COMMISSION STAFF WORKING DOCUMENT Follow-up of recommendations to the Commission report on the protection of the EU’s financial interests – fight against fraud, 2015 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 2016
Date: 2017-07-20
Institutions: European Anti-Fraud Office, European Commission
Subjects: EU programme, activity report, common strategy, crime, fight against crime, financial control, fraud, fraud against the EU, illicit trade

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 20.7.2017  SWD(2017) 267 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, 2015 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 2016 {COM(2017) 383 final} {SWD(2017) 266 final} {SWD(2017) 268 final} {SWD(2017) 269 final} {SWD(2017) 270 final}  
 
 
TABLE OF CONTENTS 

COMMISSION  STAFF  WORKING  DOCUMENT  FOLLOW-UP  OF 
RECOMMENDATIONS  TO  THE  COMMISSION  REPORT  ON  THE 
PROTECTION OF THE  EU’S FINANCIAL INTERESTS – FIGHT AGAINST 
2015 

EXECUTIVE SUMMARY ........................................................................................................ 2 

1.

follow up by recommendation ...................................................................................... 5 

1.1 

Revenue ........................................................................................................................ 5 

1.1.1 

Improved Coordination and Cooperation: a new impetus in the fight against fraud .... 5 

1.1.2  Yearly planning of staff and resources to include voluntary admissions ................... 12 

1.2 

Expenditure ................................................................................................................. 14 

1.2.1 

 Increasing detection: results and open issues ............................................................ 14 

2.

2.1.

2.2 

Replies of member states ............................................................................................ 22 

Revenue ...................................................................................................................... 22 

Expenditure ................................................................................................................. 93 

2 

 
 
 
 
 
 
 
 
EXECUTIVE SUMMARY 

In  the  2015  Report  on  the  protection  of  the  European  Union's  financial  interests,  the 
Commission  made  a  number  of  recommendations  to  the  Member  States.  More  specifically, 
two  recommendations  for  the  revenue  side  of  the  budget  and  two  recommendations  for  the 
expenditure side as follows: 

A. Revenue 

(1)  Requested  Member  States  to  strike  the  right  balance  between  trade  facilitation  and  the 
protection of the EU's financial interests, invited them to exchange experiences on detecting 
fraud  or  irregularities  at  clearance,  requested  them  to  incorporate  information  received 
through  CRMS,  AFIS  or  OWNRES  systems  into  risk  management  and  invited  them  to 
cooperate closely with one another; 
(2) Invited them to adapt their customs controls strategies taking into account the outcomes of 
voluntary admissions;  

B. Expenditure 

(3) Requested Member States to further improve the quality of information submitted via IMS 
and;  
(4)  Invited  Member  States  to  plan  and  focus  their  audits  and  controls  on  the  basis  of  risk 
analysis  and  performing  IT  tools  and  encouraged  the  Member  States  to  use  tools  such  as 
Arachne, IMS and Fraud Risk Assessment. 

As stated in the previous report, 2015 has been a year of consolidation for several initiatives 
taken by the Commission and the Member States in previous years. Several Member States1 
reported  that  the  balance  between  trade  facilitation  and  the  protection  of  the  EU's  financial 
interests  is  ensured  while  some  Member  States2  are  implementing  measures  to  ensure  this 
balance.  Belgium  reassured  control  system's  efficiency  via  the  National  Operation  Plan, 
Germany  and  France  via  a  detailed risk  analysis  operating  system,  Spain  and  Italy's  control 
system is based on an entirely computerised system of control. Greece's report demonstrates 
the efficiency of the reformed framework of ex post checks as well as the improved results in 
comparison to 2015, as regards seizures by the Customs Authorities. Hungary has provided a 
particularly successful example of efficient risk analysis and trade facilitation via a bilateral 
cooperation with Slovenia which resulted to targeted checks in both countries on the payment 
of customs duties. Poland and Romania have been achieving this balance via implementation 
and development of new systems and checks on Traditional Own Resources. Bulgaria ensures 
efficiency  via  implementing  the  EU  Customs  Competency  Framework  and  expanding  the 
functions  of  the  Customs  Intelligence  and  Investigations  directorate  while  maintenance, 

1  

2  

Belgium,  Bulgaria,  Germany,  Spain,  France,  Italy,  Cyprus,  Hungary,  Poland,  Romania,  Finland, 
Sweden. 
Denmark, Slovenia. 

3 

 
 
 
 
 
 
 
                                                 
improvement  and  upgrade  of  the  information  system  took  place  in  2016.  Bulgaria  provided 
two  case  examples  of  particular  success  in  detecting  fraud  and  irregularities  at  the  time  of 
clearance. 

With  regards  to  the  first  recommendation,  information  received  from  Member  States  or  the 
Commission departments is well considered into risk management systems in most Member 
States3.  Moreover,  a  number  of  Member  States4  have  provided  information  as  regards  to 
having close cooperation amongst each other in relation to exchanging information over post-
clearance  controls/audits  to  prevent  fraud  related  trade  diversion.  Belgium  reported  that 
already  integrated  CRMS,  AFIS  or  OWNRES  in  national  work  procedures  of  risk 
management. Bulgaria has provided examples where information received via CRMS created 
27 financial risk profiles. Eighteen Member States5 are forwarding information received from 
other  Member States or the Commission  departments to  their national  competent bodies for 
risk  assessment  and  analysis.  Furthermore,  Bulgaria  provided  examples  of  success  stories 
related to close cooperation with other Member States in detecting fraud and irregularities at 
the  time  of  clearance.  Spain  informed  on  the  close  cooperation  with  France  and  Portugal, 
Croatia about cooperating with Slovenia, Italy and Hungary, Italy reported on the increase of 
relations and cooperation with Germany, the United Kingdom, France and Belgium, Romania 
is  exchanging  information  with  Hungary  and  informed  about  a  Romania-Moldova-Ukraine 
trilateral cooperation on cross-border exchange of information of illicit trafficking. Hungary 
and  Slovakia  informed  about  their  cooperation  with  the  Visegrad  countries6.  Finland  and 
Sweden  are  cooperating  within  the  group  (Denmark-Finland-Sweden)  on  risk  management 
keeping a close cooperation with Germany on control plans and authorisation.  

In relation to recommendation two, a number of Member States7 reported that they have taken 
good  consideration  of  the  Commissions’  recommendation  to  adapt  their  yearly  planning  of 
staff  and  resources  required  for  ex-post  verification  of  information  received  by  voluntary 
admissions and to take account of the types of irregularities revealed by voluntary admissions.  
Several Member States8 reported that they have included information on voluntary admissions 
to risk analysis and management to minimise risk and use it for post clearance examination. 
Denmark has set up a specific unit to deal with companies' voluntary admissions. Lithuania 
reported that it does not have staff planned for voluntary admissions but has a specific system 
used  namely,  the  Risk  Assessment  and  Control  System,  to  produce  risk  indicators  with 
regards to imports declarations and risk assessment of economic operators. Malta stated that a 

3  

4  
5  

6  
7  

8  

Belgium,  Bulgaria,  Czech  Republic,  Denmark,  Estonia,  Ireland,  Spain,  France,  Croatia,  Italy,  Cyprus,  Lithuania, 
Hungary, the Netherlands, Poland, Romania, Slovenia, Slovakia, Finland, Sweden. 
Bulgaria, Spain, Croatia, Italy, Romania, Hungary, Slovakia, Finland, Sweden. 
Czech  Republic,  Denmark,  Estonia,  Ireland,  Spain,  France,  Croatia,  Italy,  Cyprus,  Lithuania,  Hungary,  the 
Netherlands, Poland, Romania, Slovenia, Slovakia, Finland and Sweden. 
Czech Republic, Poland, Hungary and Slovakia. 
Belgium,  Denmark,  Germany,  Estonia,  Ireland,  Greece,  Spain,  France,  Italy,  Cyprus,  Hungary,  the  Netherlands, 
Poland, Slovakia, Sweden. 
Belgium,  Germany,  Estonia,  Spain,  France,  Italy,  Cyprus,  Hungary,  the  Netherlands,  Poland,  Sweden  and  the 
United Kingdom. 

4 

 
 
 
                                                 
voluntary  admission  is  considered  to  fall  under  the  situation  of  traders  quoting  the  wrong 
currency and informing the customs afterwards. Finland reported that not much focus was put 
on voluntary admissions, but to the recoveries made based on risk analysis and audit by the 
Customs. 

With regards to the third recommendation and the low level of reporting of irregularities, six 
Member States9 that were specifically recommended to strengthen their systems in relation to 
detecting  and/or  reporting  fraud,  responded  on  changes  made  for  improving  their  national 
system.  The  United  Kingdom  reported  that  they  have  a  zero  tolerance  approach  to  fraud 
against national and EU funds. Two Member States10 specifically and in detail referred to the 
measures undertaken to improve the reporting of irregularities. Spain reported that there was 
actually  an  increase  in  irregularities  reported  due  to  the  efficiency  of  the  detection  system. 
Seven other Member States11 highlighted their efforts in reporting fraudulent irregularities via 
improving  their  systems  and  organising  trainings.  The  remaining  Member  States12  assumed 
that this recommendation was not applicable to them. 

In relation to the fourth recommendation on the use of risk analysis and performing IT tools 
(Arachne, IMS and the Fraud Risk Assessment Tool), several Member States13 reported that 
they  make  use  of  some  of  these  tools  combined  with  national  tools,  whereas,  some  other 
Member States14 reported that they mainly make use of their own established alternative tools. 
In  particular,  some  Member  States15  have  incorporated  Arachne  into  their  manuals  of 
procedure and some other Member States16 are currently evaluating a potential use or are in 
the  process  of  implementing  Arachne.  Two  Member  States17  reported  that  they  do  not  find 
Arachne  complying  with  their  management  systems  at  the  moment.  The  Irregularity 
Management  System  (IMS)  is  widely  used  from  all  Member  States18  that  have  provided 
detailed information regarding this recommendation. Lastly, nine Member States reported that 
they have made use of the Fraud Risk Assessment Tool19. 

9  
10  
11  
12  

13  

14  
15  
16  
17  
18  

19  

Spain, France, Lithuania, Austria, Finland and the United Kingdom. 
France, Lithuania 
Bulgaria, Denmark, Estonia, Croatia, Latvia, Poland, Slovenia 
Belgium,  Czech  Republic,  Germany,  Ireland,  Greece,  Italy,  Cyprus,  Luxembourg,  Hungary,  Malta,  the 
Netherlands, Portugal, Romania, Slovakia, Sweden. 
Belgium,  Bulgaria,  Czech  Republic,  Denmark,  Germany,  Estonia,  Greece,  Spain,  France,  Croatia,  Italy,  Cyprus, 
Latvia,  Lithuania,  Luxembourg,  Hungary,  Netherlands,  Poland,  Portugal,  Romania,  Slovenia,  Slovakia  and  the 
United Kingdom. 
Ireland, Malta, Finland, Sweden, United Kingdom. 
Belgium, Bulgaria, Czech Republic, France, Croatia, Italy, Luxembourg, Hungary, Romania. 
Denmark, Ireland, Latvia, Lithuania, Malta,  Netherlands, Poland, Slovenia, Slovakia, Finland. 
Germany, Estonia. 
Belgium,  Bulgaria,  Czech  Republic,  Denmark,  Germany,  Estonia,  Ireland,  Greece,  Spain,  France,  Croatia,  Italy, 
Cyprus,  Latvia,  Lithuania,Luxembourg,  Hungary,  Malta,  Netherlands,  Poland,  Portugal,  Romania,  Slovenia, 
Slovakia, Finland and Sweden.  
Bulgaria, Estonia,Greece,Croatia,Cyprus, Luxembourg,Netherlands, Poland, Romania. 

5 

 
 
 
 
 
 
                                                 
1. 

FOLLOW UP BY RECOMMENDATION 

Introduction 

In  the  2015  Report  on  the  protection  of  the  European  Union's  financial  interests,  the 
Commission made a number of recommendations to the Member States. As part of the 2016 
reporting  exercise,  the  Commission  has  to  follow  up  on  the  implementation  of  these 
recommendations by the Member States and to report to the European Parliament and to the 
Council.  

The role of the Member States is pivotal in ensuring that the financial interests of the EU are 
adequately  protected.  Indeed,  as  Member  States  collect  or  manage  and  spend  the  greatest 
share of the resources of the EU budget, they also have a specific responsibility in ensuring 
that  the  principles  of  sound  financial  management  are  duly  applied  and  respected.  Member 
States have the obligation to  ensure that fraud and irregularities affecting the EU's financial 
interests are detected and corrected, and in the case of fraud, adequately prosecuted. 

1.1 

Revenue 

1.1.1 

Improved Coordination and Cooperation: a new impetus in the fight against fraud 

The  adoption  of  Regulation  (EU)  No  2015/1525  has  improved  the  current  framework  for 
detecting  and  investigating  customs  fraud  at  EU  and  national  level,  significantly 
strengthening  the  analytical  capabilities  of  both  OLAF  and  national  customs  authorities  in 
detecting fraudulent operations. 

Against  this  background,  the  results  from  detections  in  the  traditional  own  resources  area 
show a slightly downward trend, partly influenced by the high values of detections in 2014. 

The  detection  of  irregularities  and  fraud  concerning  solar  panels  (many  of  which  were 
detected following mutual assistance notices issued by OLAF) underlines: 

the importance of investigations conducted by OLAF in the detection of irregularities 

• 
in transactions with certain types of goods;  and 

the  added  value  that  coordination  and  cooperation  at  EU  level  can  generate  in  the 

• 
fight against fraud. 

Customs  control  strategy  is  a  combination  of  different  types  of  controls.  Post-clearance 
controls  are  the  most  effective  method  of  detection  both  in  terms  of  the  number  of  cases 
detected  and  in  terms  of  amounts. However,  controls  at  the  time  of  clearance  of  goods  and 
inspections carried out by anti-fraud services are indispensable for detecting certain types of 
fraud and new fraud patterns. 

In  many  Member  States,  budget  constraints  have  led  to  the  reduction  of  staff  in  charge  of 
controls. Some Member States operate with remarkably few customs staff. Reduced controls 
may  boost  inward  trade  flows  but  this  could  be  at  the  cost  of  effective  controls  and  the 
protection of the EU’s financial interests. 

6 

 
 
 
 
Recommendation 1: 

Given the current budget constraints, Member States are: 

• requested to strike the right balance between trade facilitation and the protection of 
the  EU's  financial interests, which are  also national interests considering the national 
taxes  collected  at  import  and  considering  that  Member  States  are  compensated  for 
collecting traditional own resources; 

•  invited  to  exchange  experiences  on  instances  where  customs  authorities  were 
particularly successful in detecting fraud or irregularities at the time of clearance; 

•  requested  to  incorporate  information  received  from  other  Member  States  or  the 
Commission  departments  through  the  CRMS,  AFIS,  or  OWNRES  systems  into  risk 
management  and  complement  the  national  populations  used  for  risk  management 
purposes; 

•  invited  to  cooperate  closely  with  one  another  and  exchange  information  beyond  the 
borders  over  post-clearance  controls/audits  and  to  prevent  fraud-related  trade 
diversion from one Member State to another. When determining which companies are 
to be checked, attention should be paid to those that are established in one country but 
which clear all their imports at customs offices in other Member States. 

The  Commission  believes  that  the  role  of  Member  States  is  pivotal  in  ensuring  that  the 
financial interests of the EU are adequately protected, via striking the right balance between 
this concern and trade facilitation. In addition, close cooperation between the Member States 
and  exchange  of  information  beyond  the  borders  for  purposes  of  customs  controls  is 
welcomed.  A  positive  observation  is  that  several  Member  States'  replies  indicate  that 
information received from other Member States or the Commission departments is already an 
integral  part  to  risk  management  and  supplements  the  national  populations  used  for  risk 
management purposes. 20 

To be more specific, several Member States have responded in relation to measures taken to 
strike  a  balance  between  trade  facilitation  and  the  protection  of  EU's  financial  interests  and 
how they ensure efficiency of the control systems given any budgetary cuts affecting the level 
of staff at control level. In accordance with information provided, nine Member States21 have 
reported  that  budgetary  cuts  did  not  have  an  impact  on  the  level  of  staff  at  control  level 
whereas five Member States22 reported that budget cuts affected their level of staff at a certain 
extent.  

As  regards  to  measures  taken  in  order  to  strike  a  balance  between  trade  facilitation  and  the 
protection of the EU's financial interests, the Member States reported the following: 

20  

21  
22  

Belgium,  Bulgaria,  Czech  Republic,  Spain,  Denmark,  France,  Croatia,  Ireland,,  Italy,  Lithuania,  Hungary,  the 
Netherlands, Poland, Slovenia, Slovakia, Finland, Sweden 
Belgium, Czech Republic, Germany, Estonia, Croatia, Latvia, Luxembourg, Netherlands, Sweden 
Ireland, Spain, Italy, Cyprus, Malta. 

7 

 
 
 
                                                 
  Belgium assured balance via a risk-oriented approach, implementation of AEO certificates 
in  the  control  procedures,  investments  in  ICT  and  the  establishment  of  the  service 
"Enforcement". The control system's efficiency is ensured via the National Operation Plan.  

  Bulgaria  reported  that  recently  expanded  the  functions  of  the  Customs  Intelligence  and 
Investigations  Directorate.  In  2016,  maintenance,  improvement  and  upgrade  of  the 
functionalities  of 
the 
implementation of module management and administration of the information systems of 
the 'Customs Agency of Activity' to ensure compliance with the EU requirements. Bulgaria 
provided two case examples where customs authorities were successful in detecting fraud 
or irregularities at the time of clearance. 

took  place  along  with 

information  system 

launching 

the 

  Denmark  reported  that  the  number  of  FTEs  in  SKAT  has  been  declining  in  recent  years 
due to improvements in efficiency via digitalization, new working methods and data based 
control.  

  Germany reported that financial risk analysis is used to strike a balance between economic 
promotion  i.e.,  freest  possible  movement  of  goods,  and  the  protection  of  EU's  financial 
interests. 

  Greece  reported  that  the  results  stemming  from  the  2016  customs  checks  and  detected 
infringements  demonstrating  a  good  target  level  of  ex-post  documentation  checks.  The 
customs  service  carried  out  an  effective  control  both  at  clearance  and  ex-post  control 
stages.  Furthermore,  the  information  provided  reveals  an  improved  performance  of 
taxation measures taken as well as an increase rate on customs seizures and commitments 
of certain goods. 

  Spain ensures balance between trade facilitation and the protection of financial interests via 
control at the  time  of customs clearance  which is based on an entirely computerised risk 
analysis, supplemented by ex-post controls. Spain provided examples of reports from the 
Spanish  administration  to  OLAF  involving  anti-dumping  duties  related  to  the  origin  of 
solar panels and citric acid. 

  France reported that the control system in place, which is based on a detailed risk analysis, 
effective targeting and three supplementary levels of control (ex ante and first and second 
level ex post checks), provides for highly effective coverage of all customs operations and 
operators. 

  Italy  reported  that  it's  Customs  and  Monopolies  Agency  has  always  aimed  to  achieve  a 
balance between the need to protect the budget (EU and National) and public security and 
the need to expedite and facilitate legitimate trade. Therefore the choice was to keep both 
online and ex-post controls at a constant level and to support these activities with a robust 
risk  analysis  and  digitalisation  task. This  has  led  to  a  fully  computerised  management  of 
customs clearance procedures and selection of online checks, along with the development 
of special procedure, also based on centralised risk analysis to identify sensitive sectors to 
undergo ex post controls. 

  Cyprus  has  reported  that  the  right  balance  between  budgetary  cuts,  trade  facilitation  and 
the  protection  of  EU's  financial  interests  has  been  ensured  via  random  controls  at  ports, 
airports and warehouses or other premises, performed by Customs Administration. 

8 

 
  Hungary reported that on the balance of trade and EU financial interests' protection, central 
risk  analysis  activities  develop  risk  profiles  as  well  as  local  risk  assessments  and  case 
specific  decisions  taken  by  the  customs  body.  A  particularly  successful  example  was  the 
bilateral  cooperation  with  Slovenia  in  the  exchange  of  information  regarding  the  use  of 
customs  procedure  42,  which  led  to  targeted  checks  in  both  countries  on  the  proper 
payment of customs duties (mainly VAT on imports). 

  Poland is bringing together the Customs Service, Tax Administration and Treasury Control 
to  form a  national tax authority from March  2017. This  aims at increasing  the efficiency 
and  effectiveness  of  the  checks  carried  out,  including  checks  on  Traditional  Own 
Resources. 

  Romania reported that the balance between the need to facilitate trade and the protection of 
the  EU’s  financial  interests  has  been  achieved  through  the  implementation  and 
development of new systems for selection for control of customs operations.  

  Slovenia reported taking the following measures: the customs and tax administrations were 
merged  into  a  single  Financial  Administration  of  the  Republic  of  Slovenia  in  2014.  This 
was followed by a staff rationalisation which resulted in  optimisation and fewer customs 
inspectors.  Three  competent  units  are  in  charge  of  inspections  that  were  created  in  2016 
with a view to increasing efficiency. 

  Finland reported that generally, the Customs has been developing more efficient and more 
sophisticated electronic declaration systems and IT tools for risk management purposes. 

  Sweden reported putting trade facilitation and the protection of EU's financial interests as a 
high  priority  for  the  Swedish  customs  who  are  participating  in  the  EU  common  priority 
control areas (PCA). 

  The  United  Kingdom  reported  that  the  approach  to  control  continues  to  be  effective  and 
proportionate, using a risk based approach and a range of tools to address the spectrum of 
non-compliant behaviours. Striking the right balance via working hard to understand their 
customers and their behaviours to enable them to continue to do so. 

Moreover,  regarding  information  received  from  other  Member  States  or  the  Commission 
departments  through  the  CRMS,  AFIS  or  OWNRES  systems  into  risk  management,  the 
Member States have reported the following: 

  Belgium  reported  that  the  integration  of  CRMS,  AFIS  or  OWNRES  is  already  set  in 

national work procedures of risk management services.  

  Bulgaria has provided an example where information received from other Member States 
via  the  CRMS,  27  financial  risk  profiles  were  created.  A  total  of  34  notifications  from 
OLAF  were  received  via  AFIS-mail,  along  with  reports  on  administrative  missions 
conducted by OLAF in third countries in 2016. In addition, in 2016, a total of 16 cases of 
fraud and irregularities were registered in the OWNRES system. 

  Czech  Republic  reported  that  the  Czech  customs  administration  forwards  information 
received from other Member States and OLAF via AFIS to the JESSICA application which 
is also available to the public to report suspicious incidents. In addition, information from 
the OWNRES system is not used retroactively and information from the new CRMS-RIF 

9 

 
 
reports is processed by the Ruzyne Communications Centre, which operates 24 hours per 
day.  

  Denmark  reported  that  the  SKAT  unit  receives  risk  information  (RIF)  on  new  trends 
concerning possible areas of fraud from the Commission or other EU customs authorities 
via CRMS. Then, the unit assess all the RIFs and creates the relevant ones in the import 
system  with  a  risk  profile.  The  financial  RIFs  are  sent  to  a  customs  operations  unit  for 
further processing. 

  Estonia reported that information via CRMS, AFIS and OWNRES is  received on a daily 

basis and it is analysed by the risk analysts. 

  Ireland  reported  that  information  supplied  by  the  EU  or  other  Member  States  is  made 

available to their Risk Unit and their Prosecutions and Investigations department. 

  Spain reported that all information received through the relevant applications is analysed in 
the  central  services  of  the  Department  of  Customs  and  Excise  and  is  taken  into  account, 
where  appropriate,  for  the  purposes  of  activating  a  risk  profile  or  the  ex-post  control 
measures that are deemed most appropriate in the light of the information received. 

  France  receives  and  provides  information  from  other  Member  States  for  monitoring 
foreign  operators  clearing  customs  in  France  via  IMAA,  RIF  and  SCENT  messages  and 
MA communications. 

  Croatia  receives  information  from  other  Member  States  in  the  framework  of  the  mutual 
assistance,  including  both  requests  for  mutual  assistance  and  spontaneous  information. 
Those are being analysed and in case where such information is of the interest, and if it is 
important  for  further  proceedings  for  customs  officers  it  is  integrated  in  the  risk 
management  system.  Information  received  from  the  Commission  departments  through 
CRMS, AFIS and OWNRES systems is analysed and the results are taken into account and 
incorporated in risk management systems. 

  Italy  reported  that  the  exchange  of  information  with  other  customs  authorities  of  the 
Member States and with the police forces and courts are being constantly improved. The 
General Headquarters – Division II of the Guardia di Finanza is continuously monitoring 
the information forwarded by the Member States via the AFIS system. 

  Cyprus reported that customs officers involved in risk analysis and information exchanged 
have access to CRMS and AFIS systems. The information is processed and accordingly is 
decided  to  create  national  profiles  in  the  electronic  risk  analysis  systems,  send  alert 
messages  to  front  line  offices,  disseminate  the  information  to  the  appropriate  sections  or 
provide feedback. OWNRES is managed by the post control section. 

  Lithuanian  customs  exchange  information  on  the  customs  procedures  for  imports  of 
economic  operators  which  is  relevant  to  risk  management  with  other  Member  States  via 
AFIS, CRMS and OWNRES systems. This information is subject to regular analysis and 
assessment. 

  Hungary  reported  that  information  received  by  other  Member  States  or  Commission 
departments is constantly analysed and evaluated during risk analysis which may result in 
customs inspections. 

10 

 
  The  Netherlands  reported  that  all  clearance  controls  are  risk  based  and  information  from 
other Member States is taken into account. Most noteworthy information is shared via the 
CRMS system. Also, pursuant to the Regulation, all relevant findings of cases of fraud and 
irregularities  are  reported  in  OWNRES.  A  recent  example  is  the  CRMF  information 
exchanges relating to anti-dumping fraud with solar panels. 

  Poland makes extensive use of available information received from other Member States or 

Commission departments through CRMS and AFIS systems in risk management.  

  Romania  reported  that  Information  on  risks  identified  in  international  trade  operations 
received via the CRMS-RIF, AFIS mail and OWNRES systems are examined at national 
or local level, as relevant, and risks identified as being applicable in Romania are subjected 
to customs surveillance measures implemented at national level in the RMF IT system in 
the form of risk profiles or in the ADIS system in the form of alerts. 

  Slovenia  reported  that  all  information  received  through  the  CRMS  system  is  evaluated, 
processed and recorded in the national risk analysis record. Additional information may be 
requested  through  the  CRMS  system,  if  needed,  for  the  purpose  of  risk  analysis.  Any 
useful information transmitted through the AFIS system is also entered in the national risk 
analysis record where it is further processed and analysed to create risk profiles. Entries in 
the OWNRES application mainly concern additional payments following controls. 

  Slovakia  reported  that  information  received  through  the  systems  is  analysed  and 
incorporated  into  the  national  risk  profiling  system  and  information  from  the  CRMS 
system is monitored and processed continuously in a unit which operates 2 hours per day. 
Cases  reported  via  CRMS  represent  information  base  on  identification  of  trends  in 
violation of customs legislation. AFIS application is a permanent tool which allows to the 
analytical units to have data coming from various sources in a real time. Information from 
AFIS  enables  the  relevant  authorities  to  identify  transit  operations  where  any  doubts  of 
data  authenticity  exist.  The  Slovak  Republic  also  makes  use  of  AREP  and  FIDE 
applications 

  Finland  reported  that  CRMS  and  AFIS  are  everyday  tools  in  risk  management's  work. 

OWNRES is used less frequently. 

  The  Swedish  customs  uses  the  information  obtained  through  the  CRMS,  AFIS  and 
OWNRES insofar as it is relevant to their priority risk areas. Such information serves as a 
basis for identifying new priority risk areas. 

  The  United  Kingdom  maximises  the  effective  use  of  resources  to  assure  compliance 
through  systems  based  control  and  a  sophisticated  and  mature  risk  management  and 
intelligence  led  approach  that  targets  the  highest  compliance  risks.  The  UK  uses 
information stored in the AFIS system to identify risks and to direct actions towards high 
risk traders.  

Furthermore,  a  number  of  Member  States  have  provided  information  regarding  close 
cooperation with  other Member States  in relation to  the exchange of information over post-
clearance controls/audits to prevent fraud related trade diversion. To be more specific, several 
Member States have reported in relation to cooperation with one another. It can be observed 

11 

 
that there is a tendency of neighbouring Member States to tend to cooperate closely and on a 
usual basis. 

  Bulgaria  provided  examples  where  customs  authorities  were  particularly  successful  in 
detecting  fraud  or  irregularities  at  the  time  of  clearance.  Those  involved  110  cases  of 
diversion of goods from transit and unlawful completion of transit operations that affected 
seven  Member  States.  The  second  example  related  to  a  seizure  of  a  total  of  196  kg  of 
heroin and 380 packets of victory deluxe slim cigarettes without excise duty fiscal stamps. 

  Spain  reported  on  close  cooperation  with  France  and  Portugal  giving  examples  of 
implementing information exchange and cooperation on the basis of controls carried out by 
Spanish customs on undervaluation and warning bout cases of a risk diversion. 

  Croatia  reported  on  the  cooperation  with  the  neighbouring  countries  (Slovenia,  Italy  and 
Hungary)  and  participates  in  the  Quadrilateral  meetings  where  big  numbers  of 
irregularities are being detected. 

  Italy  reported  increase  in  relations  and  cooperation  with  customs  officers  from  certain 
countries such as Germany, the United Kingdom, France and Belgium. Italy also reported 
on  close  cooperation  with  Germany  and  Austria  where  important  investigative  and 
cooperative activities were carried out involving the Agency and Italian judicial authorities 
and  the  corresponding  customs  and  judicial  authorities  of  other  Member  States  (Austria, 
Belgium,  Germany,  the  Netherlands,  Poland,  the  United  Kingdom  and  Hungary).  A 
particularly  successful  example  was  the  bilateral  cooperation  with  Slovenia  in  the 
exchange of information regarding the use of customs procedure 42, which led to targeted 
checks in both countries.  

  Romania reported using OLAF’s AFIS platform for the exchange of information between 
Romania  and  Hungary  on  import  transactions  under  procedure  42  approved  in  those  two 
Member States, information which can be used to tackle VAT fraud. Furthermore, at the 
border  customs  office  of  Giurgiuleşti,  the  Romania-Moldova-Ukraine  trilateral  contact 
centre also operates, for the operational cross-border exchange of information with a view 
to  combating  more  effectively  the  phenomenon  of  illicit  trafficking  at  the  EU’s  eastern 
border. 

  Hungary  and  Slovakia  reported  on  the  cooperation  in  the  framework  of  the  regional 
customs  cooperation  of  the  Visegrad  countries  (Czech  Republic,  Poland,  Hungary  and 
Slovakia).  In  addition,  exchange  of  experiences  also  takes  place  amongst  Croatia,  Italy, 
Slovenia  and  Hungary  –  the  Q4.  Information  is  about  the  work  done  and  the  results 
achieved in the well- functioning and active Visegrad expert groups. 

  Finland  reported  about  the  Permanent  Customs  2020  project  group  (Denmark-Finland-
Sweden) concerning risk management and control of own resources, established in 2016 in 
order to exchange information regularly on post-clearance controls/audits, irregularities at 
the time of clearance as well as the tools, methods and results of risk management. 

  Sweden reported about cooperation with Germany on control plans and authorisation. 

  One  successful  example  provided  by  the  United  Kingdom  was  Operation  Octopus  2016. 
The United Kingdom worked in cooperation with OLAF and French Customs to provide 

12 

 
near real time information on consignments of textiles travelling under CPC42. This was 
followed up with debriefing of the findings with our French and other partners. 

1.1.2 

Yearly planning of staff and resources to include voluntary admissions 

In 2015, ‘voluntary admissions’ became a more important source of irregularity detection. In 
the  light  of  this,  the  outcomes  of  voluntary  admissions  need  to  be  taken  into  account  when 
planning  future  control  strategies,  in  particular  for  post-clearance  controls  but  also  when 
adapting the control strategies and so that it is possible to conduct oversight on self-assessed 
operators  in  the  future.  Above  all,  ex  post  adjustments  of  customs  value  need  to  be  taken 
thoroughly into account. 

Recommendation 2: 

Considering  the  increasing  number  of  cases  of  voluntary  admission  and  the  related 
amounts,  Member  States  are  reminded  of  the  need  to  adapt  their  customs  controls 
strategies, taking  into account  the outcomes of  voluntary admissions and are therefore 
invited to: 

• adapt their yearly planning of staff and resources required for ex post verification of 
information received by voluntary admissions; 

•  take  into  account  customs  risk  management  and,  if  required,  take  into  account  in 
control plans the types of irregularities revealed by voluntary admissions; 

•  extend  customs  controls  to  other  economic  operators  with  businesses  or  operations 
identical or comparable to those having made voluntary admissions. 

In  relation  to  Recommendation  2,  most  Member  States  reported  that  in  information  on 
voluntary  admissions  is  taken  into  consideration  and  it  is  dealt  within  their  respective  risk 
management  process.  However,  some  Member  States  have  little  to  zero  entries  relating  to 
voluntary admissions resulted in detected irregularities.23 More specifically: 

  Belgium  reported  that  there  is  a  marginal  phenomenon  in  Belgium  regarding  voluntary 
admissions. Thus, the risk analysis activities were extended from a transaction based on an 
integrated approach of "transactions and economic operators".  

  The Czech customs administration's adaptations of the control strategy are ensuring a more 

effective targeting of post-clearance controls. 

  In Denmark, SKAT has set up a unit to deal with companies' voluntary notifications. 

  Germany  includes  information  from  voluntary  notifications  to  the  national  risk  analysis 
and control strategy. Germany also provided a survey result of OWNRES database here for 
the first half of 2016 it was revealed that out of 10 363 records only 184 cases were marked 
as 'voluntary notification'. 

23 

Bulgaria, Croatia, the Netherlands, Slovenia 

13 

 
                                                 
  Estonia provided the procedure followed in this particular Member State, when there is a 

voluntary admission notification. 

  Ireland  reported  that  they  only  had  a  small  number  of  voluntary  admissions  and  when  it 
occurs, the relevant authorities carry out checks to see if that issue has arisen or could arise 
in  other  importers'  transactions,  and  accordingly  implement  necessary  changes  to  the 
customs controls strategies. 

  Greece  reported  that  in  the  last  quarter  of  2016  Greek  Customs  completed  a  quantitative 

and qualitative upgrade of staff in Customs Administration. 

  Spain  reported  that  all  voluntary  admissions  are  recorded  in  the  IT  system  and  are  taken 

into account in the risk analysis and drafting of control plans.  

  France is concerned that risk analysis is a key element of the revised control policy of their 
administration and therefore constitutes an important aid to decision making for planning 
and  targeting  first  and  second  level  ex  ante  and  ex  post  controls.  In  France,  'voluntary 
admissions'  are  taken  into  account  when  preparing  the  risk  analysis  and  scheduling  the 
inspections. 

  Italy reported that 'voluntary admissions' are taken into consideration for ex post controls 

with instrumental analysis that aims to minimising risk. 

  Cyprus  reported  that  when  there  is  a  'voluntary  admission  the  competent  authorities 
proceed  to  a  risk  management  to  establish  whether  similar  cases  existed  in  the  past.  The 
findings  of  this  risk  management  are  evaluated  and  then  an  Emergency  Action  Plan  for 
Post Clearance Control and Audit is prepared and executed. However, there is no concrete 
or legal definition of 'voluntary admissions' in Cyprus. 

  In Latvia, the Customs Board of the State Revenue Services informs that the merchant has 
been put request for large scale of corrections to be made for goods. The control procedure 
is  done  as  far  as  to  obtain  assurance  whether  the  risk  has  been  corrected.  The  Customs 
Board  in  practice  does  not  impose  extensive  measures  for  merchants  that  have  been 
requested the corrections for the goods customs applications. 

  Lithuania  does  not  have  staff  for  'voluntary  admissions'  planned.  Ex  post  verification  on 
this  issue  is  carried  out  by  the  same  customs  unit  that  carries  out  post  clearance  on  the 
customs initiative. There is a specific system used, namely, Risk Assessment and Control 
System (RACS) which is used to produce risk points with regards to imports declarations 
and risk assessment of economic operators. 

  Hungary  reported  that  the  annual  control  plan  developed  with  a  view  to  achieving  the 
principal objective that the inspection of the activities of operators identified as presenting 
a  genuine  risk  should  give  a  picture  of  lawful  and  unlawful  practices  related  to  the  field 
targeted by the control activities. The risk information obtained by the customs authority 
includes  information  resulting  from  checks  carried  out  following  voluntary  admissions. 
Such  information  is  analysed,  evaluated  and  processed.  Therefore,  'voluntary  admissions' 
are dealt as part of the risk management process.  

14 

 
  Malta reported having a number of cases when traders quote the wrong currency in correct 
values  and  inform  the  customs.  This  is  what  they  consider  a  voluntary  admission  which 
exonerated the trader from being subjected to additional fines. 

  In the Netherlands, voluntary admissions would fall to the general risk management.  

  Poland reported that depending on the assessment of the risk of irregularities detected as a 
result of voluntary declarations, there are plans to step up analytical activities concerning 
risks identified in customs proceedings instigated at the request of the party concerned. 

  Slovakia  reported that with  the creation  of their annual planning of controls, information 
on  'voluntary  admissions'  was  taken  into  consideration.  However,  they  only  registered 
three cases of voluntary admissions notified via OWNRES to the European Commission. 

  In  Finland,  the  analysis  of  post  clearance  recoveries  is  one  of  the  criteria  of  the  risk 
management and audit but the focus has been rather on the recoveries made based on risk 
analysis and audit by the Customs and not so much on voluntary admissions. 

  Sweden  reported  that  if  the  voluntary  declarations  are  initiated  by  the  customs,  this 
information  is  passed  forward  to  the  analysis  unit  where  the  result  is  then  used  for  post 
clearance examination.  

  The  United  Kingdom  reported  that  it  has  always  reviewed  Customs  Debts  of  any  type, 
including  voluntary  admissions,  through  our  risking  and  intelligence  service.  The  United 
Kingdom uses this data on every project commissioned via the National Work Programme. 
This data feeds all cases and the United Kingdom’s assessment of associated potential risk. 
The UK has run specific projects around trade statistical errors where voluntary admissions 
were included. The most recent project resulted in recovery of £4 million across 129 cases, 
with an associated hit rate of 33%. 

1.2 

 Expenditure 

1.2.1   Increasing detection: results and open issues 

On  the  expenditure  side,  the  fluctuation  in  the  number  of  fraudulent  irregularities  reported 
over  the  last  five  years  is  difficult  to  interpret.  However,  whereas  the  overall  number  of 
detections has remained fairly stable over the last three years, the amounts concerned have 
regularly increased. There is a significant difference between: 

spending  programmes  which  are  multiannual  and  for  which  the  level  of  detection 

a. 
follows their cyclical nature; and 

b. 
direct payments and market support (agricultural policy), where payments and actions 
follow  an  annual  cycle  and  the  detection  of  fraud  and  irregularities  shows  a  certain 
consistency and stability over time. 

Fraud detection practices still differ between Member States. The number of Member States 
detecting  and  reporting  a  significant  number  of  fraudulent  irregularities  has  increased, 
showing their commitment to the fight against fraud affecting the EU’s financial interests. 

15 

 
 
 
Recommendation 3 

Member  States  are  requested  to  further  improve  quality  control  of  the  information 
submitted  via  the  Irregularity  Management  System  (IMS),  in  particular  information 
on: 
- the description of detected irregularities; 
- the priority areas concerned; 
- the localisation of the projects/actions affected by fraud and irregularities. 
As  some  Member  States  report  a  very  low  number  of  fraudulent  irregularities,  in 
particular  in  relation  to  the  amount  of  funds  allocated  to  them,  the  Commission 
recommends strengthening their work on detecting and/or reporting fraud: 
• in agriculture: Finland, Austria and the United Kingdom; 
• in cohesion policy: Spain, France and Lithuania. 

The  Commission  remains  concerned  about  the  low  number  of  potentially  fraudulent 
irregularities reported by some countries. In particular, the progress noted in the 2014 Report 
for  certain  Member  States  came  to  a  standstill  or  even  regressed  in  2015.  Although 
satisfactory, the quality of irregularity reporting could be further improved to allow more in-
depth analysis of the underlying phenomena. 

The  two  Member  States24  explicitly  invited  to  strengthen  their  work  in  relation  to  detecting 
and/or reporting fraud in the area of agriculture, took significant steps in doing so. Austria has 
drawn up a comprehensive monitoring system to detect irregularities and fraud, encompassing 
all stages, from the submission of an application to disbursement. Also, Austria has reported 
putting  a  high  number  of  administrative  checks  in  this  sector  with  the  aim  of  the  non-
occurrence  of  fraud  cases.  Finland  reported  about  a  new  information  system  with  reporting 
tools  which allow  more  specific  statistical analysis.  In  addition,  Finland  has  continued  anti-
fraud training in the area of agriculture as part of the EU Paying Agency’s training activities 
and has made efforts to raise the level of fraud awareness among the controllers and auditors 
of  the  funds.  The  UK  reported  that  they  have  a  zero  tolerance  approach  to  fraud  against 
national and EU funds. There are robust management controls and systems in place that seek 
to prevent incidences of EU budget fraud.  
While the Commission welcomes the significant steps made by France, Spain and Lithuania 
in  reporting  on  cohesion  policy  irregularities,  it  noted  considerable  room  for  improvement. 
Spain  reported  that  in  2016,  the  Spanish  NAFS  adopted  criteria  on  the  classification  and 
procedure in relation to dealing with irregularities and suspected fraud in operations subject to 
criminal  proceedings  addressed  to  all  authorities  which  report  via  the  IMS  system.  These 
criteria contributed to having a large number of irregularities in 2015 having been classified 
as suspected fraud which shows that in the context of cohesion policy, there is an increase in 
irregularities  reported  as  suspected  fraud  in  2016,  in  comparison  with  the  ones  reported  in 
2015. In addition, Spanish NAFS and the National Audit Office plan to organise trainings in 
2017 regarding the validation of reports and irregularities before they are sent to OLAF. 

24  

Austria, Finland and the United Kingdom 

16 

 
 
 
 
                                                 
France has implemented various measures to improve the quality of the information submitted 
on irregularities in detecting and/or reporting fraud. The national audit authority for EU Funds 
in France (CICC) has developed new instruments ensuring proper use of the ARACHNE tool 
in  particular  cases  of  public  procurement  and  has  developed  trainings  aimed  at  raising 
awareness  on  fraud  detection.  Other  specific  actions  reported  in  2016  include  the 
formalisation  of  alert  procedures  in  the  event  of  suspected  fraud,  the  implementation  of  a 
specific  approach  to  fraud  risk  in  the  EMFF,  the  improvement  of  knowledge  sharing  in 
respect of cases of fraud or suspected fraud via sharing of factsheets with all stakeholders, the 
development  of  an  area  dedicate  to  dealing  with  fraud  risks  and  stepping  up  cooperation 
between the paying agency and the external control bodies. 

Lithuania reported that the measures implemented in 2016 included: the EU structural funds 
administration system 2014-2020, adjusting the procedure for the provision of information on 
pre-trial  investigations  to  the  Managing  Authority  and  the  Working  Group  of  the  EU  funds 
irregularities inspectors having incorporated the STT representatives as observers. Anti-fraud 
and  anti-corruption  measures  as  well  as  actions  to  be  taken  upon  suspicion  of  criminal 
offences were also implemented.   

Bulgaria,  Denmark,  Estonia,  Croatia,  Latvia,  Poland  and  Slovenia  have  highlighted  their 
efforts  to  report  fraudulent  irregularities.  Such  efforts  entailed  updating  and  improving 
guidelines for managing irregularities. Denmark revised the reporting procedure. In the case 
of  Croatia,  a  new  version  of  Guidelines  on  Irregularity  Management  in  the  context  of 
Structural  instruments  and  ESI  funds  was  adopted  by  the  Minister  of  Finance  in  2016, 
organised  workshops  on  the  use  of  IMS  for  the  relevant  users.  Latvia  reported  various 
improvements  impacting  the  Managing  Authority  for  EU  structural  funds  and  the  cohesion 
funds.  Poland  has  implemented  uniform  national  procedures  and  guidelines  for  individual 
reporting  for  the  period  2014-2020  and  Slovenia  reported  that  emphasis  is  put  on 
improvements to the register of fraud indicators via the Agency for Agricultural Markets and 
Rural Development of Slovenia. 

The  remaining  Member  States  which  did  not  reply  to  this  recommendation  assumed  that  it 
was only applicable to six named Member States.  

Recommendation 4 

• Given the complexity of the operations managed and the high number of beneficiaries 
concerned,  Member  States  (managing  authorities/paying  agencies  and  audit/control 
authorities) are invited to plan and focus their audits and control activities on the basis 
of risk analysis and performing IT tools. 

• The Commission has developed and put at the Member States' disposal systems and 
tools  such  as  Arachne,  IMS  and  the  Fraud  Risk  Assessment  tool.  The  Commission 
encourages  Member  States  to  use  these  systems  and  tools  more  systematically  and 
efficiently, unless other comparable alternatives are already available to them. 

17 

 
 
 
 
 
The  role  of  managing  and  paying  authorities  in  detecting  fraud  has  grown  since  2012  and 
should be further enhanced in the coming years under the new regulatory framework for the 
2014-2020 period. The Commission believes that this role could be further enhanced if these 
authorities make systematic use of appropriate tools. 

Regarding  this  recommendation,  Member  States  replies  mainly  focused  on  providing  an 
overview of their audit and control systems in different sectors where the relevant authorities 
are dealing with EU Funds, giving information on the specific tools they are using to perform 
relevant control and audit activities.  

Several Member States25 reported that they make use of the Arachne system and incorporated 
it into their manuals of procedure. Some Member States26 are currently evaluating a potential 
use or are in the process of implementing Arachne whereas other Member States27 do not find 
Arachne complying with their management systems at the moment. IMS information system 
is  widely  used  through  the  Member  States  as  well  as  the  Fraud  Risk  Assessment  Tool. 
However, several Member States established their own alternative tools. 

To be more specific, Belgium reported that their Managing Authority is set to use the Arachne 
system  as  a  tool  for  identifying  operations  liable  to  exposure  to  risk  of  fraud,  conflicts  of 
interest or irregularities. 

Bulgaria reported that all relevant bodies conduct fraud risk assessment. IMS, Managing and 
Monitoring Information System for the Operational programmes 2014-2020 under ESIF and 
Integrated  Administration  and  Control  System  for  the  Agriculture  funds  are  used.    For  the 
purposes of risk assessment in the context of monitoring, including the risk of fraud at project 
level,  the  respective  authorities  have  taken  on  a  commitment  to  use  the  special  risk  scoring 
tool  Arachne.  Its  use  is  expected  to  enable  the  bodies  responsible  for  the  management  and 
monitoring of funds to raise efficiency on project selection, verification and audit and further 
improve the identification, prevention and detection of fraud. 

Czech Republic reported that both relevant Managing Authorities and the audit authority used 
the Arachne information system in the 2007-2013 programming period as a pilot and for the 
2014-2020 period Arachne is already incorporated into the management and control system of 
all  operational  programmes.  Regarding  the  IMS,  Czech  Republic  reports  that  this  system  is 
mainly  used  y  the  LKB  and  the  AFCOS  central  contact  point  for  forwarding  information 
relating both to newly detected irregularities and to the acquisition of up-to-date information 
concerning developments in the investigation of previously reported irregularities detected in 
connction with the implementation of EU funds externally. 

Denmark has launched, in 2016, the process for analysing data through the BI and Tableau IT 
systems.  IMS  tool  is  systematically  used  by  the  relevant  Danish  authorites  and  there  is 

25  
26  
27  

Belgium, Bulgaria, Czech Republic, France, Croatia, Italy, Luxembourg, Hungary, Romania. United Kingdom. 
Denmark, Ireland, Latvia, Lithuania, Malta,  Netherlands, Poland, Slovenia, Slovakia, Finland, United Kingdom. 
Germany, Estonia. 

18 

 
 
                                                 
constant  communication  between  the  Commission  and  Denmark  regarding  Arachne  and  its 
potential launching. 

Germany reported that alongside IMS, standard Office programmes such as Excel and Word 
are used for risk assessment.  

Estonia reported the use of the Fraud Risk Assessment tool which gave general results. The 
implementing  bodies  can  use  national  methods  of  risk-based  controls  named  MIS,  which 
gives an overview of all irregularities detected and information on the fraud risks.  

The Irish customs too, namely, the Customs Risk Intervention Selection Programme (CRISP) 
carries out an analysis of all available data and the results outline the riskiest declaration in 
relation to post clearance checks and riskiest traders in relation to customs audits. However, 
Ireland reported that is currently evaluating the potential implementation of Arachne as a risk 
analysis tool for the Structural Funds programme. 

Greece reported that regarding to actions taken for the programming period of 2014-2020, the 
implementation  of  procedures  is  supported  by  certein  IT  systems  and  tools  which  are:  the 
Monitoring  Information  System,  the  Risk  Assesment  Tool  and  the  Irregularity  Management 
System (IMS).  

Spain  uses  a  national  tool  named  ex  ante  matrix  which  is  a  reporting  and  prevention  tool 
which  aims  to  identify  the  risk  level  associated  with  each  case  for  the  management  of  the 
ESF. There is also, as reported, an ex-post matrix is a tool which identifies and quantifies the 
risks occuring by operation.  

France reported that the Managing Authorities had decided to use the Arachne tool and had 
incorporated into their manuals of procedure, protocols for use of the tool on the basis of the 
results of the risk mapping.  

Croatia  has  a  number  of  systems  and  tools  at  its  disposal  in  order  to  perform  efficient  risk 
analysis  varying  from  Arachne  risk  scoring  tool,  IMS,  ESIF  MIS,  risk  assessment 
methodologies,  Irregularity  and  Fraud  Risk  Management  Methodology  as  well  as 
methodology for ex ante and ex post verifications. 

Italy's  national  authorities  use  the  Arachne  system,  pending  completion  of  a  antional  anti-
fraud  database  being  developed  by  Italian  AFCOS.  In  addition,  Guardia  di  Finanza  has 
recently developed an IT tool to enhance action to combat fraud in the receipt of Community 
funds (SIAF). 

Cyprus'  Managing  Authorities  has  designed  and  fully  implemented  a  Management  and 
Control  system  regarding  European  Structural  and  Investment  funds  and  the  fraud  risk 
assesssment is carried out using the Fraud Risk Assessment Tool. 

Latvian  authorities  are  working  on  integrating  the  Arachne  risk  scoring  tool  into  the 
management  verification  processes  for  the  2014-2020  pogramming  period.  The  Managing 
Authority in Latvia is planning to use European Commission's Arachne information system as 
an additional inspection tool in cases when the possibility of fraud exists within the process of 

19 

 
checks and as soon as the system will be implemented.  Further, auditors are consulting the 
national  EU  Funds  Management  Information  System  (for  project  information),  the  Arachne 
tool (for related persons, companies and red flags) and State Revenue Service's databases (for 
company owners, employees, business areas, related persons and VAT areas). 

Lithuania reported that the Ministry of Finance is taking into consideration the Commission's 
recommendation  on  the  use  of  Arachne  and  has  thus  been  organising,  in  2016,  several 
trainings  and  exchange  of  information  to  familiarise  the  relevant  bodies  with  Arachne's 
functionalities.  Lithuanian  customs  currently  use  the  RACS  sub-system  "Verification  of 
Individuals" to carry out risk assessment concerning individuals and customs declarations for 
post clearance verification and record verifications, results and residual risk assessments. The 
National  Paying  Agency  under  the  Ministry  of  Agriculture  regularly  repots  irregularities  to 
OLAF via IMS.  

Luxembourgish  Managing  Authorities  currently  implemented  Arachne  and  is  currently 
discussing with  the EU Commission  on the management of  their internet platforms used  by 
promoters  to upload relevant information. Further, INTERREG Authority has recently taken 
the  decision  to  implement  Arachne  as  well  and  also  has  been  making  use  of  the  Risk 
Assessment Tool in the framework of the establishment of their management control system. 
Its procedures have been drafted and adapted based on the results from  the Risk Assessment 
Tool.  

Hungary reported that the Directorate-General has applied for access to Arachne data analysis 
tool to be used as a database to provide useful information and increase audit efficiency. In 
addition, a number of public databases are applied. Regarding Arachne, the software has been 
installed  for  all  Managing  Authorities.  At  the  Paying  Agency,  the  client  risk  assessment 
geared  toward  argiculture  and  rural  development,  is  implemented  in  the  framework  of  the 
Client Risk Analysis, Social Network Project. 

The  Maltese  Audit  Authority  is  planning  to  introduce  an  IT  audit  software  for  the  new 
pogramming period 2014-2020 and also to use Arachne as a risk scoring tool. 

The Netherlands reported that the ESF wants to use Arachne and the ERDF is investigating 
Arachne's  suitability.  The  Netherlands  is  preparing  a  new  fraud  register  incorporating  some 
Arachne functions. The ERDF, the Fisheries Fund and the Agricultural Funds efficiently use 
IMS version 5.0 as a matter of routine. In addition, for the programming period 2014-2020 an 
'irregularities  map'  is  being  produced  to  integrate  IMS  user  instruction  with  definitions  and 
criteria  for  notificatons.  Further,  the  Audit  Authority  is  running  the  Fraud  Risk  Assessment 
tool and the EMFF is using a totally new ICT system: the Implementation Platform (IP) along 
with a risk-analysis list that records identified risks , follows up and acts upon. 

Poland  reported that  all competent national  institutions  use IMS for planning  and managing 
audits  and  controls.  The  Fraud  Risk  Assessment  Tool  is  used  to  directly  implement 
operational programmes for European Structural and Investment Funds (ESIF). Furthermore, 
some institutions use alternative IT tools such as solutions povided by economic intelligence 
servicew, databases for analysing information on tender procedures or risk assessment spread 

20 

 
sheets  as  an  element  in  the  method  for  sampling  projects  for  audits.  The  Arachne  financial 
fraud risk scoring tool is currently being tested by some institutions. 

Portuguese  authorities  are  collecting  data  for  audit  control  data  from  the  IMS  and  an 
information  system  regarding  suitability,  reliability  and  debt  of  the  beneficiaries.  The 
information system they have at their disposal aims to provide the various parties concerned 
with a tool for detecting early warning signs (red flags) and indicators of fraud. 

Romania reported that the majority of Managing Authorities use IT systems such as Arachne, 
Fraud Risk Assessment Tool as well as AFIS and IMS. 

Slovenia reported, as regards to agriculture and rural development,  that the Control Unit uses 
the information on cases reported through the IMS in order to select applications for on-the-
spot  controls  under  different  measures.  Development  and  European  cohesion  policy  is 
considering possible use of Arachne tool.  

In  Slovakia, the Central Contact Point for OLAF quarterly reports the irregularities through 
the IMS. The Slovak national authorities are currently incorporating guidelines on Arachne to 
national legislation and the Certification Authority plans to use Arachne in relevant cases to 
browse  and  analyse  data  to  identify  possible  fraud  risk,  irregularities  and  on-going 
investigations  during  the  certification  of  expenditures  to  the  European  Commission.  Apart 
from  MS  Excel,  the  Supreme  Audit  Office  of  the  Slovak  Republic  uses  its  own  specialised 
information system that includes the tools for risk identification and assessment and provide 
support for strategic and annual planning. The Supreme Audit Office used Arachne in 2016 
but  it  is  not  in  full  operation  and  still  missing  support  at  national  level.  Further,  the 
Agricultural Paying Agency does not use any IT tool for internal audits planning. 

Finland 's Managing Authority is considering the use of Arachne as a tool and this system is 
currently being tested with national data from Structural Funds. 

Swedish Customs uses three national IT systems called TDS Sparr, Selection of the flow of 
goods SIV and LEGO, to help select information in the import, export and transit declarations 
and the manifests. 

The  United  Kingdom  reported  that  the  tools  mentioned  in  this  recommendation  are  used 
across different UK Managing Authorities, though Gibraltar uses a different system which has 
specifically  been  designed  to  take  the  small  programme  size  and  the  limited  amount  of 
projects  into  consideration.    They  will  therefore  not  be  using  the  Commission  tools  as  and 
they feel that they already have an effective system in place. For those MAs that were using 
the tools, they were broadly considered positively, though did have some concerns. In answer 
to the systems and tools used to perform a risk analysis, the UK reported that most of the MAs 
and  DAs  have  their  own  audit  strategies.    DWP  utilise  the  Fraud  Risk  Assessment  Tool.  
Whiles Scotland have a Management and Control System in place that includes processes for 

21 

 
 
 
 
 
 
 
 
setting  levels  of  management  and  administrative  verification  and  relate  these  to  their  risk 
mechanism.  

22 

 
2. 

REPLIES OF MEMBER STATES 

2.1. 

Revenue 

The adoption of Regulation (EU) No 2015/1525 has improved the current framework for detecting and investigating customs fraud at EU and national 
level, significantly strengthening the analytical capabilities of both OLAF and national customs authorities in detecting fraudulent operations. 

Against this background, the results from detections in the traditional own resources area show a slightly downward trend, partly influenced by the high 
values of detections in 2014. 

The detection of irregularities and fraud concerning solar panels (many of which were detected following mutual  assistance notices issued by OLAF) 
underlines: 

• 

• 

The importance of investigations conducted by OLAF in the detection of irregularities in transactions with certain types of goods; and 

The added value that coordination and cooperation at EU level can generate in the fight against fraud. 

Customs control strategy is a combination of different types of controls. Post-clearance controls are the most effective method of detection both in terms 
of the number of cases detected and in terms of amounts. However, controls at the time of clearance of goods and inspections carried out by anti-fraud 
services are indispensable for detecting certain types of fraud and new fraud patterns. 

In many Member States, budget constraints have led to the reduction of staff in charge of controls. Some Member States operate with remarkably few 
customs staff. Reduced controls may boost inward trade flows but this could be at the cost of effective controls and the protection of the EU’s financial 
interests. 

23 

 
 
 
Recommendation 1: 

Member States are: 

• 
requested to strike the right balance between trade facilitation and the protection of the EU’s financial interests, which are also national 
interests considering the national taxes collected at import and considering that Member States are compensated for collecting traditional own 
resources; 

invited to exchange experiences on instances where customs authorities were particularly successful in detecting fraud or irregularities at 

• 
the time of clearance; 

requested to incorporate information received from other Member States or the Commission departments through the CRMS, AFIS or 

• 
OWNRES systems into risk management and complement the national populations used for risk management purposes; 

• 
invited to cooperate closely with one another and exchange information beyond the borders over post-clearance controls/audits and to 
prevent  fraud-related  trade  diversion  from  one  Member  State  to  another.  When  determining  which  companies  are  to  be  checked,  attention 
should be paid to those that are established in one country but which clear all their imports at customs offices in other Member States. 

BE 

Federal Public Service, Finance 

Question a: 

Budgetary cuts have an overall impact on the Belgian Customs Administration, but the impact differs from control-type: 

• 
• 

Safety and security controls (shift): no impact (1 on 1 replacement) 
Clearance controls: small impact on staff, but number of executed controls remains at the same level: 

24 

 
 
 
 
 
 
 
 
o  number of controls that needs to be executed is a national objective in 

o  national management plan and hasn’t been changed; 

o  more efficient controls by investments in ICT (MODA, new feedback  application, SEDA); 

o 

less administrative burden; 

o  segregation of functions – specialization; 

Post-clearance controls and audits: small impact on staff, but teams have been reorganized (and a new concept ‘auto-conducting’ teams 

• 
have been introduced = experience of the teams is used to organize partially their activities with a formal follow-up on national level); 

Question b: 

The balance between budgetary cuts, trade facilitation and the protection of the EU’s 
financial interests is assured by: 

• a risk-oriented approach (based on a combination of analyses of goods and economic operators) to conduct controls: 

o  clearance controls of declarations; 
o  post-clearance controls of declarations; 
o  post-clearance audits of economic operators : administrative and accounting controls / system based controls; 

•  the  implementation  of  AEO  certificates  in  the  control  procedures:  less  or  none  clearance  controls  and  a  swap  to  respectively  post-clearance 
controls/audits and system based controls 

• investments in ICT: 

o  optimization of the current automatic risk-engine (SEDA) to select declarations; 
o  optimization of the current feedback-applications; 

25 

 
 
 
 
 
 
 
o  optimization of data-mining environment; 

•  Establishment  of  the  service  ‘Enforcement’.  This  service  preserves  the  balance  between  facilitation  and  control  (risk-oriented  controls, 
procedural controls, random controls, and controls on behalf of other agencies). 

Question c: 

A  National  Operational  Plan  (called  NOP)  is  written  every  year  by  the  management.  This  NOP  contains  all  the  operational  objectives  for  the 
organization: 

 

 

number of controls that needs to be executed; 

hit-rate of the executed controls that needs to be achieved; 

This NOP is communicated within the whole organization, and is tightly respected by its employees. An evaluation and follow-up takes quarterly 
place by the complete management-team. 

Question d: 

The integration of all those information sources is already set in national work procedures of risk management services (central and local levels) : 

  BE Risk Management Services (Central and Local Teams) have full access to the dedicated / specific sections of CRMS and of AFIS systems; 
Central RM service has access to OWNRES systems as reader; annual reports of ACOR-TOR committees are followed-up as EU trends; 

 

Information received from CRMS and AFIS systems are after analysis and consideration at national level either integrated in Risk analysis, 
targeting or specific actions administrative processes or registered as a confirmation of national statements / policies; information received in 
specific groups are also followed-up by Central level; Information sent by Belgium into CRMS system are also followed-up at central level; 

26 

 
 
 
  
 
 
 
 
 
 
 
  A national dashboard on CRMS information flows has been put in place, even if it is a time consuming activity; periodic measurements are 

communicated to the risk management local teams; 

  According to the DG TAXUD yearly statistics on CRMS activities, BE Customs is on the top of the RIF contributors. 

Question e: 

Council  Regulation  (EC)  No  515/97  provides  for  mutual  assistance  between the Member  States  in  order to  ensure that  customs  law  is  applied 
correctly. 

Therefore, as regards customs value, when it is necessary to audit a purchaser established in another EU Member State for goods imported via 
Belgium, whether for a request for a reimbursement of duties, for a check of the price paid, for an investigation related to the customs value or for 
any other reason, assistance is requested from the Member State in question. These requests from the CABC/SBC units are sent to the Member 
States concerned through the Klama (Customer Management and Marketing department) central division. A copy of the requests is passed on to 
E&R for information purposes. The audit requests are always specific to a sample of import declarations representing a continuous import period. 

It was recommended that each audit service (currently the CABC/SBC units, previously the IWECC) initiate investigations every year regarding 
the customs value of goods imported by non-Belgian European operators. It should be noted that the investigation of the customs value divides 
responsibility  for  auditing  these  operators  between  all  IWECC  units  (adaptations  notified  following  the  changeover  and  the  creation  of  the 
CAC/SBC units). 

The vast majority of requests for assistance on this matter have been made for French operators. In the past, mutual assistance could conclude with 
a joint France/Belgium audit of the operator. 

There have also been cases where information on under-valuation has been reported voluntarily. Indeed, another Member State, during an audit of 
one of its operators, already identified an under-valuation relating to imports by the operator in question via Belgium. This voluntary reporting 
system therefore allows the Member State, also through Regulation 515/97, to request that ‘Belgian’ imports are regularised. 
Following the adjustments made in Belgium, the Member State that initiated the audit is informed about the duties recovered. 

27 

 
 
 
 
 
 
  
 
 
At the same time, however, AG D&A (General Customs and Excise Administration), via DMGC HL (Target Group Management Service, High-
Level Risk Division) and the experts from the CABC team at the KLAMA Administration, is taking part in DG TAXUD’s ‘Post Clearance Audit’ 
project group with a view to consolidating a pilot scheme on exchanging information relating to declarations made in a Member State and audits 
of economic operators 
(Consignees) established in another Member State. The aim is basically to supplement the available information for the Member States so that 
audits and checks can be carried out more efficiently in these kinds of situations.  

BG  Measures  taken  by  the  Bulgarian  customs  administration  to  ensure  the  effectiveness  of  control  systems  —  striking  a  balance  between 

budget cuts, trade facilitation and protection of the EU’s financial interests: 

In 2016, the Customs Agency implemented the EU Customs Competency Framework (CCF). The approval of professional standards for customs 
officers ensures a higher standard and efficiency in the performance of the duties and responsibilities of a customs officer and a more successful 
application of EU regulations and EU-wide initiatives.  

With a view to strengthening administrative capacity and enhancing the functions of individual units in order to ensure better and more efficient 
performance  of  the  activities  of  the  Bulgarian  Customs  Agency,  the  functions  of  the  Customs  Intelligence  and  Investigations  Directorate  were 
expanded, in parallel to strengthening co-ordination and the monitoring and management of overall performance through the acquisition and use 
of additional specialist equipment and technical devices using ionising radiation. A co-ordination centre for the analysis of X-ray images obtained 
during customs controls has been established, which compiles summaries of the results of controls, and coordinates and monitors analysis related 
activities.  

The  activities  performed  on  a  regular  basis  to  ensure  the  uninterrupted  functioning  of  the  national  systems  and  the  systems  enabling 
communication with the EU, notably the CCN/CSI Communication Centre, the New Computerized Transit System (NCTS), the Export Control 
System — Phase 2, the Export Control System — Phase 1, the System for Registration and Identification of Economic Operators, the Integrated 
Tariff Management System (TARIC) and the Excise Goods Control System, are essential for the ability of the Customs Agency to  perform its 

28 

 
 
 
tasks and commitments in the capacity as customs administration of an EU Member State and participant in the E-Customs initiative of the EU.  

In 2016, activities relating to the maintenance, upgrade and improvement of the functionalities of the information systems used by the Customs 
Agency were performed, including the Agency’s e-portal and the Integrated Customs Information System (BICIS) used to generate reports for 
management  purposes  on  the  basis  of  information  contained  in  customs  documents,  and  in  particular  the  modules  Road  Tolls  and  Licences, 
Administrative and Penal Proceedings and Customs Duties. The BICIS was expanded with new functionalities enabling the electronic processing 
of customs import declarations (CID) and the requisite accompanying documents. Several versions of the Excise Movement and Control System 
(EMCS)  and  the  System  for  Exchange  of  Excise  Data  (SEED)  were  rolled  out  in  line  with  the  EMCS  Master  Plan  of  Directorate-General  for 
Taxation and Customs Union of the European Commission.  

In  November 2016,  the  implementation  of  module  Management  and  Administration  of  the  Information  Systems  of  the  Customs  Agency  of 
Activity 1 Implementation of the institutional architecture of the Bulgarian Customs Agency was launched as a step to ensuring compliance with 
the Community functional requirements for setting up a System for Direct Trader Access to European Information Systems.  

In connection with the IT measures to be implemented as a follow-up to the previous period in relation to the implementation of the Community 
Customs Code, the BICIS, the Simplified Declaration Module (SDM), and the ITSM and NCTS were upgraded.  

During the reporting period, a total of 166 national risk profiles of companies, vehicles, countries and goods subject to anti-dumping duties were 
activated in the Risk Analysis automated module of the BICIS with a view of preventing fraud relating to the evasion of customs duties, etc. In 
addition, 27 financial risk profiles were created on the basis of regulations introducing anti-dumping and countervailing duties.  

Examples where customs authorities were particularly successful in detecting fraud or irregularities at the time of clearance: 

In  2015,  the  Bulgarian  customs  administration  identified  110 cases  of  diversion  of  goods  from  transit  and  unlawful  completion  of  transit 
operations that affected seven Member States. As soon as the fraud was detected, the Bulgarian Customs Agency notified the competent national 
authorities and customs administrations in the affected Member States and OLAF on account of the fraud having implications for the financial 
interests of the European Union. At the end of 2015, OLAF opened an investigation under Ref. No OF/2015/1295/B1. The number of unlawfully 

29 

 
 
completed  operations  was  subsequently  limited  to  110 owing  to  the  steps  taken  by  the  Bulgarian  customs  administration.  As  a  result  of  the 
information exchanged with one of the affected Member States, the relevant customs duties have already been paid.  

On the basis of a review of the general operational safety and security risk criteria at the time of processing entry summary declarations (ESD) and 
an additional analysis of available information, a decision was made to conduct a physical check on goods declared at the Lesovo Border Crossing 
Point (BCP) as canned tomato puree transported from Iran to the Netherlands. The lorry was checked with an X-ray scanner prior to conducting a 
detailed customs check. During the check the customs officers noticed that some tomato puree cans weighed less than others and after opening 
those  with  a  lower  weight  found  that  each  contained  a  plastic  bag  filled  with  beige  powder  (heroin).  This  resulted  in  the  seizure  of  a  total  of 
196 kg of heroin and 380 packets of Victory deluxe slims cigarettes without excise duty fiscal stamps.  

Examples of the incorporation of information received from other Member States of the Commission  departments through the CRMS, 
AFIS or OWNRES systems into risk management and complement the national populations used for risk management purposes: 

On  the  basis  of  information  received  from  other  Member  States  via  the  CRMS,  27 financial  risk  profiles  were  created  and  integrated  into  the 
Customs Information System (BICIS) to preventing the avoidance of trade policy measures and complement the national populations used for risk 
analysis.  

In 2016, a total of 34 notifications from OLAF were received via AFIS-mail, along with reports on administrative missions conducted by OLAF 
in third countries. On the basis of analysis of available information and identifying the customs operations conducted in Bulgaria, steps were taken 
to levy and collect the respective anti-dumping, conventional and other duties collected by the customs authorities on importation. In some cases, 
on the basis of conducted checks infringements of customs regulations by importers were ascertained.  

In 2016, a total of 16 cases of fraud/irregularities were registered in the OWNRES system, resulting in an additional amount of BGN 1 218 866 in 
customs duties to be collected. A total of 12 cases of fraud (including three cases of cigarette smuggling) and 4 cases of irregularities were also 
detected. Modifications were made to 92 declarations in order to correct errors in cases registered during previous periods. 

30 

 
 
CZ  How  information  received  from  other  MS  or  the  Commission  departments  through  the  CRMS,  AFIS,  or  OWNRES  systems  is 

incorporated into risk management and complements the national populations used for risk management purposes: 

The  Czech customs  administration  forwards  information  from  other  Member  States  and  the relevant  Commission  department  (OLAF)  that  has 
been compiled pursuant to Regulation (EC) No 515/97 and sent via AFIS to the JESSICA application. This application is used for gathering and 
assessing significant information relating to infringements of customs regulations. Within AFIS the customs administration's analysis unit mainly 
uses MAB mail, by means of which the customs administration exchanges information within the V4 grouping (with HU, PL and SK) concerning 
imports and exports of goods for the purpose of preventing and detecting infringements of customs and tax regulations (mainly in order to combat 
the undervaluation of textiles). Data are exchanged monthly in a predefined format. The customs administration analyses the items of data and 
from the ones indicating a risk it creates risk profiles in the national electronic risk-analysis system or records them in an internal system known as 
AVR [the Czech abbreviation for 'automated risk assessment'] for further assessment. Information has been exchanged within the V4 grouping 
since 2014. Information from the OWNRES system is not used retroactively by the customs administration. The customs administration complies 
only with the reporting requirement laid down in Regulation (EU, Euratom) No 608/2014. Information from new CRMS-RIF reports is processed 
by the Ruzyně Communications Centre, which operates 24 hours a day. RIF reports are entered in the national FIF register and are analysed on the 
basis of the type of risk information – the outcome being one of the following: 

 
 
 

risk known/noted, 
risk profile created in the national electronic risk-analysis system 
information entered in the application (AVR is used mainly for assessing the interchangeability of tariff classifications for the purpose of 
applying a lower customs rate and assessing undervaluation). The Czech customs administration also creates new RIF information reports 
for other EU Member States. 

Members  of  the  public  are  able  to  report  suspicious  incidents  to  the  customs  administration  by  means  of  an  on-line  form,  which  feeds  the 
information  automatically  into  the  JESSICA  application,  where  it  is  assessed  and  forwarded  to  the  relevant  department  within  the  customs 

31 

 
 
administration. 

DK  Priorities are set for the annual operation on the basis of an assessment of materiality and risk, using the resources available for the operation. The 

priorities are also based on the collection and management of the customs duties that constitute the EU’s own resources.  

The number of  FTEs in SKAT has been declining in recent years, owing mainly to improvements in efficiency that allow the same task to be 
performed by fewer FTEs, for example digitalisation, new working methods, data-based control, etc. 

The general aim of the operational strategy is to ensure effective risk-based customs controls designed to detect fraud involving imports from third 
countries. This entails the development of segment strategies. These strategies involve an analysis of the main challenges and possible approaches 
for maintaining or increasing compliance in the area of customs, including financial customs matters.  

In order to support the segment strategies, and thus the annual action plan, Danish Customs has set up a 24/7 unit, SKAT’s 24-hour service centre 
(Døgntjeneste), which is also the national contact point (NCP). The unit receives risk information (RIF) on new trends concerning possible areas 
of fraud from the Commission or other EU customs authorities via the EU communication system (CRMS).  The unit assesses all the RIFs and 
creates the relevant ones in the import system with a risk profile. The financial RIFs are sent to a customs operations unit (post-clearance control, 
etc.) for further processing. 

OLAF uses the AFIS platform (Anti-Fraud Information System) to send Danish Customs MA communications regarding fraud and irregularities 
in the area of customs.  Operating units have been set up in Danish Customs to analyse and draw up risk profiles based on the communications 
used for various control activities.  

The  Danish  Customs’  analysis  unit  performs  risk  analyses  on  data  from  a  number  of  sources  -  mainly  declaration  information  in  the  customs 
system. The data is analysed in the Tableau and Business Intelligence (BI) IT systems. An advantage of Tableau is its effectiveness in enabling 
trends and irregularities in import patterns to be visualised. 

32 

 
 
An anti-fraud unit covering all areas of SKAT’s activities has also been set up in the Special Control division of SKAT’s Compliance department. 
The office’s main objective is to analyse trends and new areas of fraud in order to expose and combat fraud of an international nature, including 
particularly complex cases. This unit will therefore work closely with Danish Customs’ analysis units. 

SKAT points out that Denmark, along with 22 other Member States, took part in the Orion joint customs control operation led by OLAF and the 
Greek customs authorities in early 2016. Based on the experience it gained during this operation, SKAT plans to draw up an internal cooperation 
and information exchange procedure, focussing in particular on this area. 

DE 

Protecting  the  EU’s  financial  interests  is  one  of  Germany’s  main  concerns,  as  well  as  one  of  the  main  objectives  of  the  Federal  Finance 
Administration. 

In order to make best use of the Administration’s human and financial resources, risk analysis has been set up in such a way as to recognise and 
counter  risks  at  an  early  stage.  A  distinction  must  be  made  between  financial  and  security  risk  analysis.  Both  areas  are  constantly  being 
developed and updated. Administrative cooperation among Member States and between them and the EU is carried out on the basis of Council 
Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation 
between  the  latter  and  the  Commission  to  ensure  the  correct  application  of  the  law  on  customs  and  agricultural  matters.  This  Regulation  was 
amended by Regulation (EU) 2015/1525 of the European Parliament and of the Council of 9 September 2015. 

The abovementioned cooperation has the highest priority in order to effectively combat fraud relating to EU own resources. Specific mention must 
be made here of the MA communications coordinated by the European Commission. 

Financial  risk  analysis  is  used  to  strike  the  right  balance  between  economic  promotion,  i.e. the  freest  possible  movement  of  goods,  and  the 
protection of the EU’s financial interests. This enables us to give risky companies or goods the corresponding risk profiles  in the computerised 
clearance system (ATLAS); in the event of a hit customs officers are instructed to take action to detect fraud cases. 

33 

 
 
Budget cuts at the control level have in general not taken place in Germany. 

Regulation (EC) No 515/97 contains the option and indeed the duty to exchange information on specific cases of fraud in Germany (and hence 
also those discovered during the customs clearance process) with other Member States and with OLAF in order to effectively combat similar cases 
in other Member States. Risks notified by other Member States and the EU are included in Germany’s risk analysis. This exchange of information 
in  the  framework  of  Regulation  (EC)  No 515/97  also  of  course  applies  to  the  information  collected  and  cases  of  fraud  detected  during  post-
clearance controls/audits, for example by the audit units. If companies based in Germany have risky consignments cleared in other Member States 
and  not  in  Germany,  these  consignments  must  also  be  given  special  consideration.  Under  Regulation  (EC)  No  515/97  in  these  cases  too 
information  can  be  exchanged  between  the  Member  States  concerned.  This  exchange  of  information  is  vital  because  there  have  already  been 
numerous  cases  of  companies  changing  their  import  strategy  (clearing  their  imports  in  another  Member  State)  to  avoid  the  tighter  controls 
imposed on risky consignments in Germany. 

In  2015  ‘voluntary  admissions’  became  a  more  important  source  of  irregularity  detection.  In  the  light  of  this,  the  outcomes  of  voluntary 
admissions need to be taken into account when planning future control strategies, in particular for post-clearance controls but also when adapting 
the  control  strategies  and  so  that  it  is  possible  to  conduct  oversight  on  self-assessed  operators  in  the  future.  Above  all,  ex  post  adjustments  of 
customs value need to be taken thoroughly into account.  

EE 

a) Budgetary cuts have not had an impact on the level of the staff at the control level. The control level and countermeasures are dependent on the 
level of risks, which are constantly evaluated and monitored by the Estonian Tax and Customs Board (ETCB). 

b) ETCB is analysing the import declarations for detecting the risky objects (goods, companies, declarations etc.) on the basis of the analysis and 
other  risk  information  (including  RIF-s  and  AM-messages).  The  suspicious  declarations  are  directed  via  the  automatic  selectivity  into  control 
and/or post-control. 

c) See answers for a) and b). 

34 

 
 
d)  The information  of CRMS, AFIS  and OWNRES is  received on a daily basis and it is analysed  by the risk analysts and on the basis of this 
information the necessary activities are decided by the analysts (selectivity criteria and/or post-control and/or other countermeasures). 

e) In ETCB there is a National Contact Point (NCP) which, in the need of additional information, contacts with relevant international partners in 
order to get additional information about the company. Also different databases (D&B, European Business Register etc.) are used among the other 
means of exchange of information (CRMS, for instance). 

IE 

Despite  the  budgetary  difficulties  that  arose  in  2008  Ireland  has  managed  to  maintain  a  consistently  high  level  of  Trade  Facilitation  and 
Enforcement  activity.  In  recent  years  more  resources  have  been  made  available  to  the  Revenue  Commissioners  to  facilitate  control  and 
compliance activity. Throughout this period due regard has been given to the importance of Customs controls and the role they play in securing 
the  own  resources  of  the  EU  and  its  Member  States.  Information  supplied  by  the  EU  and  OMS  is  made  available  to  our  Risk  Unit  and  our 
Prosecutions and Investigations Division. Profiles are created to guard against future fraud and look backs are conducted to see if there are any 
transactions  warranting  investigation  and  investigations  have  been  instigated  where  these  have  been  found  (confirm  with  IPD).  In  respect  of 
companies that clear imports in a country where they are not established, there is an active and coherent monitoring programme across both the 
Customs  and  VAT  spheres  and  this  is  facilitated  by  the  fact  that  Revenue  is  a  combined  Tax  and  Customs  administration  and  therefore  no 
information exchanges issues arise (VIES & CP4200, etc.) 

EL  Checks - infringements - charges - amounts collected from charges and from overdue debts recovered (Tables 1, 2). 

1. Checks and infringements: 

A) Checks at the clearance stage 

157 766 checks were performed at the clearance stage and 10 568 infringements/disparities were identified during physical or documentary checks 
carried out on the basis of the risk-analysis results, i.e. non-compliance rate of 6.7%. 

35 

 
 
B) Ex-post checks 

7  684  ex-post  documentary  checks  were  performed  (annual  objective  6  000)  at  the  Customs  office  relating  to  goods  cleared  on  the  basis  of  a 
declaration, i.e. without a physical or documentary check; 958 infringements were identified, i.e. non-compliance rate of 12.47%. 

These  results  demonstrate  the  good  level  of  targeting  of  ex-post  documentary  checks  carried  out  by  the  Customs  and  the  efficiency  of  the 
reformed framework of ex-post checks, as well as a reduction in the percentage rate of checks in the clearance procedure after the adoption of 
Member States’ best practices. 

4 222 ex-post checks were carried out on the premises of undertakings and 646 infringements were detected (non-compliance rate of 15.3%). 

c) Checks on prosecution  

The prosecution units of the Customs carried out 66 661 checks and found 4 335 infringements (non-compliance rate of 6.5%). 

The Mobile Inspection Team carried out 8 715 checks and found 464 infringements (non-compliance rate of 5.3 %). 

The Customs Service’s anti-smuggling vessels carried out 114 checks and found 26 infringements. 

2. Assessment notices, certificates, receipts from assessment notices and recoveries of overdue debts: 

9 231 assessment notices were issued.  

The fines, multiple fees, duties and taxes charged for simple customs infringements and smuggling amounted to EUR 524 478 758.   

3. Attachments/seizures by the Customs: 

In 2016, in comparison with 2015, the Customs achieved excellent results regarding seizures, as shown in Tables 1 and 2 below. 

36 

 
 
Specifically, the total number of seizures increased from 1 344 in 2015 to 1 562 in 2016 an increase of 16.1%, with particularly positive results in 
the areas of: 

a) tobacco, where the cigarettes seized in 2016 were 456 146 604 pieces, compared to 327 466 935 pieces [sic] in 2015 (an increase of 39.3%). A 
particularly large increase in seizures occurred in all tobacco product groups.   

b) cash, where EUR 7 557 630 were attached in 2016 (the Euro equivalent of all currencies attached) and fines were imposed to the amount of 
EUR 1 933 009, compared to EUR 5 188 383 attached (and fines amounting to EUR 1 330 226 ) in 2015, i.e.an increase of 45.7%.  

c) narcotic drugs, where, among other narcotic substances, the quantity of 422 543 (grams) of Indian cannabis was seized in 2016, against 91 748 
(grams) in 2015, or an increase of 361%; 25 835.80 grams of heroin were seized in 2016, compared to 1 083 grams in 2015.  

d) spirits, where 249 908.68 litres of Tsipouro/Tsikoudia were seized in 2016, compared to 52 291 in 2015 (an increase of 378%) in 45 illegal 
stills, compared to 24 in 2015 (an increase of 87.5%).  

e) cars, where 285 passenger cars for private use were confiscated in 2016,  compared to 210 in 2015 (an increase of 35.7%). 

Regarding the quantities of fuel seized reported in the tables below, it should be noted that in the case of use of adulterated petrol in truck tanks 
(smuggling) the petrol is not seized, on the one hand because it is not possible to pump it out, and on the other hand because the official chemical 
analysis is issued at a later stage.  

The object of smuggling in this case is considered “forgone seizure” and the offender is charged (in addition to the increased rate of duty) also 
other taxes corresponding to the amount of adulterated fuel.  

Customs duties, taxes and fines are also levied in ex-post checks where the object of smuggling cannot be seized as it has already been released 
for consumption. 

37 

 
 
 
 TABLE 1. 2016 SEIZURES/ATTACHMENTS BY CUSTOMS  

No 

CATEGORY 
OF SEIZURE 

NUMBER  OF 
SEIZURES/ 
ATTACHME
NTS 

ITEM DESCRIPTION  QUANTITY OF ITEMS 

1 

NARCOTIC 
DRUGS 

33 

CANNABIS  

INDIAN 
(grams) 
HEROIN (grams) 

422 543.30 

25 835.80 

COCAINE (grams) 

5.60 

CANNABIS OIL (ml) 

17.80 

CANNABIDIOL 
(ml) 
HEROIN CRYSTALS 

1 045.00 

6 

TABLETS (pieces) 

7 680 

2 

WEAPONS  

3 

PEPPER SPRAY 

A flask of 40ml 

WEAPON 
MAGAZINES  

(pieces) 

12 

38 

 
 
IRON 
(pieces) 

KNUCKLES  

2 

TSIPOURO/TSIKOUDI
A  
BEER (in litres) 
(litres) 

249 908.68 

3 201.50 

WINE (in litres) 

29 476.90 

 LIQUEUR (litres) 

233.58 

  STILLS (pieces) 

BOTTLING 
MACHINERY 
BREEZERS  
 (pieces) 
(anhydrous litres) 
GRAPE MARC (kg) 

45 

3 

419.50 

300.00 

ALCOHOL 

ETHYL 
(litres) 
     SPIRIT  40%  VOL.  
(litres) 

22 257.14 

31 246.75 

UNLEADED 
GASOLINE  
MARINE 
(litres) 
(litres) 

460.00 

DIESEL  

300.00 

39 

3 

SPIRIT 

238 

4 

FUEL OILS 

13 

 
 
CHEMICAL 
SOLUTION  
DIESEL  
(kilograms) 
(litres) 

21 260.00 

4 260.00 

5 

MEANS  OF 
TRANSPORT 

379 

 PRIVATE-USE 
PASSENGER CARS 
AUTOTRANSPORTER
S 
TRAILERS 
TRACTOR UNITS 
TRAILER  

AND 

MOTORCYCLES 

PLATES 

(for 
passenger 

CAR 
private-use 
cars) 
BUSES 

CONTAINERS 

TRUCKS 

6 

CULTURE 

2 

CLAY POT 

40 

285 

4 

1 

1 

3 

10 

2 

50 

32 

1 

 
 
7 

TOBACCO 

464 

8 

 CASH 
(ATTACHME
NTS) 

212 

FRAGMENTS 
ANCIENT AMPHORA 

OF 

1 

CIGARETTES (pieces) 

456 146 604 

CIGARS (pieces) 

801 

PROCESSED 
TOBACCO  
NON-PROCESSED 
(grams) 
TOBACCO  
RAW 
(grams) 
LEAVES  
(pieces) 

TOBACCO 

1 631 241 

14 760 000 

22 527 

EUR 

6 345 600 

BRITISH POUNDS 

£ 27 250 

BELARUSSIAN 
ROUBLES  
ALBANIAN LEK 

1 822 500 р. 

667 000 Lek 

FYROM DENARS 

10 800 ден. 

SERBIAN DINARS 

15 200 Дин. 

BULGARIAN LEVA 

3 450 лв. 

41 

 
 
TURKISH LIRAS 

64 300 YTL 

CANADIAN DOLLARS  $ 33 900 

CHINESE YUAN 

1 360   

AUSTRALIAN 
DOLLARS  
SWISS FRANCS 

$ 62 000 

31 850 

US DOLLARS 

$ 1 220 979 

BOTTLES 

TOSHIBA  BATTERIES  
(in pieces) 
METAL 
WITH FREON 
MISCELLANEOUS 
(CLOTHING, 
HATS, 
SHOES,  WATCHES, 
SUNGLASSES, 
WALLETS, 
CASES, 
BAGS,  WRISTBANDS, 
COLOURING BOOKS 
ETC.) 
(pieces) 
CAR  ACCESSORIES 
(pieces) 

1 348 000 

598 

334 222 

11 220 

831 

42 

9 

FALSIFIED 
GOODS 
(ATTACHME
NTS) 

217 

 
 
  
  
TOTAL 

1 562 

TABLE 2. COMPARISON (SEIZURES/ATTACHMENTS) WITH 2015   

NUMB
ER  

SEIZU
RES 

TYPE 

NARCOTIC 
DRUGS 

32 

ITEM DESCRIPTION 

QUANTITY 

HEROIN  

CANNABIS  

1.83kg 

91.748kg 

PHARMACEUTICAL PREPARATIONS 

745 tablets 

ΚΗΑΤ  

COCAINE  

WEAPONS 

8 

PISTOLS/REVOLVERS 

48.841kg 

1.3gr 

13 pieces 

43 

 
 
  
 
 
 
   
 
 
RIFLES 

HANDLES FOR RIFLES 

AIRGUNS 

SWORDS/BAYONETS  

KALASHNIKOV GUN 

POWDER 

CARTRIDGES 

BULLETS 

GUN BALLS 

CARTRIDGE CAPS 

HUNTING PELLETS 

BATONS 

44 

11 pieces 

11 pieces 

4 pieces 

2 pieces 

1 piece 

3.640kg 

13 392 pieces 

155 pieces 

19 500 pieces 

2000 pieces 

90.720kg 

202 pieces 

 
 
SPIRIT 

177 

CARTRIDGE CASES 

HANDCUFFS 

277 pieces 

100 pieces 

OTHER EQUIPMENT FOR WEAPONS 

124 pieces 

SPIRIT DRINKS 40ο  

BEER  

STILLS 

WINE 

LIQUEUR 

RAKOMELO 

ALCOHOL  

3 154.2 litres 

685.3 litres 

24 pieces 

80 264 litres 

8 litres 

80 litres 

13 929.06 litres 

TSIPOURO/TSIKOUDIA/RAKI 

52 291.3 litres 

45 

 
 
FUEL OILS 

13 

OIL  

GAS  

MEANS 
TRANSPORT 

OF 

242 

FOR PRIVATE USE 

TRUCKS/TANKS 

MOTORCYCLES 

CONTAINERS 

OUTBOARD MOTORS 

BUSES  

4 335 litres 

5 710 kg 

210 

9 

3 

33 

1 

7 

CULTURE 

1 

ECCLESIASTICAL BOOK 

1 piece 

TOBACCO 

377 

CIGARETTES  

TOBACCO  

327 466 935 piece 

1 138.584 kg 

46 

 
 
CIGARILLOS 

CIGARS  

EUR 

US DOLLARS 

AUSTRALIAN DOLLARS 

BRITISH POUNDS  

TURKISH LIRAS 

UAE DIRHAM 

100 pieces 

367 pieces 

4 377 137 

702 712 

224 000 

8 050 

28 360 

17 550 

 CASH 
(ATTACHMEN
TS) 

168 

FALSIFIED 
GOODS 

(ATTACHMEN
TS) 

326 

MISCELLANEOUS 
JEWELLERY, 
SHOES, 
WALLETS, TOYS, ETC.) 

(BAGS,  WATCHES, 
SUNGLASSES, 

387 667 pieces 

47 

 
 
 
 
 
 
 
 
Total 

1 344 

ES 

There is no doubt that budgetary constraints affect the number of staff that can be assigned to control activities. 

However,  since  the  control  system  is  based  largely  on  the  use  of  information  technologies,  whose  development  can  offset  the  loss  of  human 
resources, an adequate level of protection of the EU’s financial interests is ensured. 

As regards the balance between trade facilitation and the protection of financial interests, control at the time of customs clearance is based on an 
entirely computerised risk analysis, supplemented by ex-post controls. Controls at the time of customs clearance should be those which are most 
effective at that time, e.g. by requiring a physical examination of the goods, an analytical opinion or, where necessary, a guarantee before release, 
such as in cases of undervaluation in which post-clearance controls pose serious difficulties in terms of implementation and debt recovery. 

On  the  other  hand,  cases  which  are  more  conducive  to  ex-post  verification,  e.g.  those  which  require  verification  of  commercial  accounts  or 
detailed analysis of bank movements, are carried out preferably using post-clearance controls/audits. 

As  regards  the  incorporation  of  information  received  from  other  Member  States  or  the  Commission  into  the  risk  analysis  system,  all  the 
information received through the relevant applications is analysed in the central services of the Department of Customs and Excise and is taken 
into account, where appropriate, for the purposes of activating a risk profile or the ex-post control measures that are deemed most appropriate in 
the light of the information received. 

Examples of implementing information exchange and cooperation with other Member States and the Commission would be the RIFs issued by 
Spain  with  refs  ES/2014/043,  ES/2014/055  and  ES/2014/067.  On  the  basis  of  controls  carried  out  by  Spanish  customs  on  undervaluation,  we 
warned in those cases of a risk of diversion to other Member States (France and Portugal in particular) by means of transit operations. That led to 
investigations  after  OLAF  had  organised  several  co-ordination  meetings.  Similarly,  mention  could  be  made  of  reports  from  the  Spanish 
administration to OLAF about suspected cases of fraud involving anti-dumping duties established by the EU, e.g. with regard to the origin of solar 

48 

 
 
 
 
 
panels and citric acid. 

In  2015,  ‘voluntary  admissions’  became  a  more  important  source  of  irregularity  detection.  In  the  light  of  this,  the  outcomes  of  voluntary 
admissions need to be taken  into account when planning future control strategies, in particular for post-clearance controls but also when adapting 
the control strategies and so that it is possible to  conduct oversight  on  self-assessed  operators  in  the  future.  Above  all,  ex  post  adjustments 
of customs value need to be taken thoroughly into account. 

FR 

Firstly, Article 78 of the Community Customs Code (CCC), in force at the time of the findings and recommendations of the European Court of 
Auditors set out in the Commission report, provides that ‘the customs authorities may, after releasing the goods and in order to satisfy themselves 
as to the accuracy of the particulars contained in the declaration, inspect the commercial documents and data relating to the import or export 
operations’; it is therefore for the customs authorities of the Member State where the customs clearance formalities are carried out — and 
which therefore have the supporting documents — to carry out the ex-post compliance check. This means that companies registered in France 
which clears all their imports at customs offices in other Member States cannot be selected for compliance checks in France. Indeed, any selection 
of the operations in question would have to be carried out by the customs authorities of the Member States where the import declarations were 
lodged. Furthermore, businesses which do not perform any customs operations in France, even if their registered office is on national territory, are 
under no obligation to register with the French customs administration. 

There may also be bias in the risk analysis of operations carried out by operators that clear their imports in several Member States, because it is 
impossible,  in  principle,  to  have  a  complete  overview  of  the  trade  flows  for  these  operators;  however,  foreign  operators  that  carry  out 
clearance  operations  in  France  are  never  completely  excluded  from  selection  for  inspection,  since  their  import  operations  carried  out  on 
French territory form part of the population of declarations to be selected for ex post controls. 

Furthermore, the instructions to departments, and in particular the guide on the procedures for clearance checks (last update: October 2015), 
recommend compensating for the deactivation of the automated national selection profile (PRONAT) by setting up a regional automated 
selection  profile  (PROREG)  or  a  local  automated  selection  profile  (CRILOC)  based  on  the  same  selection  principles  as  PRONAT;  even 

49 

 
 
though the aim in deactivating PRONAT is to exclude from the system companies whose reliability is not in question, ‘operators excluded from 
PRONAT must not be excluded from all checks and must be put through CRILOC on a temporary basis or subjected to first level ex post 
checks’ which are themselves programmed to run periodically, on the basis of a risk analysis. In addition, the services are asked to prioritise 
less reliable companies which manage sensitive traffic and/or procedures (‘However, the service shall verify, at least once a year, operators that 
have  not  been  subject  to  other  checks  during  the  period’).  Thus,  in  France,  all  operators  clearing  imports  in  the  country  must  undergo 
regularity and compliance checks at least once a year. 

The  aim  of  the  control  system  in  France  is  to  step  up  checks  on  high-risk  operators  without  totally  excluding  reliable  operators  from  the 
inspections. 

Indeed, the control  system  in  place  in  France, which  is  based  on  a  detailed  risk  analysis,  effective targeting  and  three supplementary  levels  of 
control (ex ante and first and second level ex post checks), provides for highly effective coverage of all customs operations and operators. 

Furthermore,  foreign  companies  clearing  customs  in  France  account  for  a  low  percentage  of  total  operations  (6.3 %  of  traditional  and  postal 
freight in 2014). These operators are mainly, but not exclusively, subject to ex-ante controls. 

Statistics released by CANOPEE28 show that in 2014 and 2015, around 1 % (1.07 % and 0.97 % respectively) of import declarations lodged in 
France by a foreign importer using Delt@-C29 and -D2 e-procedures were targeted by an ‘own resources’ profile or randomly selected for ex ante 
control.  These  declarations  were  targeted  mainly  because  of  risks  in  connection  with  procedure  42,  problems  with  customs  values 
(implementation  of  IMAA30)  or  with  passing  on  RIF31  messages.  Nevertheless,  the  rate  is  still  close  to  the  control  rate  of  import  declarations 
targeted by an ‘own resources’ profile (or by automated random sampling) for all operators taken together (1.09 % in 2014 and 1.02 % in 2015). 
The discrepancies observed are not significant in relation to the size of the population of foreign importers compared to the total population of 

28 
29 
30 
31 

Consultation and Analysis of Shared Data 
Online Declaration using Automated Processing - Ordinary (C) and Local Clearance (D) 
International Mutual Administrative Assistance 
Risk Information Form 

50 

 
 
                                                 
importers clearing customs in France. (Foreign importers accounted for only 4.55 % of imports in 2014 and 5.11 % in 2015. These percentages 
concern imports via Delt@-C and -D e-procedures and therefore exclude express and postal freight.) 

France also receives information from other Member States for monitoring foreign operators clearing customs in France via IMAA, RIF 
and  SCENT32  messages  and  MA33  communications.  Particularly  in  connection  with  MA  communications  on  ADD  fraud34,  when  it  comes  to 
large-scale fraud, customs officials in other Member States act on requests for assistance in checking French companies carrying our clearance 
operations on their territory. 

The forthcoming implementation of GRINAR35 V2 will provide better visibility of all high-risk operators, in particular foreign operators clearing 
customs in France, and which are not covered by GRINAR V1. 

Finally,  given  what  is  at  stake  and  the  potential  bias  in  the  risk  analysis  of  operations  carried  out  by  operators  that  clear  customs  in  several 
Member States (see above), and with a view to making its customs controls more effective, France will participate in the Customs 2020 project 
group  dedicated  to  following  up  the  European  Court  of  Auditors’  recommendations  on  the  subject.  It  will  host  the  first  meeting  (6-7 
February 2017) of the subgroup on the exchange of data between the Member States in order to gauge the scale of the phenomenon and provide 
the most appropriate response. 

Here,  the  statistical  study  on  imports  into  France  by  Community  operators  for  onward  shipment  to  another  Member  State  shows  that  the  vast 
majority of the companies concerned have been audited by the French customs authorities (data source: reconciliation of data from the CANOPEE 
2 application and BANACO36). These official controls consist of ex-ante and/or ex-post controls. 

Sys 

32 
+tem Customs Enforcement NeTwork 
33 
34 
35 
36 

Mutual Assistance Communication (Council Regulation No 515/97 of 13 March 1997) 
Anti-Dumping Duties 
National Risk Analysis Grid  
National Control Database 

51 

 
 
                                                 
As  for  the  French  operators  that  carry  out  customs  clearance  in  another  Member  State,  while  risk  analysis  on  those  operations  is  not 
integrated  in  the  same  way  as  for  other  operators  (since  there  is  no  tool  that  provides  access  to  all  the  declarations  in  question),  checks  are 
carried  out  none  the  less.  Indeed,  the  French  customs  authorities  apply  Council  Regulation  (EC)  No 515/97  of  13  March  1997  on  mutual 
assistance between the administrative authorities of the Member States in respect of operators deemed high risk and they consider that they make 
an  effective  contribution  to  protecting  the  EU’s  financial  interests  by  providing  information  to  the  customs  authorities  of  other  Member States 
through IMAA, RIF and SCENT messages or MA communications. 

A task force has also been set up within the DNRED37 to combat fraud under procedure 42, focusing primarily on textiles from China and on 
companies that sell their imports on French territory. In addition to seeking information on the identities of companies at risk to pass on to the 
customs  authorities  of  other  Member  States,  some  thirty  checks  were  carried  out  on  Chinese  containers  cleared  through  customs  in  another 
Member State, resulting in 10 cases of litigation in 2014 and 2015. 

For this, the French customs administration also relies on the work of the abovementioned Customs 2020 project group, in which it is an active 
participant, to continue improving the response to the problem identified by the Community authorities. 

HR 

A)  If budgetary cuts have impacted on the level of staff at control level 

In the Republic of Croatia, budget constraints did not lead to a reduction of staff in charge of controls, therefore Customs  service continued to 
operate with the same number of Customs officers. 

B)  Whether and how the right balance between budgetary cuts, trade facilitation and the protection of the EU financial interests have 

been ensured: 

As stated in part A) Customs service did not reduce the number of staff in charge of controls. Sector for customs controls in Central Office of 

37 

National Directorate for Customs Information and Investigations  

52 

 
 
 
 
 
 
                                                 
Customs Directorate for each year brings Annual working plan, and all controls have been carried out according to the Annual Plan. Such plan 
also includes the inspections on operators/companies.  

C)  Whether and how the information received from other Member States or the Commission departments through the CRMS, AFIS 
and  OWNRES  systems  is  incorporated  into  risk  management  and  complements  the  national  populations  used  for  risk 
management purposes: 

All information received from other Member States in the framework of the mutual assistance, including both requests for mutual assistance and 
spontaneous information, are being analysed, and in case if such information is of the interest, and if it is important for further proceedings for 
customs officers, such information is being integrated in risk management system.  
Also, all information received from Commission departments through CRMS, AFIS and OWNRES systems is being analysed, and such results 
are taken into account and being incorporated in risk management systems, in order to perform needed operations. Also, such information is taken 
into account while planning and executing further operations.  

D)  Examples about how cooperation the information exchange has been developed. In particular for companies which are established 

in country but which clear all their imports at customs officers in other Member States. 

Representatives of Customs Directorate of the Republic of Croatia cooperate with the neighbouring countries (SI, IT, HU) and participate in the 
Quadrilateral  meetings  -  Q4,  where  mostly  the  operational  issues  are  being  discussed.  The  one  of  the  concerns  are  the  transports  of  lubricant 
shipments, where a big number of irregularities are being detected.  
In such cases the fast and accurate exchange of information regarding the companies, vehicles, documentation (mutual assistance) was needed, 
and  such  reply  is  crucial  for  the  proceedings  at  national  level.  In  relation  to  the  information  exchange  about  customs  procedure  CP  42,  with 
Slovenia and Hungary, Croatian Customs service has signed Memorandum of Understanding. It has been noticed that such procedure is usually 
being misused by the operators with the aim to avoid national VAT payment. 

53 

 
 
 
 
 
 
IT 

1. The Customs and Monopolies Agency has always aimed to achieve a balance between the need to protect the budget (EU and national) and 
public security and the need to expedite and facilitate legitimate trade. In that continuous and dynamic process of adjustment, within the relevant 
regulatory  frameworks,  the  use  of  resources  (financial,  human  and  material)  has  had  and  continues  to  have  an  important  role,  and  it  is  by 
optimising the combination of the various factors that make up the ‘resources’ that it has been possible effectively to guarantee that the above 
needs are met. With financial resources under pressure and staff numbers falling, the strategic choice has been made to keep both online and ex 
post controls at a fairly constant level - as can be seen from recent CUP reports published by the Commission - and to support these activities 
with an increasingly robust and refined risk analysis and the digitisation of tasks, which has led to fully computerised management of customs 
clearance procedures and selection of online checks, along with the development of a special procedure, also based on centralised risk analysis, 
to identify sensitive sectors to undergo ex post controls. The high level of computerisation of the dialogue between operators and customs has 
thus made it possible to optimise declining available resources and to maximise management efficiency and the effectiveness of controls. 

2. We note an increase in relations and cooperation with customs officers from certain countries such as Germany, the United Kingdom, France 
and Belgium. 

Given the activities carried out with customs officers from Germany and Belgium in particular, we can say that the exchange of information and 
operational coordination with those countries is now fully established. 

For example: 

Under  the  Naples  II  Convention,  the  Joint  Investigation  Teams  agreement  established  under  Article  24  of  the  Convention  (joint  special 
investigation teams) between the Interregional Anti Fraud Unit of the Interregional Directorate for Liguria, Piedmont and Valle d’Aosta and the 
Berlin  Zollfahndungsamt  -  Smuggling  of  foreign  manufactured  tobacco  products  -  was  extended  until  31  December  2015.  Steps  were  taken 
simultaneously in Italy and in Germany culminating, in November, in the enforcement of 11 pre-trial detention orders issued by the judge for 
preliminary  investigations  in  Turin  and  the  enforcement  of  a  further  six  in  Germany  by  order  of  the  German  courts.  The  Italian  facility  was 
seized and other searches were carried out, again simultaneously, in Italy and Germany. In December there was a debriefing meeting in Cologne, 
attended by officers from the Interregional Anti-Fraud Unit of Turin. 

54 

 
 
3. First of all, customs risk management must be understood in a very broad sense, to include, pursuant to Article 13 of the Community Customs 
Code38  ,  all  risks  arising  from  threats  to  the  correct  application  of  any  legislation  governing  the  entry,  exit,  transit,  final  destination  and  EU 
position of the goods with regard to the customs territory of the Union. That definition therefore includes risk management activities relating to 
threats in general39  and similar activities relating to security and safety risks which, inevitably, overlap with earlier ones40 .   

The CDC risk profiles during the period under consideration have been refined through analysis and evaluation of: 

o  non-conformities detected during checks at the time of customs clearance; 
o  data  communicated  by  the  operational  offices  (irregularity  sheets  entered  in  the  Anti  Fraud  Database,  local  risk  sheets  and  negative 
control reports)  or  by other branches of the Agency  or  by national, Community and international bodies (ministerial  orders, INF-AM, 
RIF, etc.); 

the results of analyses carried out by the new risk analysis model known as SIDDA, which allows statistical analysis of the data submitted with 
the customs declaration against an outlier detection system. The results of this initiative were presented by Italy in an EU working group which is 
introducing measures into TARIC to automatically select or reject ‘outlier’ entries, and also in a second EU initiative on ‘data mining’; 

  national and Community legislative provisions (tariff changes, anti-dumping duties, countervailing duties, opening and closing of economic 

and tariff quotas, etc.); 

  objective and subjective data retrievable through the available databases (flows, statistics, etc.); 
  data on trade movements compared with equivalent periods; 

38  
39  
40  

Regulation (EEC) No 2913/92, still applicable until 31 May 2016, when it is replaced by the Union Customs Code, Regulation (EU) No 952/2013. 
Through the use of the Customs Control Circuit (CDC) which selects declarations for placing goods under a customs procedure (SAD) for checking. 
In the process of entry of goods into the EU the Entry Security Circuit manages the risks identified prior to the arrival of  the goods in the EU, the Customs Control Circuit 
(CDC) those determined from the customs declaration (SAD), which is presented only after the arrival of the goods. Clearly, therefore, there is a close link between the two 
aspects of the process, unless one of them is absent (for example for goods in transhipment, where there is no SAD). In the exit process, risk management is, for the time being, 
still done entirely through the Customs Control Circuit. Therefore the exit process data are a sub-set of the overall CDC data. 

55 

 
 
                                                 
  how profiles are working over time, their efficiency and effectiveness, and how they are consequently updated; 
  data available through access to the movement systems of consignments of international air couriers. 

For those purposes, during the period under consideration the following were analysed, inter alia, bearing in mind the scale of the threats and the 
level of human resources available41 : 

  28 INF-AMs and thousands of irregularity sheets from the Anti-Fraud Database; 
  some 13 000 corrections of discordant declarations; 
 
  all  Risk  Information  Forms  (RIF)  produced  by  the  National  Risk  Analysis  Centres  (NRAC),  by  the  operational  offices  and  by  the 

the reports on adjustments of assessments submitted by the operational departments each month; 

Commission; 
local risk survey sheets; 

 
  other alerts from other branches of the Agency and national, Community and international organisations. 

4. In addition to the Commission’s recommendations, cooperation and exchange of information with the other customs authorities of the Member 
States and with the police forces and courts are being constantly and significantly improved, both on the initiative of the Agency (as a result of 
findings  of  investigative  and  strategic  activities carried  out  independently)  and  in  response to  requests  received  from  the  other  authorities;  this 
improvement is necessary and consistent with the marked similarity of fraud phenomena at international and trans-national level. 

The legal instruments used - Regulation (EEC) No 515/1997 on mutual customs assistance between the Commission and Member States and the 
Naples II  Convention  on  mutual  assistance  and  cooperation  between  customs  authorities,  including  courts  -  provide  a  framework  for  various 
cooperation  and  exchange  activities,  which  are  nevertheless  always  characterised,  at  all  stages  of  implementation  (upstream,  on-going  and 

41  

Please note that the customs risk management system (SAD) has been analysed by DG BUDG on several occasions (last in October 2014, the assessment of which is still on-
going) and by the EU Court of Auditors. In the corresponding reports (received 2011 for DG BUDG and 2013 for C of A), the Italian system was found to be the best of those 
visited. 

56 

 
 
                                                 
downstream),  by  complementary  and  cross-cutting  investigative  activities,  which  overall,  also  in  2015  have  led  to  important  outcomes  for  the 
prevention and combating of fraud. 

As requested by the Commission, these are examples of the main activities: 

  Continuous  cooperation  with  OLAF  on  protection  of  Traditional  Own  Resources  takes  place  in  the  context  of  mutual  assistance,  i.e.  AM 

Communications (AM = Assistance Mutuelle) which OLAF sends to the Member States.  

The steady increase in communications received in the period 2011-2014 dipped slightly in 2015, which saw 27 AM communications compared 
with 39 in 2014, as shown below: 

57 

 
 
 
 
 
 
 
 
 
 
 
However,  there  is  a  fully  confirmed  trend  towards  more  complex  cases  and  actions  taken,  including  with  regard  to  the  follow-up  to  previous 
Mutual Assistance communications, which can be attributed to the increased complexity of trade and the characteristics of infringements. The 27 
AM communications of 2015 were as follows: 

 

 

infringements  concerning:  antidumping,  with  false/incorrect  declaration  of  origin  and/or  type  and/or  value  of  goods;  counterfeiting;  illegal 
drug trafficking; 
types  of  goods:  chemical  and  pharmaceutical  products,  tube  or  pipe  fittings,  aluminium wheels,  fibreglass  fabrics,  textiles  and  footwear, 
semiconductors,  integrated  circuits,  citric  acid,  tuna-based  food  preparations,  solar  panels,  steel  fasteners  (industrial),  other  iron  and  steel 
articles, drugs and precursors, bicycles, cast threaded pipe fittings, soya concentrate, hand pallet trucks, bearings; 

  Third  countries  concerned:  China,  Taiwan,  Malaysia,  Vietnam,  Cambodia,  Thailand,  Singapore,  India,  Bangladesh,  Indonesia,  Philippines, 

Hong Kong, United Arab Emirates, Pakistan, Moldova, Brazil, Argentina and Papua New Guinea. 

Many Mission Reports were also received in the course of 2015, and Final Reports with ‘Recommendation for action to be taken following 
an OLAF investigation’; essentially there was follow-up to further measures to recover evaded duties, based on supporting documents drawn up 
by  OLAF  following  specific  on-the-spot  missions  in  the  third  countries  concerned,  and  comparative  analysis  of  the  data  collected  with  those 
relevant to imports to the Member States. 

The methodologies used in this specific area of cooperation were refined through intervention and coordination measures (with guidance 
instructions, practice memos, a ‘top down’ training action) in the Agency’s peripheral structures, in particular those structures specially set up the 
year before in 2014 (INF AM Groups) to supervise and monitor activities on the ground, including those relating to the quality of data in the IT 
systems used to record instances of fraud in the national databases42, and consistency with the data on recoveries in the EU’s OWNRES database. 

42  

Using AIDA: BDA; INF AM. 

58 

 
 
 
 
 
                                                 
  Collaboration  and  operational  cooperation  in  the  field  of  Joint  Customs  Operations  (JCO)  and  Joint  Police  and  Customs  Operations 
(JPCO) was also important; cooperation with EUROPOL was also enhanced, and it is worth noting the attention given in the Council of 
the European Union, in the Customs Cooperation Working Party, to improving the exchange of inter-institutional information to combat 
fraud. 

  There  has  been  a  further  increase  in  the  number  of  requests  for  mutual  assistance  under  the  Naples II  Convention,  with  a  concomitant 
increase  in  the  complexity  and  variety  of  circumstances,  both  sent  abroad  and  received  from  abroad,  leading  to  equally  complex 
verification and operational activities. 

The above legal instrument continues to be particularly flexible and capable of preventing and combating infringements in the context of 

transnational organised crime. 

The following graph shows the volume of cases in recent years: in 2015 a total of 301 actions were taken in respect of 184 cases opened (each 
individual request file corresponding to ‘n’ actions, depending on the complexity of the case). 

59 

 
 
 
 
 
 
 
 
 
 
  Again under the Naples II Convention, in 2015 three joint special investigation teams were decided and set up, two between Italy and Austria 

and one between Italy and Germany. 

  Under the same Convention some important investigative and cooperation activities were carried out involving the Agency, the Italian judicial 
authorities  and  the  corresponding  customs  and  judicial  authorities  of  certain  other  Member  States  (Austria,  Belgium,  Germany,  the 
Netherlands, Poland, the United Kingdom and Hungary), including eight particularly significant cases. 

The  activities  led  to  the  detection  and  combating  of  instances  of  organised  crime  against  the  EU and  national  budgets  and,  in  some  cases 
(activities  are  still  ongoing  in  others),  to  the  adoption  of  restrictive  and  precautionary  measures  against  the  suspects  and  their  movable  and 
immovable assets. 

Finally, we would point out that the principles laid down in the document in question have been included, as appropriate, in the guidelines on Post 
Clearance Audit to be published soon. 

As  regards  cooperation  and  the  exchange  of  information  among  the  customs  authorities  of  more  than  one  Member  State,  where  a  person 
established in one Member State carries out customs operations also in other Member States, in addition to application of the instruments provided 
for  in  Regulation  (EC)No 515/97  and  in  the  Union  Customs  Code  (formerly  the  Community  Customs  Code)  with  respect,  for  example,  to 
authorisations  for  customs  procedures  (now  special  procedures),  we  would  cite  as  an  example  the  bilateral  cooperation  with  Slovenia  in  the 
exchange  of  information  regarding  the  use  of  customs  procedure  42,  which  led  to  targeted  checks  in  both  countries  on  the  proper  payment  of 
customs duties (mainly VAT on imports). 

Contribution by the Guardia di Finanza 

With  regard  to  point  d)  of  the  Notes  to  Recommendation 1,  the  General  Headquarters  –  Division II  of  the  Guardia  di  Finanza  is  continuously 
monitoring the information forwarded by the Member States via the AFIS system. If examination of the information received through the system 
(a significant proportion of which relates, in turn, to cases that fall within the Agency’s remit) leads to the discovery of situations of interest to the 

60 

 
 
 
Guardia di Finanza, the units of the Guardia di Finanza are informed promptly, so that  - possibly after risk analysis at local level - appropriate 
action can be taken. 

CY 

a) Budgetary cuts have impacted up to a certain extent on a level of staff at control level mainly due to the fact that no public sector job vacancies 
have been created as a moratorium for the last four years up to end of December 2016, and, at the same time, staff retired each year let alone the 
fact that staff have also taken the early retirement option because of the fear regarding the economy. These resulted in a substantial decrease in the 
number of staff. However, due to a rise in illicit trade, the Department of Customs and Excise of the Republic of Cyprus has increased random 
controls in order to trace and thus attempt to diminish this phenomenon.  

b)  It  seems  that,  despite  the  problems  the  Republic  of  Cyprus  has  been  facing  due  to  the  economic  recession  over  the  last  five  years,  such  as 
reduction  in  the  number  of  staff  described  above,  the  right  balance  between  budgetary  cuts,  trade  facilitation  and  the  protection  of  the  EU's 
financial interests have been ensured by random controls in order to trace illicit trade movements at ports and airports as well as at crossing points 
provided  by  Regulation  866/2004  and  in  warehouses  or  other  premises  where  according  to  a  valuated  information,  smuggled  goods  are  being 
placed.  

c)  The  Customs  Administration  has dealt  with  this  situation  by  assigning  more  duties  as  well  as  more  responsibilities  to  the  existing  staff  and 
performs random checks as explained in (a) and (b) above. 

d) The Customs Officers involved in risk analysis and information exchanged, at local and central level, have access to CRMS and AFIS systems. 
At central level the information is processed and accordingly is decided to: 

  Create national profiles in the electronic risk analysis systems 
  Send alert messages to front line officers 
  Disseminate the information to the appropriate sections (e.g. post control section, investigation section, IPR section and so on) for their 

own actions. 
  Provide feedback 

61 

 
 
OWNRES is managed mainly by the post control section which is using the risk information for post control checks. 

e) Examples about how cooperation and information exchange has been developed include the MOUs and the mutual administrative  assistance. 
For the second part of the question, due to the fact that the Republic of Cyprus is an island, we do not have cases that have been encountered here 
for companies which are established in one country but which clear all their imports at customs offices in other Member States. 

LV 

a) to c) points above are not applicable for the State Revenue Services, as no budgetary cuts have had affected its work.  

whether  and  how  the  information  received  from  other  Member  States  or  the  Commission  departments  through  the  CRMS,  AFIS  or 

d) 
OWNRES systems is incorporated into risk management and  complements the national populations used for risk management purposes; 

The Customs Board of the State Revenue Services informs that the national and international information is circulated in according to the State 
Revenue Service’s (hereafter - SRS) internal rules and regulations, including information that has been received via CRMS and AFIS.  

The received information on risks is integrated into the risk management process, thus the Customs Board ensures that the information that has 
been received via CRM and AFIS is registered and disseminated to relevant Customs Board structural units and other competent SRS’s permanent 
structures.  The  information  received  via  CRMS  and  AFIS  is  evaluated  in  order  to  make  a  decision  to  impose  the  necessary  risk  mitigating 
measures.  The  mutual  assistance  requests  received  from  the  AFIS  system  is  regulated  by  the  internal  procedure  ”Procedure  for  processing  the 
information  between the  SRS  units on  the  OLAF  requests  for  mutual  assistance and  the cooperation  between  such  institutions  in line  with  the 
provisions  set  in  the  EC  Regulation  No  515/97  of  13  March  1997  on  mutual  assistance  between  the  administrative  authorities  of  the  Member 
States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters” 

Examples about how cooperation and information exchange has been developed. In particular for companies which are established in one 

e) 
country but which clear all their imports at customs offices in other Member States. 

The Customs Board  of the State Revenue  Services informs  that for the risk mitigating measures and customs offenses need  to get information 

62 

 
 
from  another  EU  Member  State,  the  Customs  Board  is  preparing  requests  on  the  basis  of  the  EC  Regulation  No  515/97  in  order  to  obtain 
assurance that the provisions of the Regulation has been correctly applied. Such practice also applies to transactions of imports if the Company is 
registered in certain Member State but customs clearance done in another Member State. Whereas, in regards to the customs procedure No.42 that 
lays  down  provisions  for  customs  clearance  for  financial  beneficiary  that  is  registered  in  another  country,  by  applying  a  0%  VAT  rate,  for 
information  control  purposes  the  information  is  exchanged  by  using  the  SCAC’s  (Standing  Committee  on  Administrative  Co-operation) 
harmonized electronic template. 

LT  Within the framework of the programme Customs 2020 (financial code CPG/136/002), the Customs of the Republic of Lithuania participate in the 
EC Expert Group on Post-Clearance Audit under the project on financial risk management where decisions are taken on further actions regarding 
the issues raised by the European Court of Auditors and information on risk management in the area of customs audit is exchanged. 

Lithuanian Customs contribute to the collection and analysis of data on customs procedures for imports conducted by economic operators in a 
country other than that in which they are set up or registered. The Customs also exchange information on the customs procedures for imports of 
the aforementioned economic operators which is relevant to risk management with other EU member states via CRMS. Information received from 
CRMS is subject to regular analysis and assessment. 

On the basis of AFIS  AM, investigations  are carried  out and  risk profiles are developed. On a case-by-case basis, information  is  forwarded to 
other  competent  customs  units  for  further  investigation.  Having  carried  out  the  investigations,  customs  officers  reassess  risks  against  the  risk 
criteria. Afterwards, within the set deadline they inform the OWNRES case investigators on additional risk mitigation measures. 

LU  Question a) Not the case 

Question b) Not applicable 

Question c) Not applicable 

Question d) Yes, establishment and use of risk profiles and update of existing ones. 

63 

 
 
Question e) No particular example for import clearance under the scope of the centralized clearance. 

HU  As regards the balance between trade facilitation and the protection of the EU’s financial interests, selection for the controls built in the process of 
base case customs procedures is made by taking into account the risk profiles developed as a result of central risk analysis  activities, as well as 
local risk assessments and case specific decisions taken by the customs body (in the case of customs procedures for release for free circulation, 
accounting for the largest share of import flows, this means a control level of 5% at a minimum). 

In addition to the above, EU and national efforts for the simplification and acceleration of customs procedures indicate that, simultaneously with 
the shift towards electronic and simplified customs procedures, emphasis should be shifted from the process of base case customs procedures to 
controls to be carried out after the release of goods. That control option includes individual inspections of customs declarations as well as more 
comprehensive audits of foreign trade activities subject to customs control. 

In  order  to  achieve  the  stated  objectives  and  the  appropriate  level  of  control,  having  regard  to  the  expectations  of  external  control  bodies,  a 
minimum control level of 5% needs to be ensured in annual terms, based on selection made on the basis of risk analysis, in the case of post-release 
controls. 

As  regards  the  exchange  of  experiences  among  Member  States,  it  takes  place  in  the  framework  of  the  regional  customs  cooperation  of  the 
Visegrád  countries  (the  V4:  Czech  Republic,  Poland,  Hungary  and  Slovakia),  more  specifically  at  the  annual  meetings  of  the  Member  States’ 
customs leaders and through the discussions in the expert groups. At their meetings, the customs leaders evaluate the experiences of the past year 
and define the tasks for the next period. 

On a proposal from the Czech Customs Administration, the first meeting of the V4 countries’ working party for customs ex-post controls was held 
in Prague in December 2014. The aim of this working party is to support the post-release (ex-post) controls carried out by the customs authorities 
of the V4 countries by sharing risk information, best practices and legal interpretations. The December 2015 meeting was hosted by the Slovakian 
customs  administration,  and  the  December  2016  meeting  was  organized  by  the  Hungarian  customs  administration,  based  on  the  items  on  the 
agenda  of  the  previous  working  party  meetings.  The  working  party  sub-group  is  working  effectively  and  productively.  The  next  meeting  is 

64 

 
 
planned for late 2017. 

In the framework of the V4 customs cooperation, a separate working party deals with the issue of under-invoicing footwear and textile products 
arriving  from  the  Far  East.  Under  the  Trencin Declaration for  joint  action  by the V4  against under-invoicing,  the  Member  States  undertook  to 
introduce  trigger  prices  for  a  certain  number  of  products  from  1 January 2016,  based  on  the  EU-28  fair  prices  captured  by  the  AREP  AMT 
(Automated  Monitoring  Tool).  In  accordance  with  the  Declaration,  the  risk  profiles  developed  to  combat  under-invoicing  were  updated  on 
1 January 2017. 

Furthermore, as regards the exchange of experiences among Member States, it also takes place in the context of the regional customs cooperation 
of  the  Q4  (Quadrilaterale)  countries  (Croatia,  Italy,  Slovenia  and  Hungary),  more  specifically  at  the  regular  meetings  of  the  Member  States’ 
customs leaders and through the discussions in the expert groups. At their 2016 meeting held in Villány, the customs leaders adopted a decision 
on continuing the activities of the Q4 working parties. Working parties of experts will be set up for in-depth control, increasing the effectiveness 
of the fight against under-invoicing and the application of the Union Customs Code, the members of which will consult each other on the relevant 
issues. 

In the regional cooperation of the Q4, the National Tax and Customs Administration of Hungary (NAV) plays a highly  important coordinating 
role  by  regularly  informing  the  customs  leaders  of  the  Q4  countries  about  the  work  done  and  the  results  achieved  in  the  well-functioning  and 
active Visegrád expert groups and, as a result, involving the Q4 experts in the work of the Visegrád experts. As regards information received from 
other Member States or Commission departments and point d) of the request for information attached to the recommendation, such information 
(e.g.  AM,  RIF  messages,  customs  information  exchange  agreements,  data  and  information  received  in  the  context  of  voluntary  assistance)  are 
constantly analysed and evaluated during risk analysis, which may result in customs inspections. 

As regards closer cooperation among Member States and point e) of the request for information attached to the recommendation, the Hungarian 
customs authority has concluded or intends to conclude bilateral agreements for the mutual exchange of data on customs procedures for customs 
control purposes with several EU countries. Bilateral agreements are currently in force between Hungary and the customs authorities of Slovakia, 
Romania,  Slovenia,  the  Czech  Republic,  Poland  and  Croatia.  Negotiations  for  a  bilateral  agreement  are  currently  underway  with  the  customs 

65 

 
 
administration of Greece. 

In accordance with these agreements, data are provided regularly within the framework of voluntary assistance by the customs authorities of other 
Member  States  on  the  customs  procedures  initiated  in  the  given  Member  State  in  respect  of  operators  established  in  Hungary,  and  by  the 
Hungarian party on the Hungarian customs procedures concerning operators established in the given Member State. 

The  central  body  carrying  out  the  risk  analysis  periodically  involves  the  data  in  a  complex  analysis  and  informs  the  customs  administration 
(control) function in case risks are identified. The relevant risk information is also notified to the foreign customs administration concerned, in the 
framework of voluntary assistance. 

In addition to the above, under the framework or empowerment provided by EU and national legislation, the Hungarian customs authority also 
cooperates with domestic partner organizations in order to support the customs control activities. 

MT  a) if budgetary cuts have impacted on the level of staff at control level; 

To a certain extent yes. 

b) whether and how the right balance between budgetary cuts, trade facilitation and the protection of the EU’s financial interests have 
been ensured;  

Yes. 

c) if a) and/or b) yes, how Member States have dealt with this situation in order to ensure that the efficiency of the control system remains 
unaffected;  

We  have  re-structured  and  joined  a  number  of  sections,  which  operate  within  the  same  area,  thus  making  better  use  of  our  present  human 
resources. Also, we are reviewing the Department’s work practices in order to identify out-dated practices and correct them. 

66 

 
 
d) whether and how the information received from other Member States or the Commission departments through the CRMS, AFIS or 
OWNRES systems is incorporated into risk management and complements the national populations used for risk management purposes;  

Yes indeed. All foreign information is evaluated by our Risk Management Team and when applicable that intelligence is incorporated into our 
national profile system for eventual targeting.   

e) examples about how cooperation and information exchange has been developed. In particular for companies which are established in 
one country but which clear all their imports at customs offices in other Member States. 

Information  is  provided  under  the  Naples  II  Convention  on  Mutual  Assistance  and  Co-operation  between  Customs  Administrations  and  Reg. 
515/97; other bilateral agreements also make this possible. On numerous cases we assisted OLAF and other EU Customs Administrations with 
information  about shipments (which included LUBRICATING  OILS and TOILETRIES) and which are despatched from a Member State with 
Malta as the declared place of final delivery – the shipments never materialise. These are normally MTIC cases. 

NL 

In the Netherlands there was no budgetary cut to Customs that affected staff numbers. The UCC had more impact: due to the necessary changes 
to agreements, permits and audit files the total number of post-clearance audits in 2016 was smaller compared to 2015. This will also have an 
impact in 2017. This is partly offset by a different way of organising audits (cyclical monitoring). 

We will always consider what the most relevant issues are and ensure that we find the right balance between trade facilitation and protection of 
EU financial interests. All clearance controls (at the time of clearance and post-clearance) are risk-based (incl. ad random) and information from 
other Member States is taken into account. Successes and noteworthy information of possible interest to other Member States are shared by the 
CRMS system. Pursuant to the Regulation all relevant findings (cases of fraud or irregularity) are reported in Ownres. The most recent relevant 
examples are the CRMF information exchanges relating to antidumping fraud with solar panels in recent years. 

AT  No Information Provided 

67 

 
 
PL 

The actions suggested in the recommendations are being implemented in Poland through the: 

  Reorganisation  of  the  institutions  and  services  also  competent  for  protecting  the  EU's  financial  interests  by  bringing  together  the  Customs 
Service, Tax Administration and Treasury Control to form a national tax authority from March 2017. This solution is aimed at increasing the 
efficiency and effectiveness of the checks carried out, including checks on traditional own resources; 

 

Intensive  use  of  available  information  channels,  including  the  CRMS  and  AFIS  systems  for  exchanging  experiences  in  cases  where  the 
customs authorities have been particularly effective in detecting irregularities during customs clearance; 

  On-going  use  of  information  received  from  other  Member  States  or  the  Commission  through  the  CRMS  and  AFIS  systems  in  risk 

management. The centralised body coordinating this process is the Customs Service’s Strategic Analysis Centre; 

 

Increase in international cooperation activities by the Customs Service, particularly in cases involving the declaration of low transaction values 
for  goods.  The  Customs  Service  is  also  looking  forward  to  improved  cooperation  from  other  Member  States  with  regard  to  the  transfer  of 
information by Polish operators for declarations under customs procedure 4200 concerning significant quantities of goods imported from Asia 
in sea containers and with a value close to the threshold values (used in risk analysis). In such cases, the likelihood of detecting fraud in the 
form of the under-declaration of transaction values during customs clearance is low. That is why the Commission suggested focusing more on 
the transfer by Member States with key cargo sea ports of information on operators declaring low transaction values under customs procedure 
4200.  This  information  could  be  used  in  ex-post  controls  (information  exchanges  via  the  Eurofisc  network  cannot  replace  the  proposed 
cooperation at the moment, as not all EU Member States with key cargo sea ports are part of Eurofisc and, equally important, the Eurofisc data 
concerning consignments with a value of EUR 25 000 or over, for example, do not include a significant number of container consignments 
with a lower transaction value). 

PT 

The  recommendation  under  consideration  does  not  fall  directly  within  the  scope  of  the  work  of  entities  involved  in  managing  the  European 

68 

 
 
 
 
 
Structural and Investment Funds (ESI Funds). 

However, the Agency for Development and Cohesion (AD&C) reports that in the field of ESI Funds, all transactions and suppliers (national and 
foreign)  are  included  within  the  scope  of  expenditure  that  might  be  examined  by  the  Managing  Authorities  as  part  of  management  checks 
(administrative or on-the-spot), and might also be subject to audits, where required, in the framework of audits of operations. 

RO  Following  the  reorganisation  of  customs  activity  resulting  from  the  entry  into  force  of  Government  Decision  No  520/2013  on  the 
organisation  and  functioning  of  the  National  Tax  Administration  Agency,  published  in  Official  Gazette  No  473  of  30  July  2013,  the 
operational staff performing customs control activities has increased, enhancing the capacity for customs control and supervision at the EU’s 
external border. 

Selection for control based on risk assessment at local or national level by means of the RMF (Risk management framework) IT system, the 
computer  processing  of  customs  declarations  by  means  of  the  SIIV  (Integrated  customs  IT  system),  the  implementation  of  computerised 
transit systems (NCTS), the excise goods movement system (EMCS), the prior auditing of authorised economic operators (AEO), simplified 
customs procedures and the green clearance channel, make it possible to facilitate transport and international trade by reducing border and 
inland clearance times and to perform more effective customs controls. 

Information on risks identified in international trade operations received via the CRMS-RIF, AFIS mail and OWNRES systems are examined 
at  national  or  local  level,  as  relevant,  and  risks  identified  as  being  applicable  in  Romania  are  subjected  to  customs  surveillance  measures 
implemented at national level in the RMF IT system in the form of risk profiles or in the ADIS system in the form of alerts. 

In order to obtain data and information relating to customs activity carried out in other Member States by operators registered in Romania, 
use  is  made  of  mutual  assistance  and  administrative  cooperation,  as  set  out  in  Council  Regulation  (EC)  No  515/97  on  mutual  assistance 
between the administrative authorities of the  Member States and cooperation between the latter and the  Commission to ensure the correct 

69 

 
 
application of the law on customs and agricultural matters. 

ADDENDUM 

c) Ensuring the efficiency of the control system 

Although the Directorate-General for Customs has fewer staff following the reorganisation of customs activities resulting from the entry into 
force of Government Decision No 520/2013 on the organisation and functioning of the National Tax Administration Agency, published in 
Official Gazette No 473 of 30 July 2013, the balance between the need to facilitate trade and the protection of the EU’s financial interests has 
been achieved through the implementation and development of new systems for selection for control of customs operations, as follows: 

- over the period 2013-2015, the operational staff performing customs control activities at border customs offices has increased by more than 
800, enhancing the capacity for customs control and supervision at the EU’s external border both in terms of the number of physical checks 
carried out and the use of non-destructive scanning techniques (RAPISCAN). 

-  the  use  of  selection  for  customs  control  based  on  risk  analysis  has  facilitated  the  implementation  of  clearance  channels,  customs 
declarations accepted via the green clearance channel following a process of post-clearance customs control. 

-  close  cooperation  with  the  European  Commission’s  Anti-fraud  Office  (OLAF)  with  a  view  to  obtaining  data  and  information  for  use  in 
combating customs fraud and improving the performance of the national risk management IT system RMF (Risk Management Framework) 
has  facilitated  selection  for  control  on  the  basis  of  risk  assessment  at  local  or  national  level,  leading  inter  alia  to  a  reduction  in  cases  of 
undervaluation of the customs value declared on import of textiles and footwear from China and Turkey. 

- the application of the provisions of Regulation (EU) No 952/2013 laying down the Union Customs Code and subsequent regulations has led 
to the development of working procedures based on modern principles, developing the system of audit at the premises of economic operators 

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(AEO),  extending  local  clearance  procedures  (entry  in  the  records),  customs  transit  procedures  based  on  authorisations  of  approved 
recipients  etc.,  and  shortly  centralised  clearance,  control  methods  which  benefit  from  the  cooperation  of  economic  operators  and  release 
customs staff from performing inefficient routine checks. 

e) Examples of the development of cooperation and the exchange of information: 

Romania currently carries out exchanges of customs information with Member States on the basis of Regulation 515/1997, exchanges of data 
and information which are used for carrying out checks of customs declarations, and through the AFIS, CRMS-RIF or CEN IT systems, and 
agreements concluded between the EU and non-EU States, in individual cases of breach of customs legislation and on a reciprocal basis.  

For example, using OLAF’s AFIS platform, an exchange of information takes place between Romania and Hungary on import transactions 
under procedure 42 approved in those two Member States, information which can be used to tackle VAT fraud. Furthermore, at the border 
customs  office  of  Giurgiuleşti,  the  Romania-Moldova-Ukraine  trilateral  contact  centre  also  operates,  for  the  operational  cross-border 
exchange of information with a view to combating more effectively the phenomenon of illicit trafficking at the EU’s eastern border. 

With  regard  to  Romanian  companies  which  clear  entirely  in  other  states,  their  activity  is  not  controlled  because  there  is  no  legal  customs 
relationship.  At  the  request  of  Member  States  in  which  these  customs  assistance  operations  take  place,  targeted  checks  are  performed  in 
accordance with such requests. 

With regard to imports  into Romania by companies established in other Member States, given that, together with customs duties, national 
consumption taxes, VAT and excise duties are also paid on import, customs declarations by economic operators established in other Member 
States can only be submitted by a tax representative. These operations are recorded in the Integrated Customs Information System (SIIV) and 
are subject to the same filters and automated risk assessment performed with the aid of the RMF as other customs declarations submitted by 

71 

 
 
operators established in Romania. 

Sl 

Questions: (a), (b), (c): 

In  order  to  reduce  administrative  costs  and  optimise  operations  the  customs  and  tax  administrations  were  merged  into  a  single  Financial 
Administration  of  the  Republic  of  Slovenia  (FURS)  in  2014.  The  consolidation  was  followed  by  staff  rationalisation,  which  resulted  in 
optimisation  and  fewer  customs  inspectors.  Three  competent  units  in  charge  of  inspections  were  created  in  2016  for  optimisation  and 
rationalisation purposes and with a view to increasing efficiency. 

All declared shipments in the clearance process are automatically subjected to electronic risk analysis, which uses risk profile templates that cover 
a variety of risk areas. Whenever a risk profile is identified, a risk assessment is carried out, followed by a control and the recording of control 
results. Risk profiles are updated daily on the basis of available information. 

(d) Thanks to bilateral agreements with Italy, Hungary and Croatia, the FURS exchanges information on customs procedures 42 and 63 carried out 
by economic operators established in those Member States, with the clearance procedure being carried out in the other of the two signatories. 

All  information  received  through  the  CRMS  system  is  evaluated,  processed  and  recorded  in  the  national  risk  analysis  record.  Additional 
information may be requested through the CRMS system, if needed, for the purpose of risk analysis. Once risk analysis and assessment findings 
are obtained, all the necessary measures are taken for mitigating risks in customs procedures, including the creation of corresponding risk profiles 
and  the  submission  of  information  to  the  competent  authorities  (e.g.  ex-post  control)  or  other  bodies.  Information  on  all  the  measures  and 
activities undertaken and new risks identified is transferred through the CRMS system. 

Any  useful  information  transmitted  through  the  AFIS  system  (e.g.  AM-messages,  rejections,  etc.)  is  also  entered  in  the  national  risk  analysis 
record where it is further processed and analysed to create risk profiles; where any similar previous cases are identified a proposal is generated for 
an ex-post control. 

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Entries in the OWNRES application mainly concern additional payments following controls. 

Information on any newly discovered irregularities in customs procedures, excise duty procedures, ex-post controls or other controls for which the 
FURS  is  in  charge  (e.g.  mobile  units)  is  exchanged  through  the  national  VIR  system,  which  supports  the  creation  of  local  SAT  profiles  for 
customs procedures and enables the monitoring of import, export and transit customs controls. 

(e) Italy, Croatia and Hungary report to us on the import of goods into their respective countries under procedures 42 and 63 by Slovenian-based 
companies, while we provide them with data on import procedures 42 and 63 for imports into Slovenia by companies established  in any of the 
three  countries.  The  data  is  analysed  and  corresponding  risk  profiles  are  created  where  required,  after  which  the  information  is  fed  to  the 
department in charge of ex-post controls. The exchange of information makes it possible to more effectively fight financial irregularities and the 
ensuing losses. 

SK  Due to the fact that such reduction actually started to be applied since the end of previous year we have no information about such impact in 

relation to the budget cuts. 

a)  Information  received  through  the  systems  are  analysed  and  incorporated  into  the  national  risk  profiling  system,  moreover  information 
from the CRMS system are monitored and processed continuously in a unit 24/7. 

CRMS 

Cases  reported  via  CRMS  application  by  Member  States  represent  information  base  on  identification  of  trends  in  violation  of  customs 
legislation.  Reported cases  and  described situations about  the  movement of imported  goods, behaving the  people  and ways of committing 
unlawful acts serve as knowledge base for the operational departments. By verification of specific situations described in CRMS it was found 
e.g., that false identification documents were used. Smugglers submitted false documents to the customs authorities. There was also found 
the vehicle registered in one of the Member states which, after deregistration, becomes the possession of a third-country citizen. This person 

73 

 
 
used it for smuggling of small arms in its hidden shelter. 

AFIS 

This application is permanent tool which allows, to the analytical units, to have data coming from various sources in a real time. Having such 
safe international communication channel is currently also valuable tool to avoid & prevent cyber-attacks. Information from AFIS enables us 
to identify transit operations where exists any doubts of data authenticity.  

AREP application and its Automated Monitoring Tools Reports (AMT Dashboards) allow  focusing on diversion of customs values during 
customs clearance processing for selected nomenclatures. The low number of analysts which are able to work with this on-line tool and also 
persons which are able to read data from the reports caused poor transformation of such information to the units which carry out customs 
clearance itself. 

FIDE application is also valuable on line resource. It’s used, by investigation bodies in their search operations, in framework of recorded 
violation of customs regulations. 

The information about possible fraud, for companies established in other Member states, are forwarded to the particular Member states on the 
basis  of  Reg.  515/1997  („Mutual  assistance“).    Close  cooperation  is  conducted  also  in  the  exchange  of  information,  in  framework  to  the 
control of companies that are established in one EU country but all their customs formalities for the import of goods are made in another EU 
country,  especially  in  controlling  the  dispatch  of  goods  within  the  procedure  42  for  V4  countries  (SK,  CZ,  PL,  HU).  In  addition  to  this 
agreement the Slovak Republic, at the level of Heads of customs administrations of the V4 countries, also signed the agreement in relation to 
risk analysis and excise duties." 

FI 

During  the  past  years  person-years  have  been  decreasing  because  of  the  different  governmental  programs  aiming  at  savings  and  at 

74 

 
 
intensification in administrative work.  

The figures are the following regarding development of person-years in the Finnish Customs: 2015: 2202 person-years, 2016: 2160 person-
years and 2017 started with 1925 person-years.  

From the beginning of the year 2017 Tax administration is responsible for excise duties, car tax and also for the VAT in importation from 
January 1st 2018. The tasks were transferred from Customs to Tax administration and 196 employees were relocated to Tax administration. 
Tasks related to control activities are shared. 

Generally the Customs has been developing more efficient and more sophisticated electronic declaration systems and systems and IT-tools 
for Risk Management purposes. 

Question 1 (d) CRMS and AFIS are everyday tools in risk management work. OWNRES is also used but less frequently.  

Question 1 (e) Permanent Customs 2020 project group DK-FI-SE concerning risk management and control of own resources was established 
in the year 2016 in order to change regularly information of post-clearance controls/audits, irregularities at the time of clearance as well as 
the tools, methods and results of risk management. One target area of this group is the companies which are established in one country but 
which clear imports at other Member States. 

Representative  of  Corporate  Audit  of  Finnish  Customs  is  a  member  of  the  C2020  Project  Group  on  post  clearance  audits  -  follow-up  of 
annual ECA findings and recommendations. The project group works out the state of affairs of the companies which are established in one 
country but which clear all their imports at customs offices in other Member States. 

SE 

a) if budgetary cuts have impacted on the level of staff at control level;  

75 

 
 
It has not affected the number of staff at control level since the budget has not been reduced but rather increased in 2015.  

b)  whether  and  how  the  right  balance  between  budgetary  cuts,  trade  facilitation  and  the  protection  of  the  EU’s  financial  interests  have  been 
ensured;  

See  answer  to  a).  The  balance  between  trade  facilitation  and  the  protection  of  financial  interest  of  EU  is  always  a  high  priority  for  Swedish 
Customs.  Within  Swedish  Customs  it  is  an  issue  that  is  under  the  responsibility  of  the  Directors  responsible  for  the  Department  of  Law 
Enforcement and the Department of Managing the trade. 

c) see answer to a) 

d) whether and how the information received from other Member States or the Commission departments through the CRMS, AFIS or OWNRES 
systems is incorporated into risk management and complements the national populations used for risk management purposes; 

Yes, Swedish Customs uses the information obtained through the CRMS, AFIS and OWNRES insofar as it is relevant to our priority risk areas. 
Furthermore, such information, together with other information, serves as basis for identifying new priority risk areas.  

e)  examples  about  how  cooperation  and  information  exchange  has  been  developed.  In  particular  for  companies  which  are  established  in  one 
country but which clear all their imports at customs offices in other Member States.  

Swedish  Customs  has  during  the  year  participated  in  an  initiative  under  Customs  2020  programme  to  form  a  working  group  together  with 
Denmark and Finland with a focus on control issues regarding anti-dumping. Furthermore, our experience is that it is easy to ask another MS for 
assistance in the event that we have a control problem with a company in another MS.  

Swedish Customs think that it's SASP (which will be replaced by centralized clearance) that is meant in the working documents. We are unaware 
of to what extent operators import through other MS anyway. No Swedish economic operators have SASP permit. Customs' current stance is to 
only participate in the licensing of exports under the condition that other MS issued the permit. Sweden is participating in two events in which the 

76 

 
 
license was granted in Germany. In the two cases, Customs in Germany, who grants the authorization, develops a control plan that tells us what 
Sweden and Germany should do. The main rule is that the controls are made in Germany, although Sweden also has the opportunity to perform a 
control of a stock that the economic operator has in Sweden. 

Swedish  Customs  are  participating  in  the  EU  common  priority  control  areas  (PCA).  Furthermore,  Swedish  Customs  are  active  in  efforts  to 
develop the working method SBA (system-based approach). We participate in the SBA network and also in the project. It may also be mentioned 
that some people from Swedish Customs will make a working visit to Belgium during February 2017 to study the Belgian Customs work with the 
SBA, in order to develop it further in Sweden.  

As for cooperation and information exchange in general, we do it in the form of Mutual Assistance, OLAF-AM and Risk Information Form. 

UK 

The UK’s approach to control continues to be effective and proportionate, using a risk based approach and a range of tools to address 

a) 
the spectrum of non-compliant behaviours. 

b) 

The UK has struck the right balance working hard to understand our customers and their behaviours to enable us to continue to do so. 

The UK maximises the effective use of resources to assure compliance through systems based control and a sophisticated and mature 

c) 
risk management and intelligence led approach that targets the highest compliance risks. 

Yes. The UK has an effective process to manage cases that impact on risks in the UK.  The UK uses information stored in the AFIS 

d) 
system to identify risks and to direct actions towards high risk traders. 

Operation Octopus in 2016. The UK worked with OLAF/French Customs to provide near real time information on  consignments of 

e) 
textiles travelling under CPC42. This was followed up with debriefing of the findings with our French and other partners 

77 

 
 
 
In 2015, 'voluntary admissions' became a more important source of irregularity detection. In the light of this, the outcomes of voluntary admissions need 
to be taken into account when planning future control strategies, in particular for post-clearance controls but also when adapting the control strategies and 
so  that  it  is  possible  to  conduct  oversight  on  self-assessed  operators  in  the  future.  Above  all,  ex  post  adjustments  of  customs  value  need  to  be  taken 
thoroughly into account. 

Recommendation 2: 

Considering the increasing number of cases of voluntary admission and the related amounts, Member States are reminded of the need to adapt 
their customs controls strategies, taking into account the outcomes of voluntary admissions and are therefore invited to: 

• adapt their yearly planning of staff and resources required for ex post verification of information received by voluntary admissions; 

•  take  into  account  customs  risk  management  and,  if  required,  take  into  account  in  control  plans  the  types  of  irregularities  revealed  by 
voluntary admissions; 

 • extend customs controls to other economic operators with businesses or operations identical or comparable to those having made voluntary 
admissions. 

BE 

SPF Finances 

Year 

Total number of records 

Voluntary admission records 

78 

 
 
 
 
 
 
 
2014 

2015 

2016 not including December 

240 

236 

215 

7 

11 

7 

Voluntary admission records entered in OWNRES are categorised as follows:  

It can be concluded from these figures that this is a marginal phenomenon in Belgium. Furthermore, for a relatively constant total annual 
number of records, the number of voluntary admission records is also relatively constant. Therefore, this phenomenon does not constitute 
an emerging trend in Belgium. 

There is no national definition of ‘voluntary admission’. 

Question a 

Since several years, BE Customs has extended the risk analysis activities starting from the transaction based approached to an integrated 
approach of the couple “transactions and economic operators”: the on-going situation is to complete the overall landscape of risk analysis 
control activities with a more direct input on post-clearance audits. 

  Post-clearance controls via the clustering of subset of yearly declarations controls to be performed by 2nd line teams; 

79 

 
 
 
 
 
 
 
 
 
 
 
  National thematic controls (e.g. undervaluation, origin, misclassification,…) driven by fraud detection data-mining models, to be 

executed by 2nd line audit teams and based on effective fraud cases; 

  Those risk analysis triggers can be taken on board in post-clearance audits and if applicable, the ‘auto-conducting’ methodology 
implies that in some cases, the proposition is made to the economic operator for applying “voluntary admission” as a solution to 
resolve some cases; 

 

In some instances, a case is propagated nationally through the risk management channel, for regularization. 

Question b 

The compliance policy is not yet totally completed nationally. 

Some initiatives indicate that it should be developed more comprehensively / holistically: requests for regularizations of minor systematic 
errors in an economic operator’s declarations (with no impact on Traditional Own Resources) are well appreciated. 

BG 

CZ 

The check conducted in the OWNRES system of the European Commission of the entire period from 1 January 2007 to date did not return any 
entries relating to ‘voluntary admissions’ that have resulted in detected irregularities.  

Similarly, no cases of voluntary admissions of neither economic operators nor additional amounts to be collected were identified on the basis of 
ex-post controls.  

The Czech customs administration's adaptations of the control strategy have yielded, for example, the following results:  

If whilst post-clearance controls are being carried out, an entity submits its own request for SAD rectification, the system automatically 
flags up the fact that procedures are being conducted in respect of that entity; hence a SAD rectification cannot be requested. The purpose 

80 

 
 
 
DK 

DE 

of this is to prevent entities from evading the requirement to pay default interest.  

Furthermore,  once  post-clearance  controls  have  been  carried  out,  information  concerning  the  places  in  which  infringements  have  been 
detected  is  processed  and  the  findings  are  fed  into  the  AVR  application,  which  automatically  assesses  risk  in  the  case  of  the  entities 
concerned.  At  the  same  time  the  findings  are  compiled  in  the  form  of  a  newsletter  issued  four  times  a  year  and  distributed  within  the 
customs  administration  (to  customs  offices  and  to  specialist  departments),  thereby  ensuring  more  effective  targeting  of  post-clearance 
controls as reflected in the relatively high effectiveness rate: the average figure over the last four years exceeds 78 %. 

SKAT has set up a unit to deal with companies’ voluntary notifications in SKAT’s areas of competence, i.e. taxes, VAT, excise duties, 
etc.  When  a  company  contacts  SKAT  to  ensure,  for  example,  correct  customs  clearance,  the  company’s  notification  is  referred  to  the 
Customs Department for subsequent control assessments. 

Information from voluntary notifications, including tip-offs from citizens, other operators, anonymous tip-offs or information from any other 
source, are included in the national risk analysis and control strategy. When voluntary notifications are made, the normal procedure is to check, 
as  part  of  risk  analysis  and  market  monitoring,  whether  any  other  market  operator  in  that  sector,  apart  from  the  notifier,  has  been  acting 
fraudulently.  The  category  of  ‘voluntary notifications’  includes  cases  in  which  the  correction  or  the  recording  of  the  data  is  based  on  the 
parties’ (corrective) applications. The term ‘voluntary notification’ in the OWNRES application specifies the ‘type of control’ with which the 
irregularity was discovered. A survey of the OWNRES database for the 1st half of 2016 in Germany has revealed that out of 10 363 records 
only 184 cases (around 1.8%) were marked as ‘voluntary notification’. 

The  number  of  Member  States  which  discover  and  report  a  sizeable  number  of  fraudulent  irregularities  has  increased;  this  shows  their 
commitment to the fight against fraud affecting the financial interests of the EU. 

The  Commission  remains  concerned  about  the  comparatively  low  number  of  potentially  fraudulent  irregularities  notified  by  some  Member 

81 

 
 
States. In particular the progress in certain Member States highlighted in the 2014 Report either stagnated or even declined in 2015. 

Although  the  quality  of  the  irregularities  reported  is  satisfactory,  it  could  be  further  improved  to  enable  a  more  in-depth  analysis  of  the 
underlying phenomena.  

EE 

 As far as we understand 'a contact without proceedings' is in question – where a person after the contact with ETCB submits voluntarily 
an amendment to the declaration (application for amendment of the customs declaration). A contact with ETCB may be a telephone call, 
an e-mail or a meeting (less often several of these together). During this, the official may ask and / or the person may submit documents / 
certificates in addition to his / her explanations but need not.  

The description in the tax auditor’s work procedure is the following:  

The  objective  of  a  contact  without  proceeding  is  to  direct  the  person  voluntarily  to  correct  his  /  her  tax  returns  without  conducting  a 
control procedure, if the tax authority has the information that the present data are incorrect.  

A contact without proceedings is appropriate in the situation where the tax authority becomes aware of the circumstance increasing the tax 
liability when checking another person or in some other way. For example, it appears that the transaction partner has not declared the sales 
invoice in turnover but the person being checked has reflected it in his / her acquisitions, or the tax authority has become  aware of some 
other inescapable circumstance increasing the tax liability.   

In  follow-up  controls  both  the  persons  who  have  been  selected  for  control  and  those  who  have  voluntarily  corrected  their  customs 
declarations shall be taken into consideration. 

IE 

In the last number of years we have had only a very small number of voluntary admissions.  

82 

 
 
Generally we consider the outcomes of all audits and apply what we have learned in one case to others.  This would for example include 
risks relating to the 2500 code and authorised IP traders.  

Where a voluntary admission is made an issue is identified as a result we carry out checks to see if that issue has arisen or could arise in 
other importers’ transactions, and accordingly we will implement necessary changes to our customs control strategies. Risk management 
is at the core of protecting taxes and duties and our systems are developed and updated as necessary with this in mind.  

The principles around tax and duty disclosures and how they are defined are set out in the Revenue “Code of Practice for Revenue Audit 
and other Compliance Interventions”. 

EL 

Planning of Staff: 

a) in the last quarter of 2016 Greek Customs completed a quantitative and qualitative upgrade of the permanent positions for  the staff of 
advanced qualifications of the Customs Administration; 

b)  there  has  been  adopted  a  2  years  plan  (2017-2018)  for  new  recruitments,  in  order  almost  all  of  the  available  vacant  positions  to  be 
covered.  

The above actions in combination with sustained and targeted education and training aim to ensure on a mid-term basis the quality and 
effectiveness of on-going anti-fraud controls, despite budget constraints. 

ES 

The second recommendation relates to the treatment of voluntary admissions, in so far as they generate an OWNRES report to be sent to the 
Commission. All payments of import duties, thus including those which derive directly from the information voluntarily provided by operators, 
are recorded in the IT system and are taken into account in the risk analysis and drafting of control plans, both in relation to the operators which 

83 

 
 
provide the information and others whose operations are of a similar nature. 

FR  OWNRES statistics for France, from the EU portal, are as follows: 

2011: 3 voluntary admissions out of a total of 267 irregularities (i.e. 1.12 % of cases); 

2012: 10 voluntary admissions out of a total of 264 irregularities (i.e. 3.79 % of cases); 

2013: 16 voluntary admissions out of a total of 260 irregularities (i.e. 6.15 % of cases); 

2014: 40 voluntary admissions out of a total of 289 irregularities (i.e. 13.84 % of cases); 

2015: 11 voluntary admissions out of a total of 269 irregularities (i.e. 4.09 % of cases); 

2016 (for the first 3 quarters only): 11 voluntary admissions out of a total of 204 irregularities (i.e. 5.39 % of cases - 7.84 % including drafts). 

France  is  not  concerned  by  the  statement  of  the  Community  authorities,  i.e.  that  voluntary  admissions  are  the  second  most  common 
method of detecting irregularities reported in OWNRES-web, accounting for 16 % of the said irregularities. There is no apparent explanation 
for  the  significant  increase  in  the  number  of  irregularities  observed  in  2014,  other  than  the  fact  that  the  increase  coincides  with  a  major 
operation to update the database and make it more reliable, as requested on several occasions over the years by the Commission, during its 
inspections of traditional own resources (a simultaneous increase has been observed in the number of irregularities reported and in the number 
of voluntary admissions among them, but at different rates). 

The aim of the French customs administration, in fulfilling its role in regulating trade, is to strike the right balance between facilitating trade 
and detecting and preventing fraud. The effective application of the principles of risk management should make it possible to achieve this 
balance. Risk analysis is therefore a key element of the revised control policy of our administration. 

Risk analysis can be defined as a working method which aims to identify and assess all the components of fraud risk and to bring them together 

84 

 
 
in an organised fashion, using a method that enables fraud risk to be established in respect of a specific target (natural or legal person, product, 
industry, customs procedure, means of transport, etc.), which can only be confirmed or ruled out through investigation or audit. 

Risk analysis therefore constitutes an important aid to decision-making for planning and targeting first and second level ex ante and ex 
post controls. 

It is possible to identify two main types of risk: real risks of fraud and potential risks of fraud. In the context of this recommendation, only 
the first type of risk will be presented, i.e.: the real risks of fraud in connection with a firm or operator. 

The analysis of real risks of fraud relates to the ‘history’ of companies or operators and products, in as far as they have already been 
identified during inspections or in connection with established cases of fraud. 

For risks linked to an undertaking or operator, analysis is required on: 

 

the frequency of the controls already carried out in the company or on the operator’s premises and the results thereof (study based 
primarily on data from the National Control Database (BANACO)); 

  previous  disputes:  type,  number  and  seriousness  of  the  infringements  detected.  The  study  was  carried  out  using  SILCF43  data, 
particularly  notable  cases,  and  information  gathered  under  the  mutual  assistance  arrangements  (IMAA)  or  in  collaboration  with  the 
European Anti-Fraud Office (OLAF). 

The SILCF includes all litigation files, particularly those relating to voluntary admissions, which are fully covered by the risk analyses. 

Once the high-risk undertakings or suspected perpetrators of fraud in relation to particular goods or vectors have been identified through  an 
analysis of the economic climate and, where possible, a statistical analysis, enquiries have to be made into their litigation history, with possible 
consultation of files held by other customs authorities or other bodies to which the customs administration has access. 

43 

Anti-fraud information system. 

85 

 
 
                                                 
Consultation  of  the  SILCF  reveals  any  previous  disputes  involving  the  same  companies  or  offenders,  and  the  gravity  of  any  infringements 
uncovered. 

It is also useful to consult BANACO, in particular operator files or data retrieved using the advanced search tools. 

In parallel, an analysis can be carried out on cases of fraud already detected in respect of the product or vector. This makes it possible 
to determine: 

 

 

the number of cases of fraud detected, i.e. the number of irregularities identified by country of origin or destination, by the amount of 
duties and taxes at stake and by type of offence (by consulting the SILCF and BANACO); 
the types of fraud in respect of the product or the vector identified via notable national cases flagged up in the SILCF or Community 
cases flagged up under the mutual assistance arrangements (MA cases). 

In  conclusion,  it  is  apparent  that  all  previous  disputes,  including  irregularities  in  respect  of  which  the  operators  have  made  ‘voluntary 
admissions’, are taken into account when preparing the risk analysis and scheduling the inspections. 

HR  Whether they have taken into account the remarks of the Commission: 

In relation to the fact that a “voluntary admission” became a more important source of irregularity detection, we would like to inform you 
that in the Republic of Croatia, such method is not yet recognised to be one of the methods of detection of cases reported as non-fraudulent.  

If yes, whether these adaptations have produced results. The Commission would welcome concrete results: 

Customs  Directorate  of  the  Republic  of  Croatia  will,  upon  to  the  recommendations  given  by  the  Commission  closely  monitor,  look  and 
coordinate the activities of the local level  – customs units for the clearance of goods, in order to make better coordination with units for 
inspections (post verification of information). 

86 

 
 
IT 

Point 1) 

‘Voluntary admissions’ or own-initiative requests for review of customs assessment are taken into consideration for the purposes of planning 
ex post controls. For the related arrangements see point 2 below. 

Point 2) 

The instrumental analysis, aimed at minimising risk in the field in question, is as follows: 

  each month the Risk Analysis Office prepares a file on the list of assessment reviews sent to the Agency’s competent IT department; 
  after that stage, ‘potential risk’ factors are taken into consideration and analysed.  

These include: 

a)  whether the person concerned is in the Anti-Fraud Database; if they are, the information entered in the database is examined; 
b)  if requests for review of assessment are repeated, with an indication of the frequency of requests over the previous three years; 
c)  examination of the type of error, formal or substantial, for which review of assessment is requested; 
d)  on the basis of all the above factors, an assessment is made of the possible inclusion of a ‘subjective’ risk profile and ‘monitoring over 

time’ of how the profile develops. 

Point 3) 

For the Agency this modus operandi has always been the general rule, stated in various regulations on ex post controls, the most recent being 
the ‘Manual of Procedures for reviewing assessment and management the correction of customs declarations’ (document No 151197RU of 27 
December 2013), which states as follows: ‘It is of course understood that, at the end of the review procedure, a copy of the relevant acts must 
be sent to the customs offices where the declarations subject to review were originally accepted, with a view to updating the records in order to 
adopt subsequent acts (updating of local risk sheets, evaluation of the possibilities of extending the verification to other persons that break the 

87 

 
 
 
  
law in the same manner, updating of records of customs declarations, etc.).’ and to state whether these adaptations have produced results, and 
if so please give concrete examples. 

As  for  concrete  examples,  the  Customs  and  Monopolies  Agency  would  point  out  that  in  view  of  the  extent  of  this  methodology,  it  will  be 
possible to provide more detailed information on areas of particular interest. 

CY 

a) In every case we have voluntary admission regarding mistakes and/or irregularities in declarations, we do proceed in a risk management 
process in order to establish whether similar cases which had existed in the past, concerning the behaviour of the same importer in previous 
declarations, or other similar declarations applied from other importers. 

The findings of this kind of risk management are evaluated and Emergency Action Plans for Post Clearance Control and Audit are prepared 
and executed immediately. We consider that such cases are better handled with the preparation and execution of Emergency Action Plans 
instead of Annual Plans because by using this method we have a better timing in action. 

b) A recent concrete example is the Emergency Action Plan prepared for the couriers DHL, UPS, TNT, and ARAMEX, which has been 
prepared and executed by the central team of Post-Control Section on 24th and 25th of November 2016 in the relevant Airfreight Store of 
Larnaca Airport. 

The most important findings in these false declarations do not seem to involve the four above mentioned couriers but the different supplier 
companies. 

As regards voluntary admission, we do not have a concrete or legal definition but each and every time we have such voluntary admissions, 
its time duration has to be taken account, and obviously not after the importer has been informed about a Customs Control. 

LV 

The Customs Board of the State Revenue Services informs that the merchant has been put request for large scale of corrections to be made 
for goods. The information shall be registered in the national risk management correspondence recording system. In fact, such request does 

88 

 
 
not mean that there will be immediate sanctions put for the merchant. Such information is collected and maintained for the risk analysis 
purposes when planning the risk mitigating measures. In case when the systemic nature of corrections are being recognized for the goods 
origin, value etc., the Customs Board may develop and implement risk mitigation measures to ensure that no violation are done in regards 
customs  rules  and  regulations.  The  control  procedure  is  done  as  far  as  to  obtain  assurance  whether  the  risk  has  been  corrected.  The 
Customs Board in practice do not impose extensive measures for merchants that have been requested the corrections for the goods customs 
applications. 

LT 

The number of officers required for ex post verification of information received by voluntary admissions is not subject to planning. Ex post 
verification  of  information  received  by  voluntary  admissions  is  carried  out  by  the  same  customs  unit  that  carries  out  post  clearance 
verification  of  declarations  on  the  customs  initiative  (other  post  clearance  verifications  than  customs  audit).  However,  planning  and 
monitoring are applied as concern the number of verified declaration where requests made by individuals are examined in the area of tariff 
regulation  and  customs  valuation  (a  percentage  of  the  total  goods  verified  in  conducting  other  post  clearance  verifications  than  customs 
audit).  For  the  ex  post  verification  of  information  received  by  voluntary  admissions  as  well  as  for  the  declaration  verifications  on  the 
customs initiative, Sub-system “Verification of Individuals” of the Risk Assessment and Control System (RACS) is used. This computer-
based  system  contains,  inter  alia,  information  on  all  the  post  clearance  verifications  of  declarations  and  individuals  (area  in  which 
declaration was verified (classification, origin, value, etc.), whether verification was carried out on the customs initiative or at the  request 
of  an  individual,  nomenclature  codes  of  verified  goods,  results  of  verification  (discrepancies  detected/no  discrepancies),  calculated  tax 
changes at the moment of verification and copies of verification reports). This information is used for risk analysis. It has been collected 
prior to the issue of this recommendation as well. 

With the help of special risk assessment rules and profiles, the RACS sub-system “Verification of Individuals” produces risk points with 
regards to import declarations executed over the last 3 years (customs procedure for release for free circulation) on the basis of individual 
risk areas and the overall risk point of the declaration. 

Regarding  risk  assessment  of  economic  operators,  Lithuanian  Customs  may  apply  risk  mitigation  measures  under  the  RACS  (e.g. 

89 

 
 
profiling), carry out risk assessment of economic operators and draw up early plans of verifications. 

LU  No information provided. 

HU  The full implementation of control tasks is ensured by an annual control plan developed with a view to achieving the principal objective that 
the inspection of the activities of operators identified as presenting a genuine risk should give a picture of the lawful and unlawful practices 
related to the field targeted by the control activities. 

The plan is developed by taking into account that, in line with the principles contained in the Customs Audit Guide published by the European 
Commission, the primary objective of post-release (ex post) controls is prevention and steering the activities of operators towards lawfulness; 
naturally, an additional priority objective is to maintain the EU budget and the central budget of Hungary at the highest level possible through 
the post-clearance recovery of any amounts unpaid during the basic procedures, using the available audit resources in the most efficient and 
effective way. 

In order to achieve the stated objectives, having regard to the expectations of external control bodies, a minimum control level of 5% needs to 
be ensured in annual terms, based on selection made on the basis of risk analysis. In theory and practice, the risk information obtained by the 
customs  authority  include  information  resulting  from  checks  carried  out  following  voluntary  admissions  (typically  requests  for  amendment 
filed  by  clients).  Such  risk  information  are  analysed,  evaluated  and  processed  as  described  above.  In  the  light  of  the  foregoing,  all  in  all, 
voluntary admissions are dealt with as part of the risk management process. 

MT 

a) whether they have taken into account the remarks of the Commission;  

Yes. 

CHAPTER 37 - CUSTOMS ORDINANCE      

90 

 
 
Article 62 (M) 

Provided that a person who makes an incorrect declaration and informs the Commissioner in writing about the said incorrect declaration – 

(i) before the Commissioner informs the person that the particulars of the customs declaration are not  correct, and 

(ii) during the period where it is not yet established, in the systems relating to the processing of customs declarations, whether manual or 
electronic, if control of the goods will be exercised, or when it is established that such control is not to be exercised, and 

(iii) such information is given to the Commissioner by not later than ten working days from the date of release of the goods, and 

(iv) such incorrect declaration does not tend to make the declaration applicable to goods, other than those which were originally covered 
by the declaration, such person shall be deemed not to have committed an offence under this paragraph. 

b) if yes, whether these adaptations have produced results. The Commission would also welcome concrete examples. 

We  had  a  number  of  cases  when  traders  quote  the  wrong  currency  or  incorrect  values  and  inform  customs  before  the  declaration  has 
reached its timeout. This is considered as a voluntary admission which exonerated that particular trader from being subjected to additional 
fines. 

NL 

The notes from the Commission were taken into account, but we did not detect any increase in voluntary admissions in the Netherlands. As 
a result, no adaption of the number of staff and/or resources is necessary. We find that staff numbers and resources are sufficient to deal 
with  the  volume  of  post-verification  and/or  information  received.  The  small  number  of  these  in  the  Netherlands  can  be  handled  by  the 
number of staff assigned to this task.  

As already observed in the first recommendation, all audits are based on risk management, all information, e.g. voluntary admissions, will 
be  taken  into  account,  and  there  will  always  be  a  broader  scope  concerning  other  economic  operators  with  comparable  business  or 

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operations. A voluntary admission is an input for intelligence and will be part of the risk analysis concerning these companies and/or the 
commodities.  

We do see voluntary admissions by AEOs. This is the result of the agreements associated with the certificate. We don't have any actual 
examples available of voluntary admissions as requested in sub b. There is no national definition of voluntary admission in place. 

AT  No Information Provided 

PL 

PT 

RO 

Information on the risks arising from customs proceedings instigated at the request of the party concerned is included in the control system 
implemented by the Customs Service. Depending on the assessment of the risk of irregularities detected as a result of voluntary declarations, 
ex-post  controls  are  carried  out  on  economic  operators  carrying  out  similar  activities.  In  addition,  there  are  plans  to  step  up  analytical 
activities concerning risks identified in customs proceedings instigated at the request of the party concerned 

The management checks carried out by the competent Managing Authorities are generally based on a random sample. However, where this 
random sample does not alleviate concerns with regard to all the identified risk factors, a further investigation must be carried out which takes 
these into account. 

Where voluntary admissions are understood by the MA to be a risk factor, this will be analysed. 

Information from the business sector on potential violations of customs legislation in the customs declaration process in Romania is 

- 
assessed and, if it is pertinent, is entered in the RMF and ADIS systems in the form of risk profiles and alerts. 
In accordance with OVANAF No 7521/2006, customs control teams can extend checks to all economic operators falling within the 
- 
risk profile. With a view to disseminating information held at local level, the ‘Tema de studiu’ document is drawn up, setting out the risks 
and  the  fraud  mechanism  identified  in  the  local  risk  assessment  with  a  view  to  performing  checks  at  national  level  of  operators  falling 
within the risk profile. 
- 

In national legislation there is no definition of the term ‘voluntary admission’. 

SI 

Recommendation 2 is currently being examined and analysed. Depending on the results of a study on the voluntary payment of customs duties, 

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risk  indicators  may  be  drawn  up,  which  will  serve  as  the  basis  for  producing  the  annual  plan  of  customs  inspections  and  ex-post  controls. 
Controls will ensue where risk is identified as high. 

SK  With the creation of annual planning of controls, information about voluntary admissions was taken into account. The form of  voluntary 
admission is used by economic operators which, after their findings of additional costs associated with importation of goods, request for 
amendments of customs declaration after release of goods (Art.173 (3) UCC). In Slovak Republic we only registered 3 cases of voluntary 
admission for which related duty exceeding 10 000 €. All of them were notified via OWNRES to the European Commission (DG BUDG). 

FI  

SE 

UK 

The analysis of post clearance recoveries is one of the criteria of the risk management and audit but the focus has been rather on the recoveries 
made based on risk analysis and audit by the Customs than on Voluntary admission. 

We understand that Voluntary admission mean the recoveries which are made by request of the importer. 

Yes, if the declarations are initiated by Customs for example in cases where the gods have not been declared at the customs border and the 
company wants to declare it afterwards. Information on customs initiated declarations is passed forward to the analysis unit. The result of the 
analysis is then used for post clearance examination, for example audits and has in some cases resulted in charges for customs duty. 

The  UK  has  always  reviewed  Customs  Debts  of  any  type,  including  voluntary  admissions,  through  our  risking  and  intelligence 

a) 
service. The UK uses this data on every project commissioned via the National Work Programme. 

b) 
This  data  feeds  all  cases  and  the  UK’s  assessment  of  associated  potential  risk.  The  UK  has  run  specific  projects  around  trade 
statistical errors where voluntary admissions were included. The most recent project resulted in recovery of £4 million across 129 cases, 
with an associated hit rate of 33%. 

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2.2 

Expenditure 

On  the  expenditure  side,  the  fluctuation  in  the  number  of  fraudulent  irregularities  reported  over  the  last  five  years  is  difficult  to  interpret.  However, 
whereas the overall number of detections has remained fairly stable over the last three years, the amounts concerned have regularly increased. There is a 
significant difference between: 

a.  spending programmes which are multiannual and for which the level of detection follows their cyclical nature; and 

b.  direct payments and market support (agricultural policy), where payments and actions follow an annual cycle and the detection of fraud and 

irregularities shows a certain consistency and stability over time. 

Fraud detection practices still differ between Member States. The number of Member States detecting and reporting a significant number of fraudulent 
irregularities has increased, showing their commitment to the fight against fraud affecting the EU’s financial interests. 

The Commission remains concerned about the low number of potentially fraudulent irregularities reported by some countries. In particular, the progress 
noted in the 2014 Report for certain Member States came to a standstill or even regressed in 2015. 

Although satisfactory, the quality of irregularity reporting could be further improved to allow more in-depth analysis of the underlying phenomena. 

94 

 
 
 
 
 
 
 
 
 
 
Recommendation 3 

Member States are requested to further improve quality control of the information submitted via the Irregularity Management System (IMS), 
in particular information on:  

- the description of detected irregularities; 

- the priority areas concerned; 

- the localisation of the projects/actions affected by fraud and irregularities. 

As some Member States report a very  low  number  of  fraudulent irregularities, in particular  in relation to  the  amount  of  funds allocated to 
them, the Commission recommends strengthening their work on detecting and/or reporting fraud: 

• 

• 

in agriculture: Finland, Austria and the United Kingdom; 

in cohesion policy: Spain, France and Lithuania. 

BE  No information provided 

BG  Bulgaria ensures strict compliance with its obligations to report irregularities to the European Commission within the relevant timeframes laid 
down  by  law.  In  line  with  the  national  mechanism  for  irregularity  reporting  put  in  place  the  AFCOS  Directorate  of  the  Ministry  of  Internal 
Affairs (MVR) makes arrangements for and co-ordinates the reporting of irregularities to the competent national authorities and the European 
Commission at national level and monitors and controls the process.  

By the end of each month following the previous quarter, the units responsible for the administration of EU funds, instruments and programmes 
report all new detected irregularities and actions taken to rectify them to the AFCOS Directorate, which then reports all irregularities subject to a 
requirement for reporting to  OLAF  within the second  month following the end of each quarter. As a result of the controls  conducted by the 

95 

 
 
 
 
AFCOS Directorate on the process of reporting irregularities, the quality of reporting to OLAF has improved.  

The  AFCOS  Directorate  is  responsible  for  ensuring  and  monitoring  compliance  with  irregularity  administration  procedures  within  the  units 
responsible  for  the  management  of  EU  funds.  The  outcomes  of  conducted  checks  are  set  out  in  dedicated  reports,  containing  the  relevant 
findings, along with recommendations and timeframes for their implementation.  

The AFCOS Directorate coordinates the use at national level of the electronic Irregularity Management System (IMS) in line with the relevant 
OLAF guidelines, thereby ensuring its proper functioning. IMS maintenance and administration requires daily correspondence with OLAF and 
the national units authorised to use the system to ensure access, troubleshooting and other technical and methodological support. The AFCOS 
Directorate conducts training events for the employees of the competent institutions on IMS use. 

CZ  No information provided. 

DK  Denmark gives priority to observing the Commission’s guidelines for reporting via IMS. With regard to irregularities involving the agricultural 

funds, in 2014-2015 Denmark revised the reporting procedure, thus greatly improving the consistency and accuracy of reports. 

In  line  with  the  current  internal  organisation  of  the  structural  funds’  managing  authority,  which  aims  to  ensure  enhanced  and  consistent 
assessment of cases of suspected fraud, emphasis is also placed on improving the internal procedure for reporting irregularities, including the 
information transmitted via IMS. 

The structural funds’ managing authority also keeps abreast of the Commission’s and Member States’ activities for drawing up more detailed 
guidelines for reporting irregularities. 

DE  No information provided 

EE  So far OLAF has not had any complaints regarding the quality of the reports on Estonian  irregularities. Our SF Managing Authority, who is 

96 

 
 
responsible  for  the  irregularity  reporting  to  OLAF,  does  thorough  data  checks  and  approves  correct  data  only.  The  2nd  level  Intermediate 
Authorities  must  enter  into  our  Managing  Information  System  (MIS)  an  irregularity  report  as  soon  as  they  have  first  or  new  additional 
information. That means, we do not have an extra burden at the end or beginning of each quarter. The Managing Authority just imports from the 
MIS into the IMS all irregularity reports exceeding EUR 10 000 in the specific quarter. 

OLAF initiated the case closing campaign for PAA measures recently and we will send all required additional reports. 

Our institutions detect a few fraudulent irregularity cases every year and we keep  OLAF  informed of the situations of the cases by sending via 
the  IMS  additional  reports  with  essential  information  quarterly  until  the  case  is  completely  (if  applicable,  including  judgement)  and  finally 
solved. 

IE  No information provided. 

EL  No information provided 

ES 

 1) As regards the quality control of the information on irregularities sent via IMS, it should be pointed out that Spain has a highly decentralised 
administrative structure in which the Autonomous Communities manage a substantial share of European funds, each of them in turn through a 
multitude of bodies and entities. 

This coupled with the plethora of intermediate bodies at national level, means that a large number of bodies and entities are obliged to report 
irregularities in Spain, which hampers effective coordination. 

In the light of the problem raised in the 2015 PIF report, and with a view to improving reporting of irregularities, at the meetings held over the 
year with the various bodies and entities which report irregularities – and thus must fill in the necessary fields – it was found that the cause of 
the shortcomings in the information provided is usually the lack of clear instructions on how to fill in the different fields in the system. 

97 

 
 
In order to solve this problem, once IMS 5 is operational – and both the entities reporting irregularities via IMS and those that will have to start 
doing so in the new 2014-2017 framework are familiar with the new system and have solved the problems arising from the transition from one 
system to another — in the course of 2017 the National Anti-Fraud Coordination Service and the National Audit Office, which is responsible 
for validating the reports of irregularities by all the bodies and entities in the system before they are sent to OLAF, intend to organise a number 
of training days for those responsible for filling in the necessary fields for reporting irregularities. 

The training will be eminently practical and aimed at pointing out the most relevant fields of the IMS system that should be  filled in in every 
case, as well as the specific information to be included in each field, thereby clarifying any doubts which people may have. 

2)  With  regard  to  the  need  to  improve  the  reporting  of  irregularities  which  constitute  fraud  or  suspected  fraud,  it  should  be  noted  that  on  3 
February  2016 the National Anti-Fraud Coordination Service adopted criteria on the classification of and procedure on action  to  be taken in 
relation to irregularities and suspected fraud in operations or projects subject to criminal proceedings, addressed to all the authorities responsible 
for the management, certification and audit of all European funds which are required to report irregularities via the IMS system. 

The  criteria  are  based  on  the  assumption  that,  in  accordance  with  the  applicable  European  rules,  suspected  fraud  means  ‘an  irregularity  that 
gives rise to the initiation of administrative or judicial proceedings at national level in order to establish the presence of intentional behaviour, in 
particular fraud, as referred to in Article 1(1)(a) of the Convention on the protection of the European Communities’ financial interests’. 

The existence of administrative or judicial proceedings aimed at establishing the presence of fraud is thus a decisive factor in classifying a given 
irregularity as suspected fraud for the purpose of reporting it to OLAF. 

In this context, section 5.1 (on the concept of ‘suspected fraud’) of the working document on the fight against fraud and other illegal activities - 
requirements  for  the  reporting  of  irregularities  by  the  Member  States,  drawn  up  by  the  European  Anti-Fraud  Office  (OLAF)  in  2011,  states 
among other things that any irregularity should be classified as suspected fraud if it is reported to the public prosecutor for the purpose of taking 
the appropriate action. 

That  being  the  case,  the  fundamental  idea  behind  the  above  criteria  established  by  the  National  Anti-Fraud  Coordination  Service  (a  copy  of 

98 

 
 
which  is  attached  as  an  annex  to  this  document)  is  that  whenever  knowledge  is  acquired  by  any  truthful  means  of  the  existence  of  legal 
proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects funded in whole or in part by 
one of the funds under the IMS system, all irregularities detected in those projects or operations must be classified as ‘suspected fraud’ for the 
purpose of reporting them to OLAF under the procedures for reporting irregularities set out in the Community rules referred to above. 

A procedure is also established for the National Anti-Fraud Coordination Service to follow up on those irregularities. 

Thanks in part to the adoption of the above criteria by the National Anti-Fraud Coordination Service, a large number of irregularities in 2015 
have been classified as suspected fraud. As can be seen in the IMS application, at present 102 irregularities are classified as suspected fraud in 
Cohesion Policy – compared with a single case in the 2015 PIF report – and one irregularity is classified as suspected fraud in the Common 
Fisheries Policy, compared with no cases in the 2015 PIF report. 

In addition, the data currently contained in IMS show, in the context of the Cohesion Policy, an increase in irregularities reported as suspected 
fraud  in  2016  (5)  compared  with  those  initially  reported  in  2015  (1).  Irregularities  for  the  last  quarter  of  2016  are  still  to  be  reported;  the 
deadline being the end of February. 

Finally, two cases of irregularities reported as suspected fraud in 2016 under the Common Agricultural Policy were based on the application of 
the criteria of the National Anti-Fraud Coordination Service referred to above. 

CRITERIA  ON THE  CLASSIFICATION OF AND ACTION TO BE TAKEN IN  RELATION TO IRREGULARITIES AND SUSPECTED 

99 

 
 
FRAUD IN OPERATIONS OR PROJECTS THAT ARE SUBJECT TO CRIMINAL PROCEEDINGS. 

Suspected  fraud  means  ‘an  irregularity  that  gives  rise  to  the  initiation  of  administrative  or  judicial  proceedings  at  national  level  in  order  to 
establish the presence of intentional behaviour, in particular fraud, as referred to in Article 1(1)(a) of the Convention on the protection of the 
European Communities’ financial interests’.44 

The existence of administrative or judicial proceedings aimed at establishing the presence of fraud is thus a decisive factor in classifying a given 
irregularity as suspected fraud for the purpose of reporting it to the Commission. 

In  this  context,  paragraph  5.1  (on  the  concept  of  ‘suspected  fraud’)  of  the  working  document  on  the  fight  against  fraud  and  other  illegal 
activities - requirements for the reporting of irregularities by the Member States, drawn up by the European Anti-Fraud Office (OLAF) in 2011, 
states among other things that any irregularity should be classified as suspected fraud if it is reported to the public prosecutor for the purpose of 
taking the appropriate action. 

In  view  of  the  above,  and  specifically  with  respect  to  legal  proceedings,  this  document  sets  out  the  criteria  and  procedures  for  the  national 
authorities  responsible  for  reporting  irregularities  to  the  Commission  to  have  access  to  information  regarding  the  legal  proceedings  aimed  at 
establishing  conduct  which  may  constitute  a  criminal  offence  affecting  operations  or  projects  fully  or  partly  financed  with  funds  from  the 
European Union, and to classify the irregularities relating to those projects or operations under the procedures for reporting irregularities to the 
European Commission in order to ensure uniform and coordinated action by the national authorities involved.  

The 25th additional provision of Law 38/2003 of 17 November 2003 (General Law on Subsidies – LGS) states in paragraph 2c) ‘it is for the 
National Anti-Fraud Coordination Service ... to establish channels for coordinating and sharing information on irregularities and suspected fraud 

44  

Article 2 of Commission Delegated Regulation (EU) 2015/1970 of 8 July 2015 supplementing Regulation (EU) No 1303/2013 of the European Parliament and of the Council 
with  specific  provisions  on  the  reporting  of  irregularities  concerning  the  European  Regional  Development  Fund,  the  European  Social  Fund,  the  Cohesion  Fund,  and  the 
European Maritime and Fisheries Fund, for the purposes of the Regulation and Delegated Regulations laying down specific provisions on the reporting of irregularities in the 
various funds. 

100 

 
 
                                                 
between  the  various  national  bodies  and  OLAF’.  The  Service  is  thus  responsible  for  establishing  the  procedures  and  common  guidelines  for 
action referred to in the preceding paragraphs, as well as managing relations with OLAF with regard to the information the latter may request in 
relation to the follow-up of irregularities which in accordance with these instructions have been classified as suspected fraud. 

ONE – Purpose. 

This document is intended to establish guidelines on the classification as suspected fraud of irregularities detected under the European Regional 
Development Fund, the European Social Fund, the Cohesion Fund, the European Maritime and Fisheries Fund, the European Agricultural Fund 
for Rural Development, the European Agricultural Guarantee Fund, the Fund for European Aid to the Most Deprived,  the Asylum, Migration 
and Integration Fund and the instrument for financial support for police cooperation, preventing and combating crime, and crisis management, 
where the existence of legal proceedings aimed at establishing conduct which may constitute a criminal offence affecting operations or projects 
fully or partly financed by those Funds becomes known. 

The  classification  of  an  irregularity  as  a  suspected  fraud  in  accordance  with  these  provisions  shall  be  solely  for  purpose  of  reporting  to  the 
European Commission under the procedures for reporting irregularities under those Funds set out in Delegated Commission Regulations (EU) 
2015/1970,  2015/1971,  2015/1972,  2015/1973  of  8  July  2015,  and  Commission  Implementing  Regulations  (EU)  2015/1974,  2015/1975, 
2015/1976 and 2015/1977 of 8 July 2015, or in those replacing them in the future. 

TWO – Classification of irregularities as suspected fraud. 

Whenever  by  any  truthful  means  the  existence  of  legal  proceedings  aimed  at  establishing  conduct  which  may  constitute  a  criminal  offence 
affecting  operations  or  projects  fully  or  partly  financed  from  one  of  the  Funds  referred  to  in  section  ONE  becomes  known,  all  irregularities 
detected in those projects or operations must be classified as ‘suspected fraud’ for the purpose of reporting them to the European Commission 
under the procedures for reporting irregularities set out in the Community Regulations referred to above. 

For the purposes of implementing the above paragraph, the procedure set out below shall be followed. 

101 

 
 
THREE – Procedure to be followed for the irregularities already detected and reported to the European Commission. 

1. As soon as the existence of the legal proceedings referred to in section TWO becomes known, the National Anti-Fraud Coordination Service 
shall  identify  the  irregularities  detected  in  operations  or  projects  concerned  by  those  proceedings  that  have  been  notified  to  the  European 
Commission under the procedures set out in the Delegated and Implementing Regulations referred to above. 

2. Subsequently, the Service shall notify the authorities which reported those irregularities of the existence of criminal proceedings affecting the 
operations  or  projects  in  which  the  irregularities  were  detected  and  instruct  them  to  immediately  update  the  initial  report  for  the  purpose  of 
classifying the irregularities as suspected fraud. 

Where the person or entity subject to the legal proceedings is known, but none or only part of the operations or projects concerned could be 
identified,  the  National  Anti-Fraud  Coordination  Service,  in  the  light  of  the  circumstances  of  the  case,  shall  consider  how  to  deal  with  the 
irregularities reported to the European Commission in relation to that person or entity, as regards their classification as suspected fraud. The 
same shall apply to irregularities detected and/or reported in relation to that person or entity after the notification referred to point 1 of section 
FOUR. 

3.  After  updating  the  reports  through  the  procedures  set  out  in  Community  legislation,  each  of  the  authorities  referred  to  in  the  previous 
paragraph shall notify the National Anti-Fraud Coordination Service of the update and shall forward to it, within 15 days, a copy of the report or 
measure in which the administrative authority confirms the existence of the irregularities concerned, as well as any other documentation that the 
Service may request in that regard. 

4.  Where  the  circumstances  of  the  case  allow,  the  National  Anti-Fraud  Coordination  Service  shall  inform  the  public  prosecutor  or  the  court 
concerned  of  all  the  irregularities  detected  in  operations  or  projects  subject  to  the  legal  proceedings  and  may  provide  them  with  any  related 
documentation from the competent authorities under the provisions of the previous point of this section, and shall inform them in any event that 
the documentation relating to the irregularities is available from the National Anti-Fraud Coordination Service. 

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FOUR – Procedure to be followed for the irregularities subsequently detected and/or reported to the European Commission. 

1. Without prejudice to the procedure set out in section THREE, and as soon as the Member State becomes aware of the existence of the legal 
proceedings  referred  to  in  section  TWO,  the  National  Anti-Fraud  Coordination  Service  shall  notify  all  administrative  authorities  with 
responsibility  for  the  management,  certification  and  audit  of  the  EU  funds  which  financed  the  projects  or  operations  of  the  existence  of  the 
proceedings and the operations or the projects affected by them. 

The notification shall specify that, from receipt of that notification, any new irregularity subsequently detected and/or reported to the European 
Commission in relation to those projects or operations must be classified from the outset as suspected fraud under the procedures for reporting 
irregularities set out in the Delegated and Implementing Regulations referred to above. 

2. Where any of the actions that were the subject of the criminal proceedings aimed at establishing whether they constituted a criminal offence 
was  not  reported  as  an  irregularity  under  the  procedures  referred  to  above,  the  National  Anti-Fraud  Coordination  Service  shall  assess  the 
circumstances  for  the  purpose  of  reporting  the  conduct  in  question  as  an  irregularity  to  the  European  Commission.  The  irregularity  shall  be 
classified as suspected fraud, the costs being borne on the basis of the outcome of the legal proceedings and, therefore, there would be no need 
to initiate a recovery procedure until the irregularity is established in the judgment closing the legal proceedings. 

3. For the purposes of the previous paragraph, and in the light of the information obtained on the criminal proceedings, the National Anti-Fraud 
Coordination  Service  may  recommend  to  the  competent  administrative  authorities  that  additional  measures  or  controls  be  carried  out  on 
operations or projects implemented by the same entity or related to those that are subject to the criminal proceedings. 

4. Each time that, through the procedures set out in Community legislation, the competent administrative authorities report a new irregularity in 
operations or projects concerned by the criminal proceedings, the reporting authority shall notify the National Anti-Fraud Coordination Service 
and  shall  forward  to  it,  within  15  days,  a  copy  of  the  report  or  measure  in  which  the  administrative  authority  confirms  the  existence  of  the 
irregularity, as well as any other documentation that the Service may request in that regard. 

5. The provisions in point 4 of section THREE of these rules shall apply to irregularities that the competent administrative authorities detect 

103 

 
 
and/or report to the European Commission after the notification referred to in point 1 of this section in respect of operations or projects affected 
by the criminal proceedings in question. 

FIVE – Measures to be taken after criminal proceedings. 

1. After the end of the criminal proceedings referred to in the above sections, the National Anti-Fraud Coordination Service shall analyse the 
final judgment and identify any conduct classified as a criminal offence therein. 

2. In view of the content of judgment, the following action shall be taken in respect of the irregularities detected in the operations or projects 
concerned by the criminal proceedings: 

a) Those irregularities reported to the European Commission which correspond to conduct classified as a criminal offence in the judgment must 
be classified as ‘established fraud’ for the purpose of reporting to the European Commission under the procedures for reporting irregularities set 
out in the Delegated and Implementing Regulations referred to above. 

b) In relation to irregularities reported to the European Commission which do not correspond to any of the acts classified as a criminal offence 
by the judgment, the reporting of these irregularities to the European Commission must be updated to the effect that they are no longer classified 
as ‘suspected fraud’ under the procedures for reporting irregularities set out in the Delegated and Implementing Regulations referred to above. 

This applies without prejudice to any further measures or pending legal proceedings which might affect the entity or the operations or projects 
concerned by the judgment, provided that such measures have not been completed. 

Without  prejudice  to  the  previous  paragraphs,  if,  prior  to  the  completion  of  the  criminal  proceedings,  the  National  Anti-Fraud  Coordination 
Service has clear evidence that any of the irregularities detected in the operations or projects concerned is in no way related to the conduct under 
investigation or are being prosecuted, it may instruct the reporting authority to withdraw the classification as suspected fraud by updating the 
report under the procedures for reporting irregularities laid down in Community legislation. 

104 

 
 
c) In relation to conduct classified as a criminal offence by the above judgment which did not give rise to any reporting of irregularity under the 
procedures for reporting irregularities referred to above, the National Anti-Fraud Coordination Service shall inform the European Commission 
under  those  procedures  of  an  irregularity  for  each  act,  and  shall  be  required  to  classify  them  as  ‘established  fraud’  for  the  purposes  of  that 
reporting. 

3. For the purposes of complying with the provisions in point 2 of this section, the National Anti-Fraud Coordination Service shall forward the 
final judgment to the authorities which notified the European Commission of the irregularities detected in operations or projects concerned by 
those proceedings. 

It shall also indicate separately to each of those authorities the irregularities which fall under 2a) of this section and those which fall under 2b) of 
this section.  

In the subsequent notification to the Commission the authorities shall update their reports on those irregularities as established for each case in 
point 2 of this section, as well as reporting the update to the National Anti-Fraud Coordination Service. 

The National Anti-Fraud Coordination Service shall also send the judgment to the other administrative authorities with responsibility for the 
management, certification and audit of EU funds which financed operations or projects concerned by the criminal proceedings. 

4.  From  the  moment  the  authorities  referred to  in  the  preceding  point  receive  the  final judgment  from  the National  Anti-Fraud  Coordination 
Service, the classification of the new irregularities detected in the operations or projects concerned by the proceedings shall be conducted in 
accordance with the guidelines set out in Community legislation and in any instructions approved by the competent bodies. 

5.  The  measures  referred  to  in  the  previous  sections  shall  be  carried  out  provisionally  where  the  initial  judgment  has  been  delivered  and,  if 
necessary, amended, once the judgment has become final. 

SIX – Measures to be taken when the authorities responsible for the management, certification or audit of the funds referred to in section ONE 

105 

 
 
are aware of the legal proceedings. 

Where, prior to receiving any notification from the National Anti-Fraud Coordination Service, an administrative authority responsible for the 
management, certification or audit of one of the funds referred to in section ONE is aware of the existence of the legal proceedings referred to in 
that  section,  the  authority  concerned  shall  inform  the  Service  so  that  the  latter  may  initiate the  measures referred to  in  sections  THREE  and 
FOUR of these rules. 

If  possible,  the  authority  concerned  shall  immediately  inform  the  National  Anti-Fraud  Coordination  Service  of  the  irregularities  reported  in 
relation to the operations or projects that were subject to the criminal proceedings and submit to the Service a copy of the report or measure in 
which the administrative authority confirms the existence of the irregularities in question. 

SEVEN – Relations with the European Anti-Fraud Office (OLAF) in relation to irregularities classified as suspected fraud. 

In the event that the European Anti-Fraud Office (OLAF) requests information on the follow-up of irregularities classified as suspected fraud 
under these rules, and the request was addressed to the administrative authority which had reported the irregularities concerned, the National 
Anti-Fraud Coordination Service must be notified of the request, so that it can manage relations with OLAF with regard to the follow-up of the 
irregularities. 

The administrative authority which received the request from OLAF must notify OLAF that the classification of the irregularities as suspected 
fraud was carried out in compliance with  these rules and that the measures have been  sent to the National Anti-Fraud Coordination Service, 
which OLAF may contact to obtain the information requested. 

EIGHT – Compatibility with existing instructions or rules in other areas. 

These provisions are without prejudice to the rules on reporting of irregularities and suspected fraud set out in General Instruction 2/2015 of the 
Spanish Agricultural Guarantee Fund on measures for fraud prevention and detection. 

106 

 
 
FR 

In response to recommendation No 3 on improving the quality of the information submitted on irregularities, which recommends that efforts be 
stepped up in detecting and/or reporting on fraud, the French authorities have implemented the following measures: 

-  the  Inter-ministerial  Commission  for  the  Coordination  of  Inspections  (CICC),  audit  authority  for  EU funds  in  France  (CICC-
Structural Funds), has developed new instruments to help its operations auditors incorporate the anti-fraud dimension in the performance of 
their  tasks.  This  was  particularly  the  case  when  the  list  of  public  procurement  controls  was  being  reviewed  to  ensure  proper  use  of  the 
ARACHNE tool in accordance with the instructions issued by the department responsible. The CICC has also developed a training programme 
for its operations auditors. One of the training modules focuses on raising awareness of issues related to detecting fraud or suspected fraud. 

- the Office of the Commissioner General for Territorial Equality (CGET) has organised regular meetings for all the authorities responsible 
for European programmes, covering different topics including the fight against fraud; the aim is to facilitate and safeguard the implementation 
of programmes co-financed by the European Structural and Investment Funds (ESIF). Since 2013, the CGET has set up an inter-fund working 
group  on  this  subject  in  direct  response  to  requests  by  the  authorities  responsible  for  European  programmes  (internal  control,  conflict  of 
interest,  whistle-blowers,  etc.)  and  has  also  drawn  up  reference  documents.  Furthermore,  in  the  context  of  fortnightly  meetings  with  the 
Directors  in  charge  of  implementing  the  operational  programme,  the  CGET  has  invited  a  representative  of  the  National  Anti-fraud 
Delegation  (DNLF  -  the  French  Anti-fraud  Subcommittee  (SCAF)/Anti-fraud  Coordination  Service  (AFCOS)  to  come  and  outline  the 
Commission’s  expectations  with  regard  to  the  fight  against  fraud  under  the  Structural  Funds.  The  tools  developed  by  OLAF  and  the 
DNLF for detecting fraud in connection with the ESIF are available on the CGET’s digital platform, bringing together all actors involved in 
implementing  the  ESIF  in  France.  Finally,  the  national  technical  assistance  programme  2014-2020  plans  to  fund  training  courses  for 
programme management authorities, certifying authorities and audit authorities on different areas, including public procurement, taking 
particular  account  of  the  European  Court  of  Auditors’  Special  Report  on  problems  with  public  procurement  in  connection  with  the  ESIF.  A 
national-level working group has been set up to organise the implementation of these training courses, in particular in the following areas: 

the rules applicable to public procurement; 

107 

 
 
The main irregularities detected and the financial corrections to be applied. 

- Finally,  the paying agency for agricultural aid  (FranceAgriMer  - FAM)  bolstered its internal control action  plan in  2015 with  anti-fraud 
measures (awareness-raising activities for staff, educational initiatives: analysis of fraud cases encountered and exchanges on these cases, etc.). 
A memorandum stressing the sensitive nature of the subject of ‘fraud’ and describing the action plan to be deployed was circulated to all staff 
on 16 June 2015. It was accompanied by a memorandum on the agency’s internal control policy and a presentation on the different components 
of the plan. 

The specific actions mentioned were deployed in 2016, including: 

  awareness-raising sessions focusing on the prevention, detection and handling of fraud risks. 454 people were trained (including 96 in 
the regional departments). The 3 EU funds in which the institution is involved, either as paying agency — PA (EAGF) or intermediate 
body — IB (FEAD and EMFF) are covered as are the authorities dealing with public procurement matters; 
the formalisation of alert procedures in the event of suspected fraud, either external or internal, or where there is a risk of conflict of 
interest; 

 

  a specific approach to fraud risk implemented as part of the review of risk analyses by measure (fisheries sector — EMFF); 
  a  review  of  the  fraud  penalty  systems  provided  for  in  Community  horizontal  and/or  sectoral  legislation,  and  if  necessary,  the 

 

 

improvement of the national framework (agricultural sector); 
the improvement of knowledge sharing in respect of cases of fraud or attempted fraud detected by the institution and the external 
control bodies: the establishment of a factsheet on fraud cases, sharing of the factsheets with all stakeholders (management and on-the-
spot checks; accounting department), proposal for the improvement of the control systems; 
first meeting of the dedicated governance body (validation of the alert procedures; presentation of the fraud statistics following ex-post 
controls (EAGF non-IACS — integrated management and control system);  

  development  of  an  area  dedicated  to  dealing  with  fraud  risks  on  the  institution’s  intranet  (rules,  instructions,  alert  procedures, 

minutes of knowledge-sharing meetings, etc.).  

108 

 
 
 

stepping  up  cooperation  in  the  fight  against  fraud  between  the  paying  agency  and  the  external  control  bodies:  organisation  of 
information  exchange  meetings  on  dealing  with  intentional  non-compliance  with  a  view  to  establishing  an  early  warning  system  for 
cases of suspected fraud identified during post-clearance controls. 

HR 

In order to improve the quality of irregularity reports within IMS, Service for Combating Irregularities and Fraud (hereinafter: SCIF) drafted 
new version of Guidelines on Irregularity Management in the context of Structural instruments and ESI Funds (hereinafter: Guidelines) which 
were  adopted  by  Minister  of  Finance  on  December  7,  2016.  Purpose  of  Guidelines  is  to  prescribe  procedures  for  prevention,  detection, 
treatment,  reporting  and  follow  up  of  established  irregularities  related  to  the  use  of  Structural  instruments  and  ESI  Funds  in  the  context  of 
irregularity reporting. According to Article 5 (3) a of Regulation on the Institutional Framework of the System of Combating Irregularities and 
Fraud  (OG  144/2013)  Irregularity  Reporting  System  bodies  (IMS  users)  are  obliged  to  follow  procedures  which  are  described  within  the 
Guidelines concerned. 

Furthermore, during 2016, SCIF organized several workshops in regards to use of IMS for the relevant IMS users. During workshops special 
emphasis was put on the improvement of quality of irregularity reports within IMS.  

Moreover, SCIF continuously conducts regular meetings with Irregularity Reporting System bodies (IMS users) in relation to implementation of 
Guidelines  in  the  context  of  Structural  instruments  and  ESI  Funds  as  well  as  it  conducts  meetings  with  AFCOS  Network  bodies  in  cases  of 
suspected fraud. 

Additionally, SCIF as a coordinative body of the AFCOS system in Croatia and main contact point with OLAF checks quality of irregularity 
reports prior to reporting to OLAF and if necessary returns reports to a body concerned for a correction. 

Planned activities in 2017 regarding improvement of irregularity reporting are: 

  Continuous maintenance of IMS 
  Organizing seminars/work-shops if needed/requested by relevant institutions concerned 
  Updating Guidelines on Irregularity Management if needed/requested by relevant institutions concerned 

IT  No information provided 

109 

 
 
CY  No information provided 

LV   The  Managing  Authority  for  EU  structural  funds  and  the  Cohesion  Fund,  Namely  ESF,  CF  and  ERDF  has  made  the  following 

improvements:  
To  ensure  the  best  possible  analysis  of  irregularities  concerning  breaches  of  procurement  rules,  Latvia  introduced  a  new  drop-down-list  for 
irregularity  type  “Breaches  of  the  procurement  rules”  in  the  national  Cohesion  Policy  Funds  information  management  system  analogous  to 
drop-down-list  of  type  of  irregularity  “Public  procurement”  in  European  Anti-Fraud  Office  Irregularity  Management  system.  Mentioned 
measure  has  been  implemented  in  order  to  provide  exceptionally  detailed  analysis  of  breaches  of  the  procurement  rules,  as  a  result  it  will 
contribute  towards  enhancement  of  measures  aimed  to  reduce  the  amount  of  irregularities  in  procurement  sphere,  as  well  to  provide 
methodology support, aimed to the most weakness branches of procurement as a control mechanism.   
In addition once a year after OLAF request to check data indicated in IMS (in order to ensure that all figures are correct in Annual Reports on 
the protection of the EU's financial interests), the Managing Authority of Latvia (hereinafter – MA) exports prior year irregularities from IMS in 
order to check correctness of the data and is it necessary to update information about irregularity.    
In order to strengthen the effort to detect fraud, Latvia has taken measures listed below: 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Single Co-operation authority; 
Single IT system; 
Separation of functions within one organization; 
Cooperation with law enforcement authorities; 
Checks of procurement documents; 
Checks of payment applications; 
Development of national guidelines and common methodology; 
On-the-spot checks, based on the risk analysis; 
Seminar organization and exchange of best practices; 
Fraud web reporting. 

110 

 
 
In regards to the FEAD: The Ministry of Welfare as a FEAD Managing authority has delegated to FEAD Intermediate body establishing and 
maintaining  FEAD  Information  system,  in  which  the  FEAD  Certification  authority  gathers  and  saves  information  of  amounts  due  to  be 
recovered, and of amounts withdrawn following cancellation of all or part thereof (in accordance with Article of Regulation No 223/2014 32. 
Article 2 () ("d", "e" and 33 'd "," g "," h "(). 
Information about irregularities in OLAF reporting system is detected by FEAD Intermediate body, which is responsible for decisions regarding 
the acceptance of irregularities. 
There have not been identified fraud activities within FEAD in 2016. 
In regards Agricultural funds and Fishery funds:  
In order to ensure that the data and information provided is relevant and qualitative, the examination of the reports cross-checks are done on two 
levels - both paying agency level, which is responsible for reporting, verification and transmission of information to the Managing Authority by 
using the IMS facilities, as well as on the level of the Managing Authority who’s responsibility is to evaluate the report, to verify it and submit 
to  Commission,  via  the  IMS.  Each  institution  level  checks  respects  the  four-eye  principle,  thus  providing  relevant  data  and  information 
relevance and quality. IMS reports are filled in accordance with the respective requirements and quality. 
Part 2 of the Recommendation: Not applicable 

LT  The  procedure  of  detection,  investigation  and  reporting  of  irregularities  related  with  the  projects  co-financed  from  the  EU  structural  funds 
(further - projects) is established in the legal acts regulating the administration of the EU structural funds. The established procedure provides 
for the detection and investigation of irregularities by the project Implementing Authority (further – IA). 

IA  may  suspect  irregularities  and  institute  the  investigation  of  irregularities  in  the  course  of  administration  of  the  project,  having  noticed 
information  in  the  mass  media  or  having  received  information  from  other  institutions  (e.g.  managing  authority,  certifying  authority,  audit 
authority, other IA, EC, European Court of Auditors, Public Procurement Office, Competition Council, Financial Crime Investigation Service 
(FCIS), Special Investigation Service (STT, anticorruption agency), the public or any other sources). 

In the case of suspecting criminal acts, IA should immediately inform about that relevant pre-trial investigation institutions such as FCIS (in the 

111 

 
 
case of suspected fraud) or STT (in the case of suspected corruption) that shall take a decision on the institution of a pre-trial investigation. 

Having  detected  irregularities  (i.  e.  having  taken  a  decision  that  the  irregularity  has  been  committed  and  related  ineligible  costs  have  been 
identified), IA reports these irregularities to the EC taking onto account the exceptions provided for in the EC regulations. 

Irregularities are reported electronically to the EC during a 2-month period that follows the quarter in which the irregularity was detected via the 
Irregularities  Management  System  (IMS)  administered  by  OLAF.  Irregularities  whereon  pre-trial  investigation  institutions  are  informed  or 
which are related with pre-trial investigations conducted by these institutions with regard to a respective project are qualified as a Suspected 
Fraud (IRQ3) and are reported via the IMS. 

In cases where IA suspects a criminal act but on the basis of the assessment of all the circumstances related with it has no grounds, within the 
scope of its competence, to establish the occurrence thereof (e.g. is not entitled to state that a proof of expenditure raising the suspicion of fraud 
is actually forged), the investigation of the irregularity is terminated without establishing the irregularity and the results of pre-trial investigation 
and court decision regarding the criminal act are anticipated. Having received the court decision, the investigation of the regularity is reopened, 
the occurrence of irregularity is approved and it is classified as Fraud (IRQ5). If the irregularity in question were related to amounts of more 
than EUR 10 000 chargeable to the general budget of the European Communities, the EC would be notified via IMS. 

During  the  administration  of  projects  in  the  programming  period  2007-2013,  14  irregularities  classified  as  Suspected  Fraud  (IRQ3)  were 
reported  to  the  EC  via  IMS  before  19  January  2017  (see  the  attached  list).  Furthermore,  the  EU  Structural  Assistance  Computer-Based 
Information  Management  and  Monitoring  System  (SFMIS)  show  that  on  15  December  2016  the  court  recognised  criminal  offences  in  two 
projects (No. VP3-1.3-ŪM-06-K-02-075 and No. VP2-2.1-ŪM-02-K-02-153). On this basis, information on them will be updated in IMS (IMS 
case No. 96159 and No. 88849) after the updated reports on the irregularities are received from the IA administering the projects. 

In order to strengthen cooperation of institutions administering the EU structural funds and pre-trial investigation institutions and enhance their 
administrative  capacities  in  counteracting  fraud  and  corruption  in  the  area  of  administering  the  EU  structural  funds,  the  following  measures 
were implemented in 2016: 

112 

 
 
 

 

the EU structural funds administration system 2014-2020 including, inter alia, Financial Crime Investigation Service (FCIS), has also 
incorporated the Special Investigation Service (STT) responsible for detection and investigation of corruption-related criminal acts and 
development and implementation of corruption prevention measures (Resolution of the Government of the Republic of Lithuania No. 
473 of 11 May 2016 „On the Amendment of the Resolution of the Government of the Republic of Lithuania No. 528 of 4 June 2014 'On 
the  Allocation  of  Responsibilities  and  Functions  among  the  Institutions  Implementing  the  Operational  Programme  for  the  European 
Union  Structural  Funds  Investments  in  2014-2020').  Both  pre-trial  investigation  institutions  participate  in  the  implementation  of  the 
Operational Programme for the European Union Structural Funds Investments in 2014-2020 approved by the EC Implementing Decision 
of 8 September 2014 (notified under document No. C(2014)6397); 

the  procedure  for  the  provision  of  information  on  pre-trial  investigations  to  the  managing  authority  has  been  adjusted.  It  has  been 
established  that  STT  and  FNTT  should  inform  the  managing  authority  in  accordance  with  the  procedure  prescribed  by  laws  on  the 
opened and/or terminated pre-trial investigations into the suspected criminal acts related with the unlawful receipt and/or use of the EU 
structural  funds.  The  managing  authority,  ministries  and  implementing  authority  must  immediately  report  the  suspected  corruption-
related  criminal acts and suspected fraud cases to  STT and FNTT respectively.  Information  on the afore-mentioned offences must  be 
accordingly provided to the managing authority, implementing authority and the respective ministry (Resolution of the Government of 
the Republic of Lithuania No. 485 of 18 May 2016 “On the Amendment of Resolution of the Government of the Republic of Lithuania 
No. 1090 of 3 October 2014 “On the Approval of the Rules of Administration of the Operational Programme for the European Union 
Structural Funds Investments in 2014-2020”; Order of the Minister of Finance of the Republic of Lithuania No. 1K-184 of 18 May 2016 
“On the Amendment of Order of the Minister of Finance of the Republic of Lithuania No. 1K-316 of 8 October 2014 “On the Approval 
of the Project Administration and Financing Rules”); 

 

the Working Group of the EU funds irregularities inspectors set up by Order of the Minister of Finance of the Republic of Lithuania 
No.1K-115 of 16 April 2009 “On the Establishment of the Working Group of the EU Funds Irregularities Inspectors” (as amended by 
Order No. 1K-75 of 2 March 2016) has incorporated the STT representatives as observers. The working group is responsible for both 

113 

 
 
 
 
2007-2013 and 2014-2020 programming periods and tackles the issues related with detection, investigation, elimination and prevention 
of irregularities (including the suspected fraud cases), coordinates the respective activities and addresses the issues on irregularities and 
suspected fraud risk management. For example, the meeting of the Working Group on 29 November 2016 discussed the amendments to 
the legal acts on the administration of irregularities, other relevant issues raised by institutions, would-be and already implemented anti-
fraud and anti-corruption measures as well as actions to be taken upon the suspicion of criminal offences. 

LU 

IMS is used by the Management Authority of FEAGA/FEADER for their declarations. 

HU  No information provided 

MT  No information provided. 

NL  No information provided  

AT 

IMS information quality: 

The new IMS reporting system means that 2015 was a year of ‘apprenticeship’ for Austria. The following is to be noted: 

The printout of a dossier currently requires 12 pages (rather than the previous maximum of 3 pages) for the same volume of information. This 
makes quality control more difficult. 

Page 4, ‘Operation specific-Project’ cannot be meaningfully filled out for the agricultural sector.  

Information  relevant  to  agriculture  is  found  on  page 5:  ‘Operation  specific-Agriculture’.  Page 4  (Operation  specific-Project)  is  not  therefore 
filled out. 

Several drop downs did not yet function in 2015. 

114 

 
 
When  account  is  taken  of  the  abovementioned  points,  Austria's  reports  on  the  agricultural  sector  for  2016  should  already  be  almost  fully 
complete. 

Low number of fraud cases: 

It should be borne in mind that aid in the agricultural sector is disbursed by officially authorised paying agencies which are supervised by the 
Member State and by the Commission. 

A comprehensive monitoring system is in place to detect any irregularities and fraud in relation to these payments. The system encompasses all 
stages, from the submission of an application to disbursement. The relevant conditions are set out in Regulations Nos 1306/2013, 907/2014 and 
908/2014. 

Depending on the aid measure, the required on-site inspections are carried out for between 5 % and 100 % of the aid applications. Risk factors 
are to be taken into account in the selection of control samples, whereby factors such as  

the amount of the (annual) payment and 

 
  any irregularities that are already known (concerning the applicant and/or measure) are to be considered. 

All the planned control measures are aimed at detecting any irregularities before disbursement, where appropriate taking account of penalties 
when calculating the aid payment. 

Furthermore, recoveries relating to one or more years earlier can also be made in the case of multiannual commitments (in particular for agri-
Furthermore, recoveries relating to one or more years earlier can also be made in the case of multiannual commitments (in particular for agri-
environmental measures). The high number of administrative checks carried out in this sector means that cases of fraud can generally no longer 
occur. There are therefore de facto now only very few, sporadically arising cases of suspected fraud. In nearly all cases, the irregularity consists 
simply  in  the  non-fulfilment  of  one  or  more  of  the  funding  conditions.  The  subsequent  recoveries  (starting  from  1  euro  cent)  are  registered 

115 

 
 
immediately and more than 90 % are made within a year by setting them off against other claims. 

PL 

- 
Poland is doing everything it can to meet its obligations under the rules governing the process for reporting irregularities. As show in the 
Commission’s annual PIF Report, Poland also differs from other Member States with regard to the cases of irregularities and suspected fraud it 
reports to the Commission, in that it is quick to pass on data it obtains to the Commission, enabling appropriate risk analyses to be carried out in 
this  area  and  used  for  their  intended  purpose.  Over  the  last  few  years,  Poland  has  built  up  considerable  experience  on  the  reporting  of 
irregularities;  it  has  been  actively  involved  in  COCOLAF  and  has  helped  the  Commission  draft  implementing  and  delegated  acts  on  the 
reporting of irregularities for the period 2014-20 and draw up the new Guidelines. 

- 
Poland  has  duly  implemented  uniform  national  procedures  and  guidelines  for  individual  reporting  for  the  period  2000-20.  In  each 
reporting period, it continuously monitors and verifies the accuracy of the reports submitted. In the light of the above, all declarations sent by 
Poland contain information of similar quality, scope and level of detail and, in each case, meet the requirements laid down in EU legislation. 

- 
Any  shortcomings  identified  by  the  Commission  in  the  IMS  database  are,  however,  to  be  linked  to  the  migration  of  data  during  the 
Commission’s  implementation  of  successive  IMS  versions  over  the  last  few  years.  These  successive  versions  merged  individual  modules, 
codified  data,  modified  the  report  form  and  transferred  certain  content  to  other  fields,  which  resulted  in  part  of  the  information  being 
irretrievably lost. This loss cannot be blamed on Member States because the entire migration of data was carried out without their participation 
by the Commission alone, in line with the strategy adopted. Another example of Commission actions that have had a very negative effect on the 
quality  of  IMS  data  is  the  deletion  of  names  and  project  numbers  in  all  declarations  in  the  database,  along  with  the  locking  of  the  manual 
adjustment  to  make  way  for  a  drop-down  list  in  the  future  (this  turned out  not  to  be  technically  feasible  as,  for  example,  in  Poland,  just  for 
cohesion  policy for the periods  2007-13 and 2014-20, over 160 000 agreements have  been  signed to  date for funding projects, and more are 
being signed every day). In Poland’s opinion, the day-to-day management and updating of such a list of all projects, only a small percentage of 
which are affected by irregularities and actually used by IMS, is unnecessary and practically impossible. Moreover, in subsequent IMS versions, 
the Commission dropped functionalities that served to prevent errors (e.g. automatic totalling of amounts or system corrections for subsequent 
fields in the form). 

In relation to the above, we would point out that it is not just the Member States that are responsible for the quality of IMS data, the 

- 
Commission’s actions also have a major impact here. 

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PT  No information provided;  

RO  No information provided. 

SI 

The reply is in two parts. 

Part 1: reply from the Agency for Agricultural Markets and Rural Development of Slovenia (AKTRP) 

When filling in the report in the IMS system, the AKTRP always seeks to provide a detailed description of the irregularities under the heading 
Modus Operandi. The description, for the most part, is taken verbatim from the request for the recovery of funds sent to the client by the paying 
agency. 

AKTRP is working to improve on identifying fraud. Lately the emphasis has been on improvements to the register of fraud indicators. 

Part 2: reply from the Government Office for Development and European Cohesion Policy 

When reporting on irregularities in Slovenia under Objective 1, the reviewer (acting as the manager) particularly closely inspects whether all the 
required fields  have  been completed;  we pay utmost attention to  the completion of fields  1.16 and 1.17 in  conjunction with  the data entered 
under points 3 and 4, 6 and 7, and also 8 and 9. The last two concern the financial consequences of an identified irregularity and the recovery of 
funds. Where no, incomplete or inconsistent data is entered, the manager will reject the report and send it back to the author with comments. 
Support to the manager is provided in the form of the IMS manual (which could be more detailed) as well as any information and instructions 
received  by  email  from  OLAF  (Unit  2D)  on  how  to  enter  data  into  the  IMS.  This  information,  i.e.  guidelines,  is  being  forwarded  to  report 
drafters as assistance for entering data, i.e. reporting on irregularities. 

SK  No information provided 

117 

 
 
FI 

In the area of agriculture the anti-fraud training has continued as part of the EU Paying Agency’s training activities. Efforts have been made in 
order to raise the level of fraud awareness among the controllers and auditors of the funds. In addition, the checklists used by the controllers 
have been updated and more fraud-related questions added. A new information system with reporting tools also allows more specific statistical 
analysis. 

SE  No information provided. 

UK  The UK’s approach to CAP fraud is based on prevention during the claim processing, administration and payment processes. For  EU funding 
programmes, all UK agencies with responsibility for distributing  CAP funds have processes in place to monitor and report fraud in line with 
current regulations. The high standard of checks means that levels of such fraud are low in the UK. Any cases of fraud pre/post-payment are 
reported to the EU Anti-Fraud Office. The low levels of reporting show that the UK’s approach is effective. Nevertheless, the UK Authorities 
continue to strive to do more to address this important issue.  
The requirements to safeguard the CAP from fraud are contained in Regulation 907 of 2014.  Paying agencies in the UK are audited annually by 
the Certifying Body and are assessed by the auditors against Reg 907/2014 accreditation criteria and we have not been found to be deficient in 
this area. 

The role of managing and paying authorities in detecting fraud has grown since 2012 and should be further enhanced in the coming years under the new 
regulatory framework for the 2014-2020 period. The Commission believes that this role could be further enhanced if these authorities make systematic 
use of appropriate IT tools. 

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Recommendation 4 

Given the complexity of the operations managed and the high number of beneficiaries concerned, Member States (managing authorities/paying 
agencies  and  audit/control  authorities)  are  invited  to  plan  and  focus  their  audits  and  control  activities  on  the  basis  of  risk  analysis  and 
performing IT tools. 

The  Commission  has  developed  and  put  at  the  Member  States’  disposal  systems  and  tools  such  as  Arachne,  IMS  and  the  Fraud  Risk 
Assessment tool. The Commission encourages Member States to use these systems and tools more systematically and efficiently,  unless other 
comparable alternatives are already available to them. 

BE 

a) REPLY from the Walloon Region: 

Managing Authority of the Regional Operational Programme ‘Wallonie-2020.EU’ 

The anti-fraud and irregularity policy applied to the management of ERDF programmes in Wallonia is centred on detecting and preventing risk, 
correcting possible irregularities or fraud, and prosecutions. 

1. Risk detection 

Except  for  the  handful  of  adaptations  imposed  by  regulatory  changes,  the  2014-2020  management  and  control  system  of  the  ERDF  managing 
authority  in  Wallonia  is  identical  to  that  used  during  the  2007-2013  programming  period.  The  risks  identified  (gross  risks)  at  the  start  of  the 
programming period are therefore broadly the same. 

As well as identify based on experience and previous audits, the Walloon managing authority is considering using the ‘fraud risk self- 

119 

 
 
 
Assessment tool’ established by the European Commission45, or a similar approach. 

In addition, the managing authority is set to use the Arachne system, which is a tool for identifying operations that are liable to exposure to risk of 
fraud, conflicts of interest or irregularities. 

2. Risk prevention 

The measures taken to prevent (or mitigate) these risks follow on from those applied during the 2007-2013 programming period, bearing in mind 
the  highly  positive  results  of  the  2007-2013  system  audits  on  the  selection  and  approval  of  projects  and  their  implementation,  as  well  as  on 
expenditure. The same was true for the system audits performed in the departments of various functional administrations and intermediate bodies. 

This documentation was therefore essential in estimating a low probability of net risks, as well as in capitalising on skills and knowledge. The 
entities  participating  in  the  management  and  implementation  of  the  2014-2020  Walloon  ERDF  OP  are  mostly  the  same  as  in  previous 
programming periods and the degree of experience acquired contributes to programme management being more effective and efficient, thereby 
minimising the probability level of risks occurring. 

Risk prevention measures include the following: 

- 

project selection by a group of independent experts, 

- 
a communication to beneficiaries on their rights and obligations, on a regular basis and immediately following a call for projects (keeping 
proper  accounts,  public  procurement,  the  existence  of  various  levels  of  control,  retention  of  supporting  documents,  penalties  applicable,  etc.). 
Work tools (vademecum, user manuals, templates, etc.) are also made available to them, in particular through the website  WalEurope, which is 
updated daily; 

- 

the existence of clear, relatively simple eligibility rules specific to the operational programme; 

45  

Guidance note relating to the assessment of fraud risk and effective and proportionate anti-fraud measures, Annex 1 
- 

the exhaustive nature of first level document checks; 

- 

- 

- 

a reliable and efficient computerised project monitoring system;  
120 

support from functional administrations (FA) through ad hoc forums; 

a check performed by the FAs, whose systematic validation of indicators 

allow the programme’s physical progress to be monitored, as well as their verification based, in particular, on the content of progress reports and 
during on the spot checks; 

 
 
                                                 
BG 

А.  OPERATIONAL  PROGRAMMES,  APPROVED  FOR  THE  PERIOD  2014-2020,  CO-FINANCED  BY  THE  EUROPEAN 
STRUCTURAL AND INVESTMENT FUNDS (ESIF) AND THE FUND FOR EUROPEAN AID TO THE MOST DEPRIVED (FEAD) 

1.  EXECUTIVE AGENCY AUDIT OF EUROPEAN FUNDS 

The risk assessment model used by the Audit Authority for strategic planning purposes is based on an analysis of the risks for compliance with 
various Key Requirements (KR) for the management and control systems in line with the European Commission’s Guidance note on assessment 
of management and control systems. The following risks have been identified:  

Importance of KR as an instrument used to limit the certification of ineligible expenditure; 

 
  Risk of fraud, including conflict of interest; 
  Systemic deficiencies detected in the framework of conducted audits on operations; 
  Number of low, medium and high priority findings from previous systems audits;  
  Major changes to legislation as compared to the previous period. 

The risk level for each Key Requirement is an aggregate value resulting from the assessment of all risk factors. Risk level is graded on a scale 
comprising three categories (low, moderate and high risk), the aim being to cover all key requirements within the three-year period 2016 – 2018.  

Risk  factors  are  rated  on  a  scale  from  1 to  4 (1 indicating  the  lowest  and  4 the  highest  level  of  risk,  respectively).    The  risk  key  requirements 
associated with high and moderate levels of risk are subject to more frequent checks.  

When developing its audit methodology, the Audit Authority conducts an assessment of the steps in the respective processes that carry the highest 
risk  and  includes  detailed  checks  in  the  relevant  checklists  to  ensure  detection  of  all  irregularities  in  high-risk  areas.  The  checklists  contain 
guidance on conducting an in-depth analysis of the detected irregularities on the basis of which auditors form an opinion on the presence/absence 
of suspected fraud. Given the very high share of detected irregularities with implications for public procurement (more than 90 %), the checklists 
used to assess the legality of public procurement calls are very detailed and fully in line with the Guidelines for determining financial corrections 
to be made to expenditure financed by the Union under shared management, for non-compliance with the rules on public procurement (European 

121 

 
 
 
 
Commission  Decision  of  19 December 2013).  According  to  the  European  Union  the  checklists  used  by  the  Audit  Authority  are  adequate  and 
sufficiently detailed and their use by all bodies concerned in the management of EU funds has been recommended as a good practice.  

2. ACCREDITATION AUDITS OF THE MANAGING AUTHORITIES 

In  accordance  with  Article 124(2)  of  Regulation  (EU)  No 1303/2013 the  Audit  Authority  has  conducted  accreditation  audits  on  the  managing 
authorities of all nine operational programmes, co-financed by the ESIF and the FEAD and approved for the programming period 2014 – 2020, 
notably:  OP  Regions  in  Growth  (OPRG);  OP  Environment  (OPE);  OP  Transport  and  Transport  Infrastructure  (OPTTI);  OP  Innovation  and 
Competitiveness  (OPIC);  OP  Initiative  for  Small  and  Medium-sized  Enterprises  (OPISME);  OP  Human  Resources  Development  (OPRD); 
OP Good  Governance  (OPGG);  OP  Science  and  Education  for  Smart  Growth  (OPSESG);  and  OP  Food  and/or  Basic  Material  Aid  (OPF), 
co-financed by the Fund for European Aid for the Most Deprived.  

The audits were conducted in accordance with the European Commission’s Guidance for Member States on Designation Procedure (EGESIF_14-
0013-final of 18 December 2014) and include an assessment of the criteria for designation of Managing Authority (MA) and Certifying Authority 
(CA) as regards the procedures put in place for monitoring and reporting of irregularities, risk management and effective and proportionate anti-
fraud measures.  

On the basis of the conducted audits the Audit Authority has ascertained that written procedures for administering irregularities, including fraud, 
have been approved under all programmes. The procedures in question include rules for the detection, registration and reporting of irregularities, 
including suspected and ascertained fraud, and monitoring the progress achieved in administrative and criminal proceedings relating to detected 
irregularities.  Rules  on  the  co-ordination  of  anti-fraud  measures  have  been  approved,  including  an  obligation  for  quarterly  reporting  to  the 
AFCOS  Directorate.  Detailed  descriptions  of  the  duties  and  responsibilities  of  staff,  including  in  relation  to  the  reporting  of  irregularities  and 
fraud,  have  been  compiled.  The  anti-fraud  measures  are  structured  around  four  key  elements  of  the  anti-fraud  cycle  —  prevention,  detection, 
rectification and prosecution.  

The descriptions compiled by all relevant bodies contain risk assessments at both programme and project level to be conducted in line with the 
Commission’s  Guidance  Note  on  Fraud  Risk  Assessment  and  Effective  and  Proportionate  Anti-fraud  Measures  —  Ares(2013)3769073 — 

122 

 
 
19/12/2013, EGESIF 14-0021-00/16/06/2014) EGESIF_14-0021-00). 

In line with the above-mentioned Guidance Note, for the purpose of risk assessment in the context of monitoring, including of the risk of fraud, at 
project level, the respective organisations have taken on a commitment to use the specialist risk scoring tool ARACHNE. Its use does not require 
additional effort from staff as the Managing and Monitoring Information System (MMIS) for the programming period 2014 – 2020 has already 
been rolled out and is fully functional. Automated interface of the MMIS ensures access to all requisite data in a predefined and structured format. 
Where information is detected via ARACHNE that indicates a higher risk of irregularity and fraud under a project, the experts responsible for 
monitoring  take  mitigating  measures  by  conducting  unannounced  on-the-spot  checks,  modifying  the  terms  and  conditions  for  project 
implementation, issuing mandatory guidelines for beneficiaries, notifying the competent bodies, etc. The use of the risk scoring tool ARACHNE 
is expected to enable the bodies responsible for the management and monitoring of funds available under the operational programmes to raise the 
efficiency of project selection, verification and audit and further improve the identification, prevention and detection of fraud.  

The  Central  Co-ordination  Unit  Directorate  of  the  Council  of  Ministers  is  the  designated  national  coordinator  for  ARACHNE  and  manages 
system  access  and  access  profiles.  By  Order  No R-249 of  the  Deputy  Prime  Minister  responsible  for  EU  Funds  and  Economic  Policy  of  the 
Republic of Bulgaria of 2 December 2015 a procedure for the management of access to the ARACHNE irregularity and fraud risk scoring tool 
was approved. In 2016, profiles enabling the access of 51 users from all managing authorities were created.  

The preliminary audit reports on accreditation detail certain detected deficiencies and set out corresponding recommendations for improvement of 
the  descriptions  of  the  systems  put  in  place  by  the  management  authorities  for  irregularity  reporting  and  monitoring,  risk  management  and 
introduction  of  effective  and  proportionate  anti-fraud  measures.  The  managing  authorities  have  accepted  all  recommendations,  implementing 
most  of  them  by  the  time  the  final  audit  reports  were  published.  In  particular,  the  following  recommendations  have  been  fully  or  partially 
implemented:   

1)  that  the  managing  authorities  make  arrangements  enabling  the  use  of  ARACHNE  and/or  develop  a  detailed  procedure  for  the  use  of 

ARACHNE under OPRG, OPE, OPTTI, OPIC, OPISME, OPRD, OPGG and OPF (fully implemented);  

2)  That  the  MA  conducts  an  initial  fraud  risk  assessment  following  the  designation  of  the  bodies  responsible  for  the  management  of  the 

OPRG, OPE, OPTTI, OPIC, OPISME, OPRD, OPGG and OPF (ongoing implementation);  

123 

 
 
3)  All other recommendations (see below) were implemented by the time the final audit reports were published:  
-  3.1) compile a more detailed description of the Risk Assessment methodology for the OPE, OPIC, OPHRD, OPSESG and OPGG;  
-  3.2) develop a procedure for providing information to the Audit Authority and other competent national bodies about cases of suspected 

fraud under the OPTTI that were detected by the MA;  

-  3.3) introduce a requirement for the reporting of irregularities by the staff responsible for the management and monitoring of the OPISME;  
-  3.4)  develop  a  procedure  for  the  prevention  of  conflicts  of  interest  in  line  with  the  principle  of  impartiality  and  independence  in  the 

management and implementation of the OPSESG;  

-  3.5)  develop  rules  for  the  recovery  of  unduly  paid  amounts/financial  corrections  in  respect  of  expenditure  that  has  been  certified  and 

declared to the European Commission under the OPSESG.  

The  implementation  of  the  recommendation  for  conducting  an  initial  assessment  of  the  risk  of  fraud  under  the  operational  programmes  was 
verified during the systems audits and the relevant findings set out in the accreditation audits were closed.  

3. SYSTEMS AUDITS 

In  2016,  the  Audit  Authority  conducted  systems  audits  on  six  out  of  the  nine  approved  operational  programmes  in  line  with  Article 127 of 
Regulation  (EU) No 1303/2013 in  2016.  The  programmes  in  question  are  OPTTI,  OPE,  OPIC,  OPHRD,  OPGG  and  OPF.  The  audits  were 
conducted in line with the Guidance Note for the Commission and Member States on a common methodology for the assessment of management 
and control systems in the Member States for the programming period 2014 – 2020 (EGESIF_14-0010-final 18/12/2014). The audits focused on 
an  assessment  of  the  management  and  controls systems  put  in  place  by  the  managing  authorities  to  ensure  compliance  with  Key Requirement 
7 Efficient implementation of proportionate anti-fraud measures. The aim of the audit checks was to verify whether the managing authorities: 

  had conducted a risk assessment at the beginning of the programme implementation period to determine the probability of fraud risk realisation 

and its impact on the key processes relating to programme implementation;  

  had developed anti-fraud measures that are structured around four key elements of the anti-fraud cycle — prevention, detection, rectification 

and prosecution;  

  had introduced adequate and proportionate preventative measures tailored to address specific situations with a view to reducing residual risk to 

124 

 
 
 
an  acceptable  level  (mission,  code  of  conduct,  top  to  bottom  communication  lines,  separation  of  duties  and  responsibilities,  training  and 
awareness raising activities, data analysis and up-to-date knowledge of the red flag warnings and indications of fraud;  

  had introduced and are effectively applying red flag detection measures;  

  had put in place a procedure for the follow-up actions to be taken in the case of suspected fraud to ensure that clearly defined and coordinated 
mechanisms are in place for reporting suspected fraud and deficiencies in the controls carried out vis-à-vis the Audit Authority, the competent 
investigating bodies of the Member State and OLAF;  

  had put in place appropriate processes enabling follow-up in all cases of suspected fraud and the actions to be taken to recover unduly paid EU 

funds in such cases;  

  had  introduced  procedures  that  enable  proper  follow-up  on  all  processes,  including  control  procedures  and  mechanisms  in  connection  with 
potential or actual fraud, and reporting the results of the follow-up actions taken to ensure that they are taken into consideration for the purpose 
of subsequent reviews of fraud risk assessment.  

On the basis of the conducted systems audits certain deficiencies were detected, which prompted the following recommendations:  

The checklists used to conduct controls on the selection of operations, project implementation by beneficiaries and verification of expenditure by 
the managing authorities of the OPGG, OPHRD, OPF, OPIC and OPTTI do not contain detailed instructions for analysis of detected irregularities 
with a view to identifying fraud indicators (red flags), including the actions to be taken in such cases. Detailed instructions were solely included in 
the checklists  to  be used to  document  the controls  performed  on the contractor selection procedures conducted by beneficiaries.  In connection 
with this, a recommendation was given to modify the checklists by including detailed instructions on the fraud indicator (red flag) identification.  

The recommendation was accepted and implemented by the managing authorities of the OPF and OPHRD by the time the final audit reports were 
published and is currently being implemented by the managing authorities of OPGG, OPIC and OPTTI.  

1)  A recommendation has been given to the managing authorities of the OPIC and OPGG to adopt dedicated anti-fraud rules/policy in line 
with  Annex  3 of  the  Commission’s  Guidance  Note  on  Fraud  Risk  Assessment  and  Effective  and  Proportionate  Anti-fraud  Measures 
(EGESIF_14-0021-0016/06/2014). The managing authorities have accepted the recommendation and its implementation is ongoing;  

125 

 
 
 
2)  A recommendation has been given to the MA of the OPGG to compile a detailed description of the minimum set of documents/evidence 
to be annexed to the irregularity files and introduce appropriate controls to verify the completeness of irregularity / suspected fraud files. 
The Managing Authority has accepted the recommendation and its implementation is ongoing;  

3)  A  recommendation  has  been  given  to  the  MA  of  the  OPHRD  to  expand  the  list  of  identified  risks  for  2015 and  2016 and  the  Risk 
Management Plan with examples of fraud affecting the programme implementation processes set out in the Commission Guidance Note. 
The recommendation has been accepted and implemented;  

4)  A recommendation has been given to the MA of the OPIC to clearly define the duties and responsibilities of MA staff in connection to the 
processes  of  preventing,  detecting  and  rectifying  cases  of  fraud.  The  recommendation  has  been  accepted  and  in  currently  being 
implemented;  

5)  A recommendation has been given to the managing authorities of the OPHRD, OPIC and OPF to develop detailed rules for the use of the 
ARACHNE  risk  scoring  tool  and  designate  users  to  whom  access  to  the  system  be  granted.  The  MA  of  the  OPF  has  implemented  the 
recommendation and the managing authorities of the OPHRD and OPIC are currently working to ensure its implementation;  

6)  A recommendation has been given to the MA of the OPTTI to conduct a risk assessment and develop an action plan for risk mitigation 
that sets out specific steps, actions, responsibilities and timeframes to ensure implementation of planned controls. The recommendation 
has been accepted and is currently being implemented.  

In the framework of the system audits performed the Audit Authority followed up on the implementation of the recommendations for conducting 
initial assessments of the risk of fraud under the operational programmes and closed the findings set out in the accreditation reports.  

4. CERTIFYING AUTHORITY 

The Certifying Authority (Directorate National Fund of the Ministry of Finance) makes full use of the systems and tools made  available by the 
European Commission. The officials to whom access to the ARACHNE tool system has been granted were designated by an order issued by the 
Minister of Finance.  

B. RURAL DEVELOPMENT MEASURES FINANCED BY THE EUROPEAN AGRICULTURAL GUARANTEE FUND (EAGF) AND 
THE EUROPEAN AGRICULTURAL FUND FOR RURAL DEVELOPMENT (EAFRD) 

126 

 
 
 
1.  EXECUTIVE AGENCY CERTIFICATION AUDIT OF EUROPEAN AGRICULTURAL FUNDS 

Executive  Agency  Certification  Audit  of  European  Agricultural  Funds  (IASOSEZF)  was  established  pursuant  to  Council  of  Ministers’  (CoM) 
Decree No 89 of 18 April 2016, amended and supplemented by CoM Decree No 218 of the Council of Ministers of 25 August 2016, and became 
fully operational after August 2016. During the period April – September 2016 efforts were focused on staff recruitment, creating an appropriate 
work environment and launching certification activities.  

At  the  stage  of  strategic  planning  of  its  work  the  IA  SOSEZF  chose  to  apply  a  certain  risk  assessment  model.  In  line  with  the  European 
Commission’s Guidelines for the Certification Audit of EAFG/EAFRD Accounts, the developed model for material misstatement risk assessment 
includes audit procedures for risk identification in several stages:   

-  gaining an understanding of the Paying Agency (RA) and its environment — a review of applicable legislation, internal rules and 

procedures, and conducting interviews; 
assessment of the changes to the internal control system;  
assessment of the efficiency of the risk management process put in place by the RA;  

- 
- 
-  verification of identified risks and determination of target functions.  

The  risk  of  material  misstatements  for  the  financial  year  (FY) 2016  is  to  be  assessed  on  the  basis  of  an  internal  control  system  assessment 
performed  by  the  previous  Certifying  Authority.  Following  that  assessment,  the  underlying  assumptions  as  regards  the  level  of  control  risk, 
respectively risk of material misstatements, are to be reviewed, if necessary, including by expanding the scope of the work to be carried out. The 
audit procedures performed confirmed the initial assumptions and a further review of planned indicators were deemed unnecessary. 

The Certifying Authority conducted the checks on the management and control systems of the Paying Agency in line with the Guidance Note on 
Anti-fraud Measures as foreseen in the context of Accreditation Criteria, 26 February 2014) of Directorate-General for Agriculture.  

2.  PAYING AGENCY – STATE FUND AGRICULTURE 

In 2016, the State Fund Agriculture (DFZ) continued to apply an effective fraud and irregularities prevention approach, conducting checks based 

127 

 
 
 
 
on an analysis of risk criteria for fraud with implications for the EU and national budget under various support measures.  

Risk analysis is performed on the basis of: 

- 

The operational experience of the Anti-fraud Department; 

Omissions and deficiencies detected prior to conducting the risk analysis in the checks performed on grant applications in accordance with 

- 
the accredited rules of procedure of Directorate Contracting for the Implementation of Rural Development Measures (PMRSR).  

- 

The use of the full functionalities of IACS and EXCEL; 

Risk analysis is also performed by the Internal Audit Department of the DFZ within the framework of strategic and annual planning and the scope 
of  individual  audits.  The  analysis  was  conducted  on  the  basis  of  pre-defined  criteria,  including  an  assessment  of  the  quality,  adequacy  and 
capabilities of the control environment and the controls out in place to prevent fraud and irregularities. One of the tools used by the Internal Audit 
Directorate is the specialist software Arbutus. 

Examples where the RA was particularly successful in applying risk analysis to detect fraud: 

  By  Order  No 03-RD/176 of  25 January  2016  of  the  Head  of  the  State  Fund  Agriculture  a  working  group  was  tasked  with  conducting  an 
additional  check  to  ascertain  cases  of  fraud  and  irregularities  and  verify  the  compliance  with  applicable  law  of  the  grant  applications 
submitted under Measure 4.1 Investment in agricultural holdings of the Rural Development Programme during the period stipulated in Order 
RD 09-213 of 27 March 2015 of the Minister for Agriculture and Food. 

The  check  was  to  be  performed  on  the  basis  of  risk  analysis  on  30 approved  grant  applications  received  during  the  period  for  submission  of 
applications specified in Order RD 90-213 of 27 March 2015, which were rated as carrying the highest overall risk. 

The following criteria and corresponding weight factors were taken into account for the purpose of risk assessment: 
a weight factor of 0.2 assigned to grant applications seeking the highest amounts of investment funding; 
a  weight  factor  of  0.2 assigned  to  grant  applications,  where  the  staff  of  the  MPRSR  Directorate  have  modified  the  status  of  an 
applicant  into  the  Integrated  Administration  and  Control  System  (IACS)  from  ‘negative  compliance  assessment  report’  to  ‘ongoing 

- 
- 

128 

 
 
 
 
entry of data from order on application refusal’; 
a weight factor of 0.2 assigned to grant applications, where reference prices were used to calculate the eligible amount of support for 
the acquisition of assets (agricultural equipment); 
a weight factor of 0.2 assigned to grant applications seeking investment support for planting and/or replanting perennial crops;  
a weight factor of 0.2 assigned to grant applications that were awarded 8 points for energy efficiency in the ranking;  

- 

- 
- 

An order was issued to apply the following additional criteria to high-risk grant applications in order to select 30 that carried the highest overall 
risk:  

-  grant applications seeking support for investments to be made in geographic areas situated in close proximity;  
-  grant applications submitted by natural and legal persons entered into the commercial registry after 1 October 2014.  

Checks  were  initially  conducted  on  30 projects.  On  the  basis  of  the  report  drawn  up  by  the  working  group  specific  guidelines  and 
recommendations were issued for all grant applications. On the basis of the outcomes of conducted checks, cases of suspected irregularities and 
fraud were singled out and additional checks based on tips were carried out on 100 projects. Irregularities were detected under 32 projects and in 
23 cases  the  information  was  referred  to  the  Prosecution  Service  for  investigation.  In  9 cases  the  checks  revealed  that  artificial  conditions  for 
financing had been created in order to obtain an advantage in breach of the aims of the measure.  

  By Order No 03-RD/2005 of 29 June 2016 of the Executive Director of the DFZ, the working group was instructed to carry out an additional 
check - for irregularities, fraud and compliance with applicable law – on the procedure for receiving and processing applications for assistance 
under sub-measure 4.2 Investments in the processing/marketing of agricultural products of the RDP 2014 – 2020.  

The check was to be performed on applications for assistance which were received during the period for receipt specified in Order RD 09-781 of 
6 November 2015 of the Ministry of Agriculture and Food and allocated for processing; on the basis of a risk analysis, the 15 applications with 
the highest comprehensive risk indicator were to be determined.  

The following criteria and corresponding weighting factors were taken into account in the risk assessment: 

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-  a weighting factor of 0.2 was assigned to applications seeking the highest amounts of investment funding; 
-  a weighting factor of 0.1 was assigned to applications with a confirmed negative compliance report;  
-  a  weighting  factor  of  0.1 was  assigned  to  applications  where,  in  the  calculation  of  activities/assets  costs  eligible  for  assistance,  the  
reference  prices  were  not  used  and  the  respective  activities/assets  accounted  for  more  than  50 %  of  the  costs  for  which  assistance  was 
applied for under the project;   

-  a  weighting  factor  of  0.2 was  assigned  to  applications  submitted  by  beneficiaries  who  had  projects  approved  under  Measures  121 and 

123 of the RDP 2007 – 2013 and/or sub-measure 4.1 of the RDP 2014 –2020;  

-  a  weighting  factor  of  0.2 was  assigned  to  applications  submitted  by  beneficiaries  whose  owners/managers/representatives  had  been 
reported  to  the  Prosecution  Service  by  the  DFZ  or  had  had  pre-trial  proceedings  initiated  against  them  in  connection  with  misuse  of 
EU funds;  

-  a weighting factor of 0.2 was assigned to applications submitted by natural and legal persons entered in the Commercial Register after 

1 January 2015. 

Checks were initially conducted on 15 projects. After a report had been drawn up by the working group, specific guidelines and recommendations 
were issued for additional checks on all applications for assistance. As a result of the actions taken, suspicions of irregularities and fraud were 
expressed,  and  checks were  carried  out  in  response  to  reports  of  irregularities  in  22 projects. Irregularities  and  fraud were  established  in  13 of 
those projects, and 5 cases were referred to the Prosecution Service. In 8 cases, the checks revealed that artificial conditions for funding had been 
created in order to obtain an advantage contrary to the objectives of the measure 

MARITIME AND FISHERIES PROGRAMME 

The Maritime Affairs and Fisheries Directorate of the Ministry of Agriculture and Food is the designated Managing Authority of the Maritime 
and Fisheries Programme 2014 – 2020 (MFP), having taken over the functions of managing authority from the Executive Agency for Fisheries 
and Aquaculture  (IARA), with a large number of the Agency’s employees being transferred to the Directorate.  

The "Description of the functions and procedures of the MFP 2014 – 2020 and MFP Manual", approved by the Head of the Managing Authority 
of the MFP, sets out detailed rules and procedures for the administration of irregularities and the effective prevention and combating of fraud to 

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be followed both by the Managing Authority and the Intermediate Body (State Fund Agriculture). A procedure for the provision of access to the 
ARACHNE tool was also approved.  

It is laid down that, at the first stage of project proposal assessment, the MA of the MFP must request an excerpt from the Irregularities Register 
for the Operational Programme Fisheries Sector Development 2007 – 2013 kept at the IARA and the DFZ, along with a report on bad debtors 
from the DFZ's register. Potential beneficiaries must be required to declare, in an annex to the application form, that they are familiar  with the 
definition of an irregularity laid down in Article 2(36) of Council Regulation (EU) No 1303/2013.  

Given that the Managing Authority is a completely new unit with new functions, additional staff training will be provided in the near future to 
raise  awareness  levels  in  connection  with  the  fight  against  fraud  and  irregularities.  In  addition,  members  of  staff  will  be  designated  for  work 
involving use of IMS, ARACHNE and the EDES-DB database.  

The information system used for the programme is UMIS 2020, which permits fully electronic submission of documents and  - at a later stage - 
reporting on project implementation.  

INTERREG IPA CROSS-BORDER COOPERATION PROGRAMMES  

The functions of Managing Authority for the Cross-border Cooperation Programmes under the Instrument for Pre-accession Assistance 2014 – 
2020 (IPA) are carried out by the Territorial Cooperation Management Directorate of the Ministry of Regional Development and Public Works 
(MRRB). The Directorate has implemented a fraud risk self-assessment tool and identified 14 risks spread over 5 key processes relating to the 
implementation  of  the  IPA  Cross-border  Cooperation  Programmes  between  Bulgaria  and  Serbia,  Bulgaria  and  Macedonia  and  Bulgaria  and 
Turkey. 

CZ 

In the case of the Czech Republic, both the relevant managing authorities and the audit authority used the ARACHNE information system in the 
2007-2013  programming  period  as  a  pilot  verification  tool  for  identifying  the  corresponding  risks  within  selected  operational  programmes  (in 

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particular the ESF). No case of confirmed fraud has been identified by means of this tool. 

For  the  2014-2020  programming  period  the  ARACHNE  information  system  was  incorporated  into  the  management  and  control  system  of  all 
operational programmes; only with one operational programme is a similar system used (Cribis). This tool is included in ex-ante, interim and ex-
post control activities at managing-authority level and it supports the audit authority's activity. 

Following the identification of risks in the operational programmes for the 2014-2020 programming period, use has been made of the June 2014 
Guidance for Member States and Programme Authorities entitled 'Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures', 
including Annex I thereto: 'Fraud risk assessment tool and instructions on how to use the tool' (EGESIF_14-0021-00). Own risk analysis has been 
carried  out  in  accordance  with  the  procedure  laid  down  at  national  level  by  the  coordinating  body  and  adapted  to  the  individual  operational 
programmes.  Risk  analysis  serves  to  identify  associated  risks  (including  the  risk  of  fraud)  and  use  thereof  enables  management  and  control 
systems to be set up. In the context of designation audits, verification is carried out by an independent audit body and subsequently by means of 
an audit procedure forming part of the Audit Authority's system audits. 

IMS: this information system is mainly used by the LKB and the AFCOS Central Contact Point for forwarding information relating both to newly 
detected  irregularities  and  to  the  acquisition  of  up-to-date  information  concerning  developments  in  the  investigation  of  previously  reported 
irregularities detected in connection with the implementation of EU funds externally. In this connection the system will in future serve also as a 
tool for producing statistics and analyses. 

DK 

 Danish Customs’ analysis units conduct risk analyses on data from a number of sources - mainly declaration information in the customs system. 
The data is analysed in the Business Intelligence (BI) and Tableau IT systems. An advantage of Tableau is its effectiveness in enabling trends and 
irregularities in import patterns to be visualised. 

In  2016,  SKAT  launched  the  process  for  analysing  data,  which  mainly  concerns  declaration  information  in  the  BI  and  Tableau  IT  systems. 
Greater use of Tableau should make it easier to identify fraud patterns. 

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A  project  involving  BIC  DATA  is  a  new  initiative  launched  by  SKAT’s  Customs  and  IT  departments.  This  project  also  supports  a  similar 
initiative by the Commission in which Denmark is participating. 

The relevant Danish managing authorities systematically use the IMS IT tool for reporting. 

The  structural  funds’  managing  authority  regularly  communicates  with  the  Commission  regarding  the  implementation  of  Arachne.  On  9  June 
2016 there was a visit by the Commission to present Arachne and discuss questions relating to the Personal Data Act. The Commission is drafting 
an Arachne charter to be concluded between the Commission and the Member States wishing to use Arachne. The Danish managing authorities 
are still awaiting the Commission’s final charter before they launch Arachne, so as to ensure compliance with the Danish Personal Data Act. 

The structural funds’ managing authority used the Commission’s Fraud Risk Assessment Tool when implementing its anti-fraud action plan at the 
start  of  the  current  programming  period.  The  authority  intends  to  use  the  tool  again  when  reviewing  the  administrative  set-up  later  in  the 
programming period. 

DE  ERDF/ESF: 

On the expenditure side the managing authorities implementing the programmes are primarily responsible for setting up effective control systems 
and taking effective measures to prevent and combat fraud. The following are the managing authorities’ systems and tools for implementing risk 
assessments and for taking fraud prevention and anti-fraud measures together with the  certifying bodies: 

The risk management and anti-fraud systems are essentially based on: 

 
 

 

the legal system in force for tackling fraud in the Federal Republic of Germany or the country concerned,  
the  procedures/measures  of  the  management  and  control  system  (MCS)  and  in-house instructions  on  how  to  combat  fraud  for  the 
administrative authority (e.g. administrative rules, e-learning etc.) and the intermediate bodies (banking standards, internal rules etc.), 
the  regular  programme-specific  risk  assessment  (including  prevention  of  corruption  and  fraud)  carried  out  by  a  dedicated  self-assessment 

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team,  in  accordance  with  the  ‘Guidelines  on  assessing  the  risk  of  fraud  and  effective  and  proportionate  anti-fraud  measures  for  the 
programming period 2014-2020’. 

In order to identify the risks the following documents/information were used:  

  COCOF 09/0003/00 of 18 February 2009 – Information Note on fraud indicators for the ERDF, the ESF and the Cohesion Fund;  
  OLAF guidance document on ‘Identifying conflicts of interest in public procurement procedures’;   
  OLAF guidance document on ‘Identifying falsified documents’;  
  Communication from the Commission to the European Parliament, the Council and the European Economic and Social Committee of 6 June 

2011 on Fighting Corruption in the EU (COM(2011) 308);  

  Transparency International’s Corruption Perceptions Index and the National Integrity System Report; 
 
  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  -  Protection  of  the  European  Union’s  financial  interests  –Fight 

Irregularities and cases of fraud during the funding period 2007-2013; 

against fraud –  Annual Report 2012 (COM(2013) 548 final) and 2013; 

  Report from the Commission to the European Parliament and the Council – EU Anti-Corruption Report (COM(2014) 38 final); 
 
 

the results of the EU Justice Scoreboard; 
the findings from sample checks and system audits carried out by the Audit Authority and other audit bodies. 

Procedures for risk assessment: 

Self-assessment  teams  have  been  set  up  for  this  task;  these  teams  can  consist  of  staff  of  the  certifying  authorities,  managing  authorities 
(management and control systems and technical assistance), possibly the intermediate bodies and contracting entities, and anti-corruption officials 
from the relevant ministries. Representatives of the audit authorities may participate in an advisory capacity. The composition of the teams varies 
partly according to the action to be evaluated, but sometimes also depending on: 

 

the fund concerned (ERDF/ESF) 

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 
 

the authorising agency concerned  
the individual financial instruments 

The Commission’s self-assessment tool has been reviewed and adapted to the specific situations in the German Länder, and further risks have 
been identified and added. 

If the systems and operational audits reveal audit findings in relation to fraud and corruption, suspicions of fraud or corruption or fraud-related 
irregularities, or if new systems are set up during the funding period, the assessment tool for the relevant groups are updated on a case-by case 
basis, reassessed, or, if necessary, extended to include an action plan. Systems which do not already require updating on a case-by-case basis are 
subject to a review at regular intervals. 

The risk management team regularly examines the level of risk of each administrative rule and each stage of the selection, authorisation, payment, 
finalisation and sustainability testing procedure, using the previous funding periods, available data and audits carried out by external bodies and 
the managing authorities as a basis. These checks include documentation and individual invoice checks, on-the-spot checks and, where necessary, 
checks on the data supplied for indicators. Each of these checks includes a risk assessment, on the basis of which a decision is taken. The on-the-
spot  checks  and  the  payment  procedures,  for  which  random  checks  are  carried  out  in  line  with  the  risk  involved,  merit  special  mention  here. 
Should risks be identified, the risk management team draws up corrective measures and monitors their implementation. These measures may be 
preventive or systemic. Irregularities are dealt with in a systematic manner. 

The self-assessment tool covers the three areas proposed by the Commission:  

  Selection of applicants  
 
  Certification of expenditure by the certifying authority and partly supplemented by the Managing Authority. 

Implementation of the projects by the beneficiaries with special attention paid to public procurement  

For this reason the risk management team in each federal state regularly examines the level of risk of each administrative rule and each stage of 
the  selection,  authorisation,  payment,  finalisation  and  sustainability  testing  procedure,  using  the  previous  funding  periods,  available  data  and 

135 

 
 
audits carried out by external bodies and the managing authorities as a basis. In individual cases the managing authority prepares fraud statistics, 
based on Sections 263 et seq. of the Penal Code (StGB), and reviews the risk using the Commission’s assessment tool on the basis of the risk 
management team’s findings.  

Should risks be identified, the risk management team draws up corrective measures and monitors their implementation. These measures may be 
preventive or systemic. Irregularities are dealt with in a systematic manner. 

The strategic approaches to prevent and combat fraud and corruption are laid down in more detail in the management and control systems of the 
individual  operational  programmes  at  Federal  Government  or  federal  state  level.  These  programmes  have  already  been  largely  checked  and 
confirmed by the audit authorities in the context of the designation procedures for the 2014-2020 programming period. 

Measures at the level of the audit authorities: 

When checking the functioning of the management and control systems, the audit authorities also assess the effective application of anti-fraud 
measures set up by the managing authorities. The systems audits are mainly based on risk assessments supported by Excel or other commercial IT 
products.  The  risk  assessment  table  provided  by  the  Commission  in  chapter  III  of  its  ‘Guidance  for  Member  States  on  Audit  Strategy 
(programming  period  2014-2020)’  -  EGESIF_14-0011-02  final  -  of  27 August  2015  is  also  used.  Details  of  the  approach  are  explained  in  the 
respective audit strategies of the audit authorities. 

Agricultural (EAGF, EAFRD) and Fisheries Funds (EFF/EMFF): 

Alongside IMS, standard Office programmes such as Excel and Word are used for risk assessment. Other applications are also used to support the 
business  processes  in  the  management  and  implementation  of  the  programmes.  These  include  Monitoring  Statistik,  Q-Chess,  IDEA  and 
efReporter (a database system for the exchange of information). In some federal states the fraud risk assessment tool is also used for the EMFF. 

AMIF/ISF: 

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Risk  assessments  are carried out  using the standard  Office programmes  Excel/Word, taking  into  account relevant parameters such as  financial 
volume,  type  of  project  selected,  project  duration  and  project  partners  (increased  management  requirements,  legal  form,  experience  of  project 
implementation). 

EE  We  tested  Arachne  last  year  and  it  appeared  that  Arachne  does  not  comply  with  our  MIS  at  the  moment.  There  have  been  some  serious  data 
matching issues that we have to solve before – in our MIS we use business entities’ registration codes (ID code) but Arachne needs VAT numbers 
to  find  the  overlaps.  Until  these  problems  are  solved  we  cannot  make  our  final  decision  about  using  Arachne.  When  we  have  resolved  these 
problems, the main potential of Arachne for Estonia will be international data. Therefore, we are thinking of using only some of the risk scores 
from Arachne, not all of them. Our own national systems (for example, tax and customs data) have specific data for the input  and are therefore 
more substantial for assessing risks.  

We  used  the  Fraud  Risk  Assessment  tool  developed  by  the  Commission  last  year  and  got  general  results  only.  We  plan  to  improve  the  risk 
assessment exercise but have not started to develop our red flag system in our MIS yet. We plan to amend our national law first, which would 
give  us  more  possibilities  and  opportunities  to  plan  risk-based  controls.  Our  implementing  bodies  can  use  national  MIS  to  plan the  risk-based 
controls already now - they have an overview of all irregularities detected and information and knowledge on the fraud risks.  

We  have  already  made  some  changes  to  our  national  public  procurement  register.  Therefore,  in  some  structural  fund  measures  the  private 
companies are required to use the public procurement register for their supplies. It has already reduced the costs of the goods or services and helps 
to use EU funds more economically and efficiently. 

IE 

Regarding Recommendation 4, Ireland is currently evaluating the potential implementation of Arachne as a risk analysis tool for the Structural 
Funds  programmes.  We  are  working  closely  with  our  counterparts  in  the  European  Commission  to  evaluate  the  suitability  of  this  tool  in  the 
context of the structure of the Irish ERDF and ESF programmes.  

In  Ireland  a  central  area  has  the  primary  focus  of  ensuring  that  Customs  EU  obligations  are  met  by  supporting  compliance  across  the 
administration  as  well  as  co-ordinating  appropriate  standards  for  audits  nationally.  The  central  area  advises  on  a  common  audit  strategy  and 

137 

 
 
strives  to  ensure  that  there  is  a  harmonised  implementation  of  customs  post  clearance  intervention  policy  nationally.    Ireland’s  customs  audit 
policy is aligned to our national corporate audit framework in the context of our broader audit policies, plans and code of practice. 

Our customs post clearance intervention targets are agreed and signed off by senior management at the start of each year as part of an operational 
plan to achieve satisfactory coverage and control of economic operators nationally. An additional reporting structure is provided through regional 
networks comprised of officers that have a key role in ensuring the effective management of our customs post clearance intervention programme. 
In Ireland, cases for post clearance intervention are evaluated by sourcing the necessary information and carrying out an assessment of the risks 
involved. All available systems are utilised in this risk assessment process.  

Our primary customs case select tool however, is our Customs Risk Intervention Selection Programme (CRISP) which is based on a number of 
risk indicators. CRISP carries out an analysis of all available data and the results outline the ‘riskiest’ declaration in relation to post clearance 
checks and ‘riskiest’ traders in relation to customs audits. CRISP uses the ESKORT risk engine for our profiling.  It consists of two sets of rules, 
one for Audit and one for Post Clearance Checks (PCC).  An Audit run is done bi-annually in May and November, while a PCI run is done tri-
annually in February, June and October. 

Importers receive a CRISP ranking in each Audit run, while declarations are ranked in the PCC run. 

The Audit run contains an analysis of declarations from the three previous years plus the current year.  The PCC run is based on the four previous 
months’ Declarations and the analysis is carried out on each individual Declaration. 

The output from each run is made available to our control officers and customs auditors and CRISP is the primary case select tool in Ireland for 
Customs audits and PCCs. 

CRISP has proven highly effective in harmonising our customs case select programme nationally. We continue to enhance the rules contained 
within the system using all currently available risk information to ensure it remains and an up to date and effective customs case select system 
based on relevant risk information 

EL  As regards to Actions of Programming Period of 2014-2020, funded by ERDF, ESF, TF. 

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The  Management  and  Control  System-MCS    incorporates  a  comprehend  and  cohesive  scheme  of  working  flows,  procedures,  roles  and 
competences for the prevention and detention of fraud based on the legislative, organizational and operational framework . 

All these provisions, fully developed in the Manual of Procedures 2014-2020, aim to ensure fight against fraud on a systematic and regular basis 
as well as to the continuous improvement and reinforcement of the System. 

Implementation of procedures is supported by certain IT systems and tools. The most important are: 

The  Monitoring  Information  System  -  MIS  is  the  central  System  as  required  by  regulatory  provisions.  It  incorporates  MCS  information  and 
procedures,  which  cover  all  levels,  aspects  and  stages  of  NSRF  OP’S  and  Actions  and  it  serves  for  the  data  exchange  between  the  involved 
authorities. Use of the system ensures the imprint of full and clear control path e.g. information on all procedures and outcomes in the lifecycle of 
Actions.  The  System  is  used  as  for  Audit  sampling  and  monitoring  while  applications  for  multiple  criteria  data  retrieval  and  analysis  allow 
complex and targeted sampling methodologies. This function can be reported as a good practice. 

The  Risk  Assessment  Tool  as  adapted  to  and  optimized  for  the  Greek  context.  The  tool  is  applied  on  a  regular  basis  by  all  MA’s.  It  is  of  a 
significant added value the fact that its results are further examined in the perspective of possible amendments and adjustments to the System.  

The Irregularity Management System – IMS is used by all MCS involved national authorities for reporting irregularities and suspected fraud as 
requested by Regulatory provisions. Country officer is EDEL, the national Control Authority. Information included to this reporting and follow 
up can contribute to fight against Fraud. 

The Information System for State Aid serves for the lifecycle management of the business projects, whereas the Information System for State Aid 
accumulation  (SACS)  supports  the  control  on  the  State  aid  cumulating  thresholds.    The  two  systems  in  combination  allow  a  thorough  and 
complex scheme of monitoring and reporting over data. 

As regard to funds by EAFRD 

139 

 
 
The  Management  Information  System  for  Rural  Development  is  the  central  sectoral  System  as  required  by  regulatory  provisions.    A  distinct 
functional area of the system supports the Risk analysis and sampling methodology needs. This methodology incorporates a complex correlation 
of factors and indicators, leading to an advanced and multi parametrical sampling. 

A more detailed description, as follows (in Greek): 

As regards risk analysis tools used in auditing non-area-related and non-animal-related Rural Development Measures (under Regulations (EU) No 
1303/2013  and  No  1305/2013  and  Council  Regulation  (EC)  No  1698/2005),  the  Managing  Authority  (Audit  Unit  of  the  RDP  Special 
Implementation Service 2014-2020) conducts on-the-spot sampling and ex-post checks through a specific subsystem of the Rural Development 
and  Fisheries  Integrated  Information  System  (OPSAA).  The  subsystem  is  configured  in  accordance  with  Articles  50  and  52  of  Implementing 
Regulation (EU) No 809/2014. 

Expenditure  covered  by  on-the-spot  checks  represents  at  least  5%  of  the  expenditure  co-financed  by  the  EAFRD  concerning  the  Measures 
referred to in Article 46 of Regulation (EU) No 809/2014 and is to be paid by the Paying Agency each calendar year.  Also, the ex post checks 
carried out each calendar year must cover at least 1% of EAFRD expenditure for operations that are still subject to attachments and for which the 
final payment has already been made. 

The risk-analysis sample is selected by taking into account the risk factors identified in national and EU checks, the risk of error occurrence in 
transactions/operations  related  to  parameters  such  as  the  type  (functional  direction,  category  of  investment,  investment  sector)  and  size  of 
operations, as well as the financial consequences from error occurrence in transactions.  

Moreover, the  checks are carried out  according to  an appropriate combination of measures/sub-measures/types  and sizes of operations/actions, 
taking into account the need to maintain the balance between them.  30-40 % of the sample on-the-spot checks and 20-25 % of the sample ex-post 
checks are extracted by random sampling through the OPSAA. 

As regard to funds by EAGF 

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A Risk Analysis Information System is used also for the needs of audits for funds by EAGF. Sampling methodology is multifunctional. The full 
risk analysis report including the previous year evaluation is submitted annually in November to the EC . 

A more detailed description, as follows (in Greek): 

The  Directorate  for  Economic  Controls  and  Inspection  (EAGF  Expenditure  Auditing  Section)  carries  out  ex  post  checks  of  commercial 
documents of entities that are beneficiaries or debtors related directly or indirectly to the financing system set up by the European Agricultural 
Guarantee  Fund  (EAGF),  or  their  representatives,  in  application  of  Regulation  (EU)  No  1306/2013  of  the  European  Parliament  and  of  the 
Council,  in  order  to  ascertain  whether  transactions  forming  part  of  the  EAGF  financing  system  have  actually  been  carried  out  and  have  been 
executed correctly. 

The  Directorate  for  Economic  Controls  and  Inspection  prepares  audit  plans  using  an  information  system  which  has  been  presented  to  the 
European Commission’s audit teams and which has been designed on the basis of risk analysis that has been computerised, so that the greatest 
possible number of risk parameters is scored and visualised, reducing the likelihood of errors made in the selection process for beneficiaries to be 
audited and the monitoring of control programmes. 

The system selects the undertakings to be audited within the annual audit programme by applying a risk analysis methodology. In particular, the 
selection of undertakings for audit is based on established risk criteria for each risk factor, to which weight factors on a scale from 0 (zero risk) to 
3 (greatest risk) are applied.  The risk analysis methodology calculates the Risk Amount for each undertaking, which is the result of the product of 
the scoring of criteria against the amount of the financial aid. The undertakings associated with the greatest risk are selected first. 

Proposals for the use of risk analysis are presented to the competent department of the European Commission each November. They include the 
assessment of the previous year’s risk analysis, the weighting of risk factors and all relevant information concerning the approach to be followed, 
the techniques, the criteria and the method of implementation, in accordance with Regulation (EU) No 1306/2013 of the European Parliament and 
of the Council and the Implementing Measures thereof.  

In addition, the Directorate for Economic Controls and Inspection selects transactions to be audited by applying a risk analysis methodology (risk 

141 

 
 
analysis  of  businesses)  so  as  to  target  correctly  and  efficiently  the  audit  work,  while  taking  into  account  relevant,  reliable  and  independent 
evidence. 

ES  As regards the need to plan control activities on the basis of risk analysis, it should be noted that most of the authorities responsible for managing 
European funds are opting to use the Commission’s fraud risk assessment tool as a reference, albeit adapted to their specific characteristics. 

For example, the managing authority for the European Social Fund (ESF) has developed a tool for risk assessment and management comprising 
two risk matrices (ex-ante and ex-post) which complement and feed into each other. 

The  ex-ante  matrix  is  a  reporting  and  prevention  tool  which  aims  to  identify  the  risk  level  (occurrence)  associated  with  each  method  (grants, 
procurement and/or own resources) used for the management of the ESF. The ex-post matrix is a tool which identifies and quantifies the risks 
occurring by operation, i.e. the ‘materialisation of the risk’. 

The results of both matrices can be compared to assess an operation and consider, on a case-by-case basis, to what extent additional controls must 
be stepped up on the sample of checks. 

For  its  part,  in  the  European  Territorial  Cooperation  (ETC)  programmes  in  which  Spain  participates,  the  Directorate-General  for  Community 
Funds  set  up  a  working  group  in  2016  comprising  the  Spanish  national  authorities  involved  in  the  management  of  such  programmes  and  the 
National Anti-Fraud Coordination Service, with a view to adapting the Commission’s fraud risk assessment tool to the specific characteristics of 
the programmes by agreeing on the risks specific to each area of action and the control measures necessary to mitigate, where applicable, each of 
those risks, so as to ensure a homogeneous and consistent approach is applied by those authorities. 

In addition, as another example, in the area of agricultural policy, the Spanish Agricultural Guarantee Fund (FEGA) set up an anti-fraud working 
group  made  up  of  the  FEGA  itself,  the  paying  agencies  of  all  the  Autonomous  Regions  and  the  National  Anti-Fraud  Coordination  Service. 
Among  other  things,  its aim  in  2016  was  to  pool  fraud risk indicators  (‘red  flags’), with  a  view  to  drawing up  a  catalogue  or  register  of  such 
indicators to be taken into account by those bodies in planning control measures. The register will be updated at future meetings of the working 

142 

 
 
group on the basis of the experience they acquire from implementation. 

In  relation to the possibility of using  IMS in the  assessment  of risks of fraud or irregularities, it should be pointed out that the difficulties for 
Member States to exploit on a massive scale the information contained in IMS and the lack of clear instructions on how to register different fields 
– with the resulting poor quality of data in the system – hamper its use by the Spanish authorities in assessing the risk of fraud or irregularities. 

Finally, in relation to the Arachne tool, the authorities responsible for managing EU funds (which are responsible for the decision to use the tool) 
are  in  the  process  of  evaluating  its  advantages  and  disadvantages  for  decision-making  under  the  procedures  for  awarding,  justifying  and 
monitoring co-financed aid. The vast majority have not yet taken any formal decision on its use. 

In that regard, the problems pointed out by those bodies include the inability to adapt the tool to the needs and specific characteristics of each 
entity or body (e.g. you cannot select certain risk indicators to be taken into account, leaving out others deemed irrelevant) and doubts about the 
cost of using the tool for Member States once it is no longer offered free of charge by the Commission. 

FR  The French authorities are able to announce the following measures:  

-  the  Ministry  of  Agriculture  stresses  that  the  control  system  for  EU  agricultural  funds  is  subject  to  a  framework  laid  down  by  various  EU 
Regulations, in particular Council Regulation 1306/2013 of 17 December 2013 and its implementing Regulation No 908/2014 of 6 August 2014. 
The control systems set up by France comply fully with the EU framework. In addition to simultaneous checks by paying agencies before aid is 
paid  to  beneficiaries,  ex  post  checks  are  carried  out  after  all  aid  (other  than  direct  aid)  is  paid  out,  based  on  an  annual  risk  assessment 
submitted for approval to the European Commission, and which forms the basis of the annual control programme. This risk assessment takes 
into  account  several  parameters,  including  the  measures  themselves,  the  amount  of  aid  paid  and  the  outcome  of  previous  checks.  It  helps  to 
predict and to better target cases where irregularities are most likely, thereby improving fraud prevention and detection.  

- the Interministerial Commission for the Coordination of Inspections (CICC), audit authority for EU funds in France (CICC-Structural 
Funds), points out that in the context of the designation procedure, the model for the description of the management and control system (DSGC) 

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provided for in Annex 3 of Implementing Regulation 1011/2014 of 22 September 2014 as well as the self-assessment list contained in the annex 
to the guide on the designation procedure (EGESIF 14-0013 of 18 December 2014) place the emphasis on risk mapping by the managing and 
certifying  authorities  and  the  adoption  of  proportionate  anti-fraud  measures  (in  the  light  of  the  guidance  note  on  fraud  prevention  — 
EGESIF 14-0021 of 16 June 2014). The CICC was therefore required to make this issue a priority for analysis during its documentary checks and 
on-the-spot audits. It found that the managing authorities had decided to use the ARACHNE tool proposed by the Commission services and had 
incorporated into their manuals of procedure, protocols for use of the tool on the basis of the results of the risk mapping. For the programming of 
its system audits, the CICC will identify its priorities, taking particular account of the conclusions and findings of work carried out in connection 
with the designation procedure. 

- the Office of the Commissioner General for Territorial Equality (CGET), acting as a cross-fund coordination authority, has been working in 
the framework of the Working Group on rules with a view to presenting the various checks for 2014-2020 (scope, objectives and main audit 
points). At regular network meetings on the subject of fighting fraud in the framework of the European Structural and Investment Funds (ESIF), 
the CGET recalls the legal basis for internal control with reference to the European Commission guidance of 19 December 2013 on preventing 
and combating fraud and the guidance on management checks on projects co-financed by EU funds. Within the Working Group on rules, a 
number of supporting documents have been developed and made available to all managing authorities, including sample risk maps, which can be 
changed and adapted to suit the particularities of each operational programme and a note recommending use of the ARACHNE tool. There have 
also been regular exchanges with the European Commission about the ARACHNE information system and its content. 

HR  As regards systems and tools used to perform a risk analysis in the preparing of audits and control activities, the Republic of Croatia (managing 
authorities/paying  agencies  and  audit/control  authorities)  has  a  number  of  systems  and  tools  at  its  disposal  in  order  to  perform  efficient  risk 
analysis varying from ARACHNE risk scoring tool, IMS (Irregularity Management System), ESIF MIS (Management Information System), risk 
assessment methodologies, Irregularity and Fraud Risk Management Methodology, Methodology for the ex ante and ex post verification of the 
procurement  documentation  based  on  the  risk  analysis  related  to  individual  procurements,  appointing  Risk  Coordinators  etc.  Also,  competent 
bodies within the system are continuously improving their tools and systems. 

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Bellow, examples will be given in order to present systems and tools used to perform a risk analysis. 

Ex. 1. Ministry of Regional Development and EU Funds as the Managing Authority for Operational Programme Regional Competitiveness 2007 
– 2013 and the Managing Authority for Operational Programme Competitiveness and Cohesion 2014 - 2020 

Managing  Authority  (MA)  is  responsible  for  the  performance  of  the  Management  and  Control  System  (MSC)  of  the  Operational  Programme 
Regional Competitiveness (OPRC) and Operational Programme Competitiveness and Cohesion (OPCC).  

The  MA’s  management  and  control  strategy  follows  the  principles  of  economy,  efficiency  and  effectiveness,  and  simultaneously  ensures 
reasonable assurance over regularity and legality of expenditure. The MA’s control activities are designed to provide for a balanced and efficient 
mix of ex-ante and ex-post controls (verifications). Controls by the MA over the IB activities / outputs cover: 

  ex-ante review and approval of the criteria and methodology (guidelines) for selecting the operations; 
  ex-ante review and approval of all versions (including modifications) of the manuals of procedures of IBs (including review and approval 

of risk assessment methodologies for sampling); 

  ex-post controls over the performance of IBs - system level verifications (SLV). 

Regular  SLVs  are  performed  by  the  MA  to  get  a  reasonable  assurance  on  adequate  performance  of  the  Intermediate  Bodies,  which  serve  as 
complementary controls to MA’s ex-ante verifications. 

During SLVs, adequacy and compliance of the main processes performed by the IBs are verified by the MA. SLVs are performed based on the 
risk  assessment  of  the  IB’s  activities  and  risk  assessment  of  the  IB’s  transactions  (Calls  for  proposals  /  Contracts  /  Applications  for 
Reimbursement). Both risk assessments include also relevant information on irregularities, frauds, previous audit and SLV recommendations and 
annual risk assessment of activities and processes in a controlled IB. 

The  SLVs  are  performed  in  accordance  with  the  Annual  SLV  Plan,  to  cover  and  get  additional  assurance  over  the  legality  and  regularity  of 
expenditure  to  be  entered  into  the  annual  accounts.  SLVs  include  administrative  (desk)  verifications  and  on-the-spot  verifications  at  IBs  (and 

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beneficiaries,  if  appropriate).  Verification  methods  include  (1)  interviews,  (2)  walk-through  tests  of  documents,  (3)  analytical  procedures,  (4) 
reconciliation of data and (5) re-performance.  

The  errors/weaknesses  identified  during  the  above  ex-ante  and  ex-post  verifications  by  the  MA  are  assessed  and  registered,  corrective  actions 
performed, if appropriate, and taken into consideration when drafting Management Declaration and Annual Summary. 

Intermediate Bodies level 2 (IB2) carry out ex ante and ex post verifications of the procurement documentation. Methodology for the ex ante and 
ex post verification is based on the risk analysis related to individual procurements, ensuring that all the procurements with estimated value equal 
to  or  higher  than  EU  thresholds  are  chosen  for  the  ex  ante  verifications.  Risk  analysis  takes  into  consideration:  value  of  procurement  item; 
complexity of procurement procedure and/or complexity of procurement item; procurement impact on the project implementation; experience of 
the  subject  in  procurement  implementation  and  contract  execution;  status  of  beneficiary/subject  who  is  implementing  the  procurement  (public 
administration body; legal entity with public authority, office for central public procurement, etc.); stated irregularities in previously implemented 
procurements; applicable procurement procedures (public procurement or other) etc. After performed risk assessment, selected procurements for 
ex ante and ex post verification are communicated to the Beneficiary. In ex post verification Beneficiary submits to the IB2 all the documentation 
related to the specific procurement. Ex post verification is generally linked to the process of submission of the Application for Reimbursement. 
The  scope  of  this  verification  is  verification  of  the  eligibility  of  the  expenses  submitted  in  Application  for  Reimbursement  and  legality  of  the 
procurements performed according to the Public Procurement Act or procedures for Non-Purchasing Organizations. 

IBs  2  also  verify  and  approve  Applications  for  Reimbursement  submitted  by  beneficiaries.  IB2  verifies  all  submitted  Applications  for 
Reimbursement and choose a sample of the claimed cost items for the verification of all the applicable elements based on the  risk assessment 
methodology  approved  by  MA.  Risk  factors  must  be  taken  in  consideration  (value  of  cost  item,  individual  procurements,  type  of  beneficiary, 
previous experience) when choosing claimed cost items. This sample is complemented by a randomly chosen sample to make sure that there is an 
equal  probability  for  all  the  cost  items  to  be  chosen.  It  is  necessary  to  determine  corresponding  indicators  and  parameters  so  that  verification 
results based on a sample can be used for the projection of error on the unverified part. If, during the sample based verification, notable amount of 
ineligible cost is determined, it is recommended to expand the sample on all the claimed cost items.  

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IB2  also  applies  risk  assessment  methodology  for  planning  on  the  spot  verifications.  Methodology  is  prepared  by  IB2  and  approved  by  MA. 
Extent of the verification corresponds to the level of risk related to project - projects with higher level of risk are subject to stricter verifications. 
While developing the methodology, the following factors are taken into consideration: complexity of project, amount of financial support, level of 
established risks, results of administrative verifications and audits carried out by Audit Authority (AA) and type of documentation delivered by 
beneficiary. This will result in a certain intensity and frequency of on the spot verifications. 

MA OPCC has introduced procedures for the use of ARACHNE risk scoring tool in the implementation of the Operational programme. The usage 
of ARACHNE in implementation of the OPCC is described in the OPCC Common National Rules No. 6 and 10 (related to selection of operations 
and risk management).  

Croatian  authorities  point  out  that  391  user  accounts  have  been  opened  for  Croatian  users  of  ARACHNE  (including  OPCC  and  OPEHR 
management  and  control  system).  The  current  stage  of  the  OPs  implementation  does  not  enable  an  intensive  usage  of  ARACHNE,  but  other 
ARACHNE functions are being used, in particular those related to identification of relations between legal entities and/or persons for the purpose 
of  identifying  a  possible  conflict  of  interest.  In  addition,  further  improvement  of  ESIF  MIS  system  in  the  next  months  will  facilitate  a  more 
intensive usage of ARACHNE. 

Croatian  authorities  consider  ARACHNE  as  one  of  the  tools  used  by  the  MAs  for  fraud  prevention,  complementary  with  other  tools  and 
measures. We are dedicated to getting the best possible benefit from using ARACHNE. In this light, we would like to advise that Guidelines for 
the usage of ARACHNE risk scoring tool in line with the Common National Rules were prepared by the MA OPCC in May 2015 and sent to the 
bodies of the MCS. 

Besides  ARACHNE,  there  are  also  other  national  databases  used  by  MCS  bodies  for  the  same  purpose:  Court  Register,  Financial  Agency 
database, Poslovna.hr etc. 

Furthermore,  MSC  bodies  are  obliged  to  assess  systemic  risks  and  fraud  risks  twice  a  year  (in  March  and  in  September).  According  to  the 
procedure, they send Risk Register and Action Plan for Risk Mitigation to MA. Every MCS body must appoint Risk Manager and Deputy Risk 

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Manager.  MA  appoints  Risk  Coordinator  for  all  bodies  of  MCS.  Risk  Coordinator  once  a  year  organizes  a  meeting  with  Risk  Managers  for 
coordination of risks at the level of OPCC. If necessary, the meeting can be organized more than once a year. Also, Risk Coordinator organizes a 
meeting of Fraud Risk Assessment Group on the level of OP twice a year, and if necessary, it can be organized even more often. Every MCS 
body  can  appoint  Coordinator  for  Antifraud  Actions  to  be  responsible  for  fraud  risks  (if  there  is  no  such  appointment,  Risk  Manager  is 
responsible).  Procedures  for  systemic  and  fraud  risk  assessment  are  described  in  OPCC  Common  National  Rules,  Rule  No.  10  related  to  risk 
management. We would also like to stress that procedures for fraud risk assessment together with relevant annexes, including those related to red 
flags, were introduced to the Common National Rules, Rule No. 10, from the COCOF 09/0003/00-EN - Information Note on Fraud Indicators for 
ERDF, ESF and CF document in order to ensure a full awareness of the Fraud Indicators in all management and control system bodies. 

MA  OPCC  has  established  also  Irregularities  Management  Network  and  its  first  meeting  was  held  on  12  January  2017.  It  is  envisaged  that 
meetings of this Network are held at least on a quarterly basis. 

Ex. 2. Audit Authority (Agency for the Audit of European Union Programmes Implementation System – ARPA) 

1. 

Usage of IMS in Audit Authority (AA) 

The usage of IMS is widely spread and regular in planning and performing daily audit activities. Currently, two auditors from Audit Authority 
(AA) have access to IMS (as the “observer” function) and other auditors from all AA services for audits (in AA) get from those two auditors the 
needed  information  on  irregularities  reported to  the  Commission.  The  irregularity  reports  are  exported  from  the  IMS  system  into  Excel  sheets 
with all embedded information. The excels are then sent to the responsible auditors who use the information for their work. This practice has been 
conducted and followed in AA for several years already and will be further conducted and applied for performing risk analyses. 

2. 

Anti-Fraud Measures and Arachne in Operational Programme Competitiveness and Cohesion 

  Each  body  in  Operational  Programme  Competitiveness  and  Cohesion  (OPCC)  is  obliged  to  appoint  person  for  management  of 

irregularities and fraud prevention and Coordinator in MA. 

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 

  At the level of OP Group for assessment the risk of fraud is established and convened by the Coordinator. 
  The anti-fraud measures are addressed in various documents such as the National Anti-Fraud Strategy in the Field of Protection of EU 
Financial Interests for the period 2014–2016; Common national rules (CNR): No. 6 Selection of projects, No. 10 Risk management and 
No. 13 Irregularity; Description of the system point 2.1.4 and Manuals of procedures. 
In  CNR  No.10  Risk  management,  it  is  determined  that  bodies  in  MCS  of  OPCC  are  obliged  to  follow  the  Guidance  “Fraud  Risk 
Assessment and Effective and Proportionate Anti-Fraud Measures” EGESIF_14-0021-00, 16/06/2014. 
In CNR 6 Selection of projects, it is determined that bodies in MCS of OPCC are obliged to provide an audit trail that they have checked 
in,  at  least,  3  searches  of  data  base  by  displaying  the  searching  results  from:  ARACHNE  as  risk  scoring  tool,  insight  into  the  Court 
Registry; relevant chambers and professional bodies; for example, Croatian Chamber of Economy, Croatian Chamber of Civil Engineers, 
etc. 

 

  AA will follow Guidance on “Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures” and Annex 4”Verification of 

the MA compliance with article 125 (4) of Common provisions regulation (Regulation 1303/2013)”. 

  AA decided to use ARACHNE application for performing additional verification regarding projects, beneficiaries and contractors. 

Following  the  above  mentioned  Common  national  rule  No.  13  Irregularity,  the  AA  is  on  a  daily  basis  informed  by  e-mails  about  the  issued 
Decisions on established irregularities within projects implemented under OPCC and on suspected cases of frauds (and in ESF as well). These 
information and documents are received by responsible auditors in relevant AA services for audits and are further addressed and reviewed during 
planning or conducting audits.  

As regards the usage of ARACHNE in the AA, nine auditors have access to ARACHNE application. During conducting audit of operations in 
2016, ARPA auditors used ARACHNE to get better overview of the internal and external data regarding projects, beneficiaries and contractors. 
Among  other  data,  we  have  checked  legal  links  between  persons,  relations  between  involved  companies,  financial  data  and  related  risks  of  a 
company. 

As regards other OPs which are implemented in Croatia, during 2016 AA services for audits of these programmes have not yet used or relied on 

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the ARACHNE.  

Ex. 3. Service for Combating Irregularities and Fraud (AFCOS Service in Croatia) 

Service  for  Combating  Irregularities  and  Fraud  has  developed  Irregularity  and  Fraud  Risk  Management  Methodology.  According  to  the 
Methodology,  Irregularity  Reporting  System  bodies,  AFCOS  Service  (Service  for  Combating  Irregularities  and  Fraud)  and  AFCOS-Network 
bodies are obliged to conduct assessment of risks related to irregularities and fraud in line with their competences. 

Purpose  of  the  Methodology  is  to  provide  instructions  and  tools  for  irregularity  and  fraud  risk  management.  The  implementation  of  the 
Methodology  is  expected  to  result  in  1)  identification  of  the  riskiest  projects,  2)  assessment  of  exposure  of  managing  authority  and  certifying 
authority  to  fraud  risks,  3)  assessment  of  exposure  of  AFCOS  to  risks  threatening  its  objectives  and  4)  identification  and  implementation  of 
corresponding risk mitigation measures. 

The Methodology is aimed at European Structural and Infrastructure Fund management and control system bodies, AFCOS-service and AFCOS-
network. 

Results of the implementation of the Methodology will be used for development of the National Anti-fraud Strategy. 

IT  Contribution of the Italian AFCOS: 

Italy uses information retrievable from the European Commission’s information systems. For anti-fraud purposes, the national authorities will use the 
ARACHNE system, pending completion of a national anti-fraud database, which is being developed by the Italian AFCOS. 

With  regard to  what  is  requested  in  the  Notes  to  Recommendation 4,  the Guardia  di  Finanza  has recently  developed  an  IT  tool  to  enhance  action  to 
combat fraud in the receipt of Community funds, called the Anti-Fraud Information System (Sistema Informativo Anti Frode - SIAF), financed under 
the national operational programme ‘Governance and Technical Assistance 2007-2013’. 

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The  application,  which  will  be  made  available  only  to  operational  units  of  the  corps  operating  in  regions  covered  by  the  Convergence  Objective 
(Campania, Calabria, Puglia and Sicily), comprises an integrated technology platform that brings together in a single analysis environment information 
on disbursed EU funds contained in the databases used, in most cases, by the bodies responsible for managing those funds, with a view to targeted, 
effective selection for inspection of recipients of public funds identified as ‘at risk’ on the basis of specific indicators. 

CY 

 Managing Authority- Management and Control system and use of Fraud Risk Assessment Tool: 

The  Managing  Authority  in  Cyprus  has  designed  and  fully  implements  a  Management  and  Control  system  regarding  European  Structural  and 
Investment Funds. The design and the implementation of the management system and control procedures include among others the following in 
relation to risk analysis and fraud prevention: 

  A  detailed  and  clear  description  of  the  responsibilities  of  each  institution  involved  in  management  and  control  and  the  allocation  of 

functions within each body to ensure compliance with the principle of separation of powers where necessary 

  The existence and implementation of procedures to ensure the legality and regularity of expenditure claimed and to ensure an  adequate 

audit trail 

  The operation and use of the Integrated Information System for the electronic storage and exchange of data, and to support the monitoring 

and control of the implementation of the OP 

  The existence of procedures for preventing, detecting and correcting irregularities, through which identified and cases of suspected fraud 
 

Informing each stakeholder to describe the management system processes and control and for any possible amendment through relevant 
documents, directives and guidelines issued by the MA. 

  The existence of national codes and ethical codes for public officials and services of the country (Conduct and Ethics Guide for Public 
Officials, National Code of Conduct for the award of Public Procurement,  Code of Ethics of VAT Service- Ministry of Finance, Code of 
Ethics of Certified Public Accountants Cyprus). 

  Conducting  training  and  awareness  actions  of  staff  involved  in  management  and  control  processes,  institutions  and  organizations,  both 
theoretical  and  practical  issues  (prevention  procedures,  detection,  correction  and  prosecution  of  fraud,  warning  signs  and  indicators  of 

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fraud, etc. .) in order to consolidate the discouraging mentality fraud and to provide all possible expertise to identify and address fraud 
risks. 

In addition to the general monitoring the sound application of the procedures of management and control system, the MA as part of preventive 
measures to combat fraud, applies the fraud risk assessment process, through which is the evaluation of the impact and likelihood of potential 
fraud risks that could affect the EU's financial interests. 

The fraud risk assessment carried out in accordance with the EU Guidance and using the Fraud Risk Assessment Tool.  

Audit Authority-Risk assessment  

The  Audit  Authority  and  as  per  the  provisions  of  the  Common  Provisions  Regulations  (Reg.  (EU)  No  1303/2013)    and  the  Commission 
Implementing  Regulations  (Reg.  (EU)  No  2015/2007)  sets  up  an  overall  risk  assessment  for  prioritizing  the  system  audit  work  on  the  Bodies 
(MA, CA and IB’s) and key requirements of the Programs concerned.  

Risk factors such as prior experience of the bodies in previous PP, complexity of functions of the Bodies, value of projects under management are 
taken into account when performing the risk assessment and are weighted accordingly. The results of the risk assessment are reported in the Audit 
Strategy of the Audit Authority which is updated on an annual basis and when deemed necessary. As per the provisions of the Guidance of the 
Commission  on  a  common  methodology  for  the  assessment  of  management  and  control  systems,  the  responsibility  for  the  effective 
implementation of proportionate anti-fraud measures lies with the Managing Authority under Key Requirement 7.  The audit by the AA of the 
MA’s  Fraud  Risk  Assessment  and  its  anti-fraud  measures  is  covered  during  its  system  audits.  The  AA  also  reviews  the  implementation  of 
effective and proportionate anti-fraud measures at the level of IB’s as part of its system audits. 

The procedures in place for audits of operations  and sampling methodology is determined by the AA based on professional judgment and taking 
into  account  the  regulatory  requirements  and  factors  such  as  the  characteristics  of  the  population  and  the  expectation  regarding  the  level  and 
variability of the errors. The sampling methodology followed is in line with the regulatory framework, EU relevant Guidance and Internationally 

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Accepted Standards.  

Any instances of suspected fraud occurring during the audits of operations and system audits, the Audit Authority follows  the procedures set by 
the National framework and legislation and the provisions of Internationally Accepted Standards. In addition, according to international accepted 
standards ISSAI 1240, ISA240, the Audit Authority conducts administrative and not criminal procedures. The scope of its power and authority is 
therefore rather limited when it comes to detecting the particular circumstances of suspected fraudulent activity. In addition, the key objectives of 
criminal and audit procedures are different. An audit of operations is of administrative nature aiming to assess the legality and regularity of the 
implementation  of  a  project,  while  the  criminal  procedures claims  to  detect  and  investigate  operations to  provide  evidence  for  the intention  to 
defraud. 

LV  

The Managing Authority for EU structural funds and the Cohesion Fund, Namely ESF, CF and ERDF provides its information in 
regards to the risk based approach:  
1) For the implementation of Article 125 (4c) of Regulation 1303/201346, the MA on the basis of the European Commission (hereinafter – EC) 
guidance  on  fraud  risk  management47  laid  down  national  guidelines  for  specific  fraud  and  corruption  risk  prevention  in  ERDF,  ESF,  CF 
project  implementation  in  the  2014-2020  programming  period  (documents  are  published  on  the  Internet  http://www.esfondi.lv/risku-
parvaldiba). To make sure that risks of fraud and corruption are assessed as well as effective and proportionate measures are implemented, 
institutions involved in the management of ESI funds on the request of the MA once a year fill out the fraud risk self-assessment tool which is 
attached to the national guidelines and then MA analyses this information in order to revive The Action Plan for minimizing risks of fraud and 
corruption. MA considers above mentioned EC guidelines as very useful tool to assess several risk scenarios particularly relevant to the key 
processes  and  later  identify  and  evaluate  the  effectiveness  of  controls  already  in  use  to  mitigate  against  these  risks  of  fraud  either  from 
occurring or ensuring that fraudulent behaviour does not remain undetected.   

46  
47  

Regulation  (EU)  No  1303/2013  of  the  European  Parliament  and  of  The  Council  of  17  December  2013  laying  down  common  provisions  on  the  European  Regional 
Development Fund, the European Social Fund, the Cohesion Fund, the European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and 
laying down general provisions on the European Regional Development Fund, the European Social Fund, the Cohesion Fund and the European Maritime and Fisheries Fund 
and repealing Council Regulation (EC) No 1083/2006. 

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2) Latvian authorities are still working on integration of the Arachne risk scoring tool, developed by the EC, into the management verification 
processes for the 2014-2020 programming period. On 13th of October 2016 the project data file for testing Arachne (acceptance version) was 
delivered  by the Co-operation Institution and in the first  EC analysis of the data was  concluded that  data quality and quantity is sufficient, 
although some minor data issues occurred. Currently, Co-operation Institution is analysing information and results of potentially most risky 
ESI projects (red-flags), available in the Arachne acceptance environment. 

3) One of the functions of the MA is the control of intermediator’s delegated functions by overseeing and revising checks, made by Co-operation 
Institution, such as checks of procurement documents, checks of payment applications, on-the-spot checks e.t. as well as revising procedures 
of Co-operation  Institution.  

Control of delegated  function is being planned on the basis of the risk-cantered approach while taking into account risky spheres, which were 
identified during the time of previous checks. Information on risky spheres is being accumulated in internal registers of the MA. Inspection is 
being  performed  taking  in  account  also  an  analysis  of  all  available  information  including  information,  which  has  been  provided  by  other 
departments  within  the  MA  as  well  as  by  third  persons.  The  MA  is  using  not  only  publicly  available  data  bases,  but  is  also  planning  to  use 
European Commission’s ARACHNE information system as an additional inspection tool in cases when the possibility of fraud exists within the 
process of checks and as soon as the system will be implemented. 

The Ministry of Environmental Protection and Regional Development of the Republic of Latvia ensures financial control of the European 
Territorial  Cooperation  programmes  for  2014  –  2020  planning  period  project  partners  from  Latvia.  Latvian  financial  control  institution  has 
elaborated internal procedures for financial controllers: 
1) For carrying out random sample check of the Latvian beneficiary’s procurements planned within the project with regard to procurement 

documentation after announcement of the procurement and procurement procedures before the conclusion of a procurement contract in order 
to prevent risks before the conclusion of a procurement contract in the projects. 

2) For carrying out on-the-spot verifications for high-risk projects based on risk analysis and for low-risk projects selected by random sampling 

method. 

3) For carrying out 100% desk-based administrative check.  

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In order to achieve a common understanding and interpretation of European Territorial Cooperation  programmes rules Latvian financial control 
institution organized seminars for the Latvian beneficiaries and elaborated Guidelines for Latvian beneficiaries, which describe first level control 
system and requirements for the beneficiaries. Guidelines provide the compilation of information in Latvian language with the deadlines set in 
national regulations, procedure of the reporting processes, including order of the pre-check of the public procurement procedures.  The Guidelines 
and related documents and templates are available on the web page of The Ministry of Environmental Protection and Regional Development of 
the Republic of Latvia.  

- 

On 2015 100% desk-based administrative check and on-the-spot checks were made to all Latvian beneficiaries. 

- 
On  2016  the  financial  control  institution  has  made  100%  desk-based  check  to  all  Latvian  beneficiaries  and  carried  out  random  sample 
check of the Latvian beneficiary's procurements planned within the projects with regard to procurement documentation after announcement of the 
procurement and procurement procedures before the conclusion of a procurement contract. 

- 
Starting from 2017 the financial control institution will carry out on-the-spot verifications of the Latvian beneficiaries’ projects.   These 
on-the-spot verifications will be based on risk analysis - for high-risk projects at least once during the project implementation and for low-risk 
projects  selected  by  random  sampling  method,  ensuring  that  any  low-risk  project  may  be  selected  for  verification.  Latvian  financial  control 
institution doesn’t intend to use IT tools. 

In  Interreg  VA  Latvia  –  Lithuania  cross-border  cooperation  programme  (LV-LT  programme)  where  Latvia  fulfills  functions  of  Managing 
Authority  in  order  to  ensure  effective  and  proportionate  anti  -  fraud  measures  and  appropriate  overall  risk  management  including  effective 
prevention,  detective  efforts  (fraud  risk  self  –  assessment)  and  fraud  reporting  mechanisms,  the  Risk  management  group  is  set  up  and  Risk 
management procedure for the LV-LT programme is issued.  

The controls carried out by LV-LT programme management bodies and the Financial Control have been designed to detect fraud effectively and 
proportionately.  The  error  rate  of  the  2007-2013  programming  period  was  very  low,  thus  providing  assurance  that  the  system  works  well. 
Correction of irregular amounts will take place according to the respective procedure.  

In addition, for preparation of the Programme risk management plan which will include also fraud risks in case they are identified, will be used 

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Annex 1 of the European Commission guidance”Fraud Risk Assessment and Effective and Proportionate Anti – Fraud Measures”) with focus to 
fraud  risks  in  three  key  processes  –  selection  of  applicants,  implementation  and  verification  of  projects,  including  public  procurement  related 
fraud risks and certification of expenditure and payments. 

For  the  FEAD  there  are  not  any  special  IT  tool  (system)  for  FEAD  risk  analysis  performing  by  FEAD  Managing  authority  and  FEAD 
Certification authority. There have not been identified fraud activities within FEAD in 2016. 

As regards AGRI and Fisheries funds: The Rural Development Service is using its own internal control mechanisms that have been established 
for the fraud and corruption risk prevention (red flags). 

The Audit Authority for EU Funds (ESF, CF, ERDF, FEAD, ISF and AMIF) in its system audits are strongly focusing on the most risky 
areas. The separate risk assessment is done to identify the most risky areas that are exposed to the fraud and corruption where in turn further audit 
procedures  are  focused  on.    Auditors  are  consulting  our  national  EU  Funds  Management  Information  System  (For  project  information),  the 
ARACHNE tool (for related persons, companies, red flags) and State Revenue Service’s databases (for company owners, employees, business 
area, related persons, VAT arrears). Also under audits of operations auditors are trained to oversee red flags and consult the competent authorities 
upon necessity. As for planning purposes the complaints log and black list of project and companies is consulted to identify the weight of the risk. 

LT  Ministry of Finance as a Managing Authority is responsible for the implementation of the requirement related with putting in place effective and 
proportionate anti-fraud measures provided for in Article 125 (4) (c) of the Regulation (EU) No. 1303/2013 of the European Parliament and of the 
Council of 17 December 2013. Ministry of Finance, taking into account this requirement and the EC recommendations on the use of the Arachne 
Risk Securing Tool, has acknowledged the Arachne’s functionalities:  

- representatives from the institutions administering the EU and EC structural funds and institutions participating in the administration met on 9 
December 2015 in Vilnius to familiarize with the purpose and basic functionalities of Arachne. It was also agreed on the provision the EC with 
data on the projects stored in the EU Structural Assistance Computer-Based Information Management and Monitoring System (SFMIS) that are 
necessary for testing Arachne; 

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-  managing  authority  in  cooperation  with  EC  arranged  an  interactive  training  in  Vilnius  on  19  July  2016  where  the  representatives  from  the 
Implementing Authority, STT, FCIS and National Audit Office of Lithuania were acquainted with the functionalities of Arachne and the results of 
the analysis of the tested project data; 

- on 29 September 2016 and 11 November 2016, the managing authority submitted to the EC questions concerning the elimination of drawbacks 
identified  in  testing  Arachne  (such  as  incompatibility  of  Arachne’s  internal  processes  with  the  requirements  for  audit  sequence,  inaccurate 
financial data on enterprises, inappropriate methods for the calculation of risk indicators, etc.); 

- on 5 December 2016 and 23 December 2016, EC informed the managing authority on the completed new version Arachne 2.0 and provided 
technical documentation on the modifications. EC also informed that upon the receipt of the recommendation of the European Data Protection 
Supervisor on the improvement of internal procedures, the release of Arachne 2.0 is postponed until March-April 2017.  

National Paying Agency under the Ministry of Agriculture (further – Agency) regularly reports irregularities to OLAF via IMS during a 2-month 
period  that  follows  the  quarter  in  which  the  irregularity  was  detected  as  provided  for  in  the  Regulations  (1848/2006,  498/2007,  1306/2013, 
1971/2015).  With  a  view  to  preventing  beneficiaries  from  the  unlawful  use  of  assistance,  the  Agency  also  uses  internal  systems  containing 
information  on  the  projects  provided  by  law  enforcement  institutions,  information  on  on-going/conducted  irregularity  investigations,  on-
going/conducted  project  risk  analyses  and  information  on  risks  related  with  allegedly  illegal  conditions  for  assistance.  It  also  uses  external 
systems such as Creditinfo containing information on artificially created conditions, financial capacity as well as other external registers enabling 
to prevent certain risks.  

On  the  basis  of  the  methodology  for  establishing  allegedly  illegal  conditions  for  assistance  approved  by  the  Minister  of  Agriculture  of  the 
Republic  of  Lithuania  No.  3D-285  of  5  May  2016,  the  Agency  assesses  projects  taking  into  account  the  risks  for  applicants  to  seek  illegal 
conditions for assistance.  

The  Agency  also  has  in  place  the  Description  of  the  Procedure  for  Provision/Receiving  of  Information  to/from  Law  Enforcement  Institutions 
approved by the Order of the Agency Director which contains a list of elements of alleged criminal offences. 

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Agency staff is also entitled to follow the Description of the Risk Assessment and Management Procedure regarding the projects under the Rural 
Development Programme 2014-2020 and Operational Programme of the Lithuanian Fisheries Sector 2014-2020 for conducting risk analyses and 
the Description of the Systemic Risk Analysis Procedure for carrying out risk analyses in a systemic manner. 

With the help of the RACS sub-system “Verification of Individuals”, Lithuanian Customs carry out risk assessment as concerns individuals and 
customs declarations, select individuals and/or their declarations for post clearance verification and record verifications, their results and residual 
risk assessments. For the automated risk assessment of individuals and declarations more than 100 risk assessment rules (algorithms) are used and 
assessment results are aggregated on the basis of the defined risk assessment areas. 

In view of the European Court of Auditor's recommendations, the methodology for customs verifications was updated. The procedure provides 
for  the  planning  of  verification  of  individuals  and  customs  declarations  as  well  as  their  selection  for  verification.  The  mentioned  actions  are 
carried out taking into account the highest risk assessment values under the RACS sub-system “Verification of Individuals”.  

For the risk assessment in the area of customs valuation, tariff regulation and other areas, the Lithuanian Customs use RACS as a basic IT system 
consisting of two parts – one is used for the risk assessment at the moment of clearance and the other is used for post clearance risk assessment. It 
also uses data received from the EC systems AFIS and CRMS and takes benefit of the OWNRES information on the detected irregularities. To 
identify customs value risks, information on fair prices provided by OLAF is used. 

LU  Arachne is currently implemented by the Managing Authorities of FSE and FEDER (cf. PIF 2016 report) and the EU Commission is currently 
discussing with them the management of their internet platforms, used by promoters to upload information regarding, inter alia, expenses. These 
Management Authorities use the internet platform as a management control tool for their projects as all the information is centralised on it. Part of 
the collected information is also inputted in Arachne. 

As for the Management Authority of INTERREG, it has recently taken the decision to implement Arachne as well. Further, this Authority has 
made  use  of  the  Risk  Assessment  Tool  in  the  framework  of  the  establishment  of  their  management  control  system.  Its  procedures  have  been 

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drafted and adapted based on the results from the Risk Assessment Tool. It is planned to update the Tool on a yearly basis. 

HU  I. 

Directorate General for Audit of European Funds as Audit Authority 

The Directorate General for Audit of European Funds (hereinafter referred to as “Directorate General”) uses risk analysis to select the focus of the 
system audits referred to in Article 127 of Regulation (EU) No 1303/2013 (hereinafter referred to as “CPR”). The risk analysis is based on the 
outcomes of previous audits (system audits and project audits carried out on a sample basis) and audits carried out by external audit organisations 
(e.g. European Commission, European Court of Auditors). In addition, the Directorate General selects the focus of system audits and develops 
system audit plans by using all available information and working documents, including the present follow-up report. The Directorate General 
also  conducts  project  audits  on  a  sample  basis,  which  means  the  sample-based  audit  of  expenditures  declared  in  the  previous  year  for  each 
operational programme. The sample is taken on the basis of the expenditure declared to the European Commission in the previous year. Based on 
the above, as opposed to the system audit plans, the sample-based audit plans are developed by using statistical sampling methods based on the 
guidelines published by the European Commission and the international audit standards. 

The priority objective of checking funds from Union sources in the framework of the sample-based project and system audits carried out by the 
Directorate General is to prevent irregularities and to pursue successfully and effectively the frauds detected on the occasion of such checks. In 
order to achieve the above mentioned objectives of the control activities, the checklist in Annex 4 of Guidance No EGESIF_14-0021-00 of the 
European Commission on Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures (hereinafter referred to as “Guidance”) 
was incorporated into our methodologies, while taking into account anti-fraud considerations, after the Guidance was published. In accordance 
with the Guidance, the aforementioned checklist was used to assess the compliance of the management and control system with Article 125(4)(c) 
of the CPR and the other requirements contained in the Guidance during the audit carried out for the purpose of designation, as referred to in 
Article  124  of  the  CPR,  in  2015,  and  during  the  system  audit  referred  to  in  Article  127  of  the  CPR  in  2016.  The  aforementioned  audits  also 
involved a review of the Managing Authorities’ fraud risk analyses, strategic documents relating to anti-fraud measures, guidelines and internal 
regulations. 

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The Directorate General has applied for access to the ARACHNE data analysis tool developed by the European Commission. A review of the 
methodologies of the Directorate General has been carried out to amend the audit aspects where the use of the ARACHNE database may provide 
useful information and thereby increase audit efficiency. 

In addition to the aforementioned database, a number of public and publicly available databases are applied (including the company database, the 
electronic  reporting  portal,  the  database  of  taxpayers  without  public  debt,  public  procurement  databases,  monitoring  system  data  (Unified 
Monitoring Information System (EMIR), EU Programmes System (EUPR)), Internet websites). 

The auditors of the Directorate General regularly participate in internal and external training programmes and professional conferences and, after 
due consideration, the newly acquired professional knowledge is incorporated in the control methodology.  

II. 

Prime Minister’s Office 

Regarding  the  operation  of  the  Arachne  risk-scoring  tool  used  for  risk  analysis  and  made  available  by  the  Commission,  the  following  can  be 
reported: 

II.1  Application 

The Arachne software has been installed for all Managing Authorities (MA). The intensity of use depends on the beneficiaries belonging to the 
MA concerned. The MAs which typically cooperate with budgetary units do not use Arachne, because the fraud prevention function of the system 
used  internally,  i.e.  the  EU  Programmes  Subsystem  of  the  Development  Policy  Database  and  Information  System  (FAIR  EUPR),  provide 
sufficient information to them.  

The MAs which use the Arachne system give priority to Arachne in the pre-decision process in the following cases: 

  checking SME status, exploring related parties 

160 

 
 
 
information on transparency: ownership links 

 
  examination of financial stability and risk of bankruptcy  
  existence of an established company in the case of non-resident suppliers 
  general information: address, telephone number, etc. 

II.2  Methodology 

Methodological  guidance  for  the  use  of  Arachne  has  been  prepared  with  a  focus  on  case  management  (responsible  persons,  deadlines, 
procedures).  The  essence  of  this is  that  where  the  Arachne system  indicates  a  high  risk, the staff  of  the  MA  must  investigate the matter.  This 
includes  a  review  of  the  documents  of  the  project  concerned  and,  where  available,  the  records  of  on-the-spot  checks.  The  audit  report  must 
specify whether or not the risk classification is deemed justified. Where classification in the high risk category is not justified, a modification of 
the classification is initiated; where the classification is justified, arrangements are made for reporting the suspected irregularity. 

III.  Hungarian State Treasury, Hungarian Agricultural Paying Agency 

In close connection with the anti-fraud strategy of DG AGRI, Article 24(3) of Commission Implementing Regulation (EU) No 809/2014 of 17 
July 2014 laying down rules for the application of Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to 
the integrated administration and control system, rural development measures and cross compliance provides that the results of the administrative 
and on-the-spot checks shall be assessed to establish whether any problems encountered could in general entail a risk for other similar operations, 
beneficiaries or other bodies. The assessment shall also identify the causes of such situations, any further examination which may be required and 
necessary corrective and preventive actions. 

The Hungarian Agricultural Paying Agency (hereinafter referred to as “Paying Agency”) carries out risk analyses for the following purposes:  

1. 

Selection of projects for on-the-spot check 

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• 

• 

in respect of a given payment period of a given budget line, 

where the aim of risk analysis is to reveal frequent and typical errors rather than detecting disguised frauds. 

In respect of the risk analyses for the on-the-spot checks, the sample is mostly selected by using statistical data mining procedures, applying the 
necessary software, which have taken the place of the initially used expert scoring systems from 2007 onwards. 

For administrative checks, a client risk assessment geared toward agriculture and rural development is currently being developed jointly 

2. 
by the Paying Agency and a developer to enable the complex assessment of the following: 

the history of these, 

  earlier and current applications for EU funding (primarily under the EAGF or the EAFRD) submitted by a given client, 
 
  size of the client/business concerned (small and medium-sized enterprise (SME), standard output (SO), 
 
  creation of artificial conditions, 
 
 

it provides IT support for the assessment of the conditions necessary for granting support (SME, SO, transparency), 
its result is used for the selection for on-the-spot check in respect of each risk aspect. 

the client’s network of relationships (Social Network Analysis (SNA)), 

At  the  Paying  Agency,  the  client  risk  assessment  geared  toward  agriculture  and  rural  development,  which  is  currently  under  development,  is 
implemented in the framework of the Client Risk Analysis, Social Network Project. 

Background of the Client Risk Analysis, Social Network Project:  In order to be able to meet European Union expectations with regard to client 
risk assessment, the Hungarian Paying Agency launched in the first trimester of 2014 a Pilot Project on Social Network Analysis (SNA), which 
all professional units could learn about, test and found successful. The aim of  the Social Network Analysis was to ensure compliance with the 
requirement of Article 24(2)(e) of Commission Regulation (EC) 65/2011 laying down detailed rules for the implementation of Council Regulation 
(EC)  No  1698/2005,  as  regards  the implementation  of  control  procedures  as  well as  cross-compliance  in  respect  of  rural  development  support 

162 

 
 
measures, whereby administrative checks shall include verification of: “the reliability of the applicant, with reference to any previous co-financed 
operations undertaken since 2000”. 

Following  the  Pilot  Project  on  Social  Network  Analysis  (SNA),  the  need  emerged  for  the  development  of  the  Client  Risk  Analysis,  Social 
Network  Project  at  the  Paying  Agency,  given  the  above-mentioned  requirement  laid  down  in  the  anti-fraud  strategy  of  DG  AGRI  and  Article 
24(3) of Commission Implementing Regulation (EU) No 809/2014. The aim of the Client Risk Analysis, Social Network Project is to provide the 
Paying Agency with an effective tool which enables the prevention and detection of any misuse of funds provided from the European Agricultural 
and Rural Development Fund in the 2014–2020 programming period, in particular as regards the regular use of funds approved for high value 
projects. 

The Client Risk Analysis, Social Network Project comprises three phases. Phase 1 essentially includes planning, while phases 2 and 3 basically 
comprise  deployment  and  operation  of  the  system  in  practice.  For  the  practical  applicability  of  the  project,  all  three  phases  need  to  be 
implemented. 

The  implemented  phase  1  activities  include  conceptual  planning,  requirement  analysis  and  SO  prototype  development.  SME  prototype 
development is being currently implemented. 

Phases 2 and 3 include the deployment and operation of SME and SO support, SO and SME automation, as well as the implementation of the 
artificial  conditions,  social  network  analysis,  client  risk  and  transparency  assessment  modules.  However,  these  are  conditional  upon  the 
development  and  implementation  of  the  operational  architecture,  and  then  the  system  must  be  made  fully  operational.  A  centralised  public 
procurement procedure for the tasks of phases 2 and 3 is currently in progress. The funding contract will be made for the period from 2 January 
2017  to  15  December  2017.  (The  next  phase  of  development  has  not  started  yet,  because  the  necessary  administrative  measures  are  still 
underway.) 

The  operation  of  the  Client  Risk  Analysis,  Social  Network  Project  will  be  based  on  the  data  of  existing  clients  included  in  the  records  of  the 
Paying Agency (SAPARD, Agriculture and Rural Development Operational Programme (AVOP), New Hungary Rural Development Programme 

163 

 
 
(ÚMVP), Rural Development Programme (VP), direct aids and market measures), as well as publicly authentic data sources (National Tax and 
Customs Administration and Central Office for Electronic Public Services, Microsec, National Food Chain Safety Office). 

The Client Risk Analysis, Social Network Project concerns all professional functions of the Paying Agency, and several organisational units will 
be  able  to  make  use  of  both  the  sub-processes  (calculation  of  plant  size  expressed  in  SO,  SME  classification,  transparency,  related  parties, 
detecting  cases  of  creating  artificial conditions)  and  the  final  outcome  of  client  risk analysis  (for  making  funding  decisions  and  increasing  the 
efficiency of selection for on-the-spot check). 

When fully implemented, the social network analysis will enable the exploration, visualisation and evaluation of the link(s)  between individual 
participants and entities, going beyond individual characteristics. It reveals hidden relationships and statistics that could not be seen at the level of 
individual  cases  and  participants.  The  full  implementation  of  the  Client  Risk  Analysis,  Social  Network  Project  will  make  it  possible  for  the 
Paying  Agency  to  make  an  inventory  of  all  horizontal  risks  which  may  occur  when  dealing  with  support  for  investment  provided  from  the 
EAFRD  (in  the  three  areas  of  commitment  of  funds,  audit  of  accounts  and  operation)  and  where  there  is  a  potential  for  irregularities  during 
implementation. Owing to clients identified as presenting a risk, the loss of EU funds can be reduced to a minimum by selecting such clients for 
(central) control, and the implementation of the programme can also ensure the gathering of all other potential risk elements on a single interface. 

In addition to the assessment made on the basis of the currently used risk scores, the Client Risk Analysis, Social Network Project will be able to 
provide substantial help to the assessment of the risks inherent in clients and applications, because it will enable the control of links on a real time 
basis,  in  close  connection  with  the  administrative  work,  in  order  to  find  out  how  the  supplier,  the  bidder,  the  beneficiary,  the  company 
representative, the tender writer, the machine, the equipment, the place of implementation, etc. relate to one another and to other applications, 
accounts,  decisions  issued  and  irregularities  detected  earlier,  also  using  data  from  external  records  (e.g.  company  database)  in  the  course  of 
analysis. 

Overall, experience with use so far suggests that the above mentioned Pilot Project, which all professional units could learn about, test and found 
successful,  can  be  developed  into  an  IT  tool  performing  daily  routine  tasks  (Client  Risk  Analysis,  Social  Network  Project),  and  its  completed 
components with autonomous functions (to date, SO calculation in its entirety) are put into use instantly. The IT support for SME classification 

164 

 
 
and transparency assessment may be rolled out soon. 

MT  Feedback provided by the Audit Authority, Managing Authority & Agriculture & Rural Payments Agency: 

For the new programming period 2014-2020, the Maltese Audit Authority is planning to introduce an IT audit software. The software will assist 
the  auditors  in  carrying  out  the  requested  audit  fieldwork.  Moreover,  it  will  include  a  database  where  to  record  all  financial  irregularities  and 
classified by type. This feature will be beneficial from two aspects: 

1.At planning stage, the auditor can refer back to previous irregularities detected and ensure that the respective system/audit of operation does not 
have similar irregularities. 

2.The  typology  of  errors  can  be  shared  with  the  Managing  and  Certifying  Authorities  so  as  to  be  proactive  in  identifying  potential  financial 
irregularities.  

In addition, the Audit Authority is also planning to use Arachne as a risk scoring tool.  

Managing Authority: The Planning and Priorities Coordination Division (PPCD) and ‘the EU Territorial Programmes Unit’ within the Funds and 
Programmes Division (FPD) are proceeding with the preparations for the full adoption of the Arachne risk scoring tool which assists Member 
States in identifying the most risky projects. We were informed that the updated version of Arachne will be launched next March/April 2017, at 
which stage it is envisaged that we will be in a position to fully deploy the tool. 

To assess the impact and likelihood of any potential fraud risks which could harm the EU’s financial interests, the Commission recommends that 
Managing Authorities apply a ‘fraud risk assessment tool’. Along with other tools, the Commission made available also a ‘template fraud risk 
self-assessment tool’ and this is being made use of by both PPCD and FPD; as per the Commission’s EGESIF_14-0021_00, this tool targets the 
main situations where key processes in the implementation of the programmes could be most open to manipulation by fraudulent individuals and 
organisations. According to the Commission , three selected key processes considered to be most exposed to specific fraud risks are: 

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(i) Selection of applicants; 

(ii) Implementation and verification of the operations; 

(iii) Certification and payments. 

This process of identification of risks trickles down onto the beneficiaries implementing the projects. 

On  similar  lines,  risk  registers  have  also  been  drawn  up  to  capture,  maintain  and  monitor  information  on  all  identified  risks  to  a  specific 
organisational activity and the associated controlling actions that have been identified; project risk assessment is an ongoing process.  

Both  divisions  have  adopted  an  anti-fraud  policy  and  an  anti-fraud  strategy.  The  objective  of  the  policy  is  to  promote  a  culture  which  deters 
fraudulent activity and to facilitate the prevention and detection of fraud and the development of procedures which will aid in the investigation of 
fraud  and  related  offences  and  which  will  ensure  that  such  cases  are  dealt  with  timely  and  appropriately.  The  strategy  sets  out  the  Managing 
Authorities’ commitment to preventing, detecting and deterring fraud and corruption and to taking action where it is suspected or detected. The 
strategy is based around the four key themes: prevention, detection, investigation and prosecution and reparation.’ 

Re Agriculture: the Agriculture & Rural Payments Agency (ARPA) has various features embedded into its organisational structure and operations 
that allow it to prevent and detect fraud. These include the Internal Audit and the Quality Control Units which specifically deal with checks on the 
work being performed by the Agency. Due to the nature of their work, these Units are very likely to encounter fraud and they are also able to 
suggest new ways of doing things in order to narrow down the situations for which fraud risk is high.  Furthermore, each of ARPA’s departments 
has an operational procedure that centres around the legal expenditure of EU funds in line with the relevant regulations. When one observes these 
regulations,   fraud  is  automatically  being  avoided.  Hence,  all  the  efforts  of  the  Agency  in  complying  to  all  the  relevant  EU  regulations  are  an 
automatic effort to prevent fraud. This since, a payment affected outside the remits of the regulation is automatically fraudulent. 

Amongst the tools utilised by the Paying Agency to prevent and detect fraud in addition to the in-built organisational practices mentioned above, 

166 

 
 
there are the following: 

  VIES Website: VAT numbers of beneficiary quotations and invoices, especially for investment measures, are tested using the VIES site 

in order to ensure that the VAT number is actually valid and is related to the supplier in question. 

  Registrar of Companies: The registrar of companies website is used in order to detect whether related companies are issuing quotations 
to  the  same  beneficiary  for  the  same  line  item,  with  an  intention  to  distort  the  proper  testing  of  the  market  when  beneficiaries  submit 
quotations with their applications. This test is done by identifying the ultimate beneficiaries of the companies in question and establishing 
whether these are closely related or not. 

  EU  Funds  Committee:  A  committee  composed  of  all  the  authorities  administering  the  disbursements  of  EU  funds  meets  regularly  in 
Malta with the main intention of assessing projects submitted by the same beneficiary with the primary aim of establishing whether or not 
such projects are closely related with possible intention for double funding. 

  On-the-spot Checks: Samples for beneficiaries to test on the spot are selected using a sampling software embedded within our IT system. 
In accordance to the requirements of the regulation, these samples are selected both on a risk basis and on a random sample basis. Through 
on-the-spot checks, irregularities and fraud can be easily identified. 

ARPA  also  regularly  trains  its  staff  on  fraud  as  such  training  is  crucial  to  develop  the  ability  of  its  staff  compliment  to  be  able  to  raise  the 
necessary flags when they detect possible cases of fraud. 

NL  The use of IT options varies per fund.  

The European Social Fund (ESF) in the Netherlands wants to use ARACHNE. The first 'pilot’ to determine whether ARACHNE offers the ESF in 
the Netherlands added value has been completed successfully. A second 'pilot’ is now on-going, in which a number of sample cases are being 
used to determine how a work instruction should inform staff.  

The  ERDF  is  investigating  ARACHNE’s  suitability  since  not  all  Member  States  are  already  using  or  adopting  this  instrument  as  yet.  The 
Netherlands is also actively preparing a new fraud register incorporating some ARACHNE functions. The European Maritime and Fisheries Fund 

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(EMFF) does not use ARACHNE.  

For  years,  the  IMS  system  has  been  used  by  the  Netherlands  to  report  irregularities  to  OLAF  and  in  practice  is  only  used  for  this  purpose. 
Historical  data  for  new  project  audits  are  recorded  differently.  The  ERDF,  the  Fisheries  Fund  and  the  Agricultural  Funds  efficiently  use  IMS 
version 5 as a matter of routine. For the 2014-2020 programming period we are producing an ‘irregularities roadmap’ integrating the IMS user 
instruction with definitions and criteria for notifications. 

The audit authority runs the Fraud Risk Assessment tool prior to the designation audit. This has resulted in a number of additional measures, such 
as:  

The program is required to run up until the monitoring phase of a number of projects. So far no suspected fraud has been detected. We are unable 
therefore to provide examples. The ERDF runs the Fraud Risk Assessment tool at least twice a year. The mid-2015 assessment was discussed in 
2016; a follow-up is planned in 2017. 

The EMFF uses a totally new ICT system: the implementation platform (IP). This system’s design, which includes automated follow-up action, 
substantially reduces the risk of error and streamlines the audit process. The EMFF is also now using a risk-analysis list that records identified 
risks which it then follows up and acts upon. As the IP application has only been in use for a short time to compile the risk-analysis list, it is too 
early to provide information on the impact of these instruments. 

AT  No Information Provided 

PL 

- 
With  regard  to  the  IT  tools  adopted  by  the  competent  institutions  to  assist  with  planning  and  managing  audits  and  controls,  all  the 
competent national institutions use the IMS. Information on any irregularities is used in risk analysis, as they constitute one of the possible risk 
factors. 

- 
The  Fraud  Risk  Assessment  Tool  provided  by  the  Commission  is  used  to  directly  implement  operational  programmes  for  European 
Structural and Investment Funds (ESIF). If an institution decided to not use this tool, it would need to introduce appropriate organisational tools, 
e.g. by creating risk registers (documents constituting the end product of the risk management process in the individual entities and institutions 

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involved in implementing the programme). Furthermore, some institutions use other IT tools, such as solutions provided by economic intelligence 
services,  databases  for  analysing  information  on  tender  procedures  for  roads  and  railways  for  warning  signs  of  collusive  bidding  or  risk 
assessment spread sheets as an element in the method for sampling projects for audits. The Arachne financial fraud risk scoring tool is currently 
being  tested  by  some  institutions.  The  result  of  this  testing  should  help  Poland  to  evaluate  the  tool  in  practice.  Irrespective  of  such  tools,  a 
Competition  Database  is  used  in  all  ESIF  programmes;  this  IT  tool  should  ensure  compliance  with  competition  rules  regarding  eligible 
expenditure for the European Regional Development Fund (ERDF), European Social Fund and Cohesion Fund (CS) in the period 2014-20. 

With  regard  to  the  CAP  and  the  use  of  efficient  IT  tools  to  combat  fraud,  the  competent  institutions  use  dedicated  applications  and  registers, 
always  in  response  to  the  needs  they  have  identified.  Suitable  mechanisms  for  combating  fraud  use  the  methodology  set  out  in  DG  REGIO’s 
study Cover note on financial fraud risk assessment and efficient and proportional measures for combatting financial fraud. The accreditation 
criteria  set  out  in  Annex  I  to  Commission  Delegated  Regulation  (EU)  No  907/2014  and  the  designation  criteria  set  out  in  Regulation  (EU) 
223/2014 of the European Parliament and of the Council, including the requirements to implement effective measures to combat financial fraud, 
are  also  applied  to  risk  analysis.  The  above  guidelines  should  be  taken  into  account  when  carrying  out  audits  and  controls,  both  for  the  risk 
analysis required preparing the annual CAP audit plan and for the risk analyses and planned assurance tests required to carry out the audit tasks 
covered by the accreditation and designation criteria. 

PT  The  methodology  applied  for  the  selection  of  the  sample  of  operations  audited  by  the  separate audit  unit  of  the  Development  and  Cohesion 
Agency (AD&C) complies with the principles set out in Article 28 of Commission Delegated Regulation (EU) No 480/2014 of 3 March 2014, 
which provides for the adoption of a statistical sampling method ensuring a random selection of sample items. 

However, for the purposes of the audits  data are always collected with a view to analysing the underlying  risk, namely from the IMS and the 
information system regarding the suitability, reliability and debt of the beneficiary entities. This information system aims to provide the various 
parties concerned with a tool for detecting early warning signs (red flags) and indicators of fraud. 

The information on the suitability, reliability and debt of the beneficiaries of ESI funds is kept in a dedicated information system which supports 
the activities of all entities receiving assistance under Portugal 2020. 

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The purpose of the suitability, reliability and debt codes is to identify situations where there is a particular risk of the principle of sound financial 
management being violated. This is the guiding principle of the ESIF co-financing system, which justifies blocking access to these funds during a 
specific period of time or tighter control by the Managing and Auditing Authorities. 

As regards the European Agricultural Fund for Rural Development (EAFRD) (CAP) and the European Maritime and Fisheries Fund (EMFF), the 
Financial Institute for Agriculture and Fisheries of Portugal (IFAP) reports the development and implementation of anti-fraud measure, which are 
systematised and summarised in the chart in ANNEX I, the emphasis this financial year being on: 

 

the consolidation and improvement of functionalities requiring beneficiaries to declare any special relations when submitting payment claims 
under  EAFRD Investment.  If  this  is  the  case,  the  claims  are  examined  in  order  to  assess  the  reasonableness  of  any  costs  related  to  such 
situations; 

  consolidating and improving the system for verifying the reliability of beneficiaries within the framework of the investment; 
  drafting of a new standard for the management of debtors (with a greater focus on fraud and communication of irregularities to OLAF). 

With  regard  to  the  EMFF,  it  should  also  be  noted  that  the  process  of  describing  the  management and  control  systems  of  the  MA  and  CA  is 
currently on-going. 

RO  The key elements in preventing and combating irregularities and fraud at the level of managing authorities (MA), and in the process of identifying 
and assessing risks (including the risk of fraud), are the design and implementation of internal control systems, together with effective measures 
to  detect  and  report  irregularities  and  fraud  through  the  use  of  IT  systems  and  tools  in  the  process  of  managing  European  funds,  in  order  to 
identify non-conformities and patterns of fraud, such as ARACHNE, the Fraud Risk Assessment Tool and AFIS-IMS. In this respect, the majority 
of managing authorities use IT systems such as ARACHNE, the Fraud Risk Assessment Tool and AFIS-IMS. 

The ARACHNE IT tool has been used successfully by, for example: the Managing Authority for the Competitiveness Operational Programme 
(MA  COP)  in  the  process  of  verifying  the  classification  in  the  SME  category  of  projects  under  Priority  Axis  I  –  SOP  IEC,  carried  out  by 
beneficiaries, through the consultation of databases on the ownership of commercial and public companies, as well as natural and legal persons 

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associated  with  commercial  companies,  thus  reducing  the  error  rate  in  the  use  of  EU  funds  and  ensuring  the  legality  and  regularity  of  the 
expenditure certified. 

The  audit  authority  plans  and  guides  its  audit  activities  in  accordance  with  the  requirements  laid  down  in  the  European  regulations  for  each 
funding programme audited. The planning of audit activities is generally based on a risk assessment which makes it possible to focus audit checks 
on areas exposed to a high risk of irregularity/fraud, and specific audit procedures can be established to reduce risks. 

In accordance with the Commission’s Guidance note on a common methodology for the assessment of management and control systems in the 
Member States (EGESIF_14-0010-final) and the Commission's Guidance note on fraud risk assessment and effective and proportionate anti-fraud 
measures (EGESIF_14-0021-00), the audit authority assesses annually, as part of the system audit, Key requirement 7 – effective implementation 
of  proportionate  anti-fraud  measures,  at  the  level  of  the  main  national  authorities  responsible  for  the  management  of  European  funds.  On  that 
occasion,  the  audit  authority  assesses  the  quality  of  the  fraud  risk  assessments  carried  out  at  the  level  of  managing  authorities,  using  the 
ARACHNE  IT  system,  in  accordance  with  the  internal  procedural  provisions  of  those  managing  authorities.  This  contributes  to  the 
operationalisation of the management checks. Furthermore, the impact of the use of this IT tool in detecting and correcting fraud at management 
authority level can be assessed.  

During the system audit, an assessment is also made of how the responsible national authorities use the Fraud Risk Assessment Tool, provided by 
the Commission as an Annex to its Guidance note on fraud risk assessment and effective and proportionate anti-fraud measures (EGESIF_14-
0021-00). 

According to the results of the audit checks carried out, the audit authority can make recommendations to the responsible authorities to improve 
the  use  of  these  IT  tools,  with  a  view  to  enhancing  the  prevention,  detection  and  penalising  of  irregularities  and  to  ensure  that  the  European 
Union’s financial interests are protected. 

In addition to these IT tools, managing authorities also use IT tools, e.g.: the Directorate for Control and Anti-fraud, within the Agency for the 
Financing of Rural Investments (AFIR), carries out sample checks of projects, including checks from the submission of the funding request to the 

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finalisation of the project (ex-ante) and during its monitoring period (ex-post). The sample consists of a segment of subjects identified according 
to predetermined criteria with a well-defined objective based on the risk assessment method. 

Check samples of the Directorate for Control and Anti-fraud: 

Control of projects in the process of implementation, for projects contracted under investment measures (sample to be selected throughout 

a) 
the year, taking account of the following considerations): 

- 

based on the types of irregularity identified in the quarterly information notes drawn up by DCA-SCOE on the main types of irregularities; 

- 
After receiving DG AGRI’s report on the management, control and penalty system for investment measures under NRDP 2014-2020 or 
relating to NRDP 2007-2013 where they are taken over in accordance with Chapter 19 of NRDP 2014-2020, in the event that certain types of 
irregularities are identified for funding measures, the DCA will draw up a sample for checking, comprising at least the same number of projects as 
those checked by DG AGRI in the field, for the same measures. The projects to be included in the sample will be selected according to the same 
algorithm  used  by  DG  AGRI  when  determining  the  sample  to  be  checked  during  that  mission.  The  aim  of  this  action  is  a  broader  check  of 
projects,  in  order  to  anticipate  the  scale  of  the  irregularities  found  and  the  possible  financial  impact.  Projects  taken  over  in  accordance  with 
Chapter 19 of NRDP 2014-2020 will be identified in the sample control plan by the new project code allocated following the change to NRDP 
2014-2020. 

ex-post control, sample of at least 1 % of the total value of the eligible expenditure settled in relation to projects contracted and finalised 

b) 
under investment measures, selected on the basis of the risk assessment method, to which randomly-selected projects are also added. 

Furthermore, AFIR’s Internal Audit Directorate uses its own methodologies developed internally to analyse and evaluate those  risks, including 
the identification of fraud risks associated with its own planning and assessment activities, carried out both in order to identify auditable areas 
with  high  risk  (strategic  and  annual  internal  audit  planning)  and  in  order  to  identify  risks  associated  with  areas  actually  audited  during  the 
missions carried out. 

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Also,  to  assist  in  the  performance  of  the  risk  assessment  and  the  selection  of  the  sample  of  operations  to  be  checked  during  internal  audit 
missions, AFIR-DAI has used, and still uses, a CAAT tool (Computer assisted audit techniques) and IBM SPSS (Statistical Package for the Social 
Sciences). Furthermore, AFIR-DAI is in the process of analysing internally and testing the use of ‘open source’ tools, such as VERINICE (tool 
developed to support the analysis and evaluation of risks associated with information security). 

Furthermore, the National Integrity Agency (ANI) supported the design and implementation of the ‘PREVENT’ system, the purpose of which is 
reflected in its name, i.e. to prevent corruption. The general purpose of the mechanism is to prevent conflicts of interest in the award of public 
contracts  through  the  introduction  of  ex-ante  checks  in  situations  which  could  cause  conflicts  of  interest  in  the  electronic  public  procurement 
process, so that they can be eliminated without affecting those procedures. 

This system has been implemented following the Commission’s recommendations in the CVM report on protection against conflict of interest in 
the management of public funds. In Romania and in many other countries, public procurement is prone to corruption because of the custom of 
awarding public contracts to companies owned by family members of local public officials. 

The Government has therefore adopted a memorandum which has enabled the ANI to implement an integrated IT system to prevent and identify 
conflicts of interest (PREVENT). 

The contracting authority is obliged to fill in the relevant data and information for the decision makers in the authority and tenderers each time a 
procurement procedure is opened and at the time of the submission of bids.  The type of information is entered in a new form - the integrity form - 
which will be available in SEAP. 

Furthermore,  the  integrity  form  must  be  uploaded  to  the  PREVENT  system,  where  several  databases  of  relevant  systems  (the  Commercial 
Register, personal IDs, assets/interests declared etc.) will work together to carry out an intelligent analysis of the data, with a view to detecting 
any potential conflict of interest. If a potential conflict of interest is identified, an integrity warning is issued to the head of the local authority in 
question, which must take measures to eliminate the party (or parties) with a conflict of interest. 

The ANI will continue to monitor the integrity warnings issued and, if no action is taken, it will be able to establish a conflict of interest or to 

173 

 
 
notify other competent authorities (e.g. the National Anti-corruption Directorate, the Anti-fraud Department etc.). 

This  innovative  ‘business  intelligence’  solution  in  which  multiple  databases  work  together  in  an  integrated  system  makes  a  significant 
contribution to effectively preventing conflicts of interest in a public procurement market of approximately EUR 17 billion. 

Law No 184/2016 establishing a mechanism for preventing conflicts of interest in the award of public procurement contracts was promulgated by 
the President of Romania on 17 October 2016 and was published in the Official Gazette of Romania, Part I, No 831, on 20 October 2016. 

Part 1: reply from the Agency for Agricultural Markets and Rural Development of Slovenia (AKTRP) 

SI 

The  Control  Unit  (Služba  za  kontrolo)  uses  the  information  on  cases  reported  through  the  IMS  in  order  to  select  applications  for  on-the-spot 
controls under different measures. Every year template applications for control are designed  under different measures both for random controls 
and those based on risk factors. As a rule, one of the principal risk factors is the one based on the list of applications reported through the IMS. 

Part 2: reply from the Government Office for Development and European Cohesion Policy (provided in EN) 

The  MA  and  IB  have  prepared  fraud  risk  self-assessment,  Strategy  MA  for  the  development  of  an  anti-fraud  on  the  area  of  cohesion  policy, 
training of the members of MA on the area of frauds (with help of police). For the purpose of on the spot verifications the MA has prepared risk 
analysis, based on different indicators (depending on found, on beneficiary…) which could be amended, changed in later stages, according to the 
findings of the management verifications, audits… Regarding possible use of Arachne tool Slovenia (Investment for growth and jobs) is currently 
in a reflexion phase.  

SK  THE CENTRAL CONTACT POINT FOR OLAF 

The  Central  Contact  Point  for  OLAF  quarterly  reports  the  irregularities  through  the  IMS.  Pursuant  to  the  Commission  Regulation  (EC)  No 
1828/2006  of  8  December  2006  setting  out  rules  for  the  implementation  of  Council  Regulation  (EC)  No  1083/2006  laying  down  general 
provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund  and  the  Cohesion  Fund  and  of  Regulation  (EC)  No 
1080/2006 of the European Parliament and of the Council on the European Regional Development Fund, to Slovak Republic has the obligation to 

174 

 
 
 
 
 
report all irregularities to the Commission: 

- which financial impact for EU source exceeds EUR 10 000, -EUR and which have been subject of a primary administrative or judicial finding, 

- which has shown the "suspicion of fraud" within the meaning of the Convention, 

- which expected consequences outside the Slovak Republic, 

- which indicated new methods and new practices of committing fraud.  

ARACHNE 

Currently, Slovak national authorities incorporate the Guidelines on ARACHNE system to national legislation. 

THE MINISTRY OF FINANCE OF THE SR 

The Ministry of finance of the SR is under national legislation the Certification authority. According to competencies, which arise to Certification 
Authority from the Art. 126 of the regulation (EU) No 1303/2013 of the European Parliament and of the Council of 17 December  2013 laying 
down  common  provisions  on  the  European  Regional  Development  Fund,  the  European  Social  Fund,  the  Cohesion  Fund,  the  European 
Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund and laying down general provisions on the European 
Regional  Development  Fund,  the  European  Social  Fund,  the  Cohesion  Fund  and  the  European  Maritime  and  Fisheries  Fund,  the  Certification 
authority plans to use Arachne tool in relevant cases to browse and analyse data in order to identify possible fraud risk, irregularities and on-going 
investigations during the certification of expenditures to European Commission.  

The Ministry of finance of the SR is the audit authority in the SR. Risk assessment is a basic element for determining the priorities of the planned 
audit activities based on an objective analysis of the risk factors of the Management Control System (hereinafter “the MCS”)  at the level of all 
management and control authorities: 

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• 

• 

at the strategic level (authorities covering horizontal areas), and 

at the programme level, i.e. those covered by system audits . 

Basic rules for the risk assessment: 

all  bodies  involved  in  the  MCS  are  subject  to  an  annual  risk  assessment,  whereas  the  risk  assessment  is  carried  out  for  each  authority 

• 
separately, 

the  risk  assessment  is  performed  on  an  annual  basis  usually  by  15th  January,  whereas  the  risk  assessment  concerns  the  previous 

• 
accounting year. 

Based on the risk assessment, an indicative plan of system audits (for the entire programming period 2014 – 2020), a plan of system audits (3-year 
rolling plan) and an annual plan of system audits is developed. 

The risk assessment is not carried out for the AA, as the AA cannot audit its own processes. An independent audit body can perform the audit of 
the AA, if needed. 

Connecting Risk Assessment Results to the System Audit Plan 

The AA shall create a plan of system audits based on the results of the risk assessment in 2 steps:  

1. Determining in which year within the 3-year plan of system audits, a system audit of an authority/body should be performed.  

2. Determining the areas of the system audit based on the evaluation of the MCS of the assessed authority/body (if relevant). 

Ad 1/ Determining in which year of the 3-year plan of system audit, a system audit of an authority/body should be performed  

Within  the  3-year  plan  of  system  audits,  authority/body  with  higher  risk  level  is  prioritised  time-wise  for  the  performance  of  a  system  audit 

176 

 
 
compared with authority/body with lower risk level.  

Ad 2/ Determining the focus areas of the system audit 

The  areas  for  the  performance  of  the  system  audit  shall  only  be  determined  for  the  authority/body  at  the  programme  level  –  the  Management 
authorities, Controller(s), Certification authority and IS administrators – by aiming at the specific area of the MCS (hereinafter “the KR”) that was 
assigned with the highest risk level by assessing the control risk, i.e. medium and high risk level.   

For other authorities/bodies such as the Central Coordination Authority, CCP OLAF and others, given their specific role in the assessment of the 
MCS, all KRs of each authority/body will be audited as a part of the system audit. 

THE SUPREME AUDIT OFFICE OF THE SLOVAK REPUBLIC 

Within planning the audit activities the Supreme Audit Office of the Slovak Republic uses the risk analysis and catalogue of the risks, which is 
updated  annually.  During  preparation  of  the  audit  to  be  carried  out  at  an  entity,  the  inherent,  control  and  detect  risks  are  assessed  (and  re-
assessed). 

Except of MS Excel, in the risk-assessing process, the Supreme Audit Office of the Slovak Republic uses also its own specialised information 
system (Audit Information System) that includes the tools risks identification and risks assessment. The IT tool provides a support for strategic 
and annual planning. 

The Supreme Audit Office of the Slovak Republic used the ARACHNE System during the execution of audits in 2016. As of today the tool is not 
full operation and it is missing full support at the national level. 

THE SLOVAK AGRICULTURAL PAYING AGENCY 

Each  year  the  Slovak  Agricultural  Paying  Agency  elaborates  yearly  plan  of  internal  audits  and  ex-post  controls  on  the  basis  of  risk  analysis. 
Internal  Audit  Department  evaluates  all  relevant  risk  factors  for  all  significant  areas  and  selects  areas  for  auditing  and  ex-post  controls  in  the 

177 

 
 
current year. One of the main risk factors is risk of fraud. In addition, within the preparation of each audit the relevant risk factors including risk 
of fraud are taken into account.   

They have to stress that the Agricultural Paying Agency currently does not use any IT tool for internal audits planning. 

FI 

The Managing Authority of the Structural Funds is considering the use of Arachne as a tool for fraud risk assessment. The Arachne is currently 
being tested with national data from the Structural Funds and it will be decided later on, if the Managing Authority will start permanently using 
the system. 

SE 

Swedish Customs uses three national IT-systems, called TDS Spärr, Selection of the flow of goods SIV and LEGO, to help select information in 
the import-, export- and transit-declarations and the manifests.  

ISF: Due to the early stage of ISF, no experiences regarding detecting fraud or irregularities can yet be presented. 

ESF and FEAD: The report drawn up when preparing each project application contains questions aimed at ensuring that the applicant is liquid, is 
not bankrupt and has administrative and financial capacity. The report also assesses the applicant’s capacity to make competitive purchases. A 
risk assessment plan is also drawn up for each project. The preventive work is carried out in the risk assessment plan. The plan also identifies a 
number  of  different  risk  areas,  which  are  each  assessed  in  turn.  The  risk  areas  are  identified  based  on  experience  from  audits  and  on  the 
Commission’s requirements. The risk areas are therefore identified on the basis of risk and materiality. 

An  examination  report  based  on  the  risk  assessment  plan  is  also  drawn  up  for  each  payment  application.  This  report  identifies  what  is  to  be 
examined and how based on the risk level selected in the risk assessment plan. It also describes any measures to be taken. The risk assessment 
plan can be updated after each payment application if the reviewer considers that the risk profile has changed.   

On-the-spot checks are also carried out, and special procedures have been established for these. On-the-spot checks must be carried out at least 
once per project, and are based on the costs for which the beneficiary requested aid. The on-the-spot check must be carried out when the project is 
in full swing both operationally and financially, and must complement the administrative check. 

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In addition, a self-assessment group at the authority analyses every year the risk that the authority will fall victim to fraud. The group works on 
the basis of the Commission guidance EGESIF_14-0021 on fraud risk assessment and effective and proportionate anti-fraud measures. 

ERDF: The Swedish Agency for Economic and Regional Growth has an IT system called NYPS. It also has a team tasked with developing an 
anti-fraud policy aimed at preventing, detecting and stopping fraud in accordance with Article 125(4)(c). The team has drawn up an anti-fraud 
strategy and action plan which will be adopted in the near future. The strategy will be revised every other year and the action plan every year. The 
Nyps 2020 system has a number of in-built checks to prevent fraud.  

Example of a check: Procedure for checking and recording the payment method for a project in Nyps 2020 

The  case  officer  enters  the  organisation’s  number,  its  SSEL  number,  the  Nyps  ID  and  the  company’s  name  together  with  the  desired  bank  or 
postal giro account number. Note that bank account numbers are not accepted. The data controller searches the organisation in Nyps 2020 and 
checks the bank giro account number against www.bankgirot.se. They ensure that, according to the bank transfer centre [bankgirocentralen], the 
bank giro account number corresponds to the organisation’s number and company name. The same procedure is followed for plus giros, but the 
search is made on http://www.plusgirot.se/.  

Rural  Development  Fund,  Guarantee  Fund  and  Fisheries  Fund:  Every  year  the  Board  of  Agriculture  prepares  risk  analyses  for  the  areas  it  is 
responsible for. Identifying and assessing the risk of fraud is one of the parameters in its risk assessment and identification. In addition, the Board 
has developed a separate risk analysis (not yet adopted) for fighting fraud for use by the bodies that develop risk analyses. 

AMIF:  The  Funds  department  carries  out  the  mandatory  administrative  checks  (desk  checks)  for  each  payment  application  submitted  by  the 
beneficiaries  each  quarter.  A  risk  assessment  model  is  used  to  determine  whether  extended  administrative  checks  and/or  on-the-spot  checks 
should be carried out for each project, and a risk assessment plan is drawn up for each project. Four risk areas are identified in this risk assessment 
model: operational implementation capacity, target group, administrative implementation capacity and the purchase of goods and services. These 
risk areas are identified so that the measures and examinations focus on the most at-risk areas. Depending on the selected level of risk, different 
types of checks (extended checks or on-the-spot checks) are carried out. The risk level also determines how in-depth the checks will be. The risk 
assessment tool is also flexible in that it is often possible to adapt the measures to the individual circumstances of the project. In this way, the 
Funds department is able both to prevent and detect irregularities because it carries out regular and rapid checks on every beneficiary and every 

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project.  

The SEFI Council’s Guidelines for the handling of suspected crime in connection with the management of EU funds is used as the basis and a 
tool for assessing whether certain actions should be treated as a suspected crime. The Funds department is currently working  on developing an 
anti-fraud strategy and a procedure for dealing with fraud.  

Each  payment  is  certified  by  at  least  two  mutually  independent  bodies.  Information  on  the  bank/postal  giro  number  and  the  recipient’s 
organisation  number  are  checked  against  the  Swedish  Companies  Registration  Office  records  to  ensure  that  the  beneficiary  is  correct.  No 
payments can be made to beneficiaries that are not in the Agresso register of suppliers.  

There are no examples of detected irregularities and/or fraud because the AMIF projects started late and only one application for payment has 
been submitted and checked. 

UK  The recommendation is broadly welcomed by UK Managing Authorities. The tools mentioned in the recommendation are used across different 
UK Managing Authorities, though Gibraltar use a different system which has specifically been designed to take the small programme size and the 
limited amount of projects into consideration.  They will therefore not be using the Commission tools as and they feel that they already have an 
effective system in place. For those MAs that were using the tools, they were broadly considered positively, though did have some concerns (see 
below). 

The tools used by each Managing Authority are as follows: 

Tool 

MAs currently using tool 

Comments 

ARACHNE 

ERDF  and  ESF  Northern 
Ireland 
(Northern 
Ireland 
Executive),  ERDF  and  ESF 

Department  for  Work  and  Pensions  (DWP)  and  Department  for  Communities 
and  Local  Government  (DCLG)  are  not  currently  utilising  ARACHNE,  but 
have plans to implement it upon release of a new version of the tool. 

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Scottish  Government  is  also  investigating  the  implementation  of  ARACHNE, 
with a planned introduction later in 2017. 

IMS 

Fraud  Risk  Assessment 
Tool 

Wales (Welsh Government) 

ESF  England  (DWP),  ERDF 
England  (DCLG),  Scottish 
Government, 
Northern 
Ireland  Executive,  Welsh 
Regional 
Government, 
Development  Programme  for 
England (RDPE)  

(DCLG), 
ERDF  England 
ESF 
(DWP), 
England 
Northern  Ireland  Executive, 
Scottish  Government,  Welsh 
Government 

ESF  England  (DWP)  had  some  concerns  with  ARACHNE  v1,  noting  that  the  system  requires  further  refinement  for  searches,  and  that 
ARACHNE produces red flags if a beneficiary has more than one project, but which does not necessarily mean there has been a conflict.  Welsh 
Government are fully utilising ARACHNE, though feel that the ARACHNE tool could cater more widely for voluntary sector organisations and 
other small organisations.  

IMS  was  in  use  across  all  of  the  UK  Managing  Authorities,  with  Northern  Ireland  commenting  that  the  recently  launched  update  showed 

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improvement  in  user  friendliness,  and  welcomed  that  it  allowed  MS  users  to  close  irregularities  without  having  to  submit  them  for  OLAF 
permission to proceed. They also noted that the Commission’s support team for the software had proved helpful and efficient.  

The  Fraud  Assessment  Tool  had  been  adopted  across  the  UK  MAs,  and  it  seems  to  be  valuable  in  identifying  risks  and  controls  in  the 
management of the programmes. The use of pre-populated templates helps with full consideration of potential risks, but could limit tailoring to 
local needs. There may be a case for including less pre-defined risks and controls in the tool itself to encourage this.  

In answer to the systems and tools used to perform a risk analysis, most of the MAs and DAs have their own audit strategies.   DWP utilise the 
Fraud  Risk  Assessment  Tool.    Whiles  Scotland  have  a  Management  and  Control  System  in  place  that  includes  processes  for  setting  levels  of 
management and administrative verification and relate these to their risk mechanism.   

182