REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Mid-Term evaluation of the Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 establishing a programme to promote activities in the field of the protection of the financial interests of the European Union (Hercule III programme) and repealing Decision No 804/2004/EC
Date: 2018-01-10
Institutions: European Anti-Fraud Office, European Commission
Subjects: EU financing, EU programme, cross-border cooperation, economic offence, financial control, fraud, fraud against the EU, general budget (EU), illicit trade

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 10.1.2018  COM(2018) 3 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Mid-Term evaluation of the Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 establishing a programme to promote activities in the field of the protection of the financial interests of the European Union (Hercule III programme) and repealing Decision No 804/2004/EC {SWD(2018) 3 final}  
 
 
1.  Introduction 

The European Commission is currently conducting a reflection about the type of budget that 
is needed for the Europe of the future1. An efficient and proper spending of the Union budget, 
including in the Member States, is a key element in building trust of the EU citizens and to 
boost the strength and added value of the European project. The Hercule programme fits that 
agenda as it is specifically dedicated to protecting the financial interests of the EU.  

The  current  Hercule  III  programme,  which  is  administered  by  the  European  Anti-Fraud 
Office  (OLAF)  within  the  Commission,  was  established  by  Regulation  250/20142  (‘the 
Regulation’). The general objective of the programme is 'to protect the financial interests of 
the  Union  thus  enhancing  the  competitiveness  of  the  Union's  economy  and  ensuring  the 
protection  of  taxpayers'  money'3,  whereas  the  programme's  specific  objective  is  'to  prevent 
and combat fraud, corruption and any other illegal activities affecting the financial interests 
of the Union'4.  

The  Regulation  requires  that  the  Commission  carries  out  a  mid-term  evaluation  of  the 
programme (Article 13, paragraph 2(a)). The Commission services prepared a Staff Working 
Document (SWD) on the mid-term evaluation of the Hercule III programme that contains the 
evaluation's  detailed  findings.  As  the  Regulation  requires  an  independent  assessment,  the 
SWD  was  supported  by  a  study  carried  out  by  an  external  contractor.  The  evaluation's 
detailed findings and the methodology employed are described in the SWD. 

In the light of the requirements of Article 13 of the Regulation and the Commission’s Better 
Regulation Agenda, the evaluation assesses six areas – relevance of all the objectives of the 
programme; internal and external coherence of the programme with other EU interventions; 
effectiveness  in  attaining  its  objectives  and  expected  results;  the  efficiency  of  the  use  of 
resources; the programme's EU added value; and sustainability, i.e. the effects of Hercule III 
actions  after  their  completion.  The  evaluation  also  touches  upon  the  programme’s 
contribution to the Union’s priorities of smart, sustainable and inclusive growth. 

The  time  period  covered  by  the  evaluation  is  the  first  half  of  the  seven  year  period  that 
Hercule  III  programme  lasts  for,  starting  on  1  January  2014  (when  the  Regulation  entered 
into force) until June 2017. 

2.  Key elements of the Hercule III programme 

The  Hercule  III  budgetary  envelope  amounts  to  EUR  104.9  million  over  the  period  2014-
2020. The eligible beneficiaries5 of the programme are national or regional administrations of 

Regulation (EU) No 250/2014 of the European Parliament and of the Council of 26 February 2014 

European Commission, Reflection Paper on the Future of EU Finances, COM(2017) 358 of 28 June 

1  
2017. 
2  
establishing a programme to promote activities in the field of the protection of the financial interests of the 
European Union (Hercule III programme) and repealing Decision No 804/2004/EC, OJ L 84 of 20 March 2014. 
3  
4  
5  

Article 6 of Regulation (EU) No 250/2014. 

Article 4 of Regulation (EU) No 250/2014. 

Article 3 of Regulation (EU) No 250/2014. 

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Member States and research bodies, as well as educational institutes and non-profit-making 
entities. 

The programme is implemented on the basis of annual cycles according to work programmes 
which are adopted by the Commission. Hercule III provides financial support for (i) technical 
assistance  (at  least  70%  of  the  programme's  budget)  for  actions  such  as  the  purchase  of 
technical  equipment  and  information  technology  tools,  the  promotion  of  cross-border 
cooperation  and  support  of  joint  operations,  staff  exchanges,  and  the  development  and 
provision of access to databases for Member States and OLAF, (ii) training (maximum 25% 
of  the  programme's  budget)  for  actions  such  as  conferences  and  seminars  to  ensure  cross-
border  exchange  of  experience  and  best  practices,  digital  forensics  training,  and  the 
development of high-profile research activities and studies, and (iii) any other action that falls 
within  the  programmes’  remit  (not  more  than  5%  of  the  budget).  The  programme  provides 
financial support in the form of grants,  public procurement contracts  and reimbursement of 
the costs incurred by the participants to the activities. 

3.  Mid-term evaluation methodology  

To  perform  the  mid-term  evaluation,  the  Commission  services  relied  primarily  on  the 
external  contractor’s  study,  as  well  as  the  impact  assessment  carried  out  at  the  time  of  the 
legislative proposal for the programme, the Commission’s evaluation of the previous Hercule 
programme,  the  annual  work  programmes  of  Hercule  III,  and  the  annual  overviews  on  the 
implementation of the programme that are prepared by the Commission and annexed to the 
Commission annual report on the protection of the Union's financial interests6. 

The work on the mid-term evaluation started in June 2016. An Inter-Service Steering Group 
(ISSG) of Commission services was set up to support the evaluation process. It reviewed the 
roadmap,  the  terms  of  reference  for  the  external  contract,  the  inception  and  the  end-of 
fieldwork reports. The ISSG was also closely involved in the preparation of the SWD. 

The scope of the mid-term evaluation covers the interventions supported under the Hercule 
III  programme  as  well  as  the  preparatory  and  implementing  activities  undertaken  by  the 
stakeholders for these interventions. It also covers those applications for grants submitted by 
potential beneficiaries, which remained unsuccessful. 

The  external  study  relied  upon  primary  data  sources  to  reply  to  the  evaluation  questions 
collected  via  (i)  interviews  of  EU  and  national  civil  servants,  as  well  as  of  beneficiaries  of 
actions funded under the programme and (ii) online surveys with beneficiaries, unsuccessful 
applicants,  participants  in  events  funded  under  the  programme,  as  well  as  users  of  services 
procured  under  the  programme.  Secondary  data  were  also  used,  such  as  publicly  available 
sources (e.g., the Hercule III annual work programmes) and submitted applications for grants 
and awarded contracts and grants as well as final reports submitted by beneficiaries. 

The timing for the external study entailed some limitations mainly related to the normal life-
cycle  of  the  programme.  This  was  reflected  in  the  instruments  that  could  be  used  by  the 
external  evaluator  who  had  to  rely  to  a  large  extent  on  the  opinions  expressed  by 
beneficiaries, applicants, participants, and Commission staff. This is because by the time the 

6  
COM(2017)383 final. 

Protection  of  the  European  Union’s  financial  interests  —  Fight  against  fraud,  2016  Annual  Report, 

2 

 
 
 
                                                            
data  collection  and  the  interviews  were  carried  out,  that  is  mostly  in  2017,  relatively  few 
results were available7. This limitation was particularly felt for Technical Assistance actions. 
However, because the interviewees arguably account for a large sample of the programme's 
stakeholders, the external study’s results are deemed robust enough. 

4.  Main findings of the mid-term evaluation 

The  drivers  behind  the  Commission's  proposal  for  the  Hercule  III  programme  are  still 
prevalent  today,  in  particular  the  occurrence  of  fraud  to  the  EU  financial  interests.  Against 
that background, the external study demonstrated that the specific and operational objectives 
of,  and  activities  under,  the  programme  continue  to  be  relevant.  The  supported  technical 
assistance and training actions are considered to be relevant by the interviewed beneficiaries. 
A few specific actions, such as the purchase of services to store and destroy seized cigarettes 
and  other  counterfeit  goods,  or  the  funding  of  scientific  publications  were  found  to  be  less 
relevant to fulfilling their missions in relation to the protection of the EU’s financial interests. 
This  finding  is  largely  explained  by  the  fact  that  these  actions  target  a  narrow  group  of 
possible participants and, consequently, the bulk of the participants do not see their relevance.  

Some beneficiaries suggested a few ideas of possible additional operational objectives which 
would  improve  the  relevance  of  the  programme,  in  particular  in  the  areas  of  cross-border 
cooperation  between  Member  States,  cooperation  with  non  EU  partners,  as  well  as  new 
technological developments. To what extent these ideas are shared by the other stakeholders 
was not tested within the external study. Their value is therefore limited. However, they are 
coherent  with  the  Commission’s  experience  in  implementing  the  programme  and  the 
direction towards which the Commission has started steering the programme over the last few 
years. 

The  evaluation  showed  that  the  internal  and  external  coherence  of  the  programme  was 
ensured.  The  external  study  found  that  internal  coherence  is  primarily  ensured  by  the 
allocation of the budget for the period 2014-2020 between the different categories of actions. 
Additionally the Commission, at the selection stage, examines the applications with a view to 
also  prevent  possible  overlaps  and  repetitions.  External  coherence  with  other  Commission 
spending programmes is ensured by the Commission’s internal consultation mechanisms, in 
particular  at  the  stages  of  elaboration  of  the  annual  work  programme  and  of  selection  of 
applications for grants, and in consideration of, primarily, the objectives, types of activities, 
participants  and  beneficiaries  as  defined  in  the  legal  acts  establishing  the  various  spending 
programmes.  These  internal  consultation  mechanisms  allowed  preventing  duplications  and 
overlaps  with  other  Commission  programmes,  eg,  the  Customs  Programme  or  the  Internal 
Security Programmes, as well as strengthening existing synergies and identifying new ones.  

The  evaluation  found  that  the  programme  has  been  effective.  The  programme  financed 
actions which, by nature (e.g., by financing scanners to detect smuggled goods, or supporting 
digital  forensic  trainings  to  the  benefit  of  national  services  in  charge  of  investigating  cases 
involving the EU financial interests), clearly contributed to the protection of the EU financial 
interests. 

With  regards  to  training  activities,  the  external  study  concludes,  on  the  basis  of  the  final 
reports  of  the  actions  and  surveys  of  beneficiaries,  that  they  generated  results  that  were 

7  

The first results were received mid-2016. 

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largely  in  line  with  the  expected  outputs.  Nonetheless,  it  was  found  that  only  few  actions 
involved  staff  exchanges  between  national  administrations  and  few  actions  involved 
international participation. 

With regards to technical assistance, the timing for the evaluation, i.e. early in the life of the 
programme, made it challenging to further substantiate the above finding that the programme 
is effective.  

Among  the  many  external  factors  interfering  with  the  achievement  of  the  programme’s 
objectives, the ability of fraudsters to “adapt quickly to new circumstances at the EU level, 
operate cross-border and exploit the weakest points in the external borders” was perceived 
as the most important. Such external factors tend to harm the financial interests of the EU and 
require  continued  efforts  by  national  authorities  to  combat  and  prevent  fraud.  These  efforts 
are supported, to the extent possible, by Hercule III actions.  

The  evaluation  demonstrated  the  overall  efficiency  of  the  programme  for  both  training 
actions  and  technical  assistance  activities.  In  particular,  the  application  process  does  not 
appear  to  be  too  cumbersome  for  a  large  majority  of  the  programme’s  stakeholders.  Some 
applicants  suggested  alleviating  the  burden  generated  by  the  application  and  reporting 
processes, for instance by reducing the amount of requested information or increasing the use 
of IT tools for the application process. Most of these suggestions are currently in the process 
of being addressed since the Commission, in 2017, started using  an  electronic management 
system  for  the  submission,  processing  and  management  of  grant  applications  under  the 
programme. The improvements brought about by the electronic management system involve 
for  instance  digitalising  the  whole  application  process  and  introducing  the  use  of  digital 
signatures. The electronic system is expected to noticeably alleviate the administrative burden 
and related time and resources spent on the applications in particular. 

The  evaluation  showed  the  EU  added-value  of  the  programme.  The  stakeholders  almost 
unanimously recognised the added value of the programme and its essential  contribution to 
generating benefits.  The  majority  of stakeholders  also considered that the benefits from the 
programme  would  not  materialise  without  the  support  of  Hercule  III  or  equivalent  EU 
funding.  The  actions  allowed  for  a  better  protection  of  the  Union's  external  borders.  The 
programme  is  an  enabler  for  cross-border  cooperation,  in  particular  cross-border  exchanges 
of  information  and  best  practices.  The  evaluation  also  revealed  that  the  programme's 
transparency and reporting requirements contribute to the improvement of the beneficiaries’ 
planning,  monitoring  and  quality  standards  and  to  the  quality  of  the  beneficiaries'  financial 
management in general. 

The  evaluation  concluded  that  the  programme  is  sustainable.  There  is  a  consensus  among 
beneficiaries that the actions funded under the programme will continue producing benefits, 
even  after  their  completion.  This  was  particularly  relevant  for  technical  assistance  actions 
where the deployment of equipment will continue generating results beyond the closing date 
of  the  activity.  It  also  applied  to  training  actions,  where  the  beneficiaries  were  generally 
positive  about  the  lasting  effect  of  networking  and  exchange  of  information  and  best 
practices.  Nonetheless,  a  substantial  number  of  beneficiaries  indicated  that  they  would 
discontinue  the  activities  funded  under  the  programme,  if  it  were  to  be  terminated.  This 
finding  suggests  that  the  discontinuation  of  the  programme  would  impact  the  overall 
protection of the financial interests of the Union. 

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The evaluation found that the Hercule III contribution to smart, sustainable and inclusive 
growth called for by the Europe 2020 strategy is indirect. On the revenue side, it contributes 
to  securing  the  financial  means  necessary  for  the  initiatives  taken  to  achieve  the  strategy’s 
objectives and, on the expenditure side, it contributes to ensuring that these resources are not 
diverted to other ends. In addition, the increased protection of EU external borders supported 
by  the  programme  contributes  to  creating  a  level  playing  field  between  EU  businesses  and 
their  competitors  based  in  third  countries,  which  is  considered  another  important  factor  to 
achieve Europe 2020’s targets. 

5.  Way forward 

The  mid-term  evaluation  has  demonstrated  that  the  Hercule  III  programme,  in  its  current 
form  and  at  this  stage  of  its  implementation,  has  largely  fulfilled  its  mission.  It  has  proven 
relevant,  mechanisms  are  in  place  to  ensure  its  coherence,  and  it  has  been  effective  and 
efficient. There is a clear added-value to have such a programme at the level of the EU, and 
the activities of the programme have been found largely sustainable.  

During  the  external  evaluation  process,  some  ideas  have  been  tabled  of  possible  new 
objectives  and activities for the programme going  forward. These  ideas,  with  the limitation 
that  the  external  study  did  not  test  to  what  extent  they  are  shared  by  a  large  part  of  the 
stakeholders, could feed into the Commission services’ reflection for the next three years of 
the  life  of  the  programme,  in  particular  in  the  areas  of  cross-border  cooperation  between 
Member  States,  cooperation  with  non  EU  partners,  as  well  as  new  technological 
developments.  These  ideas  will  also  feed  into  the  wider  reflection  about  the  support  to 
antifraud  activities  in  the  context  of  the  preparations  for  the  future  multi-annual  financial 
framework post-2020. 

5