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 30th Annual Report on the Protection of the European Union's financial interests - Fight against fraud - 2018
Date: 2019-10-11
Institutions: European Anti-Fraud Office, European Commission
Subjects: EU programme, EU strategy, activity report, corruption, crime, fight against crime, financial control, fraud, fraud against the EU, illicit trade

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 11.10.2019  SWD(2019) 362 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 30th Annual Report on the Protection of the European Union's financial interests - Fight against fraud - 2018  {COM(2019) 444 final} - {SWD(2019) 361 final} - {SWD(2019) 363 final} - {SWD(2019) 364 final} - {SWD(2019) 365 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 European Commission manages the Early Detection and Exclusion System (EDES). 
EDES was set up in 2016 and is rooted in the Financial Regulation applicable to the EU 
budget  revised in  20181 (Articles  135 to  145). Since 2016, EDES has  reached maturity 
and  has  proven  to  be  a  strong  tool  for  reinforcing  the  protection  of  the  EU's  financial 
interests  against  unreliable  economic  operators  and  fraudsters  (e.g.  exclusion  from 
participation in obtaining EU funds).  

EDES provides for a broad range of sanctionable practices. It ensures an independent and 
transparent  central  assessment of contemplated administrative sanctions and the respect 
of the fundamental rights of the economic operators concerned. The Financial Regulation 
provides for rules that centralise the exclusion process for all EU institutions, agencies, 
offices  and  bodies.  In  particular,  Article  143  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  by  delegation2  who  remain  sole 
competent  to  take  the  decision  to  exclude  an  economic  operator  and/or  to  impose  a 
financial penalty on it.  

On 29 January 2019, the Chair of the Panel presented to and had an exchange of views 
with the Committee on Budgetary Control of the European Parliament on the applicable 
legislation, the role of the Panel, its operation and an overview of its activities over 2016 
to 2018. 

Another notable point in the period under review, is the entry into force in August 2018 
of a revised Financial Regulation, which brought further improvements to the system.  

This Staff Working Document presents the third year of activity of the EDES Panel and 
also extends to the first semester of 2019. 

1 Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on 
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  amending  Regulations  (EU)  No 
1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 
1316/2013,  (EU)  No  223/2014,  (EU)  No  283/2014,  and  Decision  No  541/2014/EU  and  repealing 
Regulation (EU, Euratom) No 966/2012, OJ L 193 of 30.7.2018, p.1. 

2  Authorising  officers  by  delegation  are  the  persons,  generally  with  the  rank  of  Director-General  or 
Director,  who are  responsible in the Union institution or  EU body concerned  for implementing revenue 
and  expenditure  in  accordance  with  the  principle  of  sound  financial  management,  including  through 
ensuring  reporting  on  performance,  and  for  ensuring  compliance  with  the  requirements  of  legality  and 
regularity and equal treatment of recipients. 

2 

 
 
                                                 
 
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 143 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  Deputy3  are  appointed  by  the  Commission  and  are 
independent  in  the  performance  of  their  duties4.  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 
Commission.  Their  term  of  office  is  five  years.  The  current  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 Court of Justice of the European Union (Civil 
Service Tribunal). 

The two permanent Members of the Panel representing the Commission are Mr. Hubert 
Szlaszewski who is 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.  The  observers  do  not  take  part  in  the  adoption  of  the 
recommendations.  Representatives  of  OLAF  also  participate  in  the  Panel  meetings  as 
observers 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 

3 The  rules applicable to the  Deputies are in accordance  with the rules of procedure of the Panel similar 
mutatis mutandis to those applicable to the Chair. 

4 Article 144(3) of the Financial Regulation. 

5 Deputies of the Permanent Members are: Mr Olivier Dandoy, an official of the Directorate-General for 
Communication 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. 

3 

 
 
                                                 
 
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; 

- 

- 

- 

- 

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 and; 

since  2018,  two  additional  grounds  of  exclusion  have  been  added  in  the 
Financial  Regulation,  i.e.  the  creation  of  entities  in  a  different  jurisdiction 
with the intent to circumvent fiscal, social or any other legal obligations in the 

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. 

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 

 
 
                                                 
 
jurisdiction of its registered office, central administration or principal place of 
business, and such entities created themselves. 

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 3 months  from the date the Chair has 
verified the readiness of the file,  after requesting additional measures  of  verification or 
examination, where applicable. This period may be extended by the Chair in order, i.a., 
to ensure that the right to be heard is respected. However, in urgent important cases, the 
Panel  is  flexible  and  can  act  more  swiftly,  as  it  did  in  1  case  in  2018  where  a  long 
duration  of  the  procedure  would  have  resulted  in  difficulties  for  the  administrative 
operation  of  the  Commission.  In  that  case,  it  took  2  months  to  complete  the  procedure 
from the opening by the Panel to the adoption of the recommendation .  

The economic operator concerned by the procedure is granted 3 weeks as a general rules 
to  submit  observations.  By  way  of  exception,  following  a  reasoned  request  by  the 
economic  operator,  the  deadline  may  be  extended,  by  no  more  than  half  the  period 
initially granted.. 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 
European  Public  Prosecutor’s  Office8,  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)  facts referred to in decisions of persons and entities implementing Union funds 

under indirect management;9 

d)  ) information  transmitted  by  entities  implementing  Union  funds  under  shared 

management with Member States and; 

8 It will be operational at the earliest in November 2020. 

9  E.g.  by  the  European  Central  Bank,  the  European  Investment  Bank,  the  European  Investment  Fund  or 

international organisations. 

5 

 
 
 
 
                                                 
e)  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 assessments: 

a)  the possibility and the need to impose a financial penalty and its amount; 

b)  the  need  to  exclude  the  economic  operator  concerned  and,  in  that  case,  the 

recommended duration of such an exclusion; 

c)  the  need  to  publish  the  information  related  to  the  economic  operator  which  is 

excluded and/or subject to a financial penalty; 

d)  the remedial measures taken by the economic operator, if any and provided that 
the misconduct is not related to fraud, corruption, criminal organisations, money 
laundering,  terrorist  financing  or  offences,  child  labour  or  other  offences 
concerning trafficking in human beings; 

All of those assessments are made in the light of the principle of proportionality 
as recalled in  Article 136(3) of the Financial Regulation,  so as to duly  consider 
aggravating and/or mitigating circumstances.  

In  particular,  after  an  assessment  of  the  remedial  measures  the  Panel  may  decide  to 
recommend  imposing  no  sanctions  on  the  economic  operator.  This  is    based  on  the 
procurement  Directives10  in  order,  where  the  economic  operator  has  “cleaned”  its 
situation, to avoid its exclusion altogether.The non-exhaustive list of measures referred to 
in  Article  136(7)  of  the  Financial  Regulation  must  be  sufficient  to  demonstrate  the 
reliability of the economic operator for receiving and spending Union funds in future.  

2.3.  The recommendation of the Panel  

In the light of the principle of proportionality11 and of possible remedial measures taken 
by the economic operator concerned12, the Panel can recommend: 

10  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). 

11 This principle is enshrined in Articles 49 and 52 of the Charter of Fundamental Rights of the European 
Union and recalled in the Financial Regulation. 

12 Where remedial measures demonstrate the recovered reliability of the economic operator, no sanctions 
can be imposed on it.  

6 

 
 
 
                                                 
 
-  The exclusion of the economic operator concerned for up to 3 years (up to 5 
years  in  the  case  of  fraud,  corruption  and  any  similar  activities  punishable 
under  penal  law))  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 penalty13 of maximum 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; 

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

(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 funds14. 

- 

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 penalty15. 

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.  This  explains  why  since  the  outset  of  the  Early  Detection  and 
Exclusion  System  in  2016,  authorising  officers  have  up  to  now  followed  the  Panel 
recommendations without deviations. 

13 Article 138 of the Financial Regulation. 

14  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. 

15 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. 

7 

 
 
                                                 
 
 
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.  Currently,  there  are  8  sanctions  against  7  economic 
operators published on the europa website:  

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 challenged before the General Court. In some cases16, 
the publication will only 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 

Until  July  2018,  the  exclusion  rules  and  more  largely  the  EDES  system  have  been 
included in the procurement chapter of the Financial Regulation, as they stemmed from 
the  procurement  Directives.  In  the  new  Financial  Regulation,  the  rules  on  the  EDES 
system  are  part  of  the  new  Common  Rules  applying  to  all  spending  instruments 
(procurements, grants, prizes, selection of experts, financial instruments,etc.). The EDES 
system  was  already  being  applied  to  these  instruments  by  means  of  cross  references 
spread over the Financial Regulation. The regrouping of these rules under the Common 
Rules chapter will increase their coherence and readability.  

4.2.  Additional grounds 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. 

16 This depends on the legislation applicable at the time of the commission of the misconduct. 

8 

 
 
                                                 
This new ground will ensure a better coverage of the protection of the financial interests 
and the image of the European Union against some unreliable economic operators. In the 
light of the general principle of legal certainty, these provisions will apply to such facts 
that  will  have  occurred  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. 

The  revised  Financial  Regulation  also  requests  from  economic  operators  additional 
information to be submitted in the declaration on honour that participants17 or recipients 
of Union funds must submit as part of a procedure of application for EU funds. In this 
respect, participants18 will also have the obligation to disclose their beneficial ownership 
structure (Article 137(2)(b) FR). 

4.3. 

Procedure before 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  person  or  entity 
concerned  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  the  right  of  defence  of  the  persons  or 
entities subject to a Panel procedure and the legal soundness of the ensuing decisions on 
sanctions. 

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  was 
solely  competent  to  assess  cases  of  misconducts  committed  by  economic  operators.  In 
parallel, other panels set up in EU institutions had also to assess financial  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, the competences of these  former panels have 
been  merged  into  the  EDES  Panel.  This  means  that  the  EDES  Panel  will  now  be 
competent to also assess cases of internal financial irregularities19 (.Where it acts in this 
respect, the Panel 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.  

17 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. 

18 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. 

19 See Article 93 of the Financial Regulation. 

9 

 
 
 
                                                 
 
5.  REVISION OF THE RULES OF PROCEDURE OF THE PANEL  

Following on the adoption of the new Financial Regulation and also in the light of 
the lessons drawn from the first 2 years of operation of the Panel, the Commission 
adopted new Panel rules of procedure in the second semester of 2018.  

These rules provide among others for: 

– an improvement of the conditions under which the right to be heard of economic 
operators is ensured; 

-  practical arrangements for close cooperation between the Panel and OLAF; 

- 

specific provisions on the exercise of the consultative powers where financial 
irregularities on the part of the members of EU staff have been committed. 

6.  AUDIT OF THE EDES SYSTEM BY THE INTERNAL AUDIT SERVICE OF 

THE EUROPEAN COMMISSION 

The  overall  objective  of  the  audit  was  to  assess  whether  the  Commission  has 
designed  and  implemented  an  effective  and  efficient  control  system  for  the 
management  of  EDES  aimed  at  protecting  the  EU  budget,  in  line  with  the  legal 
provisions.  The  audit  also  covered  the  effectiveness  and  efficiency  of  the  EDES 
Panel,  a  key  actor  in  the  process,  assisted  in  fulfilling  its  tasks  by  the  EDES 
secretariat, which is provided by the Commision. 

The audit found that EDES has undeniable strengths: 

- 

It uses good practice from the World Bank suspension and debarment system; 

-  The  Commission  had  been  able  to  attract  high-level  individuals  as  Chair  and 
Vice-Chair.  Together  with  the  internal  standing  members,  this  ensures  that  the 
Panel has the necessary expertise and experience to carry out its tasks effectively; 

- 

It  is  well  integrated  inlocal  IT  system  notably  in  the  research:the  electronic 
workflow  and  grant  management  system  in  place  checks  whether  an  economic 
operator  receiving  funds  from  Horizon2020  programmes  is  registered  for  early 
detection or exclusion in EDES. 

The audit also made recommendations: 

-  Finalisation and regularly update of the dedicated corporate guide; 
- 
- 

Increase of awareness of EDES; 
In shared management, analysis of access to EDES Database by Member 
States’ authorities to target awareness raising efforts, and assess cost/benefits 
of use of other databases; 
Improve the follow-up of OLAF reports and recommendations and; 

- 
-  Monitor length of Panel procedure and identify steps that could lead to delays. 

10 

 
 
  
 
 
7.  AWARENESS  RAISING  WITH 

INTERNAL  AND  EXTERNAL 

STAKEHOLDERS  

Following  on  the  audit,  the  Commission  has  stepped  up  its  efforts  for  raising 
awareness all over the board In particular, it is being: 

– spreading information and disseminating good practice among others Commission 
services,  EU  Delegations  and  CSDP  missions,  including  at  senior  and  middle 
management level  and this  by various communication tools, including instructions 
given to services, dedicated workshops and training20; 

–  with  due  respect  to  the  independence  of  the  investigative  function  of  OLAF, 
strengthening  the  internal  cooperation  with  the  Office  at  senior  level,  including  as 
regards the monitoring of OLAF administrative and financial recommendations; 

-  participating  in  events  with  international  organisations  where  EDES  has  been 
highlighted  and  acknowledged  as  an  important  tool  for  sanctioning  fraud  and 
serious misconducts and; 

- developing a targeted communication strategy.  

8.  OVERVIEW OF CASES  

In 2018, 6 admissible cases, all coming from the Commission were referred to the Panel 
through its permanent secretariat by authorising officers. In addition, 4 cases sent to the 
permanent secretariat in 2017 are considered in the present report, since they were, once 
the respective files had been completed,dealt with by the Panel in 2018,  

Out of these 10 cases, the Panel issued a recommendation to exclude economic operators 
from  EU  funds  in  7  occurrences.  This  was  based  on  various  legal  grounds,  including 
fraud  and  significant  breaches  with  complying  with  main  obligations 
the 
implementation of a contract. 

in 

In  1 case, 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 2 cases, the Panel did not adopt recommendations for the following reasons: 

-  The  case  was  suspended  for  reasons  of  confientiality  of  national 

investigations; 

20 Some of them in narrow collaboration with OLAF services. 

11 

 
 
 
                                                 
-  The non final national administrative decision that was the source of findings 
of  the  case  was  annuled  by  a  national  jurisdiction  before  the  opening  of  the 
adversarial procedure by the Panel with the economic operator. 

As  regards  the  7  recommendations  adopted  so  far,  7  decisions  have  been  taken  by  the 
authorising  officers  concerned.  All  decisions  already  adopted  follow  in  full  the 
corresponding recommendation of the Panel.  

In addition, out of the 7 recommendations, the Panel recommended in 5 cases21 the the 
publication.  The  publication  was  justified  by  e.g.  the  refusal  of  controls  or  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 Panel  recommended in 2018 the  first  two  exclusions on the 
grounds  of  fraud  on  the  basis  of  the  preliminary  classification  in  law  by  the.  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.   

Overall, out of the 52 cases referred to the Panel so far22 since its setting-up, the Panel 
adopted 29 recommendations, including in 3 cases a recommendation of non-exclusion. 
This has led up to now to 25 exclusion decisions taken by authorising officers.  

The  following  table  shows  an  overview  of  the  cases  where  the  Panel  issued  a 
recommendation in 2018 and of those cases submitted to the Panel in 2017 and where the 
recommendations  were  issued  in  the  first  semester  of  2019.  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. 

Full  judicial  review  at  EU  level:  decisions  taken  by  the  EU  Institution/agency/body  on 
the basis of the Panel recommendation may be appealed before the EU Court of Justice. 

The  Court  of  Justice  has  upheld  the  validity  of  EDES  system  established  in  2016  both 
concerning  the  early  detection  (Judgment  of  the  General  Court  of  24  October  2018  in 
Case T-477/16, Epsilon International SA v European Commission) and the exclusion part 
(Judgment of the General Court of 8 November 2018 in Case T-454/17, “Pro NGO!” v 
Commission). A number of appeals have been dismissed as inadmissible23. 

21 Up to now, 2 out of these 5 cases have been already published. 

22 This discrepancy also results from the facts that a number of cases have been referred  closely before the 
adoption of this document and are not covered herein. 

23 See i.a. Orders of the General Court of 28 September 2017, in Case T-207/16, Aristoteleio Panepistimio 
in  Case  T-664/17, 
Thessalonikis  v  European  Commissions  and  of  18  September  2018 
eSlovensko/Commission. 

12 

 
 
                                                 
Two other cases have allowed – without questioning the validity of the EDES – to clarify 
certain  procedural  issues,  such  as  the  retroactive  application  of  the  more lenient  law  in 
favour  of  the  economic  operator  despite  the  existence  of  a  stricter  substantive  law  in 
force at the time of the facts24 and the non admissibility of electronic proof of receipt as 
evidence that the economic operator has  effectively become aware of the notification.25 
The  Commission  is  taking  full  account  of  this  judgment,  while  seeking  at  the  same  to 
ensure that unreliable economic operators cannot escape sanctions by not acknowledging 
the notification of legal acts addressed to them.   

24 Judgment of the General Court of 27 June 2017 in Case T-151/16, NC v Commission. It should be noted 
that,  although  the  material  EDES  rules  already  applied  when  the  challenged  Commission  decision  was 
adopted, the related exclusion procedure had taken place before the setting-up of the Panel. This means that 
the latter was ont involved in the adversarial procedure and did not issue a recommendation.   

25 Judgment of the General Court of 7 December 2018 in Case T-280/17, GE.CO.P. v Commission. 

13 

 
 
 
 
                                                 
Annex 1 - Summary of anonymised cases referred to the Panel of Article 143 (ex-108) of the Financial Regulation 

Date of the 
decision of the 
authorising 
officer: 

12.06.2018 

CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2017/09  False 

and 
information 
documentation  presented  in 
the tender procedure.  

"Fraud". 

26.03.2018 

Publication  given 
the  gravity  of  the 
its 
conduct  and 
the 
impact  on 
outcome  of 
the 
procurement 
procedure 
concerned, 
well 
as 
repeated 
statements. 

as 
the 
false 

from 
Exclusion 
and  EDF 
EU 
funding 
a 
for 
period of 3 years. 

his 

Given 
personal 
in 
involvement 
the  misconduct, 
registration  in  the 
EDES database of 
the  person  with 
power 
of 
representation, 
decision-making 
or  control  over 
concerned 
the 
linked 
operator, 
with the exclusion 
of the operator. 

 
 
 
 
 
CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2017/01  Situations  of  conflict  of 

interest 

"Serious  breaches  of 
contractual 
obligations" 

18.04.2018 

Exclusion 
from 
EDF funding for a 
period of 2 years  

NA 

Date of the 
decision of the 
authorising 
officer: 

02.07.2018 

Non-respect 
governing procurements.  

of 

rules 

Irregularities  concerning  the 
use  of  funds  (eg  absence  of 
supporting documents).  

15 

 
 
 
 
Date of the 
decision of the 
authorising 
officer: 

07.03.2018 

CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2017/11  Failure  in  providing  a  pre-
financing  guarantee,  despite 
numerous reminders. 

"Serious  breaches  of 
contractual 
obligations" 

26.01.2018 

Exclusion  for  a 
period of 3 years  

Non-replacement 
a 
performance guarantee issued 
by a non-authorised guarantor 

of 

Severe delays in delivery and 
implementation 
the 
contract.   

of 

The 
publication 
of  the  exclusion 
decision 
is 
the 
justified  by 
number  of  grave 
contractual 
violations, 
compounded  by 
the 
of 
lack 
cooperation of the 
entity  concerned, 
in  particular  with 
regard 
the 
replacement  of  a 
issued 
guarantee 
by 
non-
a 
authorised 
guarantor. 

to 

16 

 
 
 
 
Date of the 
decision of the 
authorising 
officer: 

 12.02.2019 

29.06.2018 

CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2018/8 

Case 2017/08 

"Grave 
misconduct" 

professional 

22.01.19 

Exclusion  for  a 
period of 2 years 

of 

Frequent 
false 
use 
information  to  disguise  the 
the 
criminal 
nature 
in 
operator 
exchange 
economic 
benefits.  

of 
activities 
for 

"Serious  breaches  of 
contractual 
obligations "  

30.05.2018 

Exclusion  for  a 
period of 2 years  

Violation 
contractual 
of 
obligation  refusing  to  grant 
access  to  OLAF  in  order  to 
establish  whether  there  had 
been 
crimes 
committed 
affecting  the  interests  of  the 
European Union.   

17 

The 
Panel 
recommends  not 
to  publish 
the 
exclusion  

 The  publication 
of  the  exclusion 
is 
decision 
the 
justified  by 
gravity  of 
the 
carried 
conduct 
the 
by 
out 
economic 
operator, 
who 
obstructs  OLAF 
verifications.  

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                 
 
 
 
 
CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Date of the 
decision of the 
authorising 
officer: 

Case 2018/02  The  administrative  decision 
concerning  the  behaviour  of 
economic 
two 
operators  under  the  antitrust 
been 
perspective 
judicial 
cancelled 
decision  

different 

has 
a 

by 

“Distorsion 
competition rules”  

of 

The  situation  of 
exclusion  has  not 
legally 
been 
established  

The  request  of 
recommendation 
become 
has 
of 
devoid 
purpose  – 
the 
Panel  replied  by 
on 
letter 
14.11.2018 

No  

No 

18 

 
 
Date of the 
decision of the 
authorising 
officer: 

12.07.2019 

CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2018/03  Non 

and 
conformity 
significant  failure  to  perform 
the works in compliance with 
the contractual obligations. 

“Serious  breaches  of 
the contract”  

24.5.2019 

Exclusion  for  a 
period of 3 years 

Failure  to  comply  with  the 
monitoring  program,  planned 
to 
lack  of 
address 
performance. 

the 

Obstruction  of  the  calling  of 
the guarantees. 

The 
recommends 
publish 
exclusion. 

Panel 
to 
the 

The publication is 
the 
justified  by 
finacial 
high 
impact  on 
the 
insterests 
EDF 
and the impact on 
the  image  of  the 
EU  development 
programme  in  a 
third  country  as 
well  as  from  the 
fact 
the 
that 
economic 
operator 
obstructed 
calling 
of 
guarantees.  

the 
the 

19 

 
 
Date of the 
decision of the 
authorising 
officer: 

18.07.2019 

CASE 
NUMBER 

FACTS 

CLASSIFICATION 
IN  LAW  (exclusion 
ground) 

Date of the Panel 
recommendation
: 

SANCTIONS 

PUBLICATION 

Case 2018/07  Not  honouring  the  payment 

of the guarantees 

24.5.2019 

Exclusion  for  a 
period of 3 years 

“Significant 
deficiencies 
in 
complying  with  main 
obligation 
the 
implementation  of  the 
contract” 

in 

“Grave  professional 
misconduct” 

Panel 
The 
to 
recommends 
the 
publish 
The 
exclusion. 
publication 
is 
justified, since the 
non  payment  of 
the  guarantees  by 
economic 
the 
operator 
prevented 
Contracting 
from 
Auhtority 
recovering 
an 
amount  of  EUR 
10 million. 

the 

20 

 
 
 
 
 
 
Annex 2 – Statistics concerning the Panel cases 

Legal basis of Panel Recommendations 
(number of cases presented to the Panel during 2018) 

4 

2 

1 

106 c) Grave Professional
misconduct

106 d (i) Fraud

106 e) Serious breach of
contractual obligations

21 

 
 
 
 
 
 
 
Summary of Case Status  
(number of cases presented to the Panel during 2018) 

8

7

6

5

4

3

2

1

0

2 

1 

1 

6 

Research and Information
Policy

External Action and
Neighboorhood Policy

Cases assessed by the Panel

Inadmissible Cases

Ongoing Cases

22 

 
 
 
 
 
 
 
Sanctions Recommended by the Panel (number of cases 
presented to the Panel during 2018) 

7

6

5

4

3

2

1

0

6 

3 years

1 

5 years

23 

 
 
 
 
 
Recommended Publication (number of cases 
presented to the Panel during 2018)  

3 

2 

Published

Recommended Publication

24 

 
 
 
 
 
 
 
 
 
Summary of Case Status  
(number of cases presented to the Panel during 2018) 

1 

1 

1 

8

7

6

5

4

3

2

1

0

7 

Sanctioned Cases

Non-Sanctioned Cases
(e.g.considering
remedial
actions,situation of
exclusion not legally
established)

Pending Cases

Suspended Cases

25 

 
 
 
 
 
 
Summary of Cases per Year of filing(number of cases presented to the 
Panel during 2018) 

8

7

6

5

4

3

2

1

0

4 

3 

3 

Research and Information Policy

External Action and Neighboorhood
Policy

2018

2017

26