Recommendation 5 “to improve their 
performances in the recovery of amounts unduly granted and spent” should be aimed 
primarily  at  the  first  3  phases  of  the  general  process  –  the  stages  of  contracts 
awarding, funding/payment, management and exercise of preventive control over the 
EU  programmes  beneficiaries  in  order  to  combine  the  national  actions  towards 
minimising  the  subsequent  launch  of  the  recovery  and/or  enforced  recovery  of  the 
amounts unduly paid. 

From 01.01.2010 to 31.12.2010 the National Revenue Agency has received recovery 
claims  for  47  debtors  under  the  PHARE  programme  and  54  debtors  under  the 
SAPARD  programme.  These  numbers  include:  9  municipalities,  3  associations,  25 
individuals  and  sole  proprietors  and  64  companies,  as  per  the  legal  personality  of 
contract-based state’s public receivables. 

In accordance with the provisions of art. 519, para. 2 of the Civil Code of Procedures 
in  2010  the  fieri  faciae  (enforcement  orders/a  writ  of  execution)  issued  against 
municipalities  have  been  given  to  the  respective  municipalities,  moreover  –  these 
faciae  had  to  be  paid  from  the  credit  provided  for  such  purposes  in  municipalities’ 
budget. In 2011 the aforementioned provisions were pronounced unconstitutional by 

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Decision  No.  5/2011  of  the  Constitutional  Court  of  the  Republic  of  Bulgaria  and 
currently  the  state’s  private  receivables  against  municipalities  are  being  collected 
under the ordinary procedure; 

Regarding the associations – the lack of economic activity, assets and property of such 
debtors in fact does not allow enforced recovery of the grants provided; 

In some cases there is unwillingness for voluntary compliance by individuals and sole 
proprietors  who  are  PHARE  and  SAPARD  beneficiaries  –  the  recovery  from  such 
debtors is once again hindered by the lack of property different from the non-seizable 
property as per Art. 444 of the Civil Code of Procedures; 

It could be assumed also that the companies are affected by the consequences of the 
global  economic  crisis  since  some  of  the  receivables  emerged  due  to  early 
recoverability  of  the  amounts  as  a  result  of  proceedings  initiated  for  beneficiary’s 
insolvency,  and  other  debtors  have  accumulated  insufficient  income  to  service  their 
debts. The business-to-business indebtedness is a problem too – often during enforced 
recovery it is established that beneficiary’s property has been sold by bailiffs in order 
to  satisfy  other  creditors  or  securities  have  been  constituted  in  favour  of  such 
creditors. Actions have been undertaken against debtors in order to assess and recover 
the liabilities, but due to the lack of property or real securities provided when the grant 
was given, the recovery measures are seriously hindered and often the intended result 
could not be achieved; 

Another  serious  factor  affecting  the  rate  of  recovery  is  the  fact  that  some  of  the 
beneficiaries appeal the infringements and liabilities detected. These appellants apply 
the  option  stipulated  in  art.  414  of  the  Civil  Code  of  Procedures  for  the  debtors  to 
appeal  the  warrant  issued,  which  results  in  insecurity  of  the  enforcement  process 
because  of  the  uncertain  outcome  of  the  court litigations. There are also cases when 
the  distress  warrants  submitted  to  the  Bulgarian  State  Fund  “Agriculture”  (SFA)  are 
invalidated  –  some  are  invalidated  due  to  enforced  judgements  rejecting  the  claim 
submitted by the SFA for a receivable emerged, and others – due to countermand of 
the  order  to  execute  the  warrant  immediately.  In  such  cases  the  enforcement 
proceedings  are  ceased  and  all  the  distraints  and  bans  on  debtor’s  property  are 
cancelled, incl. the state expenses made for the enforcement cannot be recovered. 

Since 2010 the NRA has taken proper measures to recover the amounts unduly paid 
and overpaid, as well as the resources unduly received or unduly spent under projects 
funded  by  the  pre-accession  financial  instruments,  but  given  the  abovementioned 
circumstances the recovery is seriously hindered. It must be noted that the NRA is not 
participating in the selection of project offers for grants nor in the following control of 
projects’ implementation, hence the NRA is not able to give a preliminary statement 
on the possibility for eventual subsequent enforced recovery of the amounts provided. 
Therefore  taking  preventive  measures  which  guarantee  recovery  already  at  the  stage 
when  amounts  are  provided  or  in  the  course  of  monitoring  of  the  projects’ 
implementation  appears  to  be  crucial  for  the  successful  subsequent  recovery  of  the 
amounts unduly paid 

LT 

 Lithuania  submits  updated  information  to  OLAF  every  quarter  on  irregularities 
detected in relation to SAPARD, PHARE and pre-accession programme projects and 
on the amounts to be recovered. Please note that, according to debt records sent by the 
European Commission, all funds indicated as being repayable (the EU share thereof) 

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transferred 

the  funds  shown  as  being  repayable),  and 

in  relation  to  PHARE  and  Transition  Facility  projects  have  been  repaid  to  the 
European Commission.  
There  were  no  repayments  of  recoverable  funds  in  2011  in  relation  to  SAPARD 
projects  (the  last  repayment  into  the  Lithuanian  Treasury’s  account  was  made  on 
8 September  2010,  when  the  project  implementer  KB Daumantų  skanėstai  (Project 
the 
No P13020014) 
implementers  of  Projects  Nos P13020010,  P33020081,  P27010010,  P27010007  and 
P33020089  have  been  wound  up  or  are  the  subject  of  bankruptcy  proceedings  or 
judicial debt recovery proceedings (the funds recoverable in respect of these projects, 
as determined in 2008-09, amount to LTL 11 910 419 (EUR 3 449 496)). 
The main reasons why it takes a long time to recover EU assistance paid and/or used 
in breach of EU and Lithuanian legislation or international agreements are the difficult 
financial situation in which project implementers find themselves and protracted court 
proceedings.  
In view of this situation, amendments were made on 17 March 2010 to the Rules on 
the recovery of funds, the main purpose of which is to ensure that EU structural funds 
allocated  for  financing  the  Lithuanian  Single  Programming  Document  for  2004-06, 
EU funds 2007–13, the EC’s EQUAL and INTERREG initiatives, the Cohesion Fund 
2004-06,  the  Ignalina  Programme  2004-06,  the  Ignalina  Programme  2007–13, 
SAPARD,  PHARE,  the  Transition  Facility  and  the  Schengen  Facility,  European 
territorial  cooperation  objective  programmes,  cross-border  cooperation  programmes 
under  the  European  Neighbourhood  and  Partnership  Instrument  in  the  2007-13 
financing period, the External Borders Fund, the European Return Fund, the EEA and 
Norwegian  financial  mechanisms,  the  Republic  of  Lithuania  Swiss  Confederation 
Cooperation  Programme  aimed  at  reducing  economic  and  social  disparities  in  the 
enlarged  European  Union,  financial  assistance  and  co-financing,  paid  out  of  the 
programmes  of  managers  of  Lithuanian  State  budget  appropriations  and/or  used  in 
breach  of  EU  and  Lithuanian  legislation  or  international  treaties,  are  repaid  into  the 
Lithuanian State budget.  
Moreover,  by  letter  No Nr  (24.16-01)-6K-1103376  of  29 March  2011  regarding 
projects  financed  from  EU  funds  in  2007–13  in  the  context  of  which  public 
procurement  arrangements  have  been  challenged  before  the  courts,  the  Ministry  of 
Finance  contacted  the  National  Courts  Administration  to  draw  the  attention  of 
Lithuanian  courts  to  the  fact  that  the  examination  of  claims  and  appeals  relating  to 
public procurement arrangements in the context of projects was taking longer than laid 
down  in  Article 95(6)  of  the  Lithuanian  Public  Procurement  Law  (Official  Gazette 
1996,  No 84-2000;  2006,  No 4-102;  2008,  No 81-3179;  2009,  No 93-3986,  2010, 
No 25-1174),  which  stipulates  that  claims  and  appeals  must  be  examined  within  45 
days at the latest from the date on which they are received, and it provided a list of the 
projects concerned. By letter of 3 May 2011 (ref. 4R-679-(1.13)), the National Courts 
Administration  informed  the  Ministry  of  Finance  that  Lithuanian  courts  and  the 
Judicial  Council  had  been  informed  of  the  risk  of  losing  EU  funding  as  a  result  of 
excessively  lengthy  examination  of  pubic  procurement  cases  in  the  courts.  At  the 
Judicial Council’s meeting of 29 April 2011, agreement was reached on a number of 
suggestions as to how the examination of public procurement cases in the courts could 
be speeded up, namely to propose to the President of the Lithuanian Court of Appeal 
and the presidents of the regional courts that a specialism be created for judges who 
examine public procurement cases; to recommend to the President of the Lithuanian 
Court of Appeal, the presidents of the regional courts and the presidents of the civil 
divisions of those courts that the work of the courts be organised in such a way that 

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between  designated  court  sittings  there  are  free  days  (hours)  without  court  sittings, 
during  which  court  sittings  could  take  place  to  examine  recently  received  public 
procurement cases; to recommend to the President of the Lithuanian Court of Appeal 
and  the  presidents  of  the  regional  courts  that  the  time-limits  for  examining  public 
procurement  cases  be  continuously  monitored  by  means  of  internal  administrative 
measures;  and  to  instruct  the  Commission  for  the  Coordination  of  Judges’  Training 
under the Judicial Council to start preparing a training programme for judges on the 
examination of public procurements cases (the Resolution of the Judicial Council on 
time-limits for the examination of public procurement cases has been published on the 
National 
http://www.teismai.lt/lt/teismu-
savivalda/teismu-savivalda-teiseju-taryba/teiseju-tarybos-nutarimai/).  
The Ministry of Finance also informed the National Courts Administration by letter of 
18 April 2012 (ref. (4.59-2408)-5K1207704)-6K-1203621) that judges examining 
cases relating to public procurement in the context of projects and cases relating to 
projects could take part in seminars/consultations which the Ministry of Finance 
organises for bodies that administer EU structural aid and which address matters 
related to public procurement in the context of projects and other topical issues.  

Courts  Administration  website: 

LV 

As regards PHARE/Transition Facility (TF), it is important to note that in the case of 
Latvia,  based  on  the  debit  note  issued  by  the  Commission,  all  unrecovered  irregular 
expenditure  incurred  from  PHARE/TF  funding  have  been  fully  reimbursed  to  the 
Commission  from  the  Latvian  state  budget,  including  for  the  cases  involving 
suspicion of fraud. Hence, at present, for Latvia there are no outstanding PHARE/TF 
recoveries  payable  to  the  Commission,  and  the  recovery  process  will  be  continued 
solely  on  a  national  level  to  recover,  to  a  feasible  extent,  the  national  state  budget 
funds  allocated  for  reimbursing  to  the  Commission  the  irregular  expenditure  made 
from PHARE/TF funding. 

As for the reasons of the slow recovery rates, indeed, it is mainly due to the lengthy 
and  complex  recovery  procedures,  including  administrative  procedures  and  criminal 
procedures, which mostly do not go hand in hand, as it also has been observed in the 
Commission’s report.  

In the case of Latvia, another major reason contributing to the slow recovery rate for 
PHARE/TF irregularities is the fact that the responsible final beneficiaries, according 
to  their  legal  status,  are  all  non-governmental  organizations  (foundations,  etc.),  and 
some of them have already been dissolved and/or declared insolvent, which, as a rule, 
causes even more legal obstacles and impedes any actual recoveries to be made.  

The lengthy and complex recovery process is well illustrated by the only new PHARE 
irregularity which was reported to OLAF by Latvia in 2010 (suspicion of fraud), and 
for which Latvia has already repaid to the Commission the full amount of the PHARE 
funding  allocated  for  the  project  in  question.  The  national  legal  proceedings,  which 
were  initiated  against  the  beneficiary  (a  foundation)  back  in  2010,  have  been 
temporarily suspended by a ruling of the competent national court based on the claim 
submitted  by  beneficiary  to  the  European  General  Court  (submitted  in  May  2011). 
The  ruling  of  the  European  General  Court  is  still  pending,  and  so  far,  no  actual 
recoveries have been made in this case.  

The Ministry of Finance of Latvia, on behalf of the National Authorising Officer for 
PHARE/TF  programmes,  closely  monitors  the  recovery  process  and  ensures  regular 

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communication  with  the  institutions  involved  incl.  programme  authorising  officers 
responsible for continuing the ongoing recovery procedures.  

Also in the case of SAPARD Latvia programme, the slow recovery progress is due to 
the lengthy and complex recovery procedures. In some of the cases the litigations are 
still in progress, however, in order to avoid further losses, in 2011 all uncovered debts 
incurred  by  SAPARD  beneficiaries  were  written-off  by  the  competent  Latvian 
authorities (the Commission was informed in writing in January 2012) given the fact 
that the debtors have either been legally dissolved or declared insolvent, or both, and 
their debts are practically irrecoverable. 

Nevertheless, the competent Latvian authorities will continue to monitor the on-going 
recovery proceedings and will inform the Commission accordingly, however, at 
present, there are no legal instruments to enhance the current recovery rate of 
SAPARD debts as well as the national funds allocated for reimbursement of 
irregularly paid PHARE/TF funds. 

Regarding Pre-accession Funds Slovenia recovered and closed all but two cases 
within SAPARD. 

RESULTS  OF  THE  QUESTIONNAIRE  ABOUT  COOPERATION  WITH  THE  MEMBER 
STATES CONCERNING THE RISK OF DOUBLE FINANCING OF PROJECTS IN THE AREA 
OF COHESION POLICY 

SI 

3. 

With  regard  to  the  use  of  the  Central  Exclusion  Database  (CED)  under  article  95  of  the 
Financial Regulation, only 5 Member Staes are using it (BG, CZ, MT, AT, PL). 

In  2011,  all  MS  which  do  not  fully  use  the  CED  are  requested  to  report  about  the 
progress made during the reporting year with regard to make use of the CED.  

RECOMMENDATION 6 

BE, DE, EE, EL, IT, CY, LU, NL, FI, UK are invited to set the CED up, and to report on 
the progress made. 

DK, IE, ES, HU, SI, SE who are using other kinds of national exclusion databases, are 
invited to set the CED up, and to report on the progress made. 

FR, LT, SK, PT, LV and RO are invited to report on the progress made regarding the 
full implementation of the CED. 

BE 

DK 

No comments. 

The relevant follow-up recommendation for Denmark concerns recommendation 
6 on the use of the Central Exclusion Database (CED).  

The Ministry of Finance is for the time being considering how Denmark could make 
a better and more systematic use of the Central Exclusion Database. For that purpose 
we will consult other ministries which have a responsibility to protect the Union's 
financial interests.  

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26 

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After having discussed the case with relevant authorities, Denmark will designate a 
national liaison point which shall be responsible for issues concerning CED and the 
communication with the Commission in that respect, cf. Article 7 in Commission 
Regulation (EC, EURATOM) No 1302/2008 of 17 December 2008 on the Central 
Exclusion Database. 

The Ministry of Finance will contact the Commission about the designation of the 
relevant national liaison point before making our decision on the matter later this 
year. 

DE the competent authorities in the regional and central government have been 
informed. Until now no notifications have been made by them. 

In Estonia the contact person has been designated. Currently it is under consideration 
how to designate the most appropriate range of users to the CED system. 

In  the  search  for  a  solution  by  the  Greek  State's  departments,  there  were  various 
views as to how to respond to the regulatory obligations. 

For  this  reason  and  in  order  to  determine  the  appropriate  liaison  point,  the  Greek 
authorities contacted the European Commission directly concerning the scope of the 
relevant provisions and suggestions of examples of best practices in other Member 
States.  Following  completion  of  these  clarifying  consultations,  the  final  decisions 
will be taken.  

As soon as information concerning this database is available, it will be forwarded to 
OLAF. 

France expects to designate the contact point for the CED shortly.  

Ireland completed registration on the Central Exclusion Database on the 15/12/2011. 

(a) 

The Liaison Point and persons with regards to the CED have been appointed 

in 2011 

(b) 

A Circular is currently being prepared in order to give guidance / instructions 
to  all  the  bodies  involved  in  the  public  procurement  /  grant  award 
procedures  with  regards  to  the  reporting  process  to  be  followed  when  an 
entry of exclusion warning needs to be registered in the database  

(c) 

Access to the database will be granted to authorised users from the various 

implementing authorities / bodies 

Points (b) and (c) above are expected to be completed during the first semester of 
2012. 

In accordance with Article 7 of Regulation No 1302/2008 (on the central exclusion 
database),  the  Autorità  di  Vigilanza  sui  Contratti  Pubblici  di  Lavori,  Servizi  e 
Forniture  (Authority  for  the  Supervision  of  Public  Contracts  for  Works,  Services 
and  Supplies)  has  been  designated  as  the  liaison  point  for  relations  with  the 
European Commission on matters relating to the database. 

DE 

EE 

EL 

ES 

FR 

IE 

CY 

IT 

LT 

Pursuant to Article 7(2) of Commission Regulation (EC, Euratom) No 1302/2008 of 
17 December 2008 on the central exclusion database (Regulation No 1302/2008) 

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27 

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HU 

NL 

PT 

RO 

FI 

(OJ L 344, 20.12.2008, p. 1) and having regard to Article 95 of Council Regulation 
(EC, Euratom) No 1605/2002 of 25 June 2002 on the Financial Regulation 
applicable to the general budget of the European Communities (OJ 2004, Special 
Edition, Volume 1, Chapter 4, p. 74), as last amended by Council Regulation (EC, 
Euratom) No 1995/2006 of 13 December 2006 amending Regulation (EC, Euratom) 
No 1605/2002 on the Financial Regulation applicable to the general budget of the 
European Communities, the Ministry of Finance has drawn up a draft government 
resolution designating the liaison point specified in Article 7(2) of Regulation 
No 1302/2008 and laying down a procedure for administering the central exclusion 
database in Lithuania and has submitted it to the authorities concerned for 
agreement.  

In 2009, during preparatory talks on implementation of the CED Decree, the 
Hungarian experts realised that further guidelines were needed for a proper 
understanding of the EU regulations, and to that end Hungary requested the 
Commission’s assistance. The Commission sent guidelines clarifying several aspects 
of the CED Decree in 2011, after which the necessary preparations could be made to 
implement the CED Decree. Talks are currently underway between the competent 
ministries and the other relevant bodies in order to implement the CED Decree as 
soon as possible. 

 The  Netherlands  has  specific  legislation  on  the  transfer  of  information  from  the 
point  of  view  of  personal  data  protection.  The  Netherlands  will  work  towards 
meeting  the  requirements  of  Article  95  of  the  current  Financial  Regulation  on  the 
basis of compliance with this specific legislation. 

A plan is being drafted on the collection and distribution of data to be included in the 
Central Exclusion Database, set up by Regulation (EC, EURATOM) No 1302/2008 
of 17 December 2008. 

In 2011, DLAF was designated Liaison Point for CED. In this respect, DLAF has 
granted access to CED to managing authorities, paying agencies. 

The introduction of the Central Exclusion Database in Finland has been the subject 
of discussion at national level between public authorities. The possible introduction 
of the database touches upon matters affecting the legal protection of the beneficiary 
which require clarification, as the database might put this protection at risk. The 
Ministry of Employment and the Economy is of the view that at this stage in the 
current programming period (2007-2013), there is no justification for using 
resources to develop new systems. Instead, resources should be used for the 
maintenance of the existing databases and for the preparation of the new 
programming period. The national databases currently used (e.g. the EURA 2007 
information system) provide data on high risk project implementers and projects, etc. 
In addition, information concerning cases of irregularities and possible fraud with 
regard to the Structural Funds is available from different authorities and registers, 
such as the Finnish judiciary, the tax administration, the police forces and the 
Business Information System (YTJ). The added value provided by the CED database 
is not considered to be sufficiently significant nationally for us to introduce the 
database during the present programming period. 

SI 

According to the Public Procurement Act (Off. J. No. 19/10), Art. 77.a, the Ministry 
of Finance keeps the register of suppliers with negative references, indicating the full 

EN 

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name and registration number of the entity, date of entry in to the register, date of 
abolishment. The register is published on the web page of the Ministry of Finance. 

SK 

In August 2011 the Slovak Liaison Point (hereinafter „LP“) of the Central Exclusion 
Database  (hereinafter  „CED“)  located  at  the  Office  of  Government  of  the  SR 
submitted  a request  to  the  Commission's  Accounting  Officer  to  insert  e-mail 
extensions of the national authorities into the CED application in order to allow the 
access for authorized users to this database.  

During  the  year  2011  negotiations  between  the  General  Prosecutor  Office  of  the 
Slovak  Republic  and  the  LP  were  conducted.  In  accordance  with  the  Cooperation 
Agreement concluded between the General Prosecutor Office of the SR (hereinafter 
„GPO SR“) and  the  Office  of Government of the SR  in September 2011,  the GPO 
SR  will  quarterly  provide  the  LP  with  copies  of  the  res  judicata  judgments  in 
accordance  with  art.  93(1)  point.  e)  Regulation  no.  1605/2002.  The  GPO  SR  will 
also  provide  the  LP  with  the  copies  of  the  judgments  which  have  come  into  force 
since the 1st of January 2009.  

Working Group for the CED was established in order to set up a system at the 
national level for the submission of information to the CED / the Commission's 
Accounting Officer, which is expected to be finilised in the second half of the year 
2012.  

SE 

SE is currently reviewing the issue of what measures need to be taken to meet the 
requirements of Article 95 of the Financial Regulation on the setting up of a central 
database. 

UK 

The UK is in the process of formally setting up the CED. 

EN 

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