COMMISSION STAFF WORKING DOCUMENT Annual Overview with Information on the Results of the Hercule II Programme in 2012 (Article 7 of Decision 878/2007 of 23 July 2007) Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Protection of the European Union's financial interests - Fight against fraud Annual Report 2012
Date: 2013-07-24
Institutions: European Commission
Subjects: EU programme, European Anti-fraud Office, European cooperation, continuing vocational training, corruption, customs inspection, exchange of information, external border of the EU, fraud against the EU, general budget (EU), implementation of the budget, technical cooperation, tobacco













EUR-Lex - 52013SC0287 - EN











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52013SC0287

COMMISSION STAFF WORKING DOCUMENT Annual Overview with Information on the Results of the Hercule II Programme in 2012 (Article 7 of Decision 878/2007 of 23 July 2007) Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Protection of the European Union's financial interests - Fight against fraud Annual Report 2012 /* SWD/2013/0287 final */









TABLE OF CONTENTS
1........... Introduction.................................................................................................................... 4
1.1........ Hercule II Programme Description.................................................................................. 4
1.2........ Purpose and scope of this
overview................................................................................ 7
2........... Budget implementation in 2012....................................................................................... 8
3........... Activities under the Hercule-II
Financing Decision in 2012............................................. 10
3.1........ Technical assistance for the
fight against fraud................................................................ 11
3.1.1..... Technical support for national
authorities' use of special investigative tools and methods in the fight
against fraud and corruption, and technical support to strengthen inspections
of containers and trucks at the EU's external borders, including the fight
against cigarette smuggling and counterfeiting (sector of activity 7.1.1
"Investigation Support")..................................................................................................................... 11
3.1.2..... Technical support for detecting
the presence of cigarettes and tobacco (sector of activity 7.1.2
"Cigarettes")    14
3.1.3..... Analysis of cigarette/tobacco
samples (sector of activity 7.1.3)...................................... 15
3.2........ Training, Seminars and Conferences.............................................................................. 16
3.2.1..... Financial support (co-financing)
for training and various cooperation measures in the area of the fight against
fraud, including the fight against cigarette smuggling and counterfeiting
(sector of activity 8.1.1). 16
3.2.2..... Organisation of training and
various cooperation measures in the area of the fight against fraud, including
the fight against cigarette smuggling and counterfeiting (sector of activity:
8.1.2)........................... 18
3.2.3..... Organisation of Computer Forensics
Training (sector of activity: 8.1.3).......................... 21
3.2.4..... Organisation of technical training
courses on image interpretation for scanning operators (sector of activity
8.1.4).................................................................................................................................... 22
3.3........ Training, Seminars and
Conferences – Legal part........................................................... 22
3.4........ IT support.................................................................................................................... 24
3.4.1..... Ensure MS' access to strategic
information in support of investigations........................... 24
3.4.2..... Develop specific IT tools for data
analysis..................................................................... 25
3.4.3..... Tobacco analysis.......................................................................................................... 25
4........... Multi-annual impact...................................................................................................... 25
4.1........ To enhance transnational and
multidisciplinary cooperation............................................. 26
4.2........ To build networks throughout the
MS, acceding countries and candidate countries......... 27
4.3........ To provide technical and
operational support for MS' law enforcement agencies............ 29
4.4........ To strike a geographical balance
by including all MS, acceding countries and candidate countries         34
4.5........ To multiply and intensify the
measures in areas identified as the most sensitive, particularly in the field
of cigarette smuggling and counterfeiting.......................................................................................... 34
5........... Communication Activities.............................................................................................. 34
5.1........ Informing potential beneficiaries..................................................................................... 35
5.2........ Dissemination of results................................................................................................. 35
5.3........ Communication and publicity......................................................................................... 35
6........... Feed-back from participants in
the programme.............................................................. 36
7........... Conclusions and Way Forward..................................................................................... 37
The present overview provides information
on actions started under the 2012 Hercule II budget as well as information on
the results of actions started before 2012 that were finalised in 2012. This
overview is in line with Article 7 of the Decision 878/2007 of 23 July 2007[1].
1.           Introduction
1.1.        Hercule
II Programme Description
The Hercule Programme was established by
Decision 804/2004/EC for the period 2004-06. By Decision 878/2007/EC, the programme was extended to cover 2007-2013 as Hercule II, with
a financial envelope of EUR 98.5 million and an average annual budget of around
EUR 14 million.
The programme
is the only instrument specifically dedicated to protecting the
financial interests of the EU by supporting the fight against irregularities,
fraud and corruption affecting the EU Budget. The Hercule Programme is
administered by the European Anti-Fraud Office (OLAF), which is a
Directorate-General of the European Commission.
The main
objectives of the Hercule II Programme are:
·                        
to enhance cooperation between the actors in the
fight against fraud damaging the EU's financial interests, i.e. the competent
authorities in the Member States, the Commission and the European Anti-Fraud
Office (OLAF);
·                        
to reinforce the networks for the exchange of
information between Member States, the accession countries and the candidate
countries;
·                        
to provide operational and technical support to
law enforcement agencies in the Member States, particularly the customs
authorities.
 General activities supported by the Programme (as stipulated by Commission Decision C(2012)1057 adopting a Financing Decision for 2012 for Hercule II)[2]: ·                         organisation of seminars and conferences; ·                         promotion of scientific studies on Union policies relating to the protection of the Union’s financial interests; ·                         coordination of activities relating to the protection of the Union's financial interests (meetings); ·                         training and raising awareness, including in connection with joint surveillance operations; ·                         promoting exchanges of specialised staff; ·                         development and supply of specific IT tools, data-processing; ·                         technical assistance, including the purchase of equipment; ·                         promoting and strengthening the exchange of data; ·                         provision of information and support for activities relating to access to information, data and data sources; ·                         purchase of specialised technical hardware and technical support for the monitoring of illegal activities in the field of the fight against fraud. 
These activities come under one of the Financing
Decision's chapters 7 until 10 or sectors of activity, as listed below:
 7. Technical assistance for the fight against fraud 7.1.1 Technical support for national authorities' use of special investigative tools and methods in the fight against fraud and corruption, and technical support to strengthen inspections of containers and trucks at the EU's external borders, including the fight against cigarette smuggling and counterfeiting ("Investigation Support"). 7.1.2 Technical support for detecting the presence of cigarettes and tobacco ("Cigarettes"). 7.1.3 Analysis of cigarette/tobacco samples. 8. Training, seminars and conferences – operational part 8.1.1 Financial support (co-financing) for training and various cooperation measures in the area of the fight against fraud, including the fight against cigarette smuggling and counterfeiting. 8.1.2 Organisation of training and various cooperation measures in the area of the fight against fraud, including the fight against cigarette smuggling and counterfeiting. 8.1.3 Organisation of training on computer forensic. 8.1.4 Organisation of technical training courses on image interpretation for scanning. 9. Training, seminars and conferences – legal part 10. IT support 10.1.1 Ensure that Member States have access to strategic information in support of investigations. 10.1.2 Develop specific IT tools for data analysis. 10.1.3 Analysis of seized counterfeit cigarettes to determine the origin and create a database to analyse trade flows of counterfeit cigarettes in relation to genuine cigarettes. 
The following beneficiaries
are eligible for funding under the programme (as stipulated by Article 2a of
Decision 878/2007/EC):
 (a)          all national or regional administrations of a Member State or a country outside the EU, which promote the strengthening of EU action to protect the EU's financial interests (b)          all research and educational institutes that have had legal personality for at least one year, are established and operating in a Member State or in a country outside the EU, and promote the strengthening of EU action to protect the EU's financial interests; (c)          all non-profit-making bodies that have had legal personality for at least one year, are established and operating in a Member State or in a country outside the EU and promote the strengthening of EU action to protect the EU's financial interests. 
The countries outside the EU (third
countries) are listed in Article 3 of the Decision. The list of third countries
includes Croatia (Acceding State) as well as the candidate countries and the
EEA/EFTA countries, provided the latter have concluded a participation
agreement with the EU.
The Hercule II Programme is administered by
the European Anti-Fraud Office (OLAF). Until the reorganisation of February
2012, the programme's activities were carried out by several administrative
units within OLAF. Since February 2012, the overall coordination and
implementation of the programme is carried out by Unit OLAF.D.5: Hercule,
Pericles & Euro protection).
The
annual work programme for 2012 was adopted on 21 February 2012[3] and financed under item 24.0201 of the European Union budget for
2012
1.2.        Purpose
and scope of this overview
The annual
overview is intended to fulfil the requirement under Article 7 of Decision 878/2007/EC to "provide annual information on the results of the programme
to the European Parliament and to the Council". To that end, it covers information
on actions for which commitments are made under the Financing Decision 2012[4].
As Hercule II
actions are multi-annual, most of the final reports on the actions funded under
the 2012 budget have not yet been received. Section 4 of this overview
(Multi-annual impact) thus assesses the impact of previous years' actions that
were finalised during 2012 (final technical and financial reports received in 2012).
2.           Budget
implementation in 2012
Table 1 gives an overview of the available budget
and the commitments made on the 2012 budget as provided for in the
Hercule II Financing Decision 2012. The overview is broken down by sector of
activity and type of support. The amounts in the "budget" column
correspond to the Financing Decision 2012, whereas the amounts in the
"commit" column correspond to the aggregated amounts indicated in the
contracts and grant agreements concluded by the Commission. The commitment
level has increased from 81% in 2011 to 87% in 2012. The payments under
the grant agreements committed on the 2012 budget cannot be reported as most of
the activities are on-going. It is only after the activity has ended that this
information can be provided. It must be noted that the payments are mostly
lower than the committed amounts as the incurred, eligible costs are almost
always lower than the foreseen in the initial budget of the action. The overall
budget available for the Hercule II programme in 2012 was increased as the
result of a transfer from the 2011 budget.
Table 1: Available
budget and commitments[5] made in 2012
 SECTOR || BUDGET || COMMIT[6] || % 
 7. TECHNICAL ASSISTANCE ||   ||   ||   
 Investigation Support (7.1.1) || Grants || 3 750 000 || 3 732 836[7] || 100 
 Cigarettes (7.1.2) || Grants || 3 300 000 || 2 848 893 || 86 
 Tobacco (7.1.3) || Procurement || 300 000 ||   ||   
 Subtotal Technical Assistance ||   || 7 350 000 || 6 581729 || 90 
 8. TRAINING  ||   ||   ||   
 Training (8.1.1) || Grants || 1 000 000 || 794 309 || 79 
 Conferences (8.1.2) || Procurement || 1 450 000 || 833 587 || 57 
 Forensic (8.1.3) || Procurement || 600 000 || 879 598[8] || 147 
 Scanners (8.1.4) || Procurement || 200 000[9] || 0 || 0 
 Subtotal Training ||   || 3 250 000 || 2 507 494 || 77 
 9. TRAINING – LEGAL PART ||   ||   ||   
 Legal (9) || Grants || 700 000 || 551 154 || 79 
 10. IT SUPPORT ||   ||   ||   
 IT Support (10.1.1) || Procurement || 2 200 000 || 2 922 427[10] || 133 
 IT Data analysis (JRC) (10.1.2) || Procurement || 500 000 || 240 000 || 48 
 Tobacco analysis (10.1.3) || Procurement || 250 000 || 252 000 || 101 
 Subtotal IT-support ||   || 2 950 000 || 3 574 427 || 116 
 TOTAL || 14 250 000 || 13 054 802 || 92 
 TRANSFER 2011 || 840 000 ||   ||   
 GRAND TOTAL || 15 090 000 || 13 054 802 || 87 
The Hercule II budget for 2012 was
implemented by making use of procurement and grants. The overall amount available
for grants was EUR 8 750 000, in particular for technical assistance (sectors
7.1.1 and 7.1.2, maximum 50% co-financing); training (sector 8.1.1, maximum 80%
co-financing) and the legal part of training (sector 9, maximum 90%
co-financing). Procurement was used for the purchase of training and
conferences (including computer forensics, sectors 8.12 and 8.1.3) and
IT-support, for an overall amount of EUR 5 500 000, as shown in the graph
below.
Graph 1: Hercule commitments 2012 by
financial instrument.
Activities to support the fight against
smuggling and counterfeiting of cigarettes are funded under Technical
Assistance "Cigarettes" and "Analyses of tobacco samples", as
well as under the Training Sector (Conferences and seminars for customs) and
IT-support (Maintenance and update of a database with information on the
chemical composition and origin of seized smuggled and counterfeited cigarettes).
Grants are awarded after the examination of
applications submitted within the framework of a Call for Proposals. The
technical specifications drawn up for each Call contain three sets of criteria
to ensure that the Hercule II budget is spent in full compliance with the
Financial Regulation and the Implementing Rules and to ensure that the
"best value for money" is obtained for the actions to be funded under
the grants. For technical assistance grants for example, applications are
examined on the basis of their feasibility; transnational and
multi-disciplinary scope; complementarity with other EU actions and
geographical coverage of the activities. The applicants need to demonstrate how
the action will contribute to strengthening the protection of the financial
interests of the EU. Beneficiaries of grants have to report how the results of
the action contributed to the protection of the EU's financial interests.
For Conferences and Training activities,
the award criteria aim at allowing the selection of the actions that have a
wide geographical scope, support implementation of the Commission's Anti-Fraud
Strategy (CAFS) and that target relevant and important groups of professionals,
such as lawyers or judges.
The programme has as one of its specific
objectives the requirement to strike a geographical balance of the programme's
activities. The graph gives an overview of the allocation of the Hercule II commitments
in 2012 by Member State[11]:
Graph 2: Commitments for grants and
procurement in 2012, by Member State
3.           Activities
under the Hercule-II Financing Decision in 2012
The Annual Work Programme is adopted as an
annex to a Commission Decision ("Financing Decision") to implement
the Hercule II Programme. In 2012, the Financing Decision was adopted on 21
February 2012[12]. The budget made available by the budget authority for 2012 was EUR
14 250 000[13].
3.1.        Technical
assistance for the fight against fraud
3.1.1.     Technical
support for national authorities' use of special investigative tools and
methods in the fight against fraud and corruption, and technical support to
strengthen inspections of containers and trucks at the EU's external borders,
including the fight against cigarette smuggling and counterfeiting (sector of
activity 7.1.1 "Investigation Support")
The aim of the financial support offered by
Hercule II to national authorities is to enable staff working in
technical/operational support units and/or investigative units to improve and
strengthen their capacities in their fight against irregularities, fraud and
corruption.
The support consists of:
·                        
technical support for national authorities' use
of special investigative tools and methods in the fight against fraud and
corruption, and;
·                        
technical support to strengthen inspections of
containers and trucks at the EU's external borders, including the fight against
cigarette smuggling and counterfeiting.
·                        
the technical support should reinforce the
Member States' capacities and logistics allocated to technical operational
support units in the fight against fraud, in particular for actions setting up,
improving or upgrading existing:
Ÿ        automated container-code recognition systems;
Ÿ        automated number-plate recognition systems;
Ÿ        technical equipment for electronic surveillance (cameras,
computers, listening devices, radio surveillance electronic equipment, etc.);
Ÿ        technical equipment for mobile surveillance (tracking and
tracing devices, audio and video transmission equipment, etc.);
Ÿ        technical equipment for the acquisition and analysis of
digital evidence (computers, specialised software, etc.);
Ÿ        technical equipment for encrypted communications (computers,
specialised software, etc.);
Ÿ        equipment and devices to detect smuggled and counterfeited
goods on the basis of the scent characteristics of the smuggled and
counterfeited goods (canine units).
In 2012, the supported activities led to
substantial qualitative improvements in existing technical systems used for
investigative and operational activities by national and regional
administrations. The purchase of new operational and investigative equipment
was made possible through grants provided under the programme. The grants also
covered specific technical training for staff to ensure optimal use,
maintenance and management of the equipment.
Following the two Calls for Proposal
published on the Commission's website, 27 applications were received
from 14 Member States. The aggregated costs of the 27 applications
amounted to EUR 10 183 052 and the Commission was asked to contribute EUR 4 648
356 (46%), where EUR 3 750 000 was available. The total amount committed under
the Technical Assistance "Investigation Support" Call for 2012 is EUR
3 731 536. Only four applications could not receive a grant.
Grants awarded under the first Call
(Deadline: 31 May 2012):
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || SUBJECT 
 1 || LU || Police Grand-Ducale || 76 853 || 38 427 || 50.0 || Procurement of technical tracking and observation equipment 
 2 || LT || Special Investigation Service || 445 617 || 220 605 || 49.5 || Procurement of special equipment 
 3 || LV || Corruption Prevention and Combating Bureau || 232 556 || 116 069 || 49.9 || Improving Surveillance Capabilities 
 4 || LT || Financial Crime Investigation Service || 202 678 || 75 192 || 37.1 || Procurement of operational equipment 
 5 || ES || Guardia Civil || 499 625 || 211 548 || 42.3 || Procurement of special investigationipment 
 6 || FR || Service Commun des Laboratoires des douanes || 1 375 265 || 110 365 || 8.0 || Fight against smuggling and counterfeiting of cigarettes 
 7 || NL || Netherlands Policy Agency - KLPD || 191 638 || 95 819 || 50.0 || Purchase equipment for improving evidence gathering abilities 
 8 || RO || National Anti-Corruption Directorate || 90 641 || 45 320 || 50.0 || Technical endowment of the national anti-corruption directorate 
 9 || PL || Ministry of Finance - Treasure Intelligence Department || 161 100 || 78 939 || 49.0 || Purchase and modernization of technical equipment 
 10 || HU || Special Service for National Security || 685 823 || 342 000 || 49.9 || Service Provider Capacity Building 
 11 || HU || National Tax and Custom Administration Hungary || 497 226 || 248 569 || 50.0 || Strengthening external border section of Hungary 
   ||   || TOTAL 1st CALL || 4 459 021 || 1 582 853 || 35.5 ||   ||   || 
Grants awarded under the Second Call
(Deadline: 13 September 2012):
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || SUBJECT 
 1 || IT || Guardia Di Finanza || 456 096 || 228 048 || 50.0 || Implementation of mobile forensic tools 
 2 || BE || Service Public Fédéral Finances || 53 890 || 26 916 || 49.9 || Technical assistance for investigation support 
 3 || RO || Anticorruption General Directorate AGD || 231 823 || 115 500 || 49.8 || Technical endowment 
 4 || LT || Financial Crime Investigation Service - FCIS || 33 270 || 16 500 || 49.6 || Procurement of operational equipment 
 5 || CZ || General Directorate of Customs || 63 000 || 26 250 || 41.7 || Procurement of audio tools for investigation 
 6 || EE || Estonian Tax and Customs Board || 175 547 || 87 636 || 49.9 || Procurement of surveillance and tracking equipment 
 7 || PL || National Police Headquarters || 657 072 || 312 390 || 47.5 || Procurement of computer forensic laboratory equipment 
 8 || DE || BKA || 183 054 || 91 527 || 50.0 || Procurement of training and video and tracking surveillance equipment 
 9 || LV || State Revenue Service of the Republic of Latvia || 205 787 || 98 778 || 48.0 || Purchase and installation of vehicle tracking system 
 10 || RO || National Anticorruption Directorate || 171 857 || 85 928 || 50.0 || Technical support in fighting fraud and corruption 
 11 || HU || Nemzeti Védelmi Szolgálat || 42 945 || 19 368 || 45.1 || Investigational capacity enhancement in the field of fight against corruption 
 12 || PL || Central Anticorruption Bureau || 117 854 || 47 481 || 40.3 || Development technical security counter measures and purchase of digital radio communication equipment 
   ||   || Partial 2nd Call || 2 392 195 || 1 156 323 || 48.3 ||   
There were three applications submitted
under the "Cigarettes" Call for Proposals that were considered to be
more appropriate funding under the "Investigation Support" Call.
 Applications transferred from the CfP Hercule II - Cigarettes 
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || SUBJECT 
 13 || ES || Guardia Civil || 329 816 || 164 908 || 50.0 || Purchase of technical and electronic devices 
 14 || PL || National Police Headquarters || 834 905 || 417 452 || 50.0 || Purchase of electronic surveillance equipment and trainings 
 15 || HU || SSNS - Special Service for National Security || 823 433 || 410 000 || 49.8 || Strengthening the service provider capacity of SSNS 
   ||   || Total Transferred || 1 988 154 || 992 360 || 49.9 ||   ||   || 
   ||   || TOTAL 2nd CALL || 4 380 350 || 2 148 683 || 49.1 ||   ||   || 
3.1.2.     Technical
support for detecting the presence of cigarettes and tobacco (sector of
activity 7.1.2 "Cigarettes")
This sector of activity specifically
concerns the fight against cigarette smuggling, in particular the purchase of
equipment for the detection of illicit consignments of tobacco products, such
as X-ray scanners and other technical devices.
The budget allocated to this sector is EUR 3
300 000. Following the first Call for Proposals
published on the Commission's website, seven applications were received
from five Member States by the deadline of 31 August 2012. The
aggregated costs of the seven applications amounted to EUR 3 568 686 and the
Commission was asked to contribute EUR 1 782 626 (50%). Three applications were
transferred to the second Call on Technical Assistance "Investigation
Support".
Grants awarded under the first Call
(Deadline: 31 August 2012):
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || SUBJECT 
 1 || ES || Departamento de Aduanas e Impuestos Especiales || 1 210 000 || 586 061 || 48.4 || Purchase of back mobile scanners 
 3 || PL || Izba Celna Wolsztynie || 162 932 || 81 466 || 50.0 || Purchase of x-ray scanners and video cameras 
 5 || IE || Revenue Commissioner || 90 000 || 45 000 || 50.0 || Procurement of x-ray scanners 
 6 || LV || State Revenue Service || 117 600 || 58 800 || 50.0 || Technical support for the purchase of fuel unloading systems 
   ||   || TOTAL 1st CALL || 1 580 532 || 771 327 || 48.8 ||   
The Financing Decision only provided for
the organization of one Call for Proposals for "Cigarettes" Technical
Assistance. The relatively low number of applications led to a substantial
non-take up of the budget but made it possible to organize a second Call for Proposals
(deadline: 14 February 2013). The Commission received 18 applications
from 13 Member States. The aggregated costs of the 18 applications
amounted to EUR 7 343 576 and the Commission was asked to contribute EUR 3 824
096 (52%), where EUR 2.5 million was left to commit. Of all the applications,
11 could not receive a grant. The applications in the table below eventually
were awarded a grant. For this second Cigarette Call there could be
developments on the basis of the pending decision on some proposals that have
been requested to submit further information.
Grants awarded under the second Call for
Proposals (Deadline: 14 February 2013)
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || SUBJECT 
 1 || ES || Departamento de Aduanas e Impuestos Especiales || 800 000 || 400 000 || 50.0 || Purchase of night and day surveillance equipment 
 2 || EE || Police and Border Guard Board - Central Criminal Police || 350 000 || 174 000 || 49.7 || Purchase of technical support for detection of cigarettes 
 3 || FI || Finnish Customs || 2 400 000 || 1 200 000 || 50.0 || Purchase of technical equipment 
 4 || LT || Lithuanian Customs || 349 000 || 174 000 || 49.9 || Strengthening of operational capacities 
 5 || PL || Regional Police Headquarters in Lublin || 97 810 || 48 905 || 50.0 || Purchase of technical equipment for border control 
 6 || LV || State Border Guard of Republic of Latvia (SBG) || 35 151 || 17 576 || 50.0 || Development of capacity of the dog handling service 
 7 || SK || Financial Directorate of the Slovak Republic || 150 568 || 63 085 || 49.8 || Purchase of technical equipment for detecting presence of cigarettes and tobacco 
   ||   || TOTAL 2nd CALL || 4 182 529 || 2 077 566 || 49.7 ||   
3.1.3.     Analysis
of cigarette/tobacco samples (sector of activity 7.1.3)
The total budget available in 2012 was EUR
300 000. Tobacco analyses, as in 2012, were made on the basis of a contract
concluded under sector of activity 10.1.3 ("Cigarette Analysis") of
the Financing Decision. There was subsequently no need for committing this
budget.
3.2.        Training,
Seminars and Conferences
3.2.1.     Financial
support (co-financing) for training and various cooperation measures in the
area of the fight against fraud, including the fight against cigarette
smuggling and counterfeiting (sector of activity 8.1.1)
The overall goal of this part of the
Hercule II Programme, which focuses on training in the fight against fraud, is
to make financial support available for preventive and/or operational
activities that contribute to fighting fraud and corruption detrimental to the
financial interests of the European Union, for example:
·                        
by encouraging exchanges of experience;
·                        
by spreading general and operational
information;
·                        
by promoting OLAF and its working practices in
order to improve cooperation by creating a better understanding of national and
EU mechanisms and their interrelationships.
The results achieved in this area include:
·                        
specific knowledge obtained in fraud prevention
and the combating of fraud;
·                        
specific skills for fraud prevention, detection
and investigation capacity in fighting fraud;
·                        
input for further developing and improving
organisational aspects, including legislative work;
·                        
dissemination of the latest developments,
methods and techniques in combating fraud and corruption; and
·                        
the creation of networks between organisations
and exchange of the latest information.
The training is also intended to help
Member States ensuring that officials responsible for decisions on and control
of the spending of EU funds in their Member State have an appropriate knowledge
of the relevant elements concerning the protection of the EU's financial
interests. Training also allows the spreading of best practice and networking
between Member State services with similar responsibilities or shared
responsibilities where cross-border issues arise.
This is in line with the objectives of the
Commission's Anti-Fraud Strategy (CAFS), which the Commission adopted earlier
in 2011[14].
Following the two Calls for Proposal
published in 2012, the Commission received 33 applications from 14
Member States. The aggregated costs of the 33 applications amounted to EUR 3
836 547, and the Commission was asked to contribute EUR 3 006 625 (80%), where EUR
1 million was available. The Commission did not provide a grant to 18
applications.
The total amount committed under the Training
Call for 2012 is EUR 794 309. The applications in the table below
eventually were awarded a grant.
Grants awarded under both Calls for
Proposals:
   || MS || BENEFICIARY || TOTAL COSTS IN EUR || TOTAL COMMITTED IN EUR || CO-FIN % || PROJECT TITLE 
 1 || CZ || General Directorate of Customs || 59 782 || 47 825 || 80.0 || Enhancing the efficiency of inspection activities of mobile groups in cooperation with the investigation units in the area of prevention of tobacco and tobacco product smuggling 
 2 || SK || Financial Directorate of the Slovak Republic || 36 263 || 29 010 || 80.0 || Training focused on the detection of smuggled and counterfeit tobacco products in a rail and shipping transport 
 3 || RO || DNA - National Anticorruption Directorate || 32 648 || 26 118 || 80.0 || Special investigation techniques used in fighting corruption and fraud detrimental to the financial interests of the European Union 
 4 || HU || National Tax and Customs Administration || 95 792 || 76 633 || 80.0 || Possibilities for improving international criminal co-operation against crimes threatening economic and financial security of the European Union 
 5 || CZ || Transparency International Czech Republic || 89 809 || 62 866 || 70.0 || EU funds watch 
 6 || RO || Anticorruption General Directorate || 62 590 || 50 000 || 79.9 || Strengthening regional cooperation for preventing and countering corruption at the EU external border 
 7 || IT || Istituto Europeo per lo Sviluppo Socio Economico || 92 020 || 73 616 || 80.0 || EU Funded Projects: law and administrative practices in the field of fraud prevention 
 8 || PL || Provincial Police Headquarters in Olsztyn || 46 081 || 36 865 || 80.0 || Legal and practical aspects of crime to the detriment of the European Union's financial interests 
 9 || IT || Regione Toscana || 50 793 || 40 634 || 80.0 || Governance of the control system to promote the fight against fraud affecting the European Union Structural Fund 
 10 || IT || Customs Agency || 193 912 || 155.129 || 80.0 || Illicit trafficking of cigarettes in the Western Balkans Region, Turkey and Italy 
 11 || LV || State Revenue Service of the Republic of Latvia || 40 793 || 31 110 || 76.3 || Detector dogs' instructor course 
 12 || SK || Financial Directorate of the Slovak Republic || 63 034 || 50 427 || 80.0 || Training of customs officers in the area of customs service cynology in fight against tobacco products smuggling and counterfeiting 
 13 || BG || National Customs Agency || 45 738 || 36 591 || 80.0 || Increasing the capacity of Bulgarian customs to combat trafficking of illicit tobacco products 
 14 || IT || Ministry of Agriculture, Food and Forestry || 34 886 || 27 909 || 80.0 || Irregularities prevention and management in the framework of EU funds 
 15 || BG || National Police Chief Directorate at the Ministry of Interior || 61 969 || 49 575 || 80.0 || Prevention and detection of crimes related to distribution of tobacco products without excise labels, with fake excise labels and/or falsified trademark 
   ||   || TOTAL || 1 006 109 || 794 309 || 79.0 ||   
3.2.2.     Organisation
of training and various cooperation measures in the area of the fight against
fraud, including the fight against cigarette smuggling and counterfeiting
(sector of activity: 8.1.2)
The training and other measures financed
under this heading covers the protection of the EU's financial interests in a
wider sense. In 2012, the Commission used the services of a firm specialised in
organising events – MCI Benelux S.A. under a framework contract for the
organisation of its conferences. In some cases, the Commission's interpretation
service (SCIC) organised the conference funded under this sector of activity.
The overall budget for conferences under procurement is EUR 1 450 000
The total amount committed in 2012 was EUR
833 587. This relates to six events (numbered 4 to 9 in the table below) for
which the preparation started in 2012, but which took place in 2012 as
well as in 2013. The table also gives an overview on the Conferences that took
place in 2012 (numbered 1 to 3), for which the preparation started in
2011 and which were committed under the 2011 Financing Decision.
The amounts in the table below are not the committed
amounts, but they refer to the incurred costs, i.e.: the amounts
eventually paid by the Commission, and are lower than the amounts committed for
these events.
The following conferences were organised by
OLAF in the course of 2012:
 N° || DATES (2012) || TITLE CONFERENCE || LOCATION - COUNTRY || PARTICIPANTS || AMOUNT PAID in EUR 
 1 || 25-27 April || OLAF/ASEAN/MS Conference on Customs antifraud cooperation || Bangkok, Thailand || 92 (20 MS, 9 OLAF, 65 ASIA) || (146 504) 
 Objectives: The main purpose of the conference was to focus on cooperation with OLAFs operational partners in the ASEAN countries in identifying, investigating and preventing commercial customs fraud. It was also to review the current methods of cooperation between OLAF and its partners in ASEAN countries and seeking to develop further the initiative agreed at the Member States conference in Stockholm to adopt a more inclusive and analysis-based approach to the investigation of cases of commercial customs fraud (so called "Stockholm approach"). 
 2 || 22-23 February || Debriefing phase of the operation BARREL || Sopot, Poland || 47 || (55 243) 
 Objectives: The participants of the conference discussed the results of the Joint Customs Operation BARREL. The participants agreed on the recommendations formulated in a final report on the basis of the developments during the JCO as well as its outcome. 
 3 || 29 March – 4 April || Fifth session of the Intergovernmental Negotiating Body on Illicit Trade in Tobacco Products (INB5) || Geneva, Switzerland || 562 || (655 559) 
 Objectives: The aims and objectives of this meeting were to negotiate the text for a Protocol on the elimination of the illicit trade in tobacco products which would be agreed and sent to the Framework Convention on Tobacco Control [FCTC] Conference of the Parties [COP] meeting in Seoul, Korea in November, 2012. All the objectives were achieved. 
 4 || 16-19 October || Targeted Regional Baltic Meeting in the context of the Eastern Border Anti-Smuggling Action Plan || Warsaw, Poland || 75 || 64 815 
 Objectives: The overall aim of this conference was to exchange information about recent developments and trends in the area of cigarette smuggling on the Eastern Border of the EU, along with discussing enforcement measures in order to improve effectiveness and co-operation in this field. 
 5 || 12-14 September || 12th Conference of International Investigators || Luxembourg, Luxembourg || 140 || 16 307 
 Objectives: The principal objectives were fivefold: (1)                    To enhance collaboration and co-operation between investigation offices in international institutions; (2)                    to develop best practice in the conduct of investigations; (3)                    to develop mechanisms for the exchange of, operational information; (4)                    to familiarise participants with latest developments in relevant fields such as forensic analysis; (5)                    to develop mutual trust and confidence between investigation offices with similar mandates and in particular those handling EU funds. 
 6 || 27-29 June || AFCOS Conference || Dubrovnik, Croatia || 74 || 98 209 
 Objectives: (1)                    To bring together AFCOS representatives from the Member States, Acceding States, Candidate Countries and potential Candidate Countries; (2)                    to present the work of OLAF and AFCOS and their cooperation; (3)                    to discuss challenges relevant to mutual cooperation; (4)                    to share experience and best practices. 
 7 || 24-27 September || 17th Annual Task Group Cigarettes || Vilnius, Lithuania || 86 || 74 012 
 Objectives: Examining the answers given by Member States to questions about new enforcement measures and special techniques in the fight against cigarettes smuggling and counterfeiting. The following tools were identified and discussed: ·                         Importance of the risk analysis. ·                         Use of X-Ray scanners, specially the mobile ones. ·                         Use of canine teams (sniffer dogs) ·                         The use of tracking devices together with controlled deliveries. ·                         The strengthen cooperation with all the neighbours countries, especially those in the Eastern Border. ·                         Special attention should be paid to the internal movements with excise/VAT fraud and to the postal smuggling. ·                         Big importance of real-time and extensive information exchange. 
 8 || 7-9 November || 10th OLAF Conference of Fraud Prosecutors The cooperation of National Prosecutors with a European Public Prosecutor's Office || Berlin, Germany || 141 || 148 541 
 Objectives: Open a debate among the judicial authorities of the Member States on the possible shape and powers of the European Public Prosecutor's Office (EPPO). The Commission plans to adopt a legislative proposal on the establishment of the EPPO in 2013 and the purpose of the conference was to discuss about it not at academic level, but by hearing the practitioners' point of view. 
 9 || 22-24 April 2013 || 12th OAFCN training seminar || Rome, Italy || N/A || 245 143 still pending 
 Objectives: The main purpose of the OLAF Anti-Fraud Communicator's Network (OAFCN) is to prevent fraud through a 'free-flow' of information ('prevention is better than cure'). The seminar, entitled "Combatting fraud by educating with new communication tools", will focus on the use of new communication tools and strategies, including social media, to target antifraud messages at different audiences (with an emphasis on young people, i.e. future taxpayers.) 
3.2.3.     Organisation
of Computer Forensics Training (sector of activity: 8.1.3)
In 2012, the
German Bundeskriminalamt (BKA) organised two training sessions in Computer
Forensics training. The training sessions were organised under a service
contract concluded under a negotiated procedure between the Commission and the
BKA. The target audience of the training consisted of staff employed by
national or regional administrations of the Member States, EFTA/EEA countries
and candidate countries which promote the strengthening of EU action to protect
the EU's financial interests. A large number of the participants worked for
customs or police forces.
Overview of the
two computer forensic training sessions organised in 2012:
   || DATES || LOCATION || COURSE || PARTICIPANTS || TRAINERS || COMMITTED 
 1 || Sep/Oct-2012 || Budenheim, Germany || 5 || 140 || 25 || 429 998 
 2 || Feb. 2013 || Wiesbaden, Germany || 12 || 180 || 17 || 449 600 
   ||   || TOTAL ||   ||   ||   || 879 598 
The training consisted of courses given to both beginners and
advanced students for improving their skills and competences in the use of
tools and software used during forensic examinations of computers tablets or
mobile phones. The course included tools used to collect evidence from devices running
under different operating systems. The courses, the trainers and the overall
quality of the training complied with the quality standards set by an
international organisation of computer forensic experts. At the end of the
training sessions, the participants had to pass an exam to assess the newly
acquired skills and competences. All participants succeeded in passing these
tests.
The training
sessions also gave the opportunity to the participants to network and to
exchange information and best practices in relation to computer forensic
examinations.
The overall commitment
for the two sessions amounted to EUR 879 598 which included the costs of
training and the accommodation and travel costs for the participants.
3.2.4.     Organisation
of technical training courses on image interpretation for scanning operators (sector
of activity 8.1.4)
Specific technical training courses on
image interpretation for scanning operators were not organised in 2012. These
technical courses are provided by the suppliers of X-Ray scanners to the
beneficiaries of technical assistance grants awarded under the sectors 7.1.1
and 7.1.2 of the Financing Decision.
3.3.        Training,
Seminars and Conferences – Legal part
The legal part of the training, conferences
and seminars sector aims to further develop the specific legal and judicial
aspects of the protection of EU's financial interests against fraud, by
promoting in particular comparative law analyses (sector of activity: 9).
The following activities are eligible under
this sector of activity:
·                        
organisation of seminars and conferences;
·                        
studies in comparative law;
·                        
dissemination, including publication of
scientific knowledge concerning the protection of the EU's financial interests;
·                        
publication and distribution of a scientific
periodical on the protection of the EU's financial interests;
·                        
organisation of the annual meeting of the
Presidents of the Associations for European Criminal Law and for the protection
of EU's Financial Interests.
The results expected in this area are:
·                        
organisation of seminars and conferences on the
priority topics identified in the 2012 Financing Decision;
·                        
production of studies that help the Commission
(OLAF) identify measures to protect the EU's financial interests;
·                        
production of scientific studies that can serve
to stimulate debate on one of the priority topics;
·                        
translation of texts and documents that are
relevant or of interest for the protection of the EU's financial interests;
·                        
promotion of the dissemination of scientific
knowledge relating to the protection of the EU's financial interests and the
results of the measures referred to above;
·                        
publication of a periodical on the protection of
the EU's financial interests;
·                        
organisation of an annual meeting of the
chairpersons of the Associations for European Criminal Law and for the
protection of EU's Financial Interest.
Following the two Calls for Proposal
published, 33 applications were received from 11 Member States. The
aggregated costs of the 33 applications amounted to EUR 2 997 508 and the Commission
was asked to contribute EUR 2 628 312 (88%), where EUR 700 000 was available. In
2012 the total amount committed was EUR 557 297. The Commission decided to
award a grant to nine applications, where 24 applications were rejected. The
applicants could receive a grant covering up to 90% of the eligible costs of
the action.
Grants awarded under the Calls in 2012
(Deadlines: 31 May 2012 and 31 October 2012):
   || MS || NAME ORGANISA-TION ||  TOTAL COSTS IN EUR ||  GRANT AWARDED IN EUR || CO-FIN % || PROJECT TITLE 
 1 || PL || ELRA || 61 499 || 55 303 || 90.0 || Conference: Evidence in EU fraud cases 
 2 || DE || ERA || 76 776 || 68 776 || 89.6 || Conference: Towards the European Public Prosecutor Office (EPPO) : institutional and practical aspects 
 3 || UK || University of Birmingham || 67 017 || 56 300 || 84.0 || Conference: The Challenges of Trans-national Investigation 
 4 || IT || Centro Studi di Diritto Penale Europeo - Como || 50 000 || 45 000 || 90.0 || Conference: Creation of the European Prosecutor and the European Criminal Law Protection of the Financial Interests of the European Union 
 5 || DE || Max Planck Institute || 77 338 || 59 999 || 77.6 || Periodical publication: eucrim: The European Criminal Law Associations' Forum 
 6 || IT || Fondazione Lelio e Lisli Basso - ISSOCO || 87 044 || 78 124 || 89.7 || Conference: Protecting Fundamental and Procedural Rights: From OLAF's Investigation to the European Public Prosecutor's Office (EPPO) 
 7 || IT || Centro di Diritto Penale Europeo - Catania || 107 220 || 93 800 || 87.5 || Conference: The challenge of setting a European Public Prosecutor's Office: definition of common rules and their impact on internal legal systems 
 8 || DE || ERA || 72 875 || 64 795 || 89.5 || Annual meeting Presidents + Conference: Making the fight against corruption in the EU more effective: towards the development of new evaluation mechanisms 
 9 || BG || Center for the Study of Democracy || 43 360 || 29 057 || 67.0 || Conference: EU's financial interests under threat: new approaches in assessing the risks from fraud and corruption 
   ||   || TOTAL || 643 129 || 551 154 || 85.7 ||   
In 2012, 8 conferences took place. Of
those, seven were funded by the second Legal Training call of 2011 and one by
the first Call of 2012. More than 1050 persons participated in the conferences.
The publication of the eucrim periodical (4
issues in 2012) was also funded under this sector of activity. The comparative
law study "EU model rules of criminal investigation and prosecution for
the procedure of the proposed European Public Prosecutor’s Office" was
finalized by the end of 2012. This study was funded under a grant signed in
2010.
3.4.        IT
support
3.4.1.     Ensure
MS' access to strategic information in support of investigations
The Hercule II programme provides funds to
procure (access to) databases for customs and fraud investigation organisations
in the Member States. The database access is needed to support their
investigations. Access to databases is procured and managed by the Commission
and allows for substantial economies of scale (sector of activity: 10.1.1).
Access to these databases is provided to
the Member States through the secure AFIS network, which is managed by OLAF.
OLAF staff also use these databases for their investigations.
During 2012, access to the following
databases was contracted under the Hercule II budget:
   || NAME || CONTENT || TOTAL PRICE IN 
 1 || SEASEARCHER || Information on vessels and vessel movements || 249 480 
 2 || NTELX || Information on ship manifests || 2 040 000 
 3 || CTI || Detailed shipments of Chinese imports and exports || 11 217 
 4 || TIPS || Detailed shipment records of Indian imports and exports || 1 430 
 5 || GRS || GRS contains basic company information from all over the world and gives information on links between companies || 525 300 
 6 || DBAI || Financial details of companies all over the world || 106 500* 
 7 || GTA || International trade statistics || 95 000 
   || COMMITTED UNDER 2012 BUDGET || 2 922 427 
*DBAI subscription for 2012 was
committed and paid under the 2010 Hercule II budget and is not included in the
total
The amount of EUR 840.000 had been committed
from the 2011 Budget, therefore rising the amount available for the procurement
of databases from EUR 2 200 000 to EUR 3 040 000.
3.4.2.     Develop
specific IT tools for data analysis
In 2012, Hercule II support was given to two
projects carried out by the Joint Research Centre (JRC): Automated Monitoring
Tool (AMT) and Container Traffic (CONTRAFFIC). These two projects provide the appropriate tools in order to support
investigations that need data and analyses on container movements (current and
past), providing more realistic and effective scenarios for joint customs
operations (sector of activity: 10.1.2).
AMT has the
following operational objectives:
·                        
to increase OLAF's operational antifraud efforts
by providing automated analysis of trade flow data at EU level;
·                        
to further develop a tool to be used to detect
signals in customs declaration data provided by Member States, with
prioritisation of the signals detected in customs declarations; and
·                        
to continue developing the ground-breaking
software so that its deployment can be widened.
CONTRAFFIC aims to develop and test an advanced risk-analysis system in the
maritime transport domain capable of automatically checking the origin of the
merchandise declared by importers, in order to detect potential fraudulent
cases of the type "false declaration of origin".
In 2011, an
administrative arrangement was concluded for a period of two years between the
Commission and the JRC for the AMT project. The overall costs for the project
amount to EUR 400 000 and the project will be extended under the 2013 Financing
Decision. . 
The
administrative arrangement For the CONTRAFFIC project was concluded in 2010 and
renewed in 2012 for an amount of EUR 240 000. An extension of the project is
expected in 2013. 
3.4.3.     Tobacco
analysis
In 2012, the Commission concluded a new
specific agreement under an existing framework contract with the Scottish
Oceans Institute (SOI Ltd) for the establishment and maintenance of a database
containing information on the specific characteristics of tobacco products and
the analysis of samples of tobacco.
For this purpose, SOI makes analysis of
samples of seized cigarettes which allows the determination of the brand and
the manufacturing plant. This information provides an important input to investigations
into cigarettes smuggling and counterfeiting. 
SOI maintained the database by entering the
results of the analyses and provides the Commission with quarterly reports on
the results (sector of activity: 10.1.3).
The total amount committed in 2012 was EUR
252 000.
4.           Multi-annual
impact
As Hercule II actions are multi-annual,
most of the final reports on actions funded under the 2012 budget have not yet
been received. For this section of the overview the Commission assessed the
impact of previous years' actions finalised during 2012 (final technical and
financial reports received in 2012). The Decision
establishing the Hercule II Programme has five specific objectives as set out
in section 1.1. For each of these objectives, the overview below provides a
summary of the main results achieved in 2012.
4.1.        To
enhance transnational and multidisciplinary cooperation
The specialised
antifraud trainings granted under Chapter 8.1.1 (Training) ensured a
far-reaching antifraud and anti-corruption campaign across the EU and allowed a
wide dissemination of antifraud measures affecting the EU's financial
interests.
The themes of these training seminars
covered a wide range of disciplines – from fraud prevention and detection, the
fight against irregularities and the strengthening of regional cooperation for
preventing corruption at the EU external border, to combating the
counterfeiting of cigarettes and tobacco and focus on laws and practices to
prevent fraud with EU funds.
The main
results of these actions are:
·                        
Better understanding of modi operandi and knowledge
obtained in the field of preventing and combating fraud detrimental to the EU's
financial interests;
·                        
specific skills in prevention, detection and
investigation in the fight against fraud;
·                        
input for further development and improvement of
the activities of national organisations, including legislative work;
·                        
dissemination of information about the latest
developments, methods, techniques in the field of the fight against fraud and
corruption; and
·                        
information obtained through networks
established between organisations.
Examples of actions financed under Hercule
II – Training Part which took place in 2012:
 Project organised by HRMC - Her Majesty's Revenue and Customs, United Kingdom with as title "Project Hiliana" which concerned the deployment of UK customs officers to the border force of the Bulgarian customs. The aim of the action was to share information and intelligence, build relationships and working practices and assist the customs from the United Kingdom, Bulgaria and Greece in the targeting of counterfeited cigarette in containers bound for EU ports. 
 Two weeks training organised by Customs Directorate of the Slovak Republic, with as title: "Training customs officers in the area of fight against corruption and fraud, particularly against tobacco products smuggling and counterfeiting" for customs officers The training focused on deepening the qualifications and improving the skills of customs officers in the fight against corruption and fraud, especially against illegal importation and production of tobacco products 
 A series of training activities organised by DLAF - Fight Against Fraud Department, Romania, in Bucharest (RO) and Zagreb (HR) with as title: "Fight against frauds affecting EU's budget - Sharing the Romanian experience with the Croatian authorities" with participants belonging to judicial and law enforcement organisations from Romania and Croatia. The aim of the project was to inform Croatian officials about the experience of the Romanian AFCOS (Anti-Fraud Coordination Service and national contact point with OLAF) following accession to the EU. The action dealt with the protection of EU's financial interests under the European enlargement policy, reporting of irregularities to OLAF and recovery and follow-up on fraud related cases. 
 A three-day conference organised by 'Der Generalstaatsanwalt' in Munich, with as title: Protection of the EU’s financial interests through fighting fraud in Europe' with participants from twelve countries (Austria, Bulgaria, Czech Republic, Germany, Hungary, Italy, Poland, United Kingdom, Croatia, Liechtenstein, Switzerland, Russian Federation). Presentations were given on the different perspectives and angles relevant for the fight against fraud such as presentations on legislation, case-law, criminal prosecution practice and cooperation with OLAF. The emphasis was put on comparing and sharing best practices. Practical reports from the Member States on fighting fraud, and in particular its harmful effect on the EU’s financial interests, were presented. 
 The Computer Forensics Training organised by the Bundeskriminalamt in Germany facilitated the further enlargement of a network of forensic specialists all over Europe. This network allows its members to share information on best practices in computer forensics and can be called upon in case of need. 
4.2.        To
build networks throughout the MS, acceding countries and candidate countries
Under the legal
sector of Hercule II, financial support has been granted to academic projects
such as legal studies, legal conferences and publications dealing with
particular issues related to the protection of the EU's financial interests.
The nine actions co-financed in 2012 had a wide international dimension. The
audiences were mainly judges, prosecutors, lawyers, investigators, police
officers, academics, researchers, national civil servants, and members and
officials of the EU institutions. These events promoted the dissemination of
legal information on the latest developments in the area of fraud prevention
and the fight against fraud, and constituted a good forum for discussion of
future legislative solutions in the field of the protection of the EU financial
interests.
The annual
meetings of the Presidents of the Associations for European Criminal Law and
for the Protection of EU's Financial Interests offered a valuable opportunity
to enhance and expand the existing network and to initiate exchanges of views
between professionals and to develop ideas for future legal projects.
Examples of actions financed under Hercule
II – Legal Part which took place in 2012 (granted under the 2011 budget):
 "eucrim" – The European Criminal Law Associations’ Forum: publication of 4 issues in 2012 by the Max Planck Institute, Germany. –                                      Issue: 1/2012 Focus: Corruption and Fraud –                                      Issue: 2/2012 Focus: European Public Prosecutor –                                      Issue: 3/2012. Focus: Liability of Legal Persons –                                      Issue 4/2012 Focus: Organised Crime The issues address current developments in the protection of the EU's financial interests and the activities of OLAF, the on-going discussion on the EPPO as well as the latest developments in relation to the reform of the EU's anti-corruption mechanism. These issues are published in English. Each news item was supplemented by internet links containing the source(s) of information (legislation, judgments, etc.) in English, French, and German (where available). eucrim is disseminated in three ways: ·     email (1585 subscribers in 2012), ·     website (all issues are stored on the eucrim website and can be downloaded free of charge), and ·      publication (2000 of each edition were printed and distributed to individuals, universities, law libraries, EU institutions, national law enforcement agencies, courts, etc. 
 Conference on “Circulation and smuggling of counterfeit products: protection of EU financial interests and of consumers in the internal market” 31 May 2012, Milano, Italy. The conference organized by the Centro Studi di Diritto Penale Europeo examined the effectiveness of the instruments of criminal law protection adopted by member countries for the protection of the financial interests of the Union . The issues of combating counterfeiting and smuggling have been also addressed as they represent the most serious and current damages to the financial interests of the European Union. Furthermore, a comparative analysis of the subject was carried out with France, Spain and the UK. Moreover, a specific section has been dedicated to investigative and judicial cooperation instruments against counterfeiting, as well as the seizure and confiscation of the counterfeit goods. In conclusion of the event, the Center printed a publication containing the contribution to the conference by all speakers. 
 Comparative Law Study and final conference on "EU Model Rules for the procedure of the proposed European Public Prosecutor's Office" 2010-2012 Luxembourg. The University of Luxembourg directed a group of European criminal law experts working on elaborating European Model Rules of investigation and prosecution. This study was built upon a previous project “Criminal investigation and prosecution of crimes affecting the financial interests of the Union – the Member States dimension”, both cofounded by the European Commission (OLAF) under the Hercule II Programme. The results of that project served as basis for the discussion on investigative and prosecutorial measures. The experts met for three workshops and finalized the discussions in a comparative analysis, which have been published. On 14-15 June 2012 a conference took place in Luxembourg to present the Model Rules as well as the methodology of the study and the results of the comparative analysis to 150 experts with different backgrounds. The conference was open to national and EU policy makers, European and Luxembourgish practitioners, academics from various European universities as well as the general public. The conference gave them an opportunity to comment on the study and on the Model Rules and gave the authors a possibility to receive feedback. Moreover the final conference allowed not only a general debate on aspects of comparative criminal procedure, but also raised the attention of policy makers and practitioners on the options of further integration of criminal justice in the EU and its alternatives. The report and the conference proceedings can be retrieved from the following internet website: http://www.eppo-project.eu/. 
4.3.        To
provide technical and operational support for MS' law enforcement agencies
The programme's
co-financing of the purchase of technical equipment for law enforcement
agencies engaged in combating fraud is aimed mainly at:
·                        
ensuring better technical equipment across the
EU and increasing compatibility to facilitate cross-border cooperation and
achieve procurement savings;
·                        
efficient use of the equipment acquired;
·                        
facilitating joint operations and international
support for operations;
·                        
better disclosure of offences and higher quality
evidence for the courts.
In 2012, the Commission received reports on
the implementation of grants awarded in previous years. These reports provided
quantitative and qualitative information on the number of investigations,
arrests, seizures of illicit and smuggled goods as well as convictions that
were made possible with equipment funded under the programme. A systematic overview
cannot be given due to the fact that the information needed by Member States on
specific investigations and operations cannot be disclosed. Moreover, it is
often not possible or difficult to establish a direct causal relationship
between the grant and the results achieved with the equipment purchased by the
grant. It can be easily assumed however that, without the financial support, a
substantially lower number of arrests, seizures and convictions would have been
made and that the efficiency and effectiveness of staff using the equipment
would not be as high as is the case nowadays.
Examples of
highly sophisticated and transnational compatible technical equipment purchased
under the 2011 budget and reported in 2012:
 The grant was awarded to a Lithuanian law enforcement agency for the purchase of technical equipment (upgraded software and hardware for computer forensic investigation and forensic duplicator). The procured tools were used in several operations to investigate illicit activities by legal entities, fraudulent management of accounts, documents forgeries and illicit or irregular use of financial EU support provided under the CAP or the structural/cohesion and TEN funds. The equipment is used in almost all on-going pre-trial investigations and undercover operations in Lithuania. The software and hardware for digital forensic examinations was successfully used investigations, which led to the identification of 38 suspects and a suspected financial impact estimated at EUR 19.6 million. 
 A grant awarded to a Spanish law enforcement agency enabled this agency the purchase special devices to track, monitor and detect vehicles and individuals suspected of involvement in cigarette smuggling (cameras and transmission devices). The equipment was used in operations dedicated to the fight of smuggling of cigarettes via containers delivered in Spain and Portugal. In addition the equipment was used in a case regarding imports of hydrocarbons and petrol in the EU that saw the arrest of 31 people and whose impact is estimated at EUR 60 million. Surveillance equipment was used in a case concerning fraud to obtain refunds of VAT via a virtual trade of olive oil for which 14 people were arrested and the financial impact is estimated to be EUR 5 million. The equipment was also successfully used in an operation concerning counterfeiting of Euro notes and coins by a transnational criminal organization, that lead to the arrest of nine persons and its financial impact is estimated at EUR 240 050. 
 Estonia, Latvia and Lithuania were able to complete the interfacing project of their respective vehicle tracking systems also thanks to the financial support (EUR 100 030) provided by the Hercule II Programme. The linking of the systems of the three states allows mutual visibility for the numbers of the means of transport registered in the three countries. In addition alert messages would be transferred from one system to another and therefore be accessible at all the borders of the three Baltic States. The objective of this project was enhancement of the customs control efficiency. Improvement of the fight against illicit trafficking of goods, in particular tobacco products, and strengthening of cooperation in collection of excise duties. As it is an on-going project, tangible results will be available in the future. The added value of the linking of the system is the possibility of extending it to other Member States using it therefore creating a wide network of exchange of information and active collaboration in the fight against counterfeiting and smuggling of cigarettes and tobacco. 
 The grant awarded for the purchase of technical equipment for investigators within a Finnish law enforcement agency proved very efficient and useful for its end users. The aggregated financial impact of one of the operations investigating corruption and bribery in a big municipality, amounts to almost EUR 200 000 and will bring to court up to ten suspects. The equipment was also used in collaboration with the Finnish national custom authority, which was then able to make a major case against cigarettes smugglers. The equipment allowed the authorities to seize at least 4 million cigarettes for a financial impact of approximately EUR 900 000. As clearly mentioned by the beneficiary, these investigations could not have taken place in the same successful way without Hercule support that enabled the purchase of the technical equipment. 
 A Romanian law enforcement agency received a grant for the purchase of technical equipment for investigators. The aggregated financial impact of the operations, in which Hercule funded equipment was used, amounts to almost EUR 300 000. One operation related to an investigation involving 14 members of the staff of a public authority who were suspected of falsifying documents in order to obtain European Funds. The value of the suspected fraud amounts to EUR 3 million. The second operation related to the abuse of an amount of EUR 5 million of EU funds given to build the first section of a motorway. The investigations could not have taken place in the same successful way without Hercule support that enabled the purchase of the technical equipment. 
Access procured
by the Commission to external databases provides essential operational
information to investigators in both Member States and OLAF. This includes data
necessary for protecting the revenue side of the budget, relating to trade
flows and shipping and container movements. Data relating to company
information is also essential for investigations and analysis relating to the
expenditure side of the budget.
 The databases containing information on trade flows from China (CTI) has been very helpful in several on-going investigations OLAF carried out in support of operational customs investigations of the Member States that may eventually lead to the recovery of evaded anti-dumping and customs duties. Its usage led, for example, to the identification of shipments of counterfeited goods, the arrest of the responsible persons and the shutdown of two illegal production sites. The results given below are made anonymous because the investigations are on-going. The vast majority of customs trade fraud cases result from the trafficking of Chinese products, it is imminently sensible to gather intelligence from reliable data sources such as the Chinese database. The database continues to be a very useful source of data for our investigations. ·                         Industrial product Nr 1: transhipment from China to Italy via Switzerland. ·                         Results in the Chinese database were used for the assessment of the case. Outcome: +/- EUR1 million of Anti-Dumping Duties (ADD) to be recovered; criminal investigations in Italy. ·                         Industrial product Nr 2: actual recoveries reported by Portugal last year. ·                         Industrial product Nr 3: trans-shipped via Taiwan; duties established more than EUR4.3 million. ·                         Industrial product Nr 4 from China: EUR0.5 million recovered. Industrial counterfeit product The work and searches have been instrumental to the success of cases: two separate searches revealed imports of the said product from a Chinese supplier of counterfeit goods, two Mutual Assistance requests were transmitted to Member States resulting in the seizure of 2 600 pieces of counterfeit goods in the Czech Republic. Chemical product Searches for Chinese exporters of alleged counterfeit chemical products from China into the UK have been instrumental in providing further assistance to the UK national authorities. This information will be added to the evidence collected so far in an upcoming prosecution against a UK importer. Searches for a specific Chinese exporter of alleged counterfeit chemicals from China into the UK revealed that the company’ exports were diverted to Ukraine. OLAF subsequently cooperated with the Ukraine customs and the information led to the seizure in Ukraine of two shipments of counterfeit goods, the arrest of eight persons (who could face between five and eight year imprisonment and confiscation of property) and the shutdown of two illegal productions sites. In several selections, OLAF asked to check whether the operator involved had traded from China. This information is essential in order to prove or disprove some of the allegations of fraud received by OLAF. 
The trade
databases continue to be vital investigative tools for investigations in custom
and trade irregularities and fraud. They are also important tools in the
assessment of incoming information to determine whether or not to open an
investigation.
 The Global Trade Atlas Database (GTA) is commercial database of trade statistics, worldwide, aggregated at monthly level. It is used by both the Member States and OLAF to analyse trade flows, identify suspicious trade and cross-check allegations of customs fraud involving one or more Member States. Cross-checks can support decisions on whether to open a case or not, thus saving resources for all concerned. GTA is used by OLAF in all initial assessments where the level of detail is appropriate, both to dismiss potential cases (thus saving time & money) or to support them (thus adding to the background information and supporting allocation of resources) Dismissed Cases: ·                         Case 1: product A allegedly transhipped via a third country: GTA enabled to determine no change in the pattern of trade. ·                         Case 2: product B from a third country. GTA results showed no significant changes of imports into the EU from 2 third countries, and suspicions about potential transhipment were not supported. Opened Cases: ·                         Case 3: product C allegedly transhipped via a third country: GTA enabled to establish clear change in the pattern of trade. Estimated financial impact of the case: EUR 2 000 000. ·                         Case 4: misrepresentation of product D. GTA extractions enabled the extension of the scope of the allegation in relation to Member States that were not considered initially as potential importers. The estimated financial impact of the case is EUR 3.700.000. 
Examples of operational results obtained from the use of the CONTRAFFIC tool
(developed with the Joint Research Centre):
 Until March 2013 the Singular Administrative Document (SAD) data analysis facility was used by 10 MS Customs sending their data to JRC systematically and receiving signals in return (out of 12 MS that joined the project so far); 800 000 SAD declarations were screened by this origin cross-checking facility in 2012; more than 180 signals for suspect mismatches were detected and sent out to MS; the estimated total value of the signals produced in 2012 amounted to about EUR 33 million. CONTRAFFIC has a 38% coverage for incoming containers into the EU; from previous experiences it is known that a large part of SAD declarations do not feature a correct container ID and cannot be analysed; in addition it is difficult to deal with cases where containers are stuffed inside transhipment hubs; and it is not possible to detect cases where products change containers in intermediate transhipment ports. Finally, in terms of SAD data analysis capacity enhancement, in the course of the past 12 months, JRC developed and operated successfully a dedicated secure on-line document management system to manage the data sharing with MS Customs and OLAF. 
4.4.        To
strike a geographical balance by including all MS, acceding countries and
candidate countries
One objective of the Hercule II Decision is
to ensure a geographical balance in the participation of Member States,
acceding states and candidate countries in the programme. In 2012,
organisations located in 19 Member States received a grant. 
Under the Technical Assistance sector
(sectors 7.1.1 and 7.1.2) 14 Member States were awarded a grant for purchasing
specialised technical equipment, strengthening their capacities in the fight
against irregularities, fraud and corruption. The external databases procured
with Hercule II budget were intensively used by national and regional
administrations responsible for protecting the EU's financial interests in all
27 Member States.
4.5.        To
multiply and intensify the measures in areas identified as the most sensitive,
particularly in the field of cigarette smuggling and counterfeiting
The widespread availability of illicit tobacco
within the EU has led to the loss of considerable tax and duty revenues (losses
to the EU and Member States' budgets as a result of cigarette smuggling are
estimated to be at least EUR10 billion per year). One feature of the illicit
market for cigarettes in the EU is the significant quantity of counterfeit
products available at lower cost than the genuine products.
 The Commission concluded a contract with the Scottish Oceans Institute (SOI) for the establishment and maintenance of a database identifying the characteristics of tobacco products and the analysis of sample tobacco products. A quarterly report was delivered by SOI, assessing the similarity between the samples delivered by OLAF and the reference samples obtained by the contractor, the likelihood of a sample being a genuine or counterfeit product, and what continent or geographic region the sample has affinities with. In 2012, OLAF received the notification that 45 samples of cigarettes packs had been sent by the MS to SOI for analysis. 
 The Danish law enforcement agency received a grant used for the purchase of six scanners used in operations dedicated mostly to the fight of smuggling of cigarettes and other illicit activities at airports and harbours. The equipment is used from December 2011 and during the first six months of 2012, almost 30 000 scans and controls were made, which led to 370 hits. As a result of those hits, the law enforcement agency was able to retrieve 87,220 cigarettes and almost 24 kg of smoking tobacco. In addition, drugs (30,000 XTC tabs, 8 kg marihuana and 91 kg qat) and medicines (almost 10.000 pieces) were seized. 
5.           Communication
Activities
The successful implementation of the
programme required the development of a structured way to:
·                        
inform (potential) beneficiaries of the
programme on funding opportunities;
·                        
disseminate information on the achievements and
the results of the actions that received funding.
5.1.        Informing
potential beneficiaries
Concerning grants, the calls for proposals
were published on the Commission's website (http://ec.europa.eu/anti_fraud/about-us/funding/index_en.htm).
The following Calls for Proposals were
published in 2012:
   || Sector of Activity || Budget available (EUR) || Deadline for the submission 
 7.1.1 || Technical support for national authorities' use of special investigative tools and methods in the fight against fraud and corruption, and technical support to strengthen inspections of containers and trucks at the EU's external borders, including the fight against cigarette smuggling and counterfeiting || 3 750 000 || 31 May 2012 13 September 2012 
 7.1.2 || Technical support for detecting the presence of cigarettes and tobacco || 3 300 000 || 31 August 2012 14 February 2013 
 8.1.1 || Training, seminars and conferences || 1 000 000 || 4 May 2012 17 September 2012 
 9. || Training, seminars and conferences – Legal part || 700 000 || 31 May 2012 1 October 2012 
The professional networks (mainly the European Lawyers' Association and the training
organisations) were approached by OLAF's staff members concerning information
on funding opportunities. Potential candidates were also informed via e-mails
sent to the members of the Advisory Committee for the Coordination of Fraud
Prevention (COCOLAF), the OLAF Anti-Fraud Communicators Network (OAFCN) and
European Judicial Training Network (EJTN). The training call was also published
in the news section of the e-Justice Portal.
5.2.        Dissemination
of results
The dissemination of the results of actions
under Hercule II, in particular technical assistance, is rather sensitive as
most of the achievements relate to investigations for which the information cannot
be disclosed. The dissemination on training activities was realised through the
distribution of electronic and/or paper reports summarising the event. Some
beneficiaries posted the training materials on their websites or created a
dedicated website for their projects.
5.3.        Communication
and publicity
Under the training (8.1.1 and 8.1.2) and
the legal training (9) sectors, all beneficiaries of grants were requested to
mention the support from the Hercule II programme:
(5)                   
In every publication (title page) or related
material developed (e.g. studies, booklets, newsletters, leaflets);
(6)                   
In electronic information (e.g. websites, audio-visual
material, videos, software) and;
(7)                   
At information events (conferences, seminars).
They were also requested to insert a link
from their website to the Hercule II programme's site.
6.           Feed-back
from participants in the programme
In 2012, OLAF
carried out an informal consultation of the following stakeholders,
partly based on questionnaires:
·                        
OLAF's Task Group Cigarettes partners (specialist
services in Member States concerned in particular with the agreements with the
tobacco manufacturers);
·                        
Member State services that access the specialist databases procured by the Commission under the programme's technical
assistance sector;
The
consultation confirmed the importance of the Hercule II programme but indicated
that the co-financing rates under the technical assistance sector were too low
(maximum 50% of the total eligible cost of actions).
Participants
attending events funded under the Hercule II programme are request to provide feed-back
on the quality, relevance and usefulness of the event in view of improving and
adjusting the events to future needs.
The Romanian
Department for the fight against fraud (DLAF) organised a series of training activities between 12 and 29 March 2012 in
Bucharest and Zagreb (Croatia) with as title: "Fight against frauds
affecting EU's budget - Sharing the Romanian experience with the Croatian
authorities" with participants belonging to judicial and law
enforcement organisations from both countries. The participants rated the
relevance, content and organisation of the event in a positive way, as shown in
the graph below:
Graph: Results
evaluation DLAF Conference (1: poor, 5 excellent).
The Customs
Directorate of the Slovak Republic organised a training for customs
officers from 19 to 31 March 2012: "Training customs officers in the area
of fight against corruption and fraud, particularly against tobacco products
smuggling and counterfeiting". The standard evaluation form was filled in
by 40 participants and showed a high degree of satisfaction on the relevance,
content and organisation of the event (Ratings from 1
(poor) to 5 (excellent)):
Graph: Results
evaluation Slovak Customs Conference (1: poor, 5
excellent).
The Academy of
European Law ('Europäische Rechtsakademie' – ERA) in Trier, Germany, organised
the Annual Forum on Combating Corruption in the EU 2012: "Protecting the
European Union's Financial Interests: Internal and External Auditing". The
event took place on 16 and 17 February 2012 and was funded under the
"Legal Training" sector of activity. The evaluation form was filled
in by 43 participants (Ratings from 1 (poor) to 5
(excellent)):
Graph: Results
evaluation ERA Conference (1: poor, 5 excellent).
7.           Conclusions
and Way Forward
The results above show that the activities covered
by the annual overview 2012, and funded under the Hercule II Programme, were
overall successful. By 31 December 2014, the Commission (OLAF) shall present to
the European Parliament and to the Council a report on the achievement of the
objectives of the programme[15].
The available budget for the Hercule II Programme
was committed for 91%. It should be noted that half of the budget was spent on
grant agreements, in particular technical assistance, which require a national co-funding
of at least 50% of the eligible costs. Budget restrictions in the Member States
eventually led to fewer applications for smaller amounts as well as the
withdrawal of some successful applications.
By the end of 2011, the Commission adopted
a proposal for a new programme, Hercule III, under the Multi-Annual Financial
Framework MFF (2014-2020)[16]. This proposal was discussed within the Anti-Fraud Working Group of
the Council (GAF), which mandated the Presidency to start negotiations. The GAF
generally supported the Commission's proposal, but could not reach a final
position on the co-funding rates for grants and the overall amount for the programme.
The EP report on the proposal, which was adopted in November 2012, contained 46
amendments. The EP, the Council and the Commission have started in 2013 an informal
trilogue within the framework of the ordinary legislative procedure. 
[1]               OJ L 193 of 25 July 2007, p.
18
[2]               C(2012)1057 of 21 February
2012. This Decision was published on OLAF's internet webpages.
[3]               C(2012)1057 of 21 February 2012
[4]               The budget line for the
commitment and payment appropriation is 24.0201. Some of the grant agreements have
only been signed in 2013 following a Call for Proposals launched in December
2012..
[5]               The figures are rounded
[6]               Commitments cover the total
costs in 2012 of legal obligations (contracts, grant agreements/decisions)
entered into for operations extending over more than one year (Art. 7, FR). The
total amount for the commitments cannot exceed the allocated budget.
[7]               This amount is slightly
higher than the aggregated commitments reported in paragraph 3.1.1 due to an
amendment to a grant agreement signed in 2010, but charged to the 2012 budget.
[8]               Procurement
costs higher than envisaged budget - in accordance with Art. 3 of the
Commission Decision on the annual financing of the expenditure of the Hercule
II programme C(2012)/1057: "Cumulated changes in allocations to specific
actions not exceeding 20% of the maximum contribution authorised by this
Decision are not considered to be substantial provided that they do not
significantly affect the nature and objective of the work programme."
[9]               This amount was available for
X-Ray Image Interpretation Training, but was transferred to cover the needs for
computer forensics training
[10]             The amount of EUR 840.000 was
transferred from the 2011 IT support budget. See section 3.4.
[11]             The high proportion of
commitments for Belgium is explained by the fact that most contractors for IT
support and for organising conferences have established their legal seat in Belgium. Conferences for example are organised by a contractor located in Belgium. The commitments for conferences are thus recorded for Belgium, even if the
conferences take place in another country, where most of the actual expenditure
is incurred.
[12]             C(2012)1057 of 21 February 2012.
[13]             Budget line 24.0201:
operational programmes in the fight against fraud – Hercule II. See: OJ L 56 of
29 February 2012.
[14]             COM (2011)376 of 24 June 2011.
[15]             Art 7
of the Decision 878/2007/EC of 23 July 2007.
[16]             COM (2011)914 final of 19
December 2011.