COMMISSION STAFF WORKING DOCUMENT Early Detection and Exclusion System (EDES) - Panel referred to in Article 108 of the Financial Regulation Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 29th Annual Report on the Protection of the European Union's financial interests - Fight against fraud - 2017
Date: 2018-09-03
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

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 3.9.2018  SWD(2018) 382 final  COMMISSION STAFF WORKING DOCUMENT Early Detection and Exclusion System (EDES) - Panel referred to in Article 108 of the Financial Regulation Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 29th Annual Report on the Protection of the European Union's financial interests - Fight against fraud - 2017  {COM(2018) 553 final} - {SWD(2018) 381 final} - {SWD(2018) 383 final} - {SWD(2018) 384 final} - {SWD(2018) 385 final} - {SWD(2018) 386 final}  
 
 
Table of Contents 

1. 

INTRODUCTION ....................................................................................................... 2 

2.  THE PANEL ............................................................................................................... 2 

2.1.  The Composition of the Panel ........................................................................... 2 

2.2.  Role of the Panel ............................................................................................... 3 

2.3.  The recommendation of the Panel ..................................................................... 5 

3.  THE  PUBLICATION  OF  SANCTIONS  IMPOSED  ON  ECONOMIC 

OPERATORS .............................................................................................................. 6 

4.  CHANGES BROUGHT BY THE NEW FINANCIAL REGULATION ................... 7 

4.1. 

Increased transparency of EDES rules .............................................................. 7 

4.2.  Additional ground for exclusion and extension of the information to be 

disclosed in the declaration on honour .............................................................. 7 

4.3.  Procedure in front of the Panel .......................................................................... 8 

4.4.  Merger of the specialised financial irregularities panels into the EDES 

Panel .................................................................................................................. 8 

5.  OVERVIEW OF CASES ............................................................................................ 8 

1 

 
 
 
 
 
 
1. 

INTRODUCTION 

The  Early  Detection  and  Exclusion  System  (EDES)  was  set  up  in  2016.  It  ensures  an 
independent and transparent central assessment of contemplated administrative sanctions 
in  the respect of the fundamental rights  of the economic operators concerned1. Articles 
105a to 108 provide for rules that centralise the exclusion process for all EU institutions, 
agencies, offices and bodies. In particular, Article 108(7) establishes an inter-institutional 
Panel  presided  over  by  a  standing  high-level  independent  Chair,  whose  role  is  to  issue 
recommendations  on  administrative  sanctions,  i.e.  exclusion  and/or  financial  penalties 
and,  where  applicable,  the  publication  thereof,  following  a  request  from  an  authorising 
officer  of  EU  institutions,  agencies,  offices  and  bodies.  These  recommendations  are 
addressed to the requesting authorising officers which remain sole competent to take the 
decision to exclude an economic operator and/or to impose a financial penalty on it.  

The  revised  Financial  Regulation2    introduced  changes  to  the  system  are  provisionally 
expected to enter into force on 23rd July 20183. 

This  Staff  Working  Document  presents  the  second  year  of    ivity  (2017)  of  the  EDES 
Panel and the first semester of 2018. 

2.  THE PANEL 

The coherence of the administrative sanctions procedure (i.e. exclusion and/or financial 
penalties and, where applicable, the publication thereof) is ensured by the Panel. 

2.1.  The Composition of the Panel  

As laid down in Article 108(7) of the Financial Regulation, the Panel is composed of: 

-  a standing high-level independent Chair; 

- 

two  permanent  Member  representatives  of  the  Commission  as  the  owner  of 
the system, who express a joint position for the cases submitted to the Panel; 
and 

-  one ad-hoc Member representative of the requesting authorising officer. 

The  Chair  of  the  Panel  and  his/her  Deputy  are  appointed  by  the  Commission  and  are 
independent in the performance of their mandate4. They are chosen from among former 
members of the Court of Auditors, the Court of Justice or former officials who have had 
at  least  the  rank  of  Director-General  in  an  institution  of  the  Union  other  than  the 

1 COM(2014) 358 final of 18.6.2014. 
2 COM/2016/0605 final 
3 see point 4 of this SWD 
4 Article 144(1) subparagraph 2 of Commission Delegated Regulation (EU) 2015/2462 of 30 October 2015 
amending  Delegated  Regulation  (EU)  No  1268/2012  on  the  rules  of  application  of  Regulation  (EU, 
Euratom) No 966/2012 of the European Parliament and of the Council on the financial rules applicable to 
the general budget of the Union (OJ L 362, 31.12.2012, p. 1). 

2 

 
 
                                                 
Commission.  Their  term  of  office  is  five  years  and  is  not  renewable.  The  Chair  is  Mr 
Christian Pennera, former Jurisconsult of the European Parliament and his Deputy is Ms 
María Isabel Rofes i Pujol, former Member of the Civil Service Tribunal of the European 
Union. 

The two permanent Members of the Panel designated by the Commission are Mr. Hubert 
Szlaszewski  designated  ad  personam,  presently  Principal  Advisor  in  the  Secretariat 
General  of  the  Commission,  and  Mr.  Olivier  Waelbroeck,  Director  of  the  Central 
Financial Service in the Directorate-General for Budget5. 

For  each  case,  the  additional  Member  representing  the  requesting  authorising  officer  is 
designated in accordance with the rules of procedure and the internal administrative rules 
of the institution, agency, office or body concerned. 

The  Panel  is  assisted  by  observers  and  in  all  cases  by  a  representative  of  the  Legal 
Service  of  the  Commission.  A  representative  of  OLAF  participates  in  the  Panel  as 
observer in the cases referred to the Panel on the basis of an OLAF investigation. This 
status allows the Panel to be informed by OLAF of the facts and findings resulting from 
its  investigations,  of  an  assessment  of  their  preliminary  classification  in  law,  their 
estimated  financial  impact,  of  the  necessary  procedural  guarantees,  and  of  the  state  of 
exchanges of information between OLAF and the competent authorities of the Member 
States. The active contribution of the Legal Service of the Commission and of OLAF to 
the work of the Panel is a key element in providing the Panel with relevant information 
and allowing it to deliver high quality recommendations in a timely way.  

The  Panel  is  supported  by  a  permanent  secretariat  provided  by  the  Commission  and 
administratively attached to the Directorate-General for Budget. 

2.2.  Role of the Panel 

In  the  absence  of  a  final  national  judgment  or,  where  applicable,  a  final  administrative 
decision,  authorising  officers  who  envisage  to  exclude  and/or  fine  an  unreliable 
economic operator6 have to first request a recommendation of the Panel. The grounds for 
excluding economic operators which require a Panel recommendation are the following: 

-  grave professional misconduct resulting from the violation of applicable laws 
or  regulations  or  ethical  standards  of  the  profession  to  which  the  economic 
operator concerned belongs, or from the engagement in any wrongful conduct 
which  has  an  impact  on  the  professional  credibility  where  such  conduct 
denotes wrongful intent or gross negligence; 

5 Deputies of the Permanent Members are: Mr. Olivier Dandoy an official of the Secretariat General of the 
Commission designated ad personam and Ms. Victoria Gil Casado, Head of Unit in the Central Financial 
Service in the Directorate-General for Budget. 
6  'Economic  operator'  means  any  natural  or  legal  person,  including  a  public  entity,  or  a  group  of  such 
persons, which applies for EU and/or EDF funds or has already received such funds. 

3 

 
 
                                                 
- 

- 

fraud,  corruption,  participation  in  a  criminal  organisation,  money  laundering 
or  terrorist  financing,  terrorist-related offences or  offences linked to terrorist 
activities, and child labour or other forms of trafficking in human beings; 

in  complying  with  main  obligations 

significant  deficiencies 
the 
performance  of  a  contract  financed  by  the  budget  ('serious  breach  of 
obligations'),  which  has  led  to  its  early  termination  or  to  the  application  of 
liquidated  damages  or  other  contractual  penalties,  or  which  has  been 
discovered  following  checks,  audits  or  investigations  by  an  authorising 
officer, OLAF or the Court of Auditors; 

in 

- 

irregularity  within  the  meaning  of  Article  1(2)  of  Council  Regulation  (EC, 
Euratom) No 2988/957.  

In  general,  each  case  is  examined  by  the  Panel  in  two  succeeding  meetings.  In  a  first 
session, the Panel examines the facts and findings and their preliminary qualification in 
law. It ensures the right to be heard by sending a letter to the economic operator in which 
the  latter  is  requested  to  submit  written  observations.  In  a  second  session,  the  Panel 
examines  the  written  observations,  if  any,  and  adopts  its  recommendation  which  is 
addressed to the requesting authorising officer. 

The Panel must adopt this recommendation within 45 calendar days from the referral of 
the  case  to  the  Panel.  This  deadline  starts  once  the  request  for  referral  of  a  case  is 
complete. Pursuant to the Financial Regulation, the economic operator should at least be 
granted 15 calendar days, i.e. a minimum of 10 working days, to submit its observations. 
In  practice,  despite  the  tight  constraint  of  the  short  deadline  of  45  calendar  days,  the 
Panel grants  more time to  the economic operator,  in  light of the rights  of defence. The 
recommendation of the Panel includes a preliminary classification in law of the conduct 
referred  to  above,  with  regard  to  established  facts  or  other  findings.  It  is  important  to 
recall that the Panel has no investigative powers. It will therefore principally rely on: 

a)  facts established in the context of audits or investigations carried out by the Court 
of  Auditors,  OLAF  or  internal  audit,  or  any  other  check,  audit  or  control 
performed under the responsibility of the authorising officer; 

b)  non-final administrative decisions which may include disciplinary measures taken 
by  the  competent  supervisory  body  responsible  for  the  verification  of  the 
application of standards of professional ethics; 

c)  decisions  of  the  European  Central  Bank,  the  European  Investment  Bank,  the 

European Investment Fund or international organisations; 

7 Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European 
Communities  financial  interests  (OJ  L  312,  23.12.1995,  p.  1)  which  defines  irregularity  as:  "any 
infringement of a provision of Community law resulting from an act or omission by an economic operator, 
which  has,  or  would  have,  the  effect  of  prejudicing  the  general  budget  of  the  Communities  or  budgets 
managed by them, either by reducing or losing revenue accruing from own resources collected directly on 
behalf of the Communities, or by an unjustified item of expenditure." 

4 

 
 
                                                 
d)  decisions  of  the  Commission  relating  to  the  infringement  of  the  Union's 
competition rules or of a national competent authority relating to the infringement 
of Union or national competition law. 

Where  the  Panel  considers  that  the  economic  operator  concerned  should  be  excluded 
and/or that a financial penalty should be imposed on it, its recommendation contains the 
facts or findings and their preliminary classification in law as well as one or several of 
the following elements: 

a)  an assessment of the need to impose a financial penalty and its amount; 

b)  an  assessment  of  the  need  to  exclude  the  economic  operator  concerned  and,  in 

that case, the suggested duration of such an exclusion; 

c)  an  assessment  of  the  need  to  publish  the  information  related  to  the  economic 

operator who is excluded and/or subject to a financial penalty; 

d)  an assessment of remedial measures taken by the economic operator, if any; 

e)  an assessment of the proportionality principle as referred to in Article 106(3) of 
the Financial Regulation so as to retain aggravating or mitigating circumstances.  

After  an  assessment  of  the  remedial  measures  the  Panel  may  decide  to  recommend 
imposing  no  sanctions  on  the  economic  operator.  The  option  to  take  into  account 
remedial  measures  was  introduced  in  the  2015  revision  of  the  Financial  Regulation, 
based  on  the  procurement  Directives8  in  order  to  reduce  the  sanctions  imposed  on  the 
economic operator or to avoid its exclusion altogether where the economic operator has 
taken  the  necessary  corrective  measures.  For  this  latter  case,  the  measures  listed  in 
Article  106(8)  of  the  Financial  Regulation  must  be  sufficient  to  demonstrate  the 
reliability of the economic operator to receive future Union funds.  

2.3.  The recommendation of the Panel  

In  the  light  of  the  principle  of  proportionality  enshrined  in  Articles  49  and  52  of  the 
Charter  of  Fundamental  Rights  of  the  European  Union9  and  of  possible  remedial 
measures taken by the economic operator concerned10, the Panel can recommend: 

8  Directive  2014/24/EU  of  the  European  Parliament  and  of  the  Council  of  26  February  2014  on  public 
procurement and repealing Directive 2004/18/EC (OJ L 94, 28.03.2014, p.65) and Directive 2014/23/EU of 
the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (OJ 
L 94, 28.03.2014, p.1). 
9 See also Recital 28 of Regulation (EU, Euratom) 2015/1929 of the European Union and of the Council of 
28 October 2015 and Article 106(3) as already quoted under point 2.2 amending regulation (EU, Euratom) 
No 966/2012 on the financial rules applicable to the general budget of the Union, OJ L 286, 30.10.2015, 
p.1. 
10 Where remedial measures demonstrate the recovered reliability of the economic operator, no sanctions 
can be imposed on it.  

5 

 
 
 
 
                                                 
-  The exclusion of the economic operator concerned for up to 3 years (up to 5 
years  in  the  case  of  fraud)  from  participation  in  all  or  part  of  funding 
procedures,  governed  by  the  Union  budget  in  line  with  the  Financial 
Regulation  and  award  procedures  governed  by  the  European  Development 
Funds; 

-  The imposition of a  financial  penalty of  between 2 %  and 10 %  of the total 
value  of  the  contract  on  an  economic  operator  who  has  attempted  to  obtain 
access  to  Union  funds  by  participating  or  requesting  to  participate  in  a 
procurement procedure, while being, without having declared it in one of the 
exclusion situations mentioned under section 2.2 above; 

(i)  as  an  alternative  to  a  decision  to  exclude  the  economic  operator,  where 
such an exclusion would be disproportionate; 

(ii)  in  addition  to  an  exclusion  which  is  necessary  to  protect  the  Union's 
financial interests,  where  the  economic  operator  has  adopted  a  systemic  and 
recurrent conduct with the intention of unduly obtaining Union funds11. 

- 

In  order  to  reinforce  the  deterrent  effect  of  the  exclusion  and/or  financial 
penalty,  the  publication  on  the  internet  site  of  the  Commission  information 
related to the exclusion and, where applicable, the financial penalty12. 

Even if they have only a non-binding nature, due to the need to respect the administrative 
autonomy of the Institutions and other EU bodies, the recommendations of the Panel bear 
a high weight due to the composition of the Panel and the recognised authority of its high 
level  independent  Chair.  This  is  further  evidenced  by  the  fact  that  if  the  Authorising 
Officer, who is also a member of the Panel, decides not to follow a recommendation of 
the  Panel,  he  must  inform  the  latter  of  the  reasons  which  have  led  him/her  to  take  a 
different decision. Since the outset of the Early Detection and Exclusion System in 2016, 
authorising officers have followed the Panel recommendations without deviations. 

3.  THE  PUBLICATION  OF  SANCTIONS  IMPOSED  ON  ECONOMIC 

OPERATORS 

The  publication  of  the  sanctions  is  a  powerful  tool  to  ensure  a  deterrent  effect  and  to 
prevent  misuse  of  EU  funds.  As  of  30  June  2018,  there  are  8  cases  published  on  the 
europa website:  

11  This  possibility  is  not  applicable  to  cases  where  the  conduct  consists  of  significant  deficiencies  in 

complying with main obligations in the performance of a contract. 

12 Information cannot be published in any of the following circumstances:- where it is necessary to preserve 
the confidentiality of an investigation or of national judicial proceedings;- where publication would cause 
disproportionate  damage  to  the  economic  operator  concerned  or  would  otherwise  be  disproportionate  on 
the basis of the proportionality criteria set out and to the amount of the financial penalty; 
-  where  a  natural  person  is  concerned,  unless  the  publication  of  personal  data  is  exceptionally  justified, 
inter alia, by the seriousness of the conduct or its impact on the Union's financial interests. 

6 

 
 
                                                 
 
http://ec.europa.eu/budget/edes/index_en.cfm 

The recommendation to publish must comply with the protection of personal data and be 
necessary to ensure this deterrent effect. Therefore, the publication is only recommended 
in  serious  cases  with  aggravating  factors,  for  instance  the  refusal  of  investigations  or 
audit, or the recurrence of a conduct. In addition, the publication can only intervene three 
months after the decision is taken by the economic operator, by which time the decision 
of the authorising officer may be contested before the General Court. If this is the case 
then the publication will take place after the judgment of the Court, should the judgment 
uphold the decision of the Authorising Officer.  

4.  CHANGES BROUGHT BY THE NEW FINANCIAL REGULATION  

4.1. 

Increased transparency of EDES rules 

To  date,  the  exclusion  rules  and  more  largely  the  EDES  system  were  contained  in  the 
procurement  chapter  of  the  Financial  Regulation,  as  they  stem  from  the  procurement 
Directives.  In  the  new  Financial  Regulation  adopted  in  2018,  the  rules  on  the  EDES 
system  have  been  moved  from  the  procurement  chapter  to  the  new  Common  Rules 
applying to all spending instruments (procurements, grants, prizes, selection of experts, 
financial instruments). The EDES system was already being applied to these instruments 
by  means  of  cross  reference  spread  over  the  Financial  Regulation.  The  regrouping  of 
these rules under the Common Rules chapter will increase their readability.  

4.2.  Additional ground for exclusion and extension of the information to be 

disclosed in the declaration on honour 

The  revised  Financial  Regulation  introduces  new  grounds  of  exclusion  related  to  so-
called  "letter  box"  of  "shell"  companies  with  the  aim  to  enhance  the  fight  against  tax 
avoidance. To this end, an authorising officer shall exclude (Article 136(1)(g) and (h): 

- 

the  person  or  the  entity  that  "has  created  an  entity  under  a  different 
jurisdiction  with  the  intent  to  circumvent  fiscal,  social  or  any  other  legal 
obligations  of  mandatory  application  in  the  jurisdiction  of  its  registered 
office, central administration or principal place of business";  

-  as well as "an entity that has been created with the intent" provided for in the 

previous point. 

This new ground will ensure a better coverage of the protection of the financial interests 
and the image of the European Union against unreliable economic operators. In the light 
of  the  general  principle  of  the  European  Union  law  of  legal  certainty,  these  provisions 
will  apply  to  such  facts  that  will  occur  after  the  entry  into  application  of  the  revised 
Financial Regulation. Again, exclusions on these grounds could be applied on the basis 
of a final judgment or a final administrative decision, or in their absence, on the basis of a 
preliminary classification in law made by the Panel. 

7 

 
 
The  revised  Financial  Regulation  also  requests  from  economic  operators  additional 
information to be submitted in the declaration on honour that participants13 or recipients 
of Union funds must submit as part of a procedure of application for EU funds. Under the 
new  Financial  Regulation,  participants14  also  have  the  obligation  to  disclose  their 
beneficial ownership structure (Article 137(2)(b) FR). 

4.3. 

Procedure in front of the Panel  

If  the  Panel  had  45  calendar  days  from  the  referral  of  the  case  to  adopt  its 
recommendation, practice has shown that the deadline given for the economic operator to 
submit  observations  was  tight,  and  therefore  an  extension  of  the  deadline  was  often 
requested by the latter to the Panel. The legislator has therefore decided to remove this 
requirement, which should benefit economic operators subject to a Panel procedure. 

4.4.  Merger  of  the  specialised  financial  irregularities  panels  into  the  EDES 

Panel 

Up  to  the  entry  into  application  of  the  new  Financial  Regulation,  the  EDES  Panel  has 
been competent to assess cases of "irregularities" committed by economic operators. To 
date,  in  accordance  with  Article  73(6)  the  2012  Financial  Regulation,  other  panels 
existed in EU institutions to assess the irregularities incurred by staff members subject to 
the  Staff  Regulations  (known  under  the  name  of  "specialised  financial  irregularities 
panel" (or ISIF)). For reasons of efficiency, economy of procedures and use of existing 
expertise,  these  Panels  have  been  merged  into  the  EDES  Panel.  This  means  that  the 
EDES  Panel  will  now  be  competent  to  also  assess  cases  of  internal  irregularities  (see 
Article 93 of the new Financial Regulation).Where it acts in this respect, it will have the 
same core composition as in EDES cases with additional ad hoc members. It will retain 
its independent features and shall not have any investigative powers either.  

5.  OVERVIEW OF CASES  

In  2017,  11  cases,  each  involving  one  economic  operator,  were  referred  to  the  Panel 
through its permanent secretariat by authorising officers, that is 10 from the Commission 
and  1  from  a  Joint  Undertaking.  In  addition  to  these  11  cases,  4  cases  sent  to  the 
permanent secretariat in 2016 concerning 4 economic operators are added in the present 
report, since they were referred to the Panel in 2017, once the respective files had been 
completed.  

Out of these 15 cases, the Panel issued a recommendation to exclude economic operators 
from  EU  funds  in  9  occurrences.  This  was  based  on  various  legal  grounds,  including 

13 Pursuant to Article 2 FR, a "participant" is: any entity or person who has applied for grants, procurement, 
prizes,  selection  of  experts,  provision  of  sponsorship  and  implementation  of  financial  instruments 
under direct management and participates in a selection procedure. 

14 And the other persons and entities mentioned in Article 136 (1) (a) and (b) for the situations referred to 

in points (c) to (h) of Article 136 (1) FR. 

8 

 
 
 
                                                 
fraud  and  significant  breaches  with  complying  with  main  obligations 
implementation of a contract. 

in 

the 

In 3 cases, the Panel also recommended to register in the EDES database "a person with 
power  of  representation,  decision-making  or  control"  over  the  excluded  operator,  as 
linked  to  the  exclusion.  The  purpose  of  this  registration  is  to  inform  all  authorising 
officers that these persons were personally involved in the related situations of exclusion 
of the economic operators concerned. 

In 6 cases, the Panel did not adopt recommendations for the following reasons: 

-  The  company  on  which  administrative  sanctions  was  contemplated  did  not 
fall  under  the  definition  of  "economic  operator"  in  Article  101(1)  of  the 
Financial Regulation; 

-  The referral did not fall within the scope of the competence of the Panel15; 

-  The  economic  operator  had  already  been  registered  in  the  database  on  the 

ground that it had been wound-up; 

- 

 A further legal analysis by the requesting authorising officer showed that the 
imposition of the contemplated sanction was not legally founded; 

-  The  adversarial  exchange  on  the  recovery  of  EU  funds  needed  to  be 

completed before envisaging administrative sanctions. 

As  regards  the  9  recommendations  adopted  so  far,  6  decisions  have  been  taken  by  the 
authorising officers concerned. [3 further decisions are to be adopted.] All follow in full 
the recommendation of the Panel.  

In addition, in all of the 6 decisions, the sanctions were published. The publication was 
justified by e.g. the refusal of audits, the refusal to reimburse the misused EU funds, the 
non-replacement of a guarantee issued by a non-authorised guarantor, or the inherent the 
gravity of the violations.  

It should be noted that the first two exclusions on the grounds of fraud on the basis of the 
preliminary classification in law by the Panel were recommended by the Panel in 2018. 
The first case16 results from related-information in an OLAF report and a final judgement 
and  the  second  is  based  on  a  non-final  judgment  for  fraud  as  well  as  an  OLAF  report. 
The preliminary classification in law for fraud was introduced with the 2015 revision of 
the Financial Regulation and could therefore not be used on facts committed before 2016, 
in observance of the general principle of legal certainty.   

15 2 cases 
16 Case 2017/07 

9 

 
 
 
                                                 
Overall,  out  of  the  31  cases  referred  to  the  Panel  so  far  since  its  setting-up,  the  Panel 
adopted 27 recommendations, including in 3 cases a recommendation of non-exclusion. 
This has led up to now to 19 exclusion decisions taken by authorising officers.  

The  following  table  shows  an  overview  of  the  cases  where  the  Panel  issued  a 
recommendation in 201717 and of those cases submitted to the Panel in 2017 and where 
the recommendations were issued in the first semester of 2018. It contains a summary of 
facts  and  findings,  their  preliminary  qualification  in  law  where  applicable,  the 
recommended  administrative  sanction  and  the  date  thereof,  and  if  a  publication  on  the 
website of the Commission was recommended. The cases have been anonymised. 

17 The first 4 cases on which the Panel issued a recommendation in 2017 were included in the Protection of 
the European Union's financial interests - Fight against fraud 2016 Annual Report, therefore they are 
not mentioned in the summary of this report. 

10 

 
 
                                                 
Annex 1 - Summary of anonymised cases referred to the Panel of Article 108 of the Financial Regulation 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 
2016/1718 

sufficient 
evidence 

and 
Lack 
of 
appropriate 
to 
corroborate  the  contribution 
to the project work;  

"Serious  breaches  of 
contractual 
obligations" 

14.07.2017 

Exclusion  for  a 
period of 2 years. 

applicable, 
Not 
facts 
committed 
before publication 
rules  entered  into 
force. 

Date of the 
decision of the 
authorising 
officer: 

10.08.2017 

Undeclared subcontracting; 

almost 
relied 
Operator 
entirely  on  subcontracting  to 
carry out the work on audited 
projects";  

No  financial  or  operational 
capacity 
the 
work. 

to  carry  out 

18 Cases 17, 18 and 20 of 2016 are included in this report as they were referred to the Panel after the first semester of 2017 once the respective files had been completed.  

 
 
 
                                                 
Date of the 
decision of the 
authorising 
officer: 

11.12.2017 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

to  reach 
the 
Case 2016/18  Impossibility 
operator  and 
therefore  no 
audit could have been carried 
out. 

"Serious  breaches  of 
contractual 
obligations" 

11.10.2017 

rejected  all 
The  auditors 
numerous 
costs.  Despite 
efforts  made 
the 
by 
Commission, the operator has 
not paid the total due sum. 

applicable, 
Not 
facts 
committed 
before publication 
rules  entered  into 
force. 

Exclusion  for  a 
period  of  3  years 
of  the  economic 
operator 

in 
EDES 
the 
with 
of 

Registration 
the 
database  of 
person 
power 
representation, 
decision-making 
or  control  over 
the 
concerned 
linked 
operator, 
with the exclusion 
of the operator. 

12 

 
 
Date of the 
decision of the 
authorising 
officer: 

27.10.2017 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

applicable, 
Not 
facts 
committed 
before publication 
rules  entered  into 
force. 

Case 2016/20  Unreliability  of 

the 

recording 
claimed costs;  

system, 

time 
over 

"Serious  breaches  of 
contractual 
obligations" 

29.08.2017 

Exclusion  of  3 
years  

Absence 
evidence 
to 
claimed  on 
projects; 

of 

adequate 
justify 
cost 
audited  EU 

Non-compliance  with 
the 
specific cumulative eligibility 
criteria 
in-house 
for 
consultants,  personnel  cost,  
subcontracting; 

Personnel  not 
according 
to 
practices of the beneficiary; 

remunerated 
the  normal 

Work  contribution  of  one 
person before recruitment. 

13 

 
 
CASE 
NUMBER 

FACTS 

Case 2016/21  Guarantor 

failure 

to 
reimburse the Commission on 
the  basis  of  the  breach  of 
contracts of the contractor 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

"Serious  breaches  of 
contractual 
obligations" 

Not  applicable  – 
Case  withdrawn 
by  the  RAO  on 
22/09/2017  

SANCTIONS 

PUBLICATION 

Date of the 
decision of the 
authorising 
officer: 

Not applicable  

Not applicable 

Not applicable 

Case 2017/01 

Non-compliant  procurement 
procedure and ineligible costs 
claims; 

"Serious  breach  of 
contractual 
obligations"  

18.04.2018 

Conflict of interest. 

from 
funding 

Exclusion 
specific 
programme 
(EDF) for 2 years. 

Case 2017/02  Final  judgement  concerning 
agreement 
other 
operators  with  the  aim  of 
distorting competition  

with 

preliminary 
No 
classification  -  Panel 
not competent. 

Remedial measures. 

Not applicable 

Not applicable  

applicable, 
 Not 
facts 
committed 
before publication 
rules  entered  into 
force. 

applicable 
Not 
(non-admissibility 
of the case). 

02/07/2018 

Not applicable. 

14 

 
 
 
 
 
 
 
CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2017/03 

False  declarations  in  grants 
regards 
application 
as 
financial 
professional  and 
capacity, leading to the award 
of the grant; 

"Misrepresentation  of 
and 
information 
of 
serious 
contractual 
obligations". 

breach 

15.11.2017 

Exclusion  of  3 
years. 

Recommended 
based 
on 
obstruction  of  the 
verifications; 
refusal  to  pay  the 
debts. 

Date of the 
decision of the 
authorising 
officer: 

   20.12.2017 

to  disclose  proper 
 Failed 
information  upon  request  of 
the Contracting Authority and 
OLAF;  

Lack  of  cooperation  for  the 
audit (obstruction); 

Refusal  of  payment  of  the 
recovery order 

Case 2017/04  Lack  of  preventive  measures 
to  avoid  conflict  of  interest 
and late disclosure. 

No 
classification.  

preliminary 

Not applicable 

No 
recommendation.  

Not 
applicable 
(case withdrawn) 

Not applicable 

Case withdrawn. 

Case  withdrawn 
by  Authorising 
Officer  based  on 
further analysis.  

15 

 
 
 
 
 
 
   
QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

Case  suspended  until 
completion 
of 
adversarial  exchange 
on the recovery. 

applicable 

Not 
(case suspended) 

SANCTIONS 

PUBLICATION 

Date of the 
decision of the 
authorising 
officer: 

Not applicable 

Not applicable 

Not applicable 

CASE 
NUMBER 

FACTS 

Case 2017/05 

Inflation  of  costs  by  using 
fictitious  contracts  with  a 
which 
sister-company, 
appeared  as  staff  resource 
provider. 

Suspicion  of  serious  fraud  in 
connection with the issuing of 
invoices. 

Misrepresentation  of  its  legal 
structure. 

to 

Failure to declare the amount 
paid 
personnel 
the 
employed  on  the  EU-funded 
unreliable 
and 
projects 
information contained in time 
sheets. 

16 

 
 
 
 
 
 
CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Date of the 
decision of the 
authorising 
officer: 

Not applicable 

Not applicable 

Not applicable 

Case 2017/06  Suspicious  of  misuse  of  EU 

funds after an investigation. 

Case  closed: company 
dissolved 
(registered 
in  the  EDES  database 
on 
the  ground  of 
Article  106(1)(a)  of 
Financial 
the 
Regulation. 

Not  applicable  - 
Case  closed  by 
on 
Panel 
the 
15.11.2017 
- 
company 
dissolved 
(registered  in  the 
EDES 
database 
on  the  ground  of 
Article  106(1)(a) 
of  the  Financial 
Regulation. 

17 

 
 
Date of the 
decision of the 
authorising 
officer: 

11.01.2018 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

not 

taken 

Case 2017/07  The  chairperson  of  the  grant 
beneficiary  used  fraudulent 
means to justify activities that 
had 
place: 
falsifying  documents  (lists  of 
participants  in  the  training 
with 
courses, 
service  providers, 
invoices 
for provision of services) and 
using  them,  misappropriated, 
on a grand scale, by fraud an 
amount of the EU funds. 

contracts 

Publication 
recommended 
given the fact that 
a  final  judgment 
and  OLAF  have 
that 
established 
economic 
the 
operator 
has 
misappropriated 
on  a  grand  scale, 
by 
the 
fraud, 
amount  provided 
the 
under 
contract. 

"Fraud",  established 
by a final judgment. 

15.11.2017 

Exclusion  for  a 
period of 3 years. 

in 
EDES 
the 
with 
of 

Registration 
the 
database  of 
person 
power 
representation, 
decision-making 
or  control  over 
concerned 
the 
linked 
operator, 
with the exclusion 
the  operator, 
of 
its 
considering 
personal 
involvement 
in 
the  situation  of 
exclusion. 

18 

 
 
Date of the 
decision of the 
authorising 
officer: 

29/06/2018 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2017/08  [Among  various  companies 
several 
implementing 
the 
in 
contracts  awarded 
framework  of  an  EU  funded 
project], 
respective 
the 
economic  operator,  suspected 
of  corruption  and/or  fraud 
refused  to  allow  access  to  its 
to 
data, 
perform 
investigative 
powers. 

impeding  OLAF 

its 

"Serious  breach  of 
contractual 
obligations". 

30/05/2018 

Exclusion  for  a 
period of 2 years. 

Publication 
recommended, 
based  on  the  fact 
that  the  economic 
operator  impeded 
OLAF to properly 
conduct 
its 
investigation. 

19 

 
 
 
 
Date of the 
decision of the 
authorising 
officer: 

12.06.2018 

CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

false 

Case 2017/09  A  contract  was  awarded  to 
the  economic  operator  based 
information  and 
on 
documentation  presented  in 
tender.  The  company 
its 
false 
repeatedly  produced 
statements  about  the  actual 
conditions  of  production  of 
delivered, 
the 
from 
which 
sources  other 
those 
than 
indicated in the tender. 

equipment 

originated 

the 
its 
its 
the 
the 

Recommended, 
justified  by 
of 
gravity 
conduct  and 
impact  on 
outcome  of 
procurement 
procedure, as well 
repeated 
as 
statements 
false 
during 
the 
implementation of 
the  contract  and 
after 
the 
provisional 
acceptance  of  the 
delivery. 

the 

"Fraud" 

26.03.2018 

Exclusion  for  a 
period of 3 years. 

in 
EDES 
the 
with 
of 

Registration 
the 
database  of 
person 
power 
representation, 
decision-making 
or  control  over 
concerned 
the 
linked 
operator, 
with the exclusion 
the  operator, 
of 
its 
considering 
personal 
involvement 
in 
the  situation  of 
exclusion. 

20 

 
 
CASE 
NUMBER 

FACTS 

QUALIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Date of the 
decision of the 
authorising 
officer: 

Case 2017/10  Collusive practices 

Not  applicable:  case 
closed by the Panel on 
21.09.2017  –  Panel 
not competent. 

Not applicable 

Not applicable 

Not applicable 

Not applicable 

Case 2017/11  Pre-financing guarantee and a 
performance guarantee issued 
by non-authorised entities; 

"Serious  breach  of 
contractual 
obligations". 

26.01.2018 

Exclusion  for  a 
period of 3 years. 

officer, 

Upon  several  requests  of  the 
the 
Authorising 
contractor  failed  to  replace 
the 
aforementioned 
guarantees; 

Late implementation. 

21 

07.03.2018 

Recommended, 
justified  by 
the 
number  of  grave 
contractual 
violations, lack of 
cooperation 
despite  numerous 
reminders, 
non-
replacement  of  a 
issued 
guarantee 
non-
a 
by 
authorised 
guarantor. 

 
 
 
 
 
 
 
 
Annex 2 – Statistics concerning the Panel cases 

Summary of Cases per Year of filing 
[number of cases presented to the Panel during 2017] 

3 

14 

Cases filed in 2017

Cases filed in 2016

8 

6 

Research and Information Policy

External Action and Neighbourhood Policy

Administrative Expenses

1 

22 

 
 
  
Summary of Case Status 
[number of cases presented to the Panel during 2017] 

Inadmissible Cases

Cases withdrawn by AO

Cases assessed by the Panel

19 

2 

2 

13 

2 

2 

10 

Research and
Information Policy

External Action and
Neighbourhood
Policy

1 

Administrative
Expenses

3 

Sanctioned Cases

Non-Sanctioned
Cases (e.g.
considering remedial
actions)

23 

1 

1 

Open Cases

Pending Cases

 
 
 
Sanctions Recommended by the Panel 
[number of cases presented to the Panel during 2017] 

8 

6 

Published Cases

6 Months

1 Year

1.5 Years

2 Years

2.5 Years

3 Years

7 

1 

1 

1 

2 

3 Years

2.5 Years

2 Years

1.5 Years

1 Year

6 Months

Published Cases

24 

 
 
 
Legal basis of Panel Recommendations 
[number of cases presented to the Panel during 2017]  

106 c) Grave Professional misconduct

106 d) (i) Fraud

106 e) Serious breach of contractual
obligations

14 

3 

2 

25