COMMISSION STAFF WORKING DOCUMENT Implementation of Article 325 TFEU by the Member States in 2018 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) 364 final  COMMISSION STAFF WORKING DOCUMENT Implementation of Article 325 TFEU by the Member States in 2018 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) 362 final} - {SWD(2019) 363 final} - {SWD(2019) 365 final}  
 
 
TABLE OF CONTENTS 

Table of Contents ....................................................................................................................... 1 

Table of Figures ......................................................................................................................... 2 

1 

2 

2.1 

2.2 

2.3 

2.4 

3 

3.1 

Protecting the EU financial interests ............................................................................ 4 

Overview of the measures taken by Member States in 2018 ....................................... 4 

Legislative measures .................................................................................................. 8 

Administrative measures ........................................................................................... 8 

Organisational measures ........................................................................................... 8 

Operational measures ................................................................................................ 9 

Cross-cutting anti-fraud initiatives and measures by Member States .......................... 9 

Progress on the development of National Anti-Fraud Strategies in 2018 .................... 9 

3.1.1 

Background to NAFS .................................................................................................. 11 

3.1.2  Guiding principles ...................................................................................................... 11 

3.2 

3.3 

3.4 

4 

5 

5.1 

5.2 

6 

6.1 

6.2 

Measures to enhance transparency and fight corruption and anti-conflict of interest in 
public procurement ..................................................................................................... 12 

Measures against financial and organised crime ........................................................ 22 

Other measures ........................................................................................................... 25 

Anti-fraud measures covering both Revenue and Expenditure sectors ..................... 27 

Anti-fraud measures in Revenue by the Member States ............................................ 29 

Fight against customs fraud .................................................................................... 29 

Fight against tax fraud............................................................................................. 34 

Anti-Fraud Measures by Member States - Expenditure ...................................... 35 

Measures covering several shared management sectors ...................................... 35 

Agriculture and fisheries ......................................................................................... 38 

6.2.1  Agriculture ................................................................................................................ 38 

6.2.2  Agriculture and Fisheries ........................................................................................ 40 

6.2.3  Fisheries .................................................................................................................... 42 

6.3 

7 

7.1 

Cohesion policy ......................................................................................................... 43 

Additional measures reported by Member States ................................................. 51 

Belgium...................................................................................................................... 51 

7.1.1  German speaking Community   2 additional measures: ...................................... 51 

1 

 
 
 
7.1.2  3 additional measures by the Walloon Region (1/ & 2/ concerning ESF, 3/ 

concerning agriculture: ........................................................................................... 51 

7.1.3  1 additional measure by the Flemish Regions - Integrity: .................................... 51 

7.2 

Bulgaria ..................................................................................................................... 52 

7.2.1  Package of measures - Structural reform of the customs administration .......... 52 

7.2.2  Package of measures - implemented by the Executive Agency for the Audit of 

European Union Funds (AEUFEA) ........................................................................ 52 

7.3 

7.4 

7.5 

Germany.................................................................................................................... 52 

Estonia ....................................................................................................................... 53 

Latvia ......................................................................................................................... 53 

7.5.1  Updated risk register in administration of FEAD ................................................ 53 

7.5.2  Internal rulings are in place which stipulates that fraud and other economic 

crimes (incl. illegal activieties in EU funds) are one of the investigative top 
priorities. ................................................................................................................... 53 

7.5.3  Risk assessment performed for Latvia-Russia CBC programme 2014-2020 ..... 53 

7.5.4  Enhanced protection of the financial interests of the Union (VAT) against fraud
 .................................................................................................................................... 54 

7.5.5  Update of anti-fraud measures in ESF management system ............................... 54 

7.6 

7.7 

8 

9 

Slovenia ..................................................................................................................... 54 

United Kingdom ....................................................................................................... 55 

Training on the Irregularity Management System organised by the Member 
States.......................................................................................................................... 55 

Case studies reported by Member States ............................................................... 56 

9.1 

Bulgaria ..................................................................................................................... 56 

9.1.1  Rural Development Programme 2007-2013 - misuse of EU funds to purchase a 

yacht as an investment under measure 4.1. ‘ Development of fishing areas’. .... 56 

9.1.2  Cigarette smuggling ................................................................................................. 56 

9.2 

9.3 

9.4 

9.5 

9.6 

9.7 

Croatia ....................................................................................................................... 57 

Hungary .................................................................................................................... 57 

Italy ............................................................................................................................ 58 

Lithuania ................................................................................................................... 59 

Romania .................................................................................................................... 60 

United Kingdom ....................................................................................................... 61 

2 

 
 
 
TABLE OF FIGURES 

Figure 1: Distribution of reported measures by type .....................................................................5 

Figure 2: Measures shown by area addressed and stage/s in the anti-fraud cycle ........................5 

Figure 3: Number of measures reported by area ...........................................................................6 

Figure 4: Cross-cutting v Sectoral .................................................................................................6 

Figure 5: Cross-cutting vs Sectoral by Member State ...................................................................7 

Figure 6: Sectoral measures: expenditure .....................................................................................8 

Figure 7: NAFS: State of play .....................................................................................................10 

Figure 8: Training sessions organised by Member States in 2017 ..............................................55 

3 

 
 
 
 
 
MEASURES TAKEN BY MEMBER STATES 

1  PROTECTING THE EU FINANCIAL INTERESTS 

The  protection  of  the  EU  financial  interests  is  a  shared  responsibility  between  the  European 
Institutions  and  the  Member  States,  which  contribute  to  the  largest  part  of  the  EU  budget, 
collect the Traditional Own Resources on behalf of the EU, but also manage directly about 74% 
of its expenditure. 

Article  325,  paragraph  2,  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU) 
states that "Member States shall take the same measures to counter fraud affecting the financial 
interests of the Union as they take to counter fraud affecting their own financial interests".  

According  to  paragraph  5  of  the  same  Treaty  article,  the  "Commission,  in  cooperation  with 
Member States, shall each year submit to the European Parliament and to the Council a report 
on the measures taken for the implementation of this Article".  

To compile this document and gather the necessary information to prepare the aforementioned 
report,  the  Commission  has  requested  Member  States  to  report  up  to  three  measures,  which 
they considered as the most important for the protection of the EU financial interests. In annex 
to this document, the reader will find the model survey through which these contributions have 
been collected, using the web platform EU Survey. 

2  OVERVIEW OF THE MEASURES TAKEN BY MEMBER STATES IN 2018 

Member States reported a significant number (71) of measures in 2018 on the protection of the 
EU’s financial interests and the fight against fraud. As Member States were invited to report a 
maximum of three (most important) anti-fraud measures, this document therefore offers a good, 
albeit non-exhaustive, overview of trends and priorities in the anti-fraud measures implemented 
by  Member  States.  The  number  of  measures  effectively  reported  would  be  higher,  if  one 
considers  that  Member  States  may  report  'single'  or  'package'  measures.  The  latter  usually 
encompasses  a  number  of  instruments  adopted  at  the  same  time  and  to  pursue  the  same 
objective. On the total number of reported measures, 29 (41%) consisted of 'package' measures. 

Some Member States also reported additional measures (for a total of 14). They are detailed in 
chapter 6 of the present document. 

7  Member  States  also  reported  case  studies  in  various  sector  of  the  protection  of  the  EU 
financial interests. They are collected in chapter 8. 

Four  different  types  of  measures  were  reported  and  analysed:  legislative,  administrative, 
organisational  and  operational.  In  2018  Member  States  reported  a  considerable  number  of 
measures  focusing  on  operational  aspects  (almost  40%).  Legislative  and  organisational 
measures have comparable shares on the total (22%), as showed in Figure 1. 

4 

 
 
Figure 1: Distribution of reported measures by type 

Member  States’  measures  covered  the  entire  anti-fraud  cycle.  Similarly  to  what  reported  in 
2017,  they  focussed  in  particular  on  fraud  prevention  (80%  of  the  measures)  and  detection 
(77%),  mostly  in  the  area  of  shared  management  and  control  of  EU  funds  and  public 
procurement (39%), followed by measures against conflict of interests and corruption (30% and 
27% respectively).  

Figure 2 shows how the various measures  are distributed per area and stage of the anti-fraud 
cycle concerned. 

Figure 2: Measures shown by area addressed and stage/s in the anti-fraud cycle 

Figure 3 breaks down the same information by Member State and by area concerned. 

5 

PreventionDetectionInvestigationRecovery Total N° of measuresPublic procurement25196728Financial crime (incl. money laundering)11107715Organised crime68439Corruption17126519Conflict of interest20185721Fraud definition66237AFCOS64457Whistleblower76547Customs / TOR / illicit trade8103313Shared management and control of EU funds25228928Antifraud or anticorruption strategy13139914Other14127716TOTAL5755232171%80%77%32%30%100% 
 
 
 
 
Figure 3: Number of measures reported by area 

It should always be kept in mind that each measure can target more areas. 

The majority of measures were sectoral (64%), but those of a horizontal natural represent more 
than a third (36%), as showed in Figure 4.  

Figure 4: Cross-cutting v Sectoral 

Figure 5 breaks down this information by Member State. 

6 

Member StateNo of measuresPublic procurementFinancial crime (incl. money laundering)Organised crimeCorruptionConflict of interestFraud definitionAFCOSWhistleblowerCustoms / TOR / illicit tradeShared management and control of EU fundsAntifraud or anticorruption strategyOtherBE311111BG3211211211CZ31111111DK2221DE332211111EE3111112IE11GR3111111121ES2211FR0HR11IT31211CY332LV313121111311LT3112LU221HU32112111MT211111NL3212211AT32111111PL211PT31111RO33122122SI3112113SK3113FI3111SE322221121UK2211111TOTAL7128159192177713281416% of total100%39%21%13%27%30%10%10%10%18%39%20%23% 
 
 
 
Figure 5: Cross-cutting vs Sectoral by Member State 

Among the sectoral measures reported, about 30 relate to various expenditure sectors and 14 to 
revenue. One addressed both areas of the budget. Figure 6 shows that the majority of adopted 
measures in expenditure sectors largely relates to Cohesion policy, followed by Agriculture and 
Fisheries. 

7 

Member StateHorizontalSectoralTotalAT33BE123BG213HR11CY33CZ33DK22EE123FI123FR0DE33GR123HU213IE11IT33LV213LT123LU22MT112NL33PL22PT33RO213SK33SI123ES22SE33UK11TOTAL254570 
 
 
Figure 6: Sectoral measures: expenditure 

2.1  Legislative measures 

Member  States  reported  twenty-one  legislative  measures  (of  which  6  as  part  of  a 
package of measures). The majority of these acts are horizontal. Legislative measures 
reported by Member States mainly relate to the definition of competences and powers 
(9 measures each) or of a specific topic (8). Four of these measures targeted recovery. 
Their adoption is mainly meant to clarify or consolidate existing rules and to enforce 
the rules in line with developments in EU law (11). 

2.2  Administrative measures 

Sixteen administrative measures have been reported by Member States (of which 12 as 
part  of  a  package  of  measures)  and  they  were  mainly  addressing  'monitoring/desk 
checks'  (11),  'irregularities  reporting'  and  'management  of  the  EU  funds'  (9).  Almost 
half  of  these  measures  also  targeted  'on-the-spot  checks'.  The  purpose  of  such 
measures was mostly to clarify or consolidate existing rules (11). 

2.3  Organisational measures 

Twenty-one  organisational  measures  were  reported  by  Member  States  (of  which  14 
adopted as part of a package of measures). In 2018 Member States focused on 'general 
trainings'  and  'fraud  awareness  trainings'  (10  measures).  Almost  another  half  of  the 
measures  concerned  redefining  the  competence  of  existing  bodies  (9)  and  enhancing 
'inter-agency  cooperation'  (8).  Organisational  measures  mostly  resulted  neutral  in 
terms  of  resources  (14),  but  in  a  number  of  cases  (6)  they  produced  an  increase  of 
resources for the bodies concerned. 

8 

 
 
 
2.4  Operational measures 

In 2018, the focus of Member States was on operational measures, as they reported 38 
of such measures (of which 21 as part of a package of measures). On the same line of 
the  previous  year  the  greatest  majority  of  these  initiatives  referred  to  the 
introduction/use of 'risk indicators' (20) and of 'IT tools' (14). Similarly to 2017 a good 
number  of  measures  (12)  aimed  at  better  'structuring  the  cooperation  with  law 
enforcement.  The  true  operational  nature  of  these  measures  is  witnessed  by  the 
expected results declared by the Member States: a more efficient 'targeting of checks 
(25), enhanced information flow (21) and enhanced ex-ante controls (20). 

3  CROSS-CUTTING ANTI-FRAUD INITIATIVES AND MEASURES BY MEMBER STATES 

The present chapter will focus on the 25 horizontal measures adopted by the Member 
States in 2018, which were reported via the questionnaire.  

Paragraph  2.1  deals  with  the  development  of  National  Anti-Fraud  Strategies, 
considering  its  horizontal  impact  on  the  systems  of  protection  of  the  EU  financial 
interests in Member States. It is mainly an update of information already provided in 
the same Commission Staff Working Document accompanying the PIF Report 2017. 

Paragraphs from 2.2 to 2.4 focus on specific topics/themes addressed by the measures 
adopted by Member States. 

3.1  Progress on the development of National Anti-Fraud Strategies1 in 2018  

By  the  end  of  2018,  a  total  of  eleven  Member  States  had  adopted  a  National  Anti-
Fraud Strategy and transmitted it to the Commission, while another one has notified it 
in the beginning of 20192. The Commission invites all other Member States to follow 
such  example  and  establish  NAFS  based  on  the  Guidelines  prepared  by  the 
Commission in collaboration with Member States experts.  

In  reply  to  the  PIF  questionnaire  2018,  two  more  Member  States  informed  the 
Commission  of  having  adopted  a  NAFS,  but  this  has  not  been  communicated  yet. 
Another  Member  State  informed  the  Commission  of  having  adopted  a  sectorial 
antifraud strategy (Customs)3. 

1  

2  

The Commission invites Member States to consult the General Guidelines on National Anti-Fraud Strategies 
when starting the procedure of establishing a NAFS.  
The  ten  Member  States  are:  Bulgaria,  Croatia,  Czech  Republic,  France,  Greece,  Hungary,  Italy,  Latvia, 
Lithuania,  Malta  and  Slovakia.  Austria  reported  its  strategy  in  the  beginning  of  2019.  Portugal  and  the 
United Kingdom replied to the questionnaire that they have adopted a National Anti-Fraud Strategy, but they 
have  not communicated it officially to the Commission. Furthermore,  Romania indicated that their strategy 
was  applicable  to  a  former  programming  period  and  are  currently  preparing  a  new  one.  Besides,  Belgium, 
Luxembourg and the Netherlands reported that the procedure to establishing a NAFS is on-going. 

3 See footnote 2. 

9 

 
 
                                                           
Figure 7: NAFS: State of play 

A National Anti-Fraud Strategy allows for structuring the fight against fraud affecting 
EU and national budgets at Member State level. It helps identifying vulnerabilities to 
fraud  in  the  systems,  assessing  the  main  fraud  risks,  setting  and  implementing 
adequate responses; evaluating progress made, adapting the response to the evolution 
of  the  fraud  trends  and  the  resources  available,  and  ensuring  the  involvement  of  all 
relevant  stakeholders  in  particular  by  means  of  enhanced  collaborative  and 
coordinated  actions.  A  NAFS  also  helps  to  ensure  harmonisation  of  the  response  to 
fraud  risks  throughout  the  country,  especially  in  the  case  of  a  decentralised 
management structure. 

The benefits of a National Anti-Fraud Strategy include: 

  Ensuring the effective and efficient protection of the EU financial interests (i.e. 
improving the prevention, detection  and  fight against corruption  and  any other 
illegal activities affecting the financial interests of the Union); 

  Setting out a better working framework upon which the institutions involved in 
the process of implementation and control of EU funds could work together to 
improve  administrative  capacity  and  determine  more  precisely  the  roles  and 

10 

 
 
 
responsibilities  of  the  institutions  involved.  This  would  ensure  effective  co-
ordination  of  legislative,  administrative  and  operational  activities  of  the 
institutions; 

  Achieving a higher degree of recovery of unduly spent funds from the budget of 
the  European  Union  and  contributing  to  proportionate  and  dissuasive  penalties 
in accordance with the applicable law. 

3.1.1  Background to NAFS 

The  new  Multiannual  Financial  Framework  applicable  to  the  programming  period 
2014-2020  has  been  strengthened  as  regards  fraud  risk  assessment,  fraud  prevention 
and  detection.  For  shared  management  the  sectoral  Regulations  require  Member 
States: 

 

 

to  put  in  place  effective  and  proportionate  anti-fraud  measures,  taking  into 
account the risks identified,  

to  take  the  necessary  steps  to  prevent,  detect  and  sanction  fraud  and 
irregularities effectively and  

 

to reimburse irregular amounts to the EU budget.  

However, going beyond the immediate regulatory requirements and embedding these 
anti-fraud measures in a National Anti-Fraud Strategy (NAFS) is encouraged in order 
to  ensure  better  monitoring  of  the  fight  against  fraud  detrimental  to  the  financial 
interests of the EU and that of the Member States, as well as to ensure homogenous 
and  effective  practices,  especially  where 
the  organisational  structures  are 
decentralised. 
The Commission has recommended in several occasion4 the adoption of NAFS which 
could  provide  the  pertinent  framework  for  enhancing  the  impact  of  all  individual 
initiatives  taken  at  national  level  to  protect  the  EU  financial  interests  and  the  same 
request has been reiterated several times in the motions for resolutions adopted by the 
European Parliament on the protection of the EU financial interests5. 

Also the European Court of Auditors, in its Special Report 06/2019: Tackling fraud in 
EU cohesion spending: managing authorities need to strengthen detection, response 
and  coordination  has  acknowledged 
instruments, 
recommending  that  "Member  States  that  do  not  have  a  national  anti-fraud  strategy 
should formulate one". 

importance  of  such 

the 

3.1.2  Guiding principles 

In  the  last  three  years,  the  COCOLAF  Fraud  Prevention  Group  focused  on  various 
aspects  of  the  NAFS  topic.  First,  as  a  pilot  project,  the  working  group  in  2014 
prepared  the  'Guidelines  for  National  Anti-Fraud  Strategies  for  European  Structural 
and Investment Funds (ESIF)'. These guidelines laid down the foundation for drafting 
a  National  Anti-Fraud  Strategy,  however  with  a  limited  scope  on  expenditure  in  the 

4 E.g. recommendation 1 in the PIF Report 2014. COM(2015) 386 final. 
5 See, for all, paragraph 5 of the motion for a European Parliament Resolution on the  Annual Report 2017 on the 

protection of the European Union’s financial interests – fight against fraud (2018/2152(INI)). 

11 

 
 
                                                           
field  of  ESIF.  In  the  following  year,  another  working  group  was  set  up  to  target  the 
practical  side  of  NAFS.  As  a  result,  in  2015  the  document  called  'Practical  steps 
towards  drafting  of  a  National  Anti-Fraud  Strategy'  was  issued  together  with  a 
practical tool6 to carry out the assessment of the state of play with regard to the current 
measures in place, taking into account all the four stages of the anti-fraud cycle.  

The current guidelines represent an update of the NAFS guidelines issued in 2014. The 
working group in 2016 aimed at revising as well as enlarging the previous guidelines 
for  the  NAFS  so  that  it  become  a  horizontal  document  covering  all  shared 
management  expenditure:  European  Structural  and  Investment  Funds  (ESIF), 
Agriculture, Home Affairs Funds (AMIF/ISF) and Fund for European Aid to the Most 
Deprived (FEAD). In addition, the guidelines were enriched with a number of concrete 
examples of Member States' practice that have proven to be successful. 

3.2  Measures to enhance transparency and fight corruption and anti-conflict of interest 

in public procurement 

13  measures  were  reported  which  addressed  the  issue  of  corruption  in  public 
procurement.  

Bulgaria – Act on combating corruption and forfeiture of illegally acquired property and 
creation of a specialised body 

In the beginning of 2018, Bulgaria adopted the Act on combating corruption and the forfeiture 
of illegally acquired property (ZPKОNPI), and the creation of a single specialised body  - the 
Commission  for  the  combating  of  corruption  and  the  forfeiture  of  illegally  acquired  property 
(KPKONPI).  The  Act  was  published  in  State  Gazette  No  7  of  19  January  2018,  amended  in 
State Gazette No 1 of 3 January 2019. 

The  Act  aims  to  protect  the  interests  of  the  public  by:  effectively  combatting  corruption; 
ensuring  that  persons  in  high  public  office  exercise  their  powers  with  honesty  and  integrity; 
preventing  the  unlawful  acquisition  and  disposal  of  property,  including  resources  from  funds 
belonging to the EU or provided by the EU to the Bulgarian State. 

Further, it removes the shortcomings resulting from the fragmented legal framework in the area 
of the fight against corruption. Different anti-corruption bodies are brought together in a single 
anti-corruption body. 

In carrying out its duties, the Commission for the combating of corruption and the forfeiture of 
illegally  acquired  property  (KPKONPI)  organises  seminars,  training  courses  and  information 
campaigns to combat corruption. 

The  objective  of  the  Act  is  also  to  raise  public  awareness  and  to  ensure  that  it  is  possible  to 
monitor  persons  who  play  a  decisive  role  in  the  disbursement  of  significant  public  funds, 
including  EU  resources,  and  who  are  at  an  increased  risk  of  corruption.  Under  Article  59 
ZPKОNPI persons in high public office are not entitled to dispose of EU resources. The scope 

6 In the form of an xls file. 

12 

 
 
                                                           
of  the  Act  also  covers  certain  types  of  financial  offences.  Indictments  for  these  types  of 
offences entail proceedings for forfeiture of the property illegally acquired. 

Bulgaria - Act amending the Public Procurement Act 

The  Act  amending  the  Public  Procurement  Act  was  published  in  State  Gazette  No  86  of  18 
October  2018  and  entered  into  force  on  1  March  2019,  apart  from  some  amendments  which 
have different deadlines depending on the matters that they address. 

The  main  objective  of  the  Act  amending  the  Public  Procurement  Act  is  to  supplement  and 
clarify the rules and conditions for the gradual introduction and implementation of the national 
electronic platform, as well as the relations between the different types of consumers. The use 
of the platform will allow public procurement contracts  in  Bulgaria to  be awarded mainly by 
electronic means. 

It lays down conditions for the introduction of the national  electronic platform and electronic 
invoicing  for  payments  due  under  contracts.  The  other  changes  concern  greater  publicity  and 
transparency  during  procurement  procedures,  optimising  the  work  of  the  competent  bodies, 
supplementing and clarifying the current legal framework, including new penalties for offences 
that are not currently covered, optimising the type and scope of ex ante controls carried out by 
the Public Procurement Agency (AOP) and so on. 

Electronic  invoicing  for  payments  due  under  contracts  has  been  introduced.  With  a  view  to 
greater publicity and transparency, purchaser profiles will also be published for subcontractors, 
while information on ‘small contracts’ and on all additional agreements in connection with the 
contracts will be published in the public procurement register. 

13 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionPublic procurement; financial crime; organised crime; corruption; conflict of interests; Whistleblower; Shared management and control of EU funds; Antifraud or anticorruption strategySingleLegislativeNCompetences, powers, other administrative penaltiesto clarify or consolidate existing rules, to remedy flaws, to enforce the rules in line with developments in EU law, other H 
 
 
 
Cyprus – Network of core officers for public procurement 

In  2018,  Cyprus  established  a  network  of  core  officers  for  the  area  of  public  procurement 
covering all ministries, departments and other contracting authorities of the wider public sector 
and  conducted  the  first  set  of  trainings  which  also  covered  areas  against  fraud  and  corrupt 
practices. 

The  training  covered  all  areas  of  public  procurement  -  publication,  evaluation,  award  and 
implementation and also covered sensitive areas for conflicts of interest, fraud and corruption. 

Cyprus –E-procurement 

In  2018  Cyprus  proceeded  to  the  automatic  publication  of  tender  prices  with  the  opening  of 
tenders through the e-procurement system for all open tender procedures above and below the 
EU thresholds. 

The  measure  limits  the  possibility  for  corruption  and  conflicts  of  interest  since  it  allows  full 
transparency of the tender procedure to all parties (information available to the general public 
not just affected parties). 

Via the implementation of this IT-tool, it will enhance fraud prevention and detection and allow 
for a better targeting of checks and investigations. 

14 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionHPublic procurement, corruptionSingleLegislativeACompetences, powers, definition of a specific topic, other admministrative penalties, otherto clarify or consolidate existing rules, to remedy flaws, to enforce the rules in line with developments in EU law, other Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionPublic procurement, conflict of interestsSingleAdministrativeAManagement of  funds, monitoring/desk checks, penaltyTo clarify or consolidate existing rules; to enhance existing measuresH 
 
 
 
 
 
 
Cyprus – Mandatory electronic submission of all published tenders both above and below the 
EU threshold 

The  measure  limits  the  possibility  for  corruption  and  conflicts  of  interest  since  it  allows  full 
transparency  of  the  tender  procedure  to  all  interested  parties  and  enhances  participation  and 
cross border involvement in the Cypriot public procurement market. 

Czech Republic - Continuity of training in the area of public procurement 

This  organisational  measure,  adopted  by  the  Czech  Republic  in  July  2018,  results  from  the 
need to continue improving the awareness of participants in public procurement procedures, as 
well as of the expert community and the general public in the Czech Republic. The Ministry of 
Regional  Development  as  the  entity  overseeing  Act  No  134/2016  on  public  procurement,  as 
amended,  launched  a  new  training  programme  in  October  2016.  It  is  aimed  at  significantly 
enhancing users' expert knowledge of public procurement, and not just in connection with the 
newly adopted public procurement legislation, as the training events also focus on controls on 
public procurement. 

15 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionOperationalNIT tools ("IT data feeding", "Other It")Public procurementSingleEnhanced information flow; targeting of checks, targeting of investigationsHAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionPublic procurement, conflict of interestsSingleOperationalNIT tools ("IT data feeding", "Other It"), Increased number of checksEnhanced information flow; enhanced ex-ante controlsH 
 
 
 
 
 
Estonia – Checks on subcontractors 

In  public  procurement  procedures  relating  to  works  and  works  concessions  the  contracting 
authority  must  verify  that  the  subcontractors  to  successful  tenderer  do  not  have  mandatory 
exclusion grounds according to Public Procurement Act art 95 para 1 (EU directive 2014/24/EL 
art 57 paragraphs 1 and 2). This provision applies to procurements above the threshold of 150 
000  EUR.  All  additional  first  level  subcontractors  must  be  checked  also  during  the 
implementation of a contract. 

Directive  2014/24/EL  art  57,  paragraph  1,  letters  b)  and  c)  include  as  exclusion  grounds 
corruption and fraud. Verifying subcontractors, in addition to tenderers, protects EU financial 
interest and promotes the fight against fraud. 

During  public  procurement  procedure  for  works  or  works  concessions,  as  well  as  during 
implementation  of  such  contract,  above  the  threshold  of  150  000  euros,  the  contraction 
authority must verify the absence of mandatory exclusion grounds of first level subcontractors 
of the successful tenderer, stated in  PPA art 95 paragraph 1. All  tenderers must state in  their 
tender  that  they  do  not  employ  any  subcontractors  with  exclusion  grounds.  If  an  exclusion 
ground is detected, such subcontractor may not be part of implementation to the contract. 

This legislative measure, amending the Public Procurement Act was adopted on July 2018 and 
aim to promote the fight against tax evasion. 

16 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionPublic procurement, corruptionSingleOrganisationalAGeneral trainingsNeutral on resourcesHAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionHPublic procurement, financial crime, organised crime, corruption, conflict of interestsSingleLegislativeAOther (public procurement)to promote the fight against tax evasion 
 
 
 
Finland - Legislative amendment on the more effective exchange of corruption-related 
information between authorities 

Finland adopted on May 2018 the Act 22/2018 which gives the tax administration the right to 
pass corruption-related information on to pre-trial investigation authorities on its own initiative. 
As part of amending the Act on the public disclosure and confidentiality of tax information, the 
tax administration has obtained the right to furnish, on its own initiative, other authorities with 
data  on  circumstances  which  come  to  light  during  the  tax  check  and  which  may  arouse 
suspicion of professional misconduct, bribery or an abuse of a position of trust. The amendment 
is aimed at making detection and investigation of corruption-related offences easier. 

The Act  on the public disclosure and confidentiality of tax information  has been amended in 
such a way to give the tax administration the right to furnish, on its own initiative and without 
prejudice to the obligation of professional secrecy, the pre-trial investigation authority with tax 
information  on  circumstances  which  come  to  light  in  a  tax  check  and  which  may  arouse 
suspicion  of  certain  offences  relating  to  professional  misconduct  and  bribery  having  been 
committed, as well as information identifying the taxable person. 

Hungary - anti-corruption activities of the Public Procurement Authority 

Hungary  reported about the anti-corruption activities (organisational  measures) of the Public 
Procurement Authority in 2018: 

I.  procurement market  

(1) participating in implementing e-procurement  

(2) verifying the legality of public procurement:  

  verifying the legality of notices;  

  verifying the legality of negotiated procedures without publication;  

  verifying the execution and amendment of concluded contracts in requests 

for legal remedy;  

(3) informing and organising training;  

(4) engaging in activities aimed at increasing transparency, e.g.: managing the list 

17 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionLegislativeACompetencesTo clarify or consolidate existing rules; to remedy flawsCorrutpionSingleH 
 
 
of banned tenderers; codes of ethics.  

II.  Organisational measures by the Authority 

Public procurement accounts for a substantial part of the Union budget. Consequently, making 
public spending integrity-based, transparent and accountable in the area of public procurement 
explicitly protects the Union’s financial interests.  

The  Authority  will  manage  its  anti-corruption  measures  as  a  ‘package’,  broken  down  in  the 
above areas. 

The  Public  Procurement  Authority  is  committed  to  establishing  and  maintaining  an 
organisation based on integrity. To this end, it has made improvements in a number of areas, 
including its internal communication system; it continuously reviews and updates internal rules 
and provides integrity training to staff. 

The  Authority’s  activities  promoting  the  effective  application  of  public-procurement  law 
include publishing guidelines, continuously improving the IT system portal, organising training 
and conferences for interested parties and revising the Code of Ethics for Public Procurement. 
The Public Procurement Authority has been a party to the Joint Declaration of the State Audit 
Office since 2016, which was created to enhance the efficiency of the fight against corruption 
and to increase harmonised institutional resilience to corruption. 

Integrity  training  for  staff  in  2018;  selection  of  prospective  staff  members  by  screening.  The 
conferences focus on the fight against corruption and the transparency of public  procurement. 
An innovative tool, the mobile application Napi Közbeszerzés (Daily Public Procurement) has 
provided guidance in public procurement law since May 2017. Integrated with the Authority’s 
other  online  interfaces,  it  offers  up-to-date  information  and  promotes  transparency.  Public 
contracts concluded after 1 January 2018 have to be uploaded to the Contract Register (CoRe) 
managed by the Authority. Available for search, the contracts are in PDF format. 

The  Authority  manages  the  list  of  banned  and  excluded  tenderers,  as  required  by  law.  The 
Authority’s  code  of  ethics  lays  down  ethical  conduct  in  public  procurement  procedures.  The 
Authority  has  appointed  an  integrity  officer  and  set  up  an  integrity  working  group.  The 
Authority has also developed its relevant risk management plan. 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionPublic procurement, corruptionPackageOrganisationalNew / AmendmentInter-agency cooperation, general trainings, otherNeutral on resourcesHOperationalNew / AmendmentIT tools, increased number of checks, otherEnhanced coordination; enhanced information flow; targeting of checks; enhanced ex-ante and ex-post controls 
 
 
Lithuania – Additional measures by Managing Authority against corruption and fraud 

The Lithuanian Managing Authority reviewed the provisions of national legal acts on reducing 
the probability of occurrence of corruption and fraud cases and analysed the recommendations 
on  the  fraud  risk  assessment  put  forth  by  the  Special  Investigation  Service  (anticorruption 
agency),  Financial  Crime  Investigation  Service  and  Transparency  International,  Lithuania 
Chapter. As a result, the Managing  Authority developed additional measures for reducing the 
occurrence of corruption and fraud cases. 

This  is  an  important  preventive  tool  designed  to  manage  the  potential  risks  of  fraud  and 
corruption. 

Latvia – Whistle-blower protection 

Latvian  Parliament  adopted  the  legislation  on  the  protection  of  whistle-blowers  on  11  of 
October 2018. It will enter into force on 1 May 2019. In addition, Corruption prevention and 
Combating Bureau (KNAB) has developed the Guidelines on Basic Requirements for Internal 
Control  System  for  the  Prevention  of  the  Risk  of  Corruption  and  Conflict  of  Interest  in 
Institutions of a Public Person, including municipalities and state owned enterprises. 

The measure  aims  at  promoting the raising of whistleblowing in  the public interest  regarding 
infringements, and to ensure the establishment and operation of whistleblowing mechanisms, as 
well as the adequate protection of whistle-blowers.  

The Law was prepared in the course of the June 2014 evaluation of Latvia's compliance with 
the  recommendation  made  by  the  United  Nations  (hereinafter  -  UN)  Anti  -  Corruption 
Convention to develop a comprehensive and special legal framework for the legal protection of 
alerts, as well as to fulfil recommendations of the OECD in the areas of anti - corruption, public 
management and corporate governance, including the recommendations made to Latvia in the 
process of accession to the OECD, and the requirements of the Council of Europe. 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionCorruption, conflict of interestsPackageOrganisationalACompetence, inter-agency cooperationNeutral on resourcesH 
 
 
Malta – Specialist training for the Department of contracts 

The  Department  of  Contracts  of  Malta,  in  conjunction  with  the  Institute  for  Public  Service 
(IPS), organised various training courses and workshops for both Contracting Authorities and 
employees of economics operators.  

The Department of Contracts focused its efforts on preventing corruption by raising awareness, 
through training, on the National Public Procurement Regulations (NPPR). In this regard, the 
measure promotes a culture of integrity, improves public procurement governance and ensures 
better interaction and cooperation between public procurement stakeholders. 

Module 6 of the booster course focuses mainly on fraud and corruption in public procurement. 
The salient topics covered during this component are as follows: 

  Main Anti-Fraud, Corruption and Collusion Organisations 
  Reform of the Appeals Process 
  Blacklisting 
  Exclusion of Economic Operators 
  Red Flags 
  Best Anti-Corruption Practices 
  Common errors in public procurement and how they should be corrected 
  Collusion 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsPreventionLegislativeNDefinition of a specific topic; otherTo enforce the rules in line with developments of EU lawDetectionAdministrativeNIrregularities reporting, OtherTo clarify or consolidate existing rules, otherOrganisationalNGeneral trainings, otherNeutral on resourcesPublic procurement, financial crime (including money laundering), organised crime, corruption, conflict of interests, whistleblower, customs/TOR/illicit trade, shared management and control of EU fundsPackage 
 
 
Romania – Adoption of the normative act on the establishment, organisation and 
functioning of the National Office for centralised acquisitions 

Romania reported about: 

 

 

the  approval  of  methodological  standards  for  the  implementation  of  the  provisions  of 
Government  Emergency  Ordinance  No  98  /2017  concerning  the  ex-ante  control 
function  for  the  process  of  awarding  public  procurement  contracts/framework 
agreements,  sectoral  contracts/framework  agreements  and  works  and  services 
concession contracts; and  
the adoption of the legal act concerning the establishment, organisation and functioning 
of the National Office for Centralised Procurement. 

The  legislative  framework  is  strengthened  in  the  field  of  ex  ante  controls,  covering  the 
methodology  for  selecting  contract  award  and  amendment  procedures,  which  function  on  the 
basis  of  a  multi-criteria  risk  matrix,  the  duration  of  control,  quality  aspects  checked  in  the 
context  of  the  tender  documents,  the  contract  notice,  the  tender  assessment  process,  the 
response to requests for clarification/additional information or contractual amendments, aspects 
concerning the conciliation procedure. 

A National Office for Centralised Procurement has been established.  

21 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionHPreventionPublic procurement; Corruption; OtherPackageAdministrativeAEligibility criteria; Management of funds; Monitoring/desk checksTo clarify or consolidate existing rules; To enhance existing measureOrganisationalAGeneral trainings; Fraud awareness trainings; Simplification of proceduresIncreased resourcesOperationalAIT tool; Flagging practiceEnhanced coordination and information flowAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionPublic procurement; financial crime; corruption; AFCOS; otherPackageLegislativeNOtherTo clarify or consolidate existing rules; to enforce the rules in line with developments in EU lawHOperationalNRisk indicators; otherEnhanced ex-ante controls 
 
 
 
3.3  Measures against financial and organised crime 

Czech Republic – Amendment of criminal code in view of EPPO 

The  Czech  Republic  adopted  and  submitted  to  the  national  Parliament  a  comprehensive 
legislative proposal to amend Act No 283/1993 on the Public Prosecutor’s Office, as amended, 
Act  No  141/1961  on  criminal  proceedings  in  court  (the  Code  of  Criminal  Procedure),  as 
amended, Act No 40/2009, the Criminal Code, as amended, and some other acts, in connection 
with  the  adoption  of  Council  Regulation  (EU)  2017/1939  establishing  the  European  Public 
Prosecutor’s Office. 

Amendments  to  the  existing  Czech  legal  provisions  governing  the  system  of  public 
prosecutions and criminal law are necessary for the future European Public Prosecutor's Office 
to function properly in the Czech Republic. 

Hungary – Reform of criminal proceeding and other measures 

Hungary reported measures for developing fraud prevention, investigation, prosecution and the 
recovery of funds: 

1.  To  facilitate  international  law  enforcement  cooperation  at  national  level  and  support 
domestic  criminal  proceedings,  Europol  Secure  Network  (ESN)  user  endpoints  have 
been  established  at  the  Directorate-General  for  Criminal  Affairs,  the  Criminal 
Directorates  and  the  Financial  Intelligence  Unit  of  the  National  Tax  and  Customs 
Administration. 

2.  Act  XC  of  2017  on  criminal  procedure  entered  into  force  (hereinafter:  ‘Criminal 

Procedure Code’) 

3.  Amending  the  definition  of  ‘budgetary  fraud’  in  Section  396(8)  (9)  of  the  Criminal 

Code. 

Direct access to the ESN information channel by investigative bodies enhances and accelerates 
effective cooperation also in law enforcement in crimes that harm budgets administered by, or 
on behalf of, the European Union. 

The new Criminal Procedure Code and the amended Criminal Code have set out clearer rules 
governing, inter alia, procedures for securing and removing assets; the appeal system has 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionAntifraud or anticorruption strategy, otherSingleLegislativeACompetences, powers, to clarify or consolidate existing rules, to enforce the rules in line with developments in EU lawH 
 
 
 
undergone substantial reform; and defendants in budgetary fraud proceedings have become 
motivated to reimburse for financial disadvantage they have caused as soon as possible. 

- Reforming the criminal procedure. 

- It is a feedback provided by practitioners that budgetary fraud is typically carried out in a 
business-like manner. The previous rule excluded the possibility of reducing penalty without 
restriction where the fraud was committed in a business-like manner.  

 Amendment of the Criminal Code has made defendants in budget fraud proceedings motivated 
to reimburse for financial disadvantage they have caused as soon as possible. 

* Investigating and prosecuting criminal offences; an incentive for the offender to repay any 
damage as soon as possible. 
** "The need for modernisation, an efficient criminal justice system and completing procedures 
in a timely manner, while preserving well-functioning institutions and principles" and " Law 
enforcement feedback". 

Latvia– Anti fraud campaign #FraudOff! 2018 

Latvia continued in implementing its social informative campaign started in 2017 with the aim 
to educate society about fraud and promote zero tolerance against fraud.  

Every  year  a  different  focus  theme  is  chosen.  For  example,  in  2017-  it  was  fight  against 
counterfeit  goods,  2018  -  strengthening  a  working  culture,  2019-  informing  society  about 
importance of reporting fraud and other illegal activities. 

#FraudOff!  shows  good  results  not  only  in  national  level  (which  we  measure  with  social 
surveys),  but  in  international  level  as  well.  For  example,  in  2018  (for  the  results  in  2017) 
campaign was awarded with 3 international prizes  - (1) IPRA Golden World Awards (GWA) 
2018;  (2)  European  Excellence  Awards  2018;  (3)  Eventiada  IPRA  Golden  World  Awards 
(2018). 

23 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionRecovery and sanctionFinancial crime, organised crime, other*PackageLegislativeOperationalNIT tools; structured cooperation with law enforcementEnhanced cooperation; enhanced information flowHNew / AmendmentCompetences, Powers, Recovery, Other (The detailed rules of investigating and prosecuting criminal offences)Other** 
 
 
 
 
Romania – Hercule III financed project: impact of EPPO on Romanian judicial authorities 

Romania  intended  to  promote  the  facilitation  of  dialogue  between  the  Member  State 
representatives and representatives of the European institutions and a contribution to supporting 
the European common approach for running the EPPO. 

As  part  of  the  project  implemented  by  the  National  Anti-Corruption  Directorate  through  the 
HERCULE  III  Programme,  a  study  was  undertaken  on  the  impact  of  implementing  EU 
Regulation  (EC)  No  2017/1939  concerning  the  EPPO  at  the  level  of  the  Romanian  judicial 
authorities. 

This  initiative  offered  the  opportunity  to  present  and  initiate  the  debates  concerning  the 
challenges of transposing the EPPO Regulation on the level of other national authorities of the 
EU Member States. 

In December 2018, the National Anti-Corruption Directorate organised a European conference 
in  Bucharest,  the  purpose  of  which  was  to  present  and  initiate  discussions  concerning  the 
challenges of transposing the EPPO Regulation at the level of other national authorities of the 
EU Member States. The conference, in which 40 participants from Romania and 39 from the 21 
MS took part, was attended by the Minister for Justice, the General Prosecutor of Romania and 
representatives of the DLAF, CSM [Consiliul Superior al Magistraturii – High Council of the 
Magistracy], European Commission, OLAF and EUROJUST. 

Sweden – Anti money laundering measures 

Sweden has implemented several anti-money laundering measures during 2018. 

24 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionACompetence, inter-agency cooperation, fraud awareness trainingsNeutral on resourcesHFinancial crime (incl. Money laundering), corruption, fraud definition, AFCOS, whistleblower, customs/TOR/illicit trade, antifraud or anticorruption strategySingleOrganisationalAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionRecovery and sanctionPublic procurement; financial crime (including money laundering); corruption; AFCOS; antifraud or anticorruption strategySingleHOrganisationalNCompetenceOther 
 
 
 
 
 
In  January  2018,  a  national  coordination  body  for  anti-money  laundering/counter-terrorist 
financing was created within the Police Authority. Among other things, the body is responsible 
for national risk assessments in this area. 

In  September  2018,  a  legislative  act  was  enacted  that  establishes  that  financial  institutions 
should respond without delay and digitally to requests from law enforcement authorities. 

Sweden is implementing the 5th Anti-Money Laundering Directive, a draft legislative proposal 
for which was circulated for public comment during 2018. 

Greece – 1st international congress on EPPO 

The Public Prosecutor’s Office at the Greek Supreme Court (‘Areios Pagos’) organised the first 
International  Congress  on  establishing  the  European  Public  Prosecutor’s  Office,  under  the 
auspices  of  the  President  of  the  Hellenic  Republic,  with  the  assistance  of  the  Secretariat-
General  for  the  Fight  against  Corruption  and  the  Inspector-General  of  Public  Administration. 
The Secretariat-General for the Fight against Corruption issued the revised national strategy for 
the fight against corruption, which also includes actions to combat fraud affecting the financial 
interests of the EU. 

3.4  Other measures 

Belgium – Manual on control system - German speaking community 

The  Ministry  of  the  German-speaking  Community  has  drawn  up  a  manual  on  the  internal 
control system which guarantees the control of risks and safeguards the Ministry’s budget. 

25 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionFinancial crime (including money laundering; organised crimeSingleLegislativeNew / AmendmentCompetences; powers; financial penaltiesTo clarify or consolidate existing rules; to remedy flaws; to enforce the rules in line with developments in EU lawHAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionInvestigation and prosecutionRecovery and sanctionPublic procurement; financial crime (including money laundering); corruption; confict of interest; AFCOS; whistleblower; antifraud or anticorruption strategyPackageOrganisationalAReorganisation of existing bodies; inter-agency cooperation; general trainings; fraud awareness trainingsNeutral on resourcesHOperationalAWeb reporting / Hotline; structured cooperation with law enforcement; structured cooperation with judicial authoritiesEnhanced coordination, cooperation and information flow 
 
 
 
 
In  preparing  the  manual,  the  Ministry  checked  the  IT  systems  (SAP,  etc.)  and  the  supply 
processes (purchases, public procurement, etc.) in 2018. These measures systematically apply 
to the financial management of European funds (for example the ESF). 

Croatia – Strengthening the competent institutions for irregularity management with a view to 
protecting the EU’s financial interests 

The  Office  for  Combating  Irregularities  and  Fraud  organised  an  international  conference 
entitled  ‘Further  strengthening  the  competent  institutions  for  irregularity  management  with  a 
view to protecting the EU’s financial interests’, which was attended by representatives from the 
European  Commission,  EU  Member  States  (Romania,  Estonia,  Malta,  Spain,  Bulgaria, 
Netherlands),  EU  candidate  countries  (Serbia,  Montenegro),  a  potential  candidate  country 
(Bosnia  and  Herzegovina),  the  management  and  control  system  of  Croatia  and  the  AFCOS 
network. 

The  conference  covered  all  the  stages  in  the  irregularity  management  cycle  (prevention, 
detection, action, reporting and follow-up of reported irregularities). After the presentations, at 
the end of each day for each of the stages in the cycle, a dedicated roundtable was held that also 
included  specific  points  on  the  protection  of  the  EU’s  financial  interests.  The  proceedings  of 
those roundtables were published in a brochure produced at the end of the conference. 

Sweden – Amendments to the Ordinance on Internal Management and Control concerning 
prevention of fraud 

The  Ordinance  (2007:603)  on  Internal  Management  and  Control  applies  to  about  70  of  the 
largest  government  agencies  in  Sweden,  including  all  authorities  that  implement  EU  funds. 

26 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionHAntifraud or anticorruption strategyPackageARisk indicatorsEnhanced ex-ante controlsOperationalAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionAFCOSSingleOrganisationalAGeneral trainings, fraud awareness trainingsIncreased resourcesH 
 
 
 
Amendments  to  this  Ordinance  were  presented  in  2018  and  entered  into  force  on  January  1, 
2019.  The  amendments  entail,  among  other  things,  that  the  management  should  make  a  risk 
assessment to prevent the authority from being subjected to corruption, undue influence, fraud 
and other irregularities.  

Sweden - The annual programme of the SEFI-council 

The  Swedish  Council  for  the  Protection  of  the  European  Union’s  Financial  Interests,  i.e.  the 
SEFI  Council,  is  responsible  for  coordinating  initiatives  in  Sweden  against  fraud  and  other 
abuse  of  EU-related  funds.  The  Swedish  Economic  Crime  Authority  is  responsible  for  the 
Council’s  offices.  The  Council  enhances  the  cooperation  between  the  eight  agencies  that  are 
implementing  EU-programmes  in  Sweden.  The  Council  has  also  organized  seminars  on  a 
number of anti-fraud issues to increase awareness and knowledge in the agencies. 

4  ANTI-FRAUD MEASURES COVERING BOTH REVENUE AND EXPENDITURE SECTORS 

Italy – Combating fraud affecting the EU budget 

The  Italian  tax  police,  Guardia  di  Finanza,  has  drawn  up  specific  operational  plans  to 
combat  embezzlement,  undue  requests  for  and/or  receipt  of  EU  funds  and  VAT  fraud. 
Inspection  campaigns  have  been  carried  out  to  combat  VAT  fraud,  and  the  investigative 
guidelines concerning the implementation of administrative activities and investigations by 
the  economic  and  financial  police  service  to  combat  tax  evasion,  tax  avoidance  and  tax 
fraud have been updated. 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionCorruption; conflict of interests; shared management and control of EU fundsSingleLegislativeACompetences; powers; definition of a specific topicTo clarify or consolidate existing rules; to remedy flaws; to enforce the rules in line with developments in EU lawHAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionFinancial crime (including money laundering; organised crime; corruption; conflict of interests; AFCOS; whistleblower; shared maangement and control of EU funds; antifraud or anticorruption strategySingleOperationalAStructured cooperation with law enforcementEnhanced coordination, cooperation and information flow; Targeting of checks and investigations; Enhanced ex-ante and ex-post controlsH 
 
 
 
 
 
Slovenia – Combating fraud affecting the EU budget 

Slovenia  reported  about  a  measure  to  increase  cooperation  between  authorities  managing 
EU financial interests and low enforcement and judicial authorities.  

Based on the Ministry of Interior's basic guidelines for the preparation of the police work 
plan for 2018, Police gave special attention to detection and investigation economic crime 
that  resulted  in  a  large  property  benefit,  criminal  offenses,  to  the  detriment  of  financial 
interests  of  EU  and  Slovenia,  while  strengthening  inter-sectoral  cooperation  with  other 
authorities.  With  this  measure  Police  wants  other  competent  authorities  to  increase  the 
perception of possible criminal offences and their reporting to law enforcement authorities 
and  thereby  increasing  investigation  of  criminal  offenses  detrimental  to  the  financial 
interests of the EU.  

United Kingdom – Public procurement and State Aid 

The United Kingdom reported about a measure addressing tax fraud and the protection of 
the Fund for the most deprived (FEAD).  

The  objective  of  this  initiative  was  to  strengthen  the  procedures  for  checking  public 
procurement,  introducing  adequate  procedures  and  checklists  for  such  projects  which 
involve procurement. Very limited assessment of compliance with procurement rules with 
regard to new procurements, at the stage of management verification, was in place. 

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Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionSingleShared management and control of EU funds; OtherSOperationalARisk indicators, structured cooperation with law enforcement and judicial authoritiesEnhanced coordination, information flow and ex-post controls; targeting of checks and investigationsAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionRecovery and sanctionPublic procurement, conflict of interests; fraud definition; Shared management and control of EU funds; otherSingleOperationalAStructured cooperation with law enforcement; structured cooperation with judicial authorities; cooperation with national supevisory authoritiesEnhanced coordination, cooperation and information flow; targeting of checks and investigationsS 
 
 
 
 
5  ANTI-FRAUD MEASURES IN REVENUE BY THE MEMBER STATES 

5.1  Fight against customs fraud 

Austria – Financial crime law on coinage 

For 2018, Austria reported a package of measures aimed at sharpening and enhancing control 
activities in the areas of Tax and Customs fraud. 

Czech Republic – Establishment of Unit "Serious Crime Detection" 

In October 2018, unit 75x.6 "Serious Crime Detection” was set up as part of the Investigation 
Division of the General Directorate of Customs. 

The need for a new unit to tackle the most serious crime in the area of infringement of customs 
and  taxation  legislation  arose  from  the  current  situation  of  crime  committed  in  this  area. 
Increased  efficiency  in  the  fight  against  the  above  fraud  is  expected,  including  improved 
protection of the EU's financial interests. 

29 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionPublic procurement; Other (State aid)PackageOperationalAIncreased number of checksTargeting of checks; enhanced ex-ante controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measure / expected resultsHorizontal / sectoralPreventionLegislativeADefinition of a specific topicTo clarify or consolidate existing rules, to remedy flawsDetectionAdministrativeN/AMonitoring/desk checks; on-the-spot checks, audit checklist, investigation, irregularity reportingTo clarify or consolidate existing rules, to enhance existing measureInvestigation and prosecutionOrganisationalN/Areorganisation of existing bodies, inter-agency cooperation, general trainings, fraud awareness trainings, simplification of proceduresNeutral on resources OperationalN/AFlaggin practice, increased number of checks, structured cooperation with law enforcement, structured cooperation with judicial authoritiesEnhanced icoordination, cooperation, information flow and ex-ante controls. Targeting of checks and investigationsPackageSFinancial crime, customs / TOR / Illicit trade 
 
 
 
 
Estonia – fight against e-commerce fraud with the sale of tobacco products 

In January 2018, Estonia passed a new legislation, Supplementing of Tobacco act, introducing 
new criminal sanctions and increasing the time barring period for violations linked to the sale 
of tobacco products. 

As a result of the new legislation, If the special state supervision measure not enable or makes 
it  especially  complicated  to  conduct  supervision  over  compliance  with  the  requirements  for 
trading in tobacco products or products related to tobacco products, but it is necessary for the 
purpose of ascertaining  or averting danger or elimination of a violation,  the law  enforcement 
authority  may,  as  a  special  state  supervision  measure,  make  a  transaction  for  the  purpose  of 
monitoring compliance. 

Estonia – Measures against undervaluation 

In  addition  to  the  pre-existing  EU  criteria  for  customs  valuation  (and  declaration),  in  2018 
Estonia  set  national  criteria  for 
the  reduced  customs  value 
(undervaluation)  of  textile  products  and  footwear  imported  from  Asia  as  well  as  porcelain 
dishes. 

the  determination  of 

30 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralDetectionInvestigation and prosecutionFinancial crime, organised crime, customs / TOR / Illicit tradeSingleOrganisationalAReorganisation of existing bodiesIncreased resourcesHAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralDetectionCustoms / TOR / Illicit tradeSingleLegislativeNPowers, criminal sanctions, time barringto remedy flawsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralDetectionCustoms / TOR / Illicit tradeSingleOperationalARisk indicatorsTargeting checksS 
 
 
 
 
Finland – New tariff analysis tool 

In 2018 Finnish authorities introduced the new tariff analysis tool for company inspections and 
the establishment of an import analysis model for occasional and thematic sampling of items to 
be checked during the preparatory phase of the inspection. 

Latvia –Enhancing STD intelligence capabilities 

The Latvian Tax and Customs Police Department Special Task Division's (STD) enhanced its 
intelligence capabilities thanks to the grant, awarded by the European Commission. It enabled 
the  STD  to  track  the  organized  criminal  groups,  prevent  and  disclose  criminal  offences  in 
matters of the State revenue and customs. This would directly affect not only the budget of the 
Republic of Latvia, but also the ones of the EU and the Member States. 

Such improvements will have a direct impact on the protection of the EU financial interests. 

Malta – Customs canine unit 

To  enhance  Malta's  border  controls,  the  Customs  Department  obtained  funds  through  the 
Hercule III programme in order to set up a Canine Unit. These funds were used to train a dog 
handling  instructor  and  eight  dog  handlers,  as  well  as  to  purchase  eight  fully  trained  dogs  in 
order  to  detect  tobacco  and  tobacco  products.  The  canines  were  further  trained  to  smell 
narcotics and to trace cash. 

The  funds  obtained  through  the  Hercule  III  programme  helped  the  Customs  Department  to 
strengthen  Malta's  surveillance  against  the  illicit movement  of  tobacco  and  tobacco  products, 
narcotics and cash. 

31 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionCustoms / TOR / Illicit tradeSingleOperationalNIT toolsSTargeting of checks, enhanced ex-post controlsAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionFinancial crime (incl. Money laundering), customs/TOR/illicit trade, SingleOperationalNOther (criminal intelligence)Other (criminal intelligence)S 
 
 
 
 
 
Notable seizures of tobacco, narcotics and cash have already been registered from passengers 
arriving and departing the country's airport, as well as at the sea terminals. 

Netherlands - Financial fraud related to e-commerce/small consignments 

In  order  to  cope  with  the  huge  increase  in  the  recent  years  of  small  consignments  due  to  e-
commerce and the total amount of this commodity and the combination of fiscal and non-fiscal 
issues  in  this  area,  the  Netherlands  launched  an  e-commerce  project,  with  a  dedicated  team 
which  combined  different  competences.    The  measure  aimed  at  increasing  the  resources  to 
deploy and, via the use of risk indicators and structured cooperation with law enforcement, at 
enhancing coordination, cooperation and a better targeting the investigations. 

Netherlands – Fighting financial fraud related to under valuated textile goods from China 

A specific operation was launched to target financial fraud related to under valuated goods by 
import specific related to textile from China and other involved countries. The interest for this 
operation  rests  in  the  underlying  financial  impact  and  the  proven  EU  interest  based  on  the 
signals and reports from the Commission and OLAF. 

32 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionOrganised crime; Customs/TOR/illicit tradeSingleOperationalNIncreased number of checksEnhanced ex-ante controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionFinancial crime; AFCOS, Customs / TOR / Illicit trade; OtherPackageAdministrativeNOtherTo enhance existing measureSOrganisationalNCompetence; OtherIncreased resourcesSOperationalNRisk indicators; Increased number of checks; Structured cooperation with law enforcementEnhanced coordination, cooperation and information flow; Targeting of investigationsS 
 
 
 
 
Portugal - Measure in the area of customs value - supplementary measures to combat under-
invoicing 

A series of supplementary measures were implemented in the automatic risk assessment system 
in order to identify transactions that might have been under-invoiced and the working hours of 
the  National  Centre  for  Risk  Analysis  [Centro  Nacional  de  Análise  de  risco]  have  been 
extended. It will now operate 24/7, which means its supervision, monitoring and risk analysis 
tasks can be carried out continuously. 

Slovakia –Expanding risk profiles to combat undervaluation of goods 

As  frauds  in  the  area  of  undervaluation  of  different  types  of  goods  are  increasingly  more 
complex and sophisticated, it is essential to use analytical software tools and databases not only 
to fraud detection but also for the continuous monitoring and evaluation of risk factors, in order 
to prevent and eliminating the risk of undervaluation for the import of goods into the EU. 

33 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionRecovery and sanctionFinancial crime (incl. Money laundering); AFCOS; Customs / TOR / illicit tradeSingleOperationalARisk indicators; Increased number of checksEnhanced coordination, cooperation and information flow; Targeting of checks and investigations; Enhanced ex-ante controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionOrganised crime, Customs / TOR / Illicit tradePackageOperationalAIT tools; Flagging practice; Risk indicators; Increased number of checks; Structured cooperation with law enforcementEnhanced coordination, cooperation and ex-ante controls; Targeting of checksSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionFinancial crime (including money laundering); Customs / TOR / Illicit trade; antifraud or anticorruption strategyPackageOrganisationalAOtherIncreased on resourcesS 
 
 
 
 
 
 
 
5.2  Fight against tax evasion and VAT fraud 

Poland – Introduction of the split payment mechanism to reduce VAT fraud 

Poland reported about the introduction of legislative amendments to reduce VAT fraud in view 
of the risk of distortion of competition on the market between honest taxpayers and tax-evading 
entities.  

The  essence  of  the  split  payment  mechanism  is  the  splitting  of  payment  executed  by  bank 
transfer for goods or services into the net amount, which is paid into the business account of the 
seller,  and  the  amount  of  VAT,  which  goes  into  a  dedicated  VAT  account  of  the  seller.  The 
funds  collected  in  the  VAT  account  belong  to  the  taxable  person,  which  may  allocate  them, 
inter  alia,  to  paying  VAT  obligations  to  the  tax  authority  or  input  tax  amounts  arising  from 
purchase invoices to the respective seller’s VAT account. 

The law was adopted in July 2018. 

Slovenia – Combating tax fraud and tax evasion and preventing aggressive tax planning 

Slovenia reported about three measures adopted by its financial administration.  

The  measures  are  necessary  in  order  to  lay  down  rules  to  strengthen  the  level  of  protection 
against aggressive tax planning in the internal market. Controlled foreign company (CFC) rules 
have  the  effect  of  reattributing  the  income  of  a  low-taxed  controlled  subsidiary  to  its  parent 
company. FARS has reviewed national procedures and control systems regarding undervalued 
goods.  

The administrative measures are related to  guidelines and instructions for customs officers in 
the area of undervaluation to clarify existing rules. 

Organisational measures are related to fraud awareness trainings. 

Operational measures are related to IT tools, enhanced coordination and risk indicators. 

34 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionAdministrativeOperationalMonitoring/desk checks; investigationIT tools, Risk indicatorsto clarify or consolidate existing rulesSEnhanced coordination; targeting of checks; targeting of investigationsSAAFinancial crime; Anti-Fraud or Anti-corruption StrategyPackage 
 
 
 
6  ANTI-FRAUD MEASURES BY MEMBER STATES - EXPENDITURE 

6.1  Measures covering several shared management sectors 

Greece – Decision on financial corrections and recovery in AMIF and ISF 

A  Ministerial  Decision  was  issued  (Government  Gazette,  Series  II,  No  4783  of  25  October 
2018)  on  a  system  for  financial  corrections  imposed  by  the  Fiscal  Audit  Committee  (EDEL) 
and  procedures  for  the  recovery  of  undue  or  improper  payments  from  the  state  and/or  EU 
budget for the implementation of national programmes co-financed by the Asylum, Migration 
and  Integration  Fund  (TAME)  and  the  Internal  Security  Fund  (TEA),  for  the  2014-2020 
programming period. 

Spain – Electronic system of red flags by the Comunidad Valenciana 

The Spanish Comunidad Valenciana implemented SALER-  an electronic system  of  red flags 
for the prevention and detection of irregularities  in  the entities which belongs to the  regional 
public sector. 

The  measure  tries  to  take  advantage  of  the  IT  tools  in  order  to  prevent  and  detect  fraud  and 
irregularities, and to centralise information from different sources. 

35 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionAdministrativeAMonitoring / desk checks; On-the-spot checks; irregularities reportingTo clarify or consolidate existing rulesSDetectionInvestigation and prosecutionRecovery and sanctionOperationalAIT tools; risk indicators; increased number of checks; structured cooperation with law enforcementEnhanced coordination, cooperation and information flow; targeting of checks and investigations; enhanced ex-ante and ex-post controlsSCustoms / TOR / Illicit trade; Tax fraudPackageOrganisationalAFraud awareness trainingsNeutral on resourcesSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralRecovery and sanctionFraud definitions; shared management and control of EU fundsSingleLegislativeNRecoveryTo clarify or consolidate existing rulesS 
 
 
 
 
To  this  end,  the  Comunidad  Valenciana  adopted  a  specific  Act,  which,  on  the  one  hand, 
describes  the  overall  system,  its  inputs  and  outcomes,  and  puts  in  place  the  procedures  to  be 
followed for using the information included in it; on the other hand, this Law tries to remove 
any  legal  obstacles  that  may  arise  in  developing  the  electronic  system,  such  as,  for  example, 
granting  access  to  the  relevant  information  stored  in  different  databases,  both  internal  and 
external. 

The measure addresses all Funds managed under shared management. 

Spain – Reinforcement of the ex-ante control over public procurement and in-house 
providing 

Spain reported having reinforced the ex-ante control carried out by the Inspectorate General of 
Finance (Intervención General de la Administración del Estado) over public procurement and 
in-house providing, in order to focus on those aspects of the public procurement process which 
are  consider  to  be  essential,  which  contributes  to  detect  irregularities  and  fraud  as  early  as 
possible. 

The  government  decision  also  adapts  these  verifications  to  the  new  Law  9/2017  on  Public 
Procurement which transposes the European Directives on Public Procurement. 

The measure addresses all the European funds under shared management. 

Romania – Use in verification activities and control of the ARACHNE IT instrument 

In  Romania,  in  the  process  of  evaluating  the  risks  of  fraud  and  of  adopting  efficient  and 
proportionate anti-fraud measures, the Managing Authorities of the cohesion policy and AMIF 
Funds use the ARACHNE IT system, developed by the European Commission. The obligation 
to  use  this  system  was  mentioned  in  the  internal  work  processes  of  the  Management 
Authorities. 

36 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionSOperationalNIT tools; risk indicatorstargeting of checks and of investigations; enhanced ex-ante and ex-post controlsSLegislativeNCompetences, powers, definition of a specific topicto remedy flaws, otherPublic procurement; conflict of interests, public expenditure in generalPackageAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralDetectionTo enhance existing measure, cross-cutting measure, multi-agency measure / measure with impact on various bodiesSPublic procurementSingleAdministrativeAMonitoring / desk checks, Other (internal control systems) 
 
 
 
United Kingdom– Counter Fraud and Conflict of Interest Policy 

The  United  Kingdom  introduced  a  revised  Counter  Fraud  and  Conflict  of  Interest  Policy 
which centralises the key information from several guidance and policy documents.  

The  policy  and  guidance  have  been  strengthened  with  the  development  of  the  new  Counter 
Fraud  and  Conflict  of  Interest  Policy,  which  merges  the  previous  Counter  Fraud  Policy, 
Counter  Fraud  Strategy,  Conflicts  of  Interest  Policy  and  Whistleblowing  Policy  into  one 
document. 

The measure addresses the Fund for the Most Deprived and the Globalisation Fund. 

Slovakia – Special investigative powers of the Antimonopoly Office 

Slovakia adopted in November 2018 Act No 345/2018 Coll. amending the Public Procurement 
Act. 

Due  to  the  initiative  of  the  Antimonopoly  Office  of  the  Slovak  Republic  and  its  proposal,  a 
specific provision was added to the Act on Public Procurement and some new obligations for 
tenderers were set. Namely, when the tenderer made use of any materials prepared by the third 
party,  this  party  has  to  be  identified  in  submitted  offer.  This  provision  could  hinder  certain 
tenderers,  suspected  of  collusion  in  particular  tender,  from  providing  any  misleading 
information and explanations of specific circumstances. The tenderers will have to provide the 
Antimonopoly  Office  of  the  Slovak  Republic  with  requested  information  and  explanations 
under the threat of specific penalties not only by the Act on Protection of Competition but also 
by  the  Act  on  Public  Procurement,  especially  if  any  discrepancies  in  public  tender 
documentation occur.  

This  measure  will  strengthen  special  investigative  powers  of  the  Antimonopoly  Office  of  the 
Slovak Republic and shift the burden of proof to suspected undertakings at certain situations. 

37 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionAFCOSSingleAdministrativeAManagement of the fundsto enhance existing measuresSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionPublic procurement; Confict of interest; fraud definition; whistleblower; antifraud or anticorruption strategyPackageAdministrativeOrganisationalNew / AmendmentEligibility criteria; management of funds; monitoring/desk checks; on-the-spot checks; audit checklist; investigation; irregularities reporting; penalty; recoveryReorganisation of existing bodies; competence; inter-agency cooperation; general trainings; fraud awareness trainings; simplification of proceduresTo enhance existing measureNew / AmendmentNeutral on resourcesS 
 
 
 
 
 
6.2  Agriculture and fisheries 

6.2.1  Agriculture 

Austria - Better administration and control of public procurement under EAFRD 

Austria developed an action plan for better administration and control of public procurement 
under EAFRD. 

The action plan was necessary to cope with the complicated and voluminous set of provisions, 
which required for clear administration rules. 

Italy– Enhancement of AGEA's antifraud structure 

In 2018 AGEA’s anti-fraud structure was consolidated; on the basis of an annual plan it has: (1) 
carried  out  analyses  and  controls  (2)  activated  the  agreement  with  the  ANASBC  (national 
agency  for  administering  the  assets  seized  from  organised  crime)  and  designed  possible 
cooperation  activities  with  the  police  and  control  bodies,  while  also  providing  specific 
verification APPs in the field and risk indicators of fraud. 

The measure concerns the paying agency as a whole, even though in this first phase it is more 
focused on the single payment scheme and also involves external entities. 

38 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionPublic procurement; Shared management and control of EU fundsSingleLegislativeACompetences; Financial penalties; otherTo clarify or consolidate existing rulesSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measure / expected resultsHorizontal / sectoralPreventionAdministrativeNOrganisationalNTo clarify or consolidate existing rulesSPublic procurement, corruptionPackageEligibility criteria, monitoring/desk checks, on-the-spot checks, audit checklistCompetence, general trainings, fraud awareness trainingsincreased resources 
 
 
 
 
Luxembourg – Alert system 

According  to  the  MA  for  FEADER  &  FEAGA,  an  alert  system  had  to  be  set  up  in  (the 
framework  of  article  58  of  regulation  1306/2013)  to  detect  facts  that  may  indicate  fraud  or 
attempted  fraud.  The  management  service  defines  as  a  red  alert  facts  or  information  that  it 
becomes  aware  of  as  part  of  its  daily  work  and  whose  content  raises  a  suspicion  as  to  the 
regularity of the action. 

In this  way, the Paying  Agency for agricultural  funds, which serves the  managing  authority's 
mission, can have an impact on the financial operations of the European Union. 

Slovakia –Strengthening prevention on agricultural funds 

Slovakia  adopted  a  measure  to  ensuring  direct  management  and  supervision  of  identification 
and control of agricultural land and determine eligible areas for financial support under EAGF 
and EAFRD. 

The  measures  aims  at  preventing  granting  agricultural  financial  support  on  ineligible  land. 
Furthermore  direct  management  and  supervision  of  identification  and  control  of  agricultural 
land will ensure acceleration of irregularities identification, improvement of information flows 
and coordination of decision-making process. 

39 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionShared management and control of EU funds; antifraud or anticorruption strategyPackageAdministrativeAManagement of the funds, monitoring/desk checks, on-the-spot checks, irregularities reportingcross-cutting measures, multi-agency measure / measure with impact on various bodiesSOrganisationalACompetenceNeutral on resourcesAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionShared management and control of EU funds; antifraud or anticorruption strategyPackageSAdministrativeOperationalEligibility criteria, management of the funds, on-the-spot checks, irregularities reportingTo clarify or consolidate existing rules, to enhance existing measureN / ANFlagging practice, risk indicatorsEnhanced coordination, enhanced information flow, targeting of checks 
 
 
 
 
 
Belgium – Risk analysis in the agricultural funds 

As a follow-up to this anti-fraud policy note and statement from 2017, a fraud risk analysis was 
carried out in 2018 for the fisheries fund, and subsequently also for the agricultural funds. The 
latter was commissioned by the Flemish Paying Agency. During this phase of the analysis in 
2018, the management services of the agricultural funds within the Department were heard. It 
will examined in the future whether a similar analysis will be launched with the management 
services  of  the  agricultural  funds  that  fall  outside  the  remit  of  the  Department  of  Agriculture 
and Fisheries. 

The  purpose  of  the  fraud  risk  analysis  commissioned  by  the  Flemish  Paying  Agency  is  as 
follows: ‘to prepare an inventory of fraud risks in the different processes, in combination with 
an  evaluation  and  analysis  of  these  risks,  using  the  Commission’s  fraud  risk  template’.  The 
analysis and results were summarised in a final report at the end of 2018. The recommendations 
will be examined in 2019. In addition to carrying out a fraud risk analysis, further investment 
was made in 2018 in comprehensive risk management at the level of the department, led by a 
risk manager. 

6.2.2  Agriculture and Fisheries 

Lithuania –Examination of breaches 

The Lithuanian Minister of Agriculture adopted the Order No. 3D-80 of 5 February 2010 "On 
Approval  of  Administration  Rules  for  the  Breaches  of  the  Legal  Acts  related  with  the 
Implementation  of  Actions  of  the  European  Agricultural  Guarantee  Fund,  European 
Agricultural Fund for Rural Development and European Fisheries Fund" (amended and updated 
by Order of the Minister of Agriculture No. 3D-868 of 5 December 2018). 

The purpose of this legal act is to ensure appropriate and effective use of the EU and national 
funds as well as protect the EU and national financial interests. The Rules frame a functioning 

40 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionShared management and control of EU fundsSingleOrganisationalNReorganisation of existing bodiesNeutral on resourcesSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionPublic procurement, conflict of interests, shared management and control of EU fundsSingleOperationalARisk indicatorsEnhanced ex-post controlsS 
 
 
 
 
system  of  administration  of  the  breaches  of  the  respective  legal  acts  in  the  Ministry  of 
Agriculture and National Paying Agency under the Ministry of Agriculture. 

In the event of a suspected breach and/or upon information on a suspected breach, actions and 
deadlines  for  the  administration  of  the  breach  are  set  out  concerning  the  examination  of  the 
breach, sharing of information with other institutions, decision-making and other. 

Lithuania –Methodology for sanctioning breaches 

The Lithuanian  Minister of Agriculture  adopted the Order No. 3D-929  of 4 December 2014 
"On Approval of the Methodology of Sanction Regime for the Breaches of Legal Acts related 
with the Implementation of the Measures of the Rural Development Programme for Lithuania 
20104-2020  (amended  and  updated  by  Order  of  the  Minister  of  Agriculture  3D-909  of  14 
December 2018). 

This  Methodology  lays  down  the  rules  for  the  application  of  sanctions  to  applicants, 
beneficiaries and partners for the breach of the respective legal acts. The methodology is used 
by the officials of the ministry of Agriculture and national Paying Agency under the Ministry 
of Agriculture. 

The Methodology defines sanctions applicable to beneficiaries for breaches of legal acts in the 
administration  of  the  Measures  under  the  afore-mentioned  Programme  as  well  as  the 
procedures of application of these sanctions and levels of sanctions in proportion to the specific 
committed breaches. 

Slovenia – Training and risk assessment 

The  Agency  of  the  Republic  of  Slovenia  for  Agricultural  Markets  and  Rural  Development 
(AKTRP) reported 2 measures: 

  Training 

41 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionRecovery and sanctionOtherSingleLegislativeADefinition of a topic, recoveryTo enforce the rules in line with developments in EU law; otherSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionPublic procurementSingleAdministrativeAManagement of the fundsTo clarify or consolidate existing rulesS 
 
 
 
  Update  fraud  indicators  (flagging  practice)  on  the  field  of  fraud  and  prevention  of 
artificially created conditions along with controlling activities (existing and additional) 
and assessment of risk. 

In  2018  AKTRP  continued  to  train  employees  on  fraud  prevention  and  artificially  created 
conditions.  This  measure  is  important  for  successful  prevention  and  detection  of  fraud  and 
artificially  created  conditions  relating  to  the  protection  of  the  EU  financial  interests.  It  is 
especially important to train the staff that is involved in the adoption of the legislative advising 
and managing administrative procedures. 

The second measure enables the Agency to detect frauds and artificially created conditions by 
beneficiaries for the funding timely and efficiently, which consequently contributes to efficient 
protection of the EU financial interests. 

6.2.3  Fisheries 

Denmark - Analysis of method to identify fraud and irregularities 

In 2018 the National  Audit Office issued  a report  on a  review of  grants  under the EMFF  for 
fisheries in the period 2014-17. The review indicates cases of shell companies and fraud. The 
Fisheries  Agency  has  examined  a  number  of  cases  with  external  legal  assistance  in  order  to 
clarify  whether  there  are  grounds  for  suspecting  fraud.  Cases  where  there  are  grounds  for 
suspected  fraud  have  been  reported  to  the  police  and  OLAF.  In  2018  the  Fisheries  Agency 
entrusted  the  Government’s  legal  adviser  with  drawing  up  a  method  to  facilitate  the 
identification of fraud and irregularities. 

As  a  follow-up  to  the  review  carried  out  by  the  National  Audit  Office,  the  Fisheries  Agency 
will  examine  existing  cases  with  regard  to  combating  fraud.  It  will  be  examined  whether  the 
findings of the National Audit Office apply to cases which were not covered by the review. In 
2018 the Fisheries Agency entrusted the Government's legal adviser with developing a method 
to facilitate the identification of fraud and irregularities. 

42 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionFraud definition; Shared management and control of EU fundsSingleOperationalAFlagging practice; risk indicatorsEnhanced ex-ante controlsS 
 
 
6.3  Cohesion policy 

Austria –High density of checks 

Austria adopted a package of measures aimed at performing a high density of the tests under 
Article 125 (4) of VO 1303/2013 with regard to the 2014-2020 programming period, intended 
to prevent irregularities. It is provided for in the examination procedures to examine 100% of 
the expenditure submitted by the beneficiary by the administrative bodies. 

Formal  rules  in  the  national  rules  on  eligibility  for  grants,  as  well  as  requirements  in  the 
management  and  control  system,  are  intended  to  increase  efficiency.  Standardised  forms 
(checklists) improve the quality of the billing submitted. 

Belgium – Methodology for the use of ARACHNE 

As  part  of  setting  up  efficient  and  proportionate  anti-fraud  measures,  the  managing  authority 
for  the  ERDF  operational  programme  ‘Wallonie-2020.EU’  has  developed  a  methodology  for 
using  the  ARACHNE  software.  The  methodology  adopted  for  this  operational  programme  is 
geared  in  the  main  around  the  quarterly  submission  to  the  functional  administrations  of  a 
sample  -  gathered  by  the  Programme  Management  Directorate  -  for  which  an  additional 
analysis is requested. A first sample was sent to the functional administrations in October 2018. 

43 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionConflict of interests, shared managemment and control of EU funds, antifraud or anticorruption strategyPackageAdministrativeAEligibility criteria, managing of funds, monitoring/desk checks, audit checklist, investigation, irregularities reportingto clarify or consolidate existing rules, otherOperationalARisk indicators; Increased number of checks, structured cooperation with law enforcement Enhanced cooperation; Targeting of checks; Enhanced ex-post controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measure / expected resultsHorizontal / sectoralPreventionDetectionRecovery and sanctionenhanced information flow, targeting of checkscross-cutting measure, multi-agency measure / measure with impact on various bodiesSPackagePublic procurement, conflict of interests, shared management and control of EU funds, Antifraud or anticorruption strategyAdministrativeAmendmentEligibility criteria, management of the funds, on-the-spot checks, irregularities reporting, recoveryOperationalAmendmentIT tool, Other 
 
 
 
 
 
Bulgaria – Operational programmes and ETC programmes 

Regulation  No  N-3  of  22  May  2018  laying  down  rules  on  payment,  verification  and 
certification of expenditure, recovery and write-off of irregular expenditure and accounting, as 
well as the timeframes and rules of completion for end-of-year accounts under the operational 
programmes and the European territorial cooperation programmes was issued by the Minister 
for  Finance  and  promulgated  in  State  Gazette  No  44  of  29  May  2018.  The  Regulation  was 
issued on the basis of Article 7(4)(4) of the Act on the Management of the European Structural 
and  Investment  Funds.  Its  objective  is  to  lay  down  detailed  rules  for  the  procedures  for 
managing and monitoring the funds. 

The above-mentioned piece of secondary legislation sets out in detail the competences of those 
involved  in  the  process  of  managing  and  monitoring  the  European  Structural  and  Investment 
Funds, states the necessary minimum controls and lays down the procedure for the recovery of 
irregular expenditure. The Regulation lays down the rules governing the payment, management 
and monitoring process. 

The  measure  sets  out  in  detail  the  processes  for  the  payment,  verification,  certification,  and 
completion of the end-of-year accounts, the recovery and write-off of irregular expenditure and 
accounting  under  the  programmes,  and  governs  the  relationship  between  the  managing 
authorities and certifying authority. 

Germany – Strategy for combating fraud and corruption. Federal Land of Thuringia. 

Germany reported about the strategy for combating fraud and corruption, including analysis of 
fraud  risk  for  all  ERDF  measures  and  guidance  for  intermediary  offices  in  the  sphere  of 
combating fraud and corruption in the Federal Land of Thuringia. 

44 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionPublic procurement, conflict of interests, shared management and control of EU fundsSingleOperationalARisk indicatorsEnhanced ex-post controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionRecovery and sanctionShared management and control of EU funds, OtherSingleLegislativeAPowers, recoveryto remedy flaws, otherS 
 
 
 
Germany – New administrative instructions on public procurement - Bavaria 

instructions  on  public  procurement 

[Verwaltungsvorschrift  zum 
New  administrative 
öffentlichen  Auftragswesen]  (VVÖA)  were  adopted  in  Bavaria  (introduction  of  Rules  of 
Procedure  for  the  award  of  public  supply  and  service  contracts  below  the  EU  thresholds 
[Unterschwellenvergabeordnung]). 

Introduction of rules of procedure for the award of public supply and service contracts below 
the EU thresholds and establishment of value limit in this respect. 

Germany – Fraud-risks self-assessment. Saxony 

Implementation at OP level by the ERDF Managing Authority of the fraud risk self-assessment 
recommended in the Commission guidelines in the Federal Land of Saxony. 

Denmark – Updating eligibility rules and monitoring administrative verifications 

45 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionAMonitoring/desk checks; On the spot checks; Audit checklist; Irregularities reporting; RecoveryTo clarify or consolidate existing rulesSPublic procurement, corruption, conflict of interests, fraud definition, whistleblower, shared management and control of EU funds, antifraud or anticorruption strategyPackageAdministrativeRecovery and sanctionOperationalAIT tools, web reporting/hotline, risk indicatorsEnhanced coordination and information flow; targeting of checksSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDefinition of a specific topicTo enforce the rules in line with developments in EU lawSPublic procurementSingleLegislativeNAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReason for  measureHorizontal / sectoralPreventionDetectionPublic procurement, corruption, conflict of interests, otherSingleOperationalAOther (fraud risk self assessment at OP level)Other (assess impact and likelihood of fraud risks and establish mitigating measures)S 
 
 
 
 
Finland – Reform of the electronic system for the management of Structural Funds 

Finland  reported  about  the  reform  of  the  electronic  system  for  the  management  of  Structural 
Funds.  The  management  body  started  using  the  fully  electronic  EURA  project  management 
system  in  2014,  in  which  recovery  decisions  were  applied  in  2018.  All  follow-up  measures 
relating  to  projects  under the Structural  Funds  are being taken in  the  EURA 2014 system.  In 
addition to the ’Findings’ section of the EURA 2014, another function was added, enabling a 
finding  to  be  recorded  as  suspected  fraud.  The  management,  certification  and  inspection 
authorities and intermediate bodies see the data recorded in the system in real time. 

Greece – Training to strengthen audit capacity 

In  2018,  the  Southern  Regional  Assembly,  as  managing  authority  (MA)  for  the  Southern  & 
Eastern  Regional  Operational  Programme  2014-2020,  began  the  integration  of  the  Arachne 
Risk Scoring Tool into the MA’s management and control system. A training seminar was held 
covering: 

a) Auditing national and EU grants and subsidies; 

b) Smuggling. 

The  purpose  of  the  seminar  was  to  strengthen  the  audit  capacity  of  staff  of  the  Special 
Secretariat  of  the  Financial  Crime  Unit  (SDOE)  and  the  effectiveness  of  joint  on-the-spot 
checks carried out with the assistance of OLAF. 

46 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionSPackageConflict of interests, shared management and control of EU fundsAdministrativeAEligibility criteria, managing of funds, monitoring/desk checksTo clarify or consolidate existing rulesAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionInvestigation and prosecutionRecovery and sanctionShared management and control of EU fundsPackageOperationalNOtherSEnhanced coordination, information flow and ex-ante controls; targeting of investigations 
 
 
 
Hungary – Actions in the Cohesion policy area 

Hungary reported having adopted in 2018 a number of actions designed to improve anti-fraud 
functions in the national IT system, provide anti-fraud training, transmit data to the ARACHNE 
system and amend Act CXLIII of 2015 on public procurement (Public Procurement Act). 

All beneficiaries from EU support in 2007-2013 have become available in the EU Programmes 
System;  an  Excel  export,  providing  detailed  information  for  assessing  fraud  prevention,  has 
been extended. Training courses seek to help the regular implementation of EU funds, protect 
the  financial  interests  of  the  EU  and  prevent  irregularities,  fraud  and  corruption.  Data 
transmission from Hungary to ARACHNE went live in October 2018. The amendment of the 
Public Procurement Act was justified by the conversion into law of e-procurement, the need to 
increase competition and transparency, simplification, etc. 

The amendment of the Public Procurement Act (Act  LXXXIII of 2018 amending Act CXLIII 
of  2015  on  public  procurement)  was  justified  by  the  conversion  of  e-procurement  legislation 
from  Government  decree  into  law,  the  need  to  increase  competition  and  transparency,  to 
simplify procedures and to promote participation in procedures. To that end, the amendment of 
the Public Procurement Act aims, inter alia, to set out the rules of e-procurement, introduce the 
mandatory acceptance of e-invoices compliant with the European standard and further reduce 
the number of negotiated procedures without publication. 

Ireland – Introduction of ARACHNE 

47 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionRecovery and sanctionFraud definitions; shared management and control of EU fundsSingleOperationalNIncreased number of checks; structured cooperation with law enforcementEnhanced coordination and cooperation; targeting of checks and investigations; enhanced ex-post controlsSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionPublic procurement, Corruption, Fraud definition, Shared management and control of EU fundsPackageLegislativeAOther (Public procurement)To clarify or consolidate existing rules; To enforce the rules in line with developments in EU lawSOrganisationalAGeneral trainings; fraud awareness trainingsIncreased knowledge in anti-fraudSOperationalNew / AmendmentIT tools, Flagging practice; risk indicatorsEnhanced cooperation and information flow; targeting of checks, of investigations and of ex-ante controlsS 
 
 
 
In  2018,  the  Southern  Regional  Assembly,  as  managing  authority  (MA)  for  the  Southern  & 
Eastern  Regional  Operational  Programme  2014-2020,  began  the  integration  of  the  Arachne 
Risk Scoring Tool into the MA’s management and control system. 

Effectively  applying  Arachne  in  the  day-to-day  management  and  verification  of  expenditure 
claims and projects would be considered as one important part in meeting the requirement of 
Article  125§4(c)  of  Regulation  (EU)  1303/2013.  The  Commission  has  provided  non-binding 
technical guidance to Member States (ref. guidance note EGESIF 14-0021-00 of 16 June 2014). 

Italy – Memorandum of Understanding between the Agency for Territorial Cohesion and the 
National Anti-corruption Authority 

The Agency for Territorial Cohesion has entered into a memorandum of understanding with the 
National Anti-corruption Authority (ANAC) aimed at identifying indicators on corruption risk 
and prevention in public authorities. Issues such as procedures for in-house award of contracts 
have been examined in more depth. 

Luxembourg - Access for the ESF Audit Authority (AA) to the ESF platform 

The  ESF-Managing  authority  (MA)  has  put  in  place  an  internet  platform  used  for  the  daily 
management of the ESF and its projects. The application has a back office for the MA and a 
front office for the project owners. 

The AA has a special access to this platform and can get all the available information needed 
for their second level control. 

Most of the common tasks are done through or with the support of the platform: deposit of new 
projects,  reporting  of  data  (i.e.  payment  claims,  follow-up  of  indicators,  monitoring  of,  first 
level control…) 

48 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionNRisk indicatorsEnhanced ex-ante and ex-post controlsSShared management and control of EU fundsSingleOperationalAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralInvestigation and prosecutionOtherSingleLegislativeAOther (examination of breaches)To enforce the rules in line with developments in EU law; otherS 
 
 
 
 
All  available  data  on  ESF-projects  is  centralised  on  this  platform  and it  ensures  transparency 
and a possible audit trail. It also enhances collaboration between the authorities. 

Netherlands – ARACHNE 

The introduction of ARACHNE is important for the early detecting of suspicion of fraud before 
acceptance  of  projects  and  during  the  implementation  of  projects.  The  results  obtained  using 
the tool will be evaluated in 2019. 

Some doubts exist about the international added value of the tool as not all Member States are 
using it. 

Poland – Mechanism for effective verification of submitted documents 

Poland  put  in  place  a  mechanism  for  the  effective  verification  of  bank  promises  sent  with 
documentation in the application process for financing from EU funds. 

It  was  found  that,  in  projects  for  which  one  of  the  conditions  for  obtaining  financing  is  the 
submission  of  a  bank  promise  constituting  evidence  of  security  in  respect  of  the  financial 
means necessary to implement the project, there is a possibility of falsified commitments being 
submitted.  As  a  result,  cooperation  was  established  with  the  Polish  Bank  Association,  in  the 
framework of which a team was set up for the exchange of information, composed of staff in 
the banking sector and in the institutions implementing the funds. 

An  exchange  of  information  between  staff  in  the  banking  sector  and  those  in  the 
implementation institutions will prevent the use of falsified promises by applicants. 

This  measure also  represent  an  example partnership between public and  private bodies  (bank 
representatives)  to  enhance  cooperation  and  exchange  of  information  (concerning  applicants 
submitting bank promises with the application documentation) and exchange of knowledge and 
experience in relation to the detection of irregularities. 

49 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionShared management and control of EU fundsSingleOrganisationalNSimplification of proceduresNeutral on resourcesSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionConflict of interests; Shared management and control of EU fundsSingleOperationalAIT toolsTargeting of checks; Enhanced ex-ante controlsS 
 
 
 
Portugal – Tool for registration, management and monitoring of complaints 

The  Agency  set  up  a  tool  for  registering,  managing  and  following-up  reports  and  complaints 
submitted by ESIF beneficiaries in Balcão 2020 (the portal for ESIF operational programmes). 
These reports and complaints are analysed in order to establish the alleged facts and to transmit 
them to the Public Prosecutor’s Office should they indicate that a crime has been committed, or 
to the relevant management authorities to facilitate the monitoring of the operations in question. 
Furthermore,  the  Agency  systematically  uses  the  Arachne  database  to  gather  information 
concerning ESIF beneficiaries in addition to relying on good repute. 

Portugal – OP anti-fraud strategies 

As  part  of  their  management  and  control  system,  the  MA  of  the  ISE  and  APMC  operational 
programmes  has  defined  an  anti-fraud  strategy  with  the  aim  of  adopting  effective  and 
proportionate anti-fraud measures, taking into account the risks identified within its remit and 
establishing the procedures to be followed as regards fraud prevention, detection and correction 
and  the  reporting  of  findings  to  the  appropriate  bodies.  The  Code  of  Ethics  and  Conduct 
adopted  in  2018  provides  for  the  compulsory  reporting  of  any  suspected  fraud  of  which  the 
staff/Management Committee are aware. 

It will have an impact on the prevention and detection of fraud under the Social Inclusion and 
Employment  Operational  Programme  and  the  Operational  Programme  supporting  the  most 
deprived. 

50 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionShared management and control of EU fundsSingleOperationalNRisk indicators; OtherEnhanced coordination, cooperation and information flow; Targeting of checks; OtherSAnti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralDetectionInvestigation and prosecutionWhistleblowerPackageOperationalAWeb reporting / hotline; flagging practice; risk indicators; structured cooperation with law enforcementEnhanced cooperation and ex-ante controlsS 
 
 
 
7  Additional measures reported by Member States 

7.1  Belgium 

7.1.1  German speaking Community   2 additional measures: 

1/ In 2018, the ESF managing authority of the German-speaking Community checked 
the  copies  of  the  supporting  documents  for  each  ESF  project.  In  addition,  the 
managing authority carried out two on-the-spot checks, as part of which it examined 
the projects’ original supporting documents, their accounting systems, etc. 

2/ In 2018, the audit authority of the German-speaking Community carried out two on-
the-spot checks of the 2015 and 2016 expenditure of the ESF managing authority, and 
also of the 2016 expenses of an ESF project. 

7.1.2  3 additional measures by the Walloon Region (1/ & 2/ concerning ESF, 3/ 

concerning agriculture: 

1/  During  a  meeting,  held  in  2018,  bringing  together  the  auditors  in  the  Joint  Audit 
Service currently being developed between the Fédération Wallonie-Bruxelles and the 
Walloon  Region,  the  European  Funds  Audit  Directorate  gave  a  presentation  on  the 
Commission’s  approach  regarding  the  role  of  auditors  in  preventing  and  detecting 
fraud.  The  presentation  aimed  to  raise  awareness  among  the  auditors  present  in 
relation to their own work. 

2/ Update of the checklists of the European Funds Audit Directorate of the Wallonia 
Public Service, by adding items on fraud risk, in relation to the checks carried out by 
the Directorate. 

3/  Improvement  of  the  control  procedure  of  the  autonomous  management  of 
agricultural holdings in connection with the CAP aid. 

7.1.3  1 additional measure by the Flemish Regions - Integrity: 

1/  Guidelines  for  staff  of  the  Flemish  Government  for  combining  professional 
activities, a measure taken as part of the updating of the Flemish Government’s code 
of ethics. 

51 

Anti-fraud cycle stepsArea coveredSingle / PackageType of MeasureNew / AmendmentScopeReasons for  measure / expected resultsHorizontal / sectoralPreventionDetectionShared management and control of EU funds; antifraud or anticorruption strategyPackageOrganisationalNCompetence; Inter-agency cooperationNeutral on resourcesSOperationalNFlagging practice, risk indicatorsEnhanced information flow, ex-ante and ex-post controls 
 
 
7.2  Bulgaria 

7.2.1  Package of measures - Structural reform of the customs administration 

In 2018 a development strategy was drawn up for the customs administration for 
the  period  from  2018  to  2020.  In  implementing  the  strategy’s  measures,  the 
customs  administration  was  restructured  in  order  to  make  staff  more  efficient, 
step up collection of customs debts and improve efforts to combat infringements 
and  offences.  The  measure  aims  to  improve  coordination,  management  and 
monitoring  when  carrying  out  high-priority  functions  and  tasks  in  connection 
with protecting the economic and financial interests not only of the Republic of 
Bulgaria, but of the EU as a whole.  It  also aims to enhance customs control in 
respect of customs, excise and currency infringements and offences. 

7.2.2  Package of measures - implemented by the Executive Agency for the Audit 

of European Union Funds (AEUFEA) 

The  regulatory  framework  and  applicable  internal  rules  have  been  amended 
(Council of Ministers Decree No 181 of 24 August 2018 amended the rules of 
procedure of the Audit of EU Funds Executive Agency, and Order No 3-34 of 13 
July  2018  issued  by  the  executive  director  of  AEUFEA  endorsed  the  fourth 
version  of  the  Manual  for  the  Auditing  of  EU  Funds  for  the  2014-2020 
programming period). Order No 3-70 of 29 October 2018 endorsed internal rules 
for  the  organisation  and  implementation  of  the  Regulation  on  the  organisation 
and procedure for performing checks of declarations, and the establishments of 
conflicts of interest in the Audit of EU Funds Executive Agency. 

Twelve  meetings  have  been  held  with  the  ESIF  managing  authorities  and 
beneficiaries to disseminate the results of the audit engagements, and 15 training 
courses have been held to provide information on the audit authority’s practices 
with  regard  to  irregularities  connected  with  the  implementation  of  the  Public 
Procurement Act. 

The prosecution authorities have been sent six final audit reports 

containing cases of suspected fraud, in accordance with the requirements of the 
Information  Note  on  Fraud  Indicators  for  ERDF,  ESF  and  CF  (  COCOF 
09/0003/00 of 18 February 2009). 

The  aforementioned  measures  are  important  because  they  will  optimise 
implement  specific  audit  activities;  and  contribute  to  greater  awareness  of  the 
ESIF  managing  authorities,  beneficiaries  and  contracting  authorities  under  the 
Public  Procurement  Act  of  the  infringements  and  irregularities,  particularly  in 
respect of the rules for public procurement, as well as to mutual cooperation and 
the sharing of good practices at national level. 

7.3  Germany 

In the current funding period, fraud prevention has been one of the key tasks for the 
establishment  of  the  management  and  control  system,  in  accordance  with  Article 
125(4)(c) of Regulation EU No 1303/2013 and was also a condition of designation in 

52 

 
 
the field of structural funds and one of the eligibility criteria in the field of agricultural 
funds. 

1. 
Inter  alia,  under  the  Federal  Operational  Programme  for  the  European  Social 
Funds  (ESF),  in  March  2018  the  Managing  Authority,  in  accordance  with  the 
Commission Guidance Note on fraud risk assessment and effective and proportionate 
anti-fraud  measures,  adjusted  and  updated  the  self-assessment  recommended  there 
from 2015/2016. This involved assessing the likelihood of specific risks arising, their 
potential  impact  and  the  counter-measures  needed  in  the  following  spheres: 
expressions  of 
implementation  by  and 
accountability  of  beneficiaries,  financial  instruments,  certification  and  payments, 
award procedures and procurements. 

interest  and  application  procedures, 

2. 
Payment  offices  and  managing  authorities  under  the  agricultural  and  structural 
funds applied and developed precautionary measures and procedures, which have been 
set out in the relevant fraud prevention manuals and become part of the management 
and  control  system.  These  manuals  are  based  on  the  ‘Guide  for  Federal  and  Länder 
payment offices on the prevention of fraud in agriculture’ and comparable procedural 
instructions for fisheries under the EMFF, developed in 2014 by a Federation-Länder 
working party. Focal points of this guidance included identifying fraud risk, analysing 
management  and  control  systems,  drafting  registers  of  fraud  indicators,  setting  up 
internal arrangements where fraud is suspected and informing and training employees. 

7.4  Estonia 

The Estonian Auditing Authority improved the auditing methodology and check-lists 
with the fraud indicators provided by in the OLAF public procurement guidelines. 

Two  of  our  Implementing  Authorities  (Enterprise  Estonia  and  the  Environmental 
Investment  Centre)  have  added  the  possibility  to  submit  anonymous  hints  regarding 
the misuse of support through their webpages. 

The  Agricultural  Register  and  Information  Board  have  focused  on  the  risk  analysis 
before granting the decision to reduce the administrative burden and possible financial 
losses in later phases. 

7.5  Latvia 

7.5.1  Updated risk register in administration of FEAD  

7.5.2  Internal rulings are in place which stipulates that fraud and other economic 
crimes (incl. illegal activities in EU funds) are one of the investigative top 
priorities. 

7.5.3  Risk assessment performed for Latvia-Russia CBC programme 2014-2020 

Inter alia included fraud related risks and anti - fraud measures; Irregularity procedure 
for  Latvia-Russia  CBC  programme  2014-2020  approved  by  the  Joint  Monitoring 
Committee.  It  describes  how  irregularities  are  detected,  notified  and  a  decision 
regarding  irregularity  and  recovery  cases  is  taken  and  how  irregularities  shall  be 

53 

 
 
recovered,  amounts  reimbursed  to  the  EC.  Measures  and  actions  to  be  taken  in  case 
there might be possible fraud case as well as reimbursement to the EC and determines 
role 
their 
responsibilities  in  each  step.  Thus,  it  provides  overall  information  to  the  programme 
implementing bodies, their employees as well as beneficiaries.  

implementing  bodies  and  defines 

this  process  of  programme 

in 

7.5.4  Enhanced protection of the financial interests of the Union (VAT) against 

fraud 

1. Amendments to the Cabinet Regulation (CR) regarding: 

- technical requirements for electronic devices (cash registers);  

- implementation of arrangements to improve the performance of the taxi sector;  

2. Amendments to the law "On Taxes and Duties":- ensuring the right of the SRS to 
apply enforcement measures already when the decision to start tax control is made;  - 
new  obligation  to  banks  to  provide  information  upon  request  regarding  recipients  of 
electronic payments and money transfers and to payment service providers to provide 
information to tax administration.  

3.  Real  time  checks  were  introduced  in  2018  as  additional  instrument  to  influence 
taxpayers.  

4.  Data  received  with  suspicious  transaction  reports  with  connection  to  tax  fraud  is 
included in the SRS database.  

7.5.5  Update of anti-fraud measures in ESF management system 

The  anti-fraud  measures  are  regularly  updated  through  the  review  and  respective 
modifications  of  procedures  and  risk  registers.  An  anti-fraud  strategy  has  been 
introduced  covering  all  phases  –  prevention,  detection,  investigation  and  sanctions. 
The system is regularly evaluated by both internal and external auditors to provide up-
to-date and effective anti-fraud measures. 

7.6  Slovenia 

Ministry of Justice: 1 measure described  

Legislative measure: Change in the offense: Abuse of the official position according to 
Article 257 of the KZ-1. 

An official or a public official  uses his  official position  or crosses the boundaries of 
official rights  or does not  perform his  official duty to  obtain  non-material  advantage 
for  himself  or  to  anyone  else  or  to  cause  damage  to  someone.  The  threatened 
punishment is after a change of up to two years in prison (before that was up to one 
year  in  prison).  The  change  of  the  previous  regulation  is  that  the  intention  of  the 
perpetrator in view of the abuses of the official position or rights is sufficient. 

Anti-fraud  cycle:  Fraud  investigation  and  prosecution,  single  measure,  legislative 
measure,  change  -  update  of  legislation,  improvement  of  legislation,  criminal 
sanctions. 

54 

 
 
7.7  United Kingdom 

The following relates to the IGJ programmes covering ERDF AND ESF in Northern 
Ireland: 

In accordance with Article 125(4) (c) of the CPR an anti- fraud risk assessment taking 
account of risks identified has been conducted by the MA. The risk assessment which 
covered key processes involved in the administration of Programmes, namely project 
selection, appraisal,  approval,  implementation,  monitoring, verification, payment  and 
procurement. The risk assessment was completed by MA staff with input sought from 
the IB. The risk levels are considered low, based on the control framework which has 
been  established  and  the  value  and  volume  of  transactions  being  administered.  The 
mitigating  controls  are  deemed  to  be  adequate  and  proportionate.  A  few  minor 
improvements  were  identified  and  an  action  plan  developed  to  further  enhance  the 
control system. 

The DFE fraud policy and response plan includes the measures which must be taken 
when  fraud  is  suspected.  This  process  ensures  that  there  is  co-ordination  of  the 
relevant  bodies  and  appropriate  involvement  of  the  audit  and  Member  State 
representatives. The process will also ensure that any suspected fraud which involves 
EU funding is brought to the attention of the Audit Authority, Commission and OLAF. 

8  Training on the Irregularity Management System organised by the Member States 

The Irregularity Management System (IMS) has more than 3,000 users across the 28 
Member  States  and  (potential)  candidate  countries.  In  order  to  organise  an  adequate 
support to users, the Commission (OLAF) has put in place a system which is based on 
the "train the trainers" approach. 

Based  on  this  "decentralised"  model,  37  training  sessions  were  organised  in  twelve 
Member States, attended by 563 trainees, as showed in Figure 8. 

Figure 8: Training sessions organised by Member States in 2017 

Member State 

Sessions 

Trainees 

BG 

CZ 

DE 

DK 

EL 

ES 

FR 

HR 

HU 

IT 

PL 

4 

3 

7 

2 

1 

1 

1 

3 

10 

3 

2 

55 

41 

80 

157 

6 

1 

35 

4 

100 

10 

60 

69 

 
 
TOTAL 

37 

563 

9  Case studies reported by Member States 

9.1  Bulgaria 

9.1.1  Rural  Development  Programme  2007-2013  -  misuse  of  EU  funds  to 
purchase a yacht as an investment under measure 4.1. ‘Development of 
fishing areas’. 

Officials of the State Agriculture Fund conducted an on-site inspection following the 
submission of an application for BGN 342 643.16 to pay for an investment (a sailing 
yacht of the model Bavaria Sailing Cruiser 56) under Rural Development Programme 
2007-2013 measure 4.1 ‘ Development of fishing areas’, submeasure 4.1.A 'Financial 
aid  for  implementing  local  development  strategies  and  covering  fisheries  groups’ 
current expenses for enhancing the tourist attractions in the fishing area of the fisheries 
local  action  group  (FLAG)’.  During  the  inspection,  the  experts  established  that  the 
investment (the sailing yacht and the equipment applied for) were missing. 

An  additional  inspection  was  launched  with  the  assistance  of  AFCOS  Directorate  – 
Ministry of Interior and the Border Police Directorate General was asked to investigate 
the yacht’s movements. It was established that the yacht had travelled outside the area 
of water indicated in the project’s business plan, and that the yacht had been used to 
perform  activities  other  than  those  declared  by  the  applicant.  The  State  Fund  for 
Agriculture  (DFZ)  registered  an  irregularity  and  launched  a  procedure  to  refuse  the 
payment  of  a  grant  of  BGN  342  643.16.  The  case  was  reported  to  the  Bulgarian 
Prosecutor’s Office. 

9.1.2  Cigarette smuggling 

At  the  port  of  Burgas  a  physical  check  was  carried  out  on  a  container  loaded  with 
timber, which officials from the Burgas Regional Directorate of Border Police (RDBP) 
and  the  Burgas  Territorial  Customs  Office  (TMU)  found  to  contain  20  pallets  of 
timber. The first  two pallets  loaded just behind  the container’s doors contained solid 
boards  made  of  coniferous  wood.  As  well  as  solid  wooden  boards,  each  of  the 
remaining 18 pallets also contained machined boards that concealed cigarettes of the 
brand ‘NZ’ manufactured in the Republic of Belarus with excise duty fiscal stamps of 
the  Ministry  of  Finance  of  the  Republic  of  Belarus.  In  total,  223  ‘master  cases’, 
corresponding to 111 312 boxes or 2 226 240 cigarettes were seized. 

The  consignee  of  the  goods  is  a  Bulgarian  commercial  company  registered  in  Sofia, 
which  declared  the  goods  as  ‘sanded  pine  boards’,  and  the  consignor  is  a  Russian 
company registered in Bryansk. 

The Burgas Customs Office opened pre-trial proceedings in respect of the case for an 
offence under Article 242(1)(e) of the Criminal Code. The Border Police Directorate-
General,  the  Customs  Agency  and  the  Sofia  City  Interior  Ministry  Directorate 
conducted a joint inspection at the consignee’s storage facility in Sofia during which 

56 

 
 
they found 123 099 boxes (246 ‘master boxes’) of ‘Regina’ cigarettes without excise 
duty fiscal stamps concealed in machined boards inside pallets. 

9.2  Croatia 

Competitiveness and Cohesion OP (2014-2020) 

Type of irregularity: infringements related to co-financing 

On  7  August  2018  suspected  irregularities  were  reported  regarding  a  project  to 
strengthen  a  beneficiary’s  production  capacity  and  improve  its  competitiveness.  The 
aim of the project was to improve the beneficiary’s competitiveness in the national and 
international markets and boost exports through investment in a hi-tech machine that 
would facilitate the development of new products, processes and markets , while also 
developing human resources  and protecting the environment.  The beneficiary  sought 
to purchase a vertical hydraulic press. 

In its reply to the beneficiary’s claim for reimbursement, the level-2 intermediate body 
(IB2) informed the beneficiary that the costs  were fully  eligible  and that the amount 
was  to  be  reimbursed  as  a  grant.  The  beneficiary  was  subsequently  paid  the  amount 
claimed. 

As part of a visibility check the beneficiary supplied photographs of the press in which 
the machine showed signs of wear. IB2 therefore suspected that the press could have 
been purchased second-hand. An on-the-spot check was carried out in the presence of 
an expert. 

The  check  confirmed  that  the  press  did  not  fully  meet  the  technical  specifications, 
while a visual inspection revealed green paint under the existing layer of white paint 
that  had  been  poorly  applied.  The  beneficiary  was  asked  to  provide  additional 
photographs, which were found not to match the press. The beneficiary was also asked 
to  provide  additional  documentation,  but  failed  to  do  so.  In  his  opinion,  the  expert 
concluded that there was not enough evidence to establish that the press was new. 

The  general  grant  contract  stipulates  that  all  ineligible  costs  are  to  be  borne  by  the 
beneficiary. According to both the special terms of the contract and the instructions to 
applicants published under the call regarding the eligibility of activities and costs, the 
purchase of second-hand equipment constitutes an ineligible cost. 

Given  that  the  beneficiary  had  applied  for  the  reimbursement  of  costs  of  new  (or 
recently  bought  and  delivered)  equipment  and  had  supplied  all  the  necessary 
documentation,  it  is  clear  that  he  had  acted  with  the  intention  of  gaining  illegal 
proceeds by way of fraud.  

As  a  result,  IB2  adopted  an  Identified  Irregularity  Decision.  After  all  the 
circumstances  of  the  case  were  examined,  and  in  particular  after  the  suspicion  was 
confirmed that the beneficiary had acted with the intention of committing a fraud, the 
case was handed over to the competent state prosecutor’s office. 

9.3  Hungary 

The investigation ordered by the County Public Prosecutor was initiated on the basis 
of an investigation conducted and reported by OLAF into the crime of budgetary fraud 

57 

 
 
causing substantial financial damage. The investigating authority of the National Tax 
and  Customs  Administration  found  that  the  offenders,  two  sisters,  had  submitted 
tenders  for  the  construction  of  cold  stores  under  the  ‘Modernisation  of  horticulture’ 
scheme  in  2010.  In  the  framework  of  the  project  supported  by  the  European 
Agricultural  Fund  for  Rural  Development,  the  self-employed  individuals  unlawfully 
obtained  aid  and  covered  their  costs  with  false  cost  invoices.  According  to  OLAF’s 
findings,  the  business  activities  of  the  beneficiaries  were  in  fact  managed  by  one 
person: the mother of the two self-employed sisters. The majority of the project costs 
were invoiced by the mother’s company. The two sisters submitted aid applications for 
almost the same purpose, i.e. the construction of greenhouses and cold stores required 
for  the  production  of  vegetables.  As  far  as  OLAF  is  concerned,  the  two  bids  were 
essentially  for  the  same  project.  The  suspects  were  therefore  seeking  to  acquire  the 
ceiling for the available aid. The investigation established that the mother’s company 
had  acted  as  an  intermediary  between  the  beneficiaries  and  the  actual  contractors, 
creating  the  possibility  for  the  limited  partnership  company  to  invoice  the  work 
already  done,  plus  its  own  interest,  to  the  contractors.  Having  demonstrated  higher 
costs, it was able to draw down a higher amount of aid. By involving the intermediary 
carrier, the company concerned obtained a profit of around 30 % (between EUR 976 
000 and EUR 776 000). Documents relating to the tenders were seized during searches 
conducted  at  the  company’s  Debrecen  head  office  and  the  cold  stores.  The 
investigation  found  that  the  self-employed  sisters  were  unable  to  finance  the 
construction,  and  covered  their  costs  from  loans.  In  several  cases,  the  limited 
partnership company itself helped the sisters settle invoices to the limited partnership 
company,  and  the  cross  transfers  did  not  generate  any  real  revenue  for  the  operator. 
According  to  the  data  collection  and  the  response  to  the  request  for  legal  assistance, 
the representatives of the insolvent Romanian company issuing invoices to the limited 
partnership company did not know the perpetrators involved in the case. According to 
the  investigation,  the  main  contractor  involved  in  the  case  and  the  two  beneficiaries 
were actually under control of the mother, who had been the contact person named in 
the  aid  applications  and  payment  claims.  She  had  been  authorised  to  represent  the 
beneficiaries  e.g.  before  the  Rural  Development  Agency,  the  bank,  the  tax  and 
customs  office,  and  to  handle  cash  and  deliver  documents.  However,  it  was  not 
economically justified to include the limited partnership company as an intermediary 
in the construction work. The investigating authority of the National Tax and Customs 
Administration  closed  the  criminal  proceedings  with  a  proposal  for  prosecution  in 
November 2018. 

9.4 

Italy 

Anti-Fraud activities by the Guardia di Finanza concerning the European Agricultural 
Fund for Rural Development (ERDF).  

A significant  service activity concluded in  2018 on the Common Agricultural  Policy 
was  carried  out  by  the  Palermo  Economic  and  Financial  Police  Unit  (‘Operation 
Valledoro’) and was aimed at examining aid applications for investment in agricultural 
holdings  dealt  with  by  the  European  Agricultural  Fund  for  Rural  Development 
(ERDF).  

The investigations made it possible, in particular, to establish that a number of parties, 
through  a  series  of  tricks,  including  presentation  of  false  accounts  and  other 

58 

 
 
documents,  persuaded  the  competent  regional  authority  to  approve  –  and  partially 
disburse  – substantial  funding for works  and services which have never  been carried 
out, while at the same time committing other economic and financial crimes.  

At the end of the investigations:  

a.  8 individuals were reported to the competent judicial authorities for aggravated 
fraud  with  a  view  to  obtaining  public  funds,  money  laundering,  forgery  of  a 
public deed, embezzlement,  fraudulent declaration and issue of false invoices 
for approximately EUR 4.5 million;  

b.  the embezzlement of public funds was established, as well as undue receipt of 
more  than  EUR  1.6  million  and  requests  for  additional  undue  payments  of 
approximately EUR 2.7 million;  

c.  approximately  EUR  5  million  was  seized  from  business  assets  and  available 

funds. 

9.5  Lithuania 

On  20/11/2017,  Financial  Crime  Investigation  Service  of  the  Republic  of  Lithuania 
launched the pre-trial investigation on fraud. 

The investigation determined that the European Social Fund Agency together with the 
Drug,  Tobacco  and  Alcohol  Control  Department  (further  referred  to  as  the  Project 
implementer)  signed  Contract  No.  08.3.1-  ESFA-V-411-0001  for  the  co-financed 
project from the European Union Structural Fund. The largest eligible amount in the 
project budget is EUR 8.688.601. 

The main activity of the Project is to provide 1600 persons dependent on psychoactive 
substances  with  psychological  and  social  rehabilitation  services  and  with  successful 
integration into society (entry onto the labour market) free of charge. 

The  project  funds  the  remuneration  of  the  staff  implementing  the  psychological  and 
social rehabilitation of the persons dependent on psychoactive substance and the long-
term  social  and  psychological  rehabilitation  of  the  persons  suffering  from  the 
psychoactive substances dependency diseases (allowances to participants). 

The Project implementer implements the Project together with 13 partners. One of the 
project  partners  is  the  public  body  Meikštų  Dvaras  which  undertook  to  ensure  that 
only the representatives of target groups take part in the implemented project activities 
and undertook not to charge the project participants for the services provided to them. 

However, after the examination of the documents of the public body Meikštų Dvaras it 
has been determined that the public body Meikštų Dvaras has individually established 
two  contracts  with  each  natural  person.  The  services  provided  by  the  public  body 
Meikštų  Dvaras  specified  in  the  contracts  are  identical.  However,  in  one  of  the 
contracts it is stated that these services will be provided to the project participant and 
paid according to the project from the funds of the European Social Fund Agency and 
the  national  budget  and  in  the  other  contract  –  that  the  person  undertakes  to 
compensate part of the expenses (cost reimbursement fee), paying a monthly amount 
of EUR 250 to the public body Meikštų Dvaras. The cost reimbursement fee charged 
from  the  project  participants  most  often  was  paid  by  the  third  persons  related  to  the 
project participant who did not know about the Project and the services finances from 

59 

 
 
the Project funds. In cooperation with the European Social Fund Agency the amount 
of EUR 134961.14 was recovered. 

9.6  Romania 

The  European  Social  Fund,  SOPHRD  2007-2013  –  continuously  and  unlawfully 
changing the intended use of European funds 

In January 2018, prosecutors of the National Anti-Corruption Directorate – Section for 
the  fight  against  infringements  equivalent  to  corruption  infringements,  initiated  legal 
proceedings  against  the  defendants:  the  Chamber  of  Commerce  and  Industry  of  the 
Municipality of Bucharest (C.C.I.B.) and the following individuals: D.S.P., at the date 
of the events and at the present date President of the C.C.I.B., M.G.D., at the date of 
the  events  Director-General  of 
the  continued 
infringements of unlawfully changing the destination of European funds, V.L., on that 
date financial director of the C.C.I.B., for committing the continued infringements of 
complicity in the unlawful changing of the destination of European funds. 

the  C.C.I.B.,  for  committing 

In the charges drawn up, the prosecutors found as follows: 

  Starting  in  2009,  the  representatives  of  the  Chamber  of  Commerce  and 
Industry of the Municipality of Bucharest started 27 projects, co-financed from 
the  budget  of  the  European  Social  Fund  in  the  framework  of  the  Sectoral 
Operational  Programme  for  the  Human  Resources  Development  (SOPHRD) 
2007-2013. 

  Following the investigations carried out, it was found that in the period 2010 – 
2012,  during  implementation  of  four  of  the  projects,  the  defendants  C.C.I.B., 
D.S.P and M.G.D., with the support of defendant V.L., unlawfully changed the 
destination of funds obtained from the EU general budget or from the budget 
administered by it or on its behalf, and used them for other purposes which did 
not relate to the projects, but rather specific needs of the C.C.I.B. 

  Therefore,  the  total  sum  of  RON  2  081  953  was  transferred  from  the  pre-
financing  accounts  to  those  for  the  projects  in  the  current  account  of  the 
C.C.I.B.  and  was  used  for:  the  payment  of  obligations  to  the  State  budget, 
payments  to  suppliers  or  of  wages  which  were  not  related  to  the  respective 
projects,  as  well  as  for  the  reimbursement  of  sums  of  money  from  other 
projects.  The  C.C.I.B.  returned  the  sum  of  RON 1  982  617  of  which  RON  2 
081  953  was  used  for  purposes  other  than  those  set  out  in  the  project.  The 
Minister for National  Education was a civil  party in  the criminal  proceedings 
with the sum of RON 3 015 918. 

  The  precautionary  attachment  was  ordered  of  a  building  belonging  to  the 

Chamber of Commerce and Industry of the Municipality of Bucharest. 

  The case was referred to the Court of Bucharest with the proposal to maintain 

the precautionary measure in question. 

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9.7  United Kingdom 

Over  the  last  12  months  there  has  been  two  ERDF  fraud  referrals  submitted  by 
Ministry  for  Housing,  Communities  and  Local  Government  (MHCLG)  to  GIAA 
Investigation  Team.  These  two  referrals  focused  on  Grant  Recipients  that  provide 
Small Medium Enterprises (SME’s) with small grants and vouchers. 

Case 1: This linked to team members of the ERDF project and a potential conflict of 
interest with family members receiving vouchers from the scheme for their businesses. 

Case  2:  This  links  to  three  SME’s  that  have  been  given  small  grants,  however,  on 
Companies House they are all classed as dissolved prior to them receiving their grants. 

Good Practice 

Although  no  fraud  has  been  detected  by  GIAA  Investigation  Team,  for  case  1  an 
irregularity is in the process of being raised, as well as, an internal investigation by the 
Grant Recipient with a staff member on the ERDF project. 

MHCLG are also currently undertaking an exercise to identify all ERDF projects that 
provide  small  grants  and  vouchers  to  SME’s  in  the  UK.  A  sample  of  these  projects 
will be checked by the departments  Counter Fraud Designated Officers (CFDO’s) to 
ensure  this  is  not  systemic  and  avoid  any  high  risk  to  the  department.  Further 
assurances will also focus on completed A125 Compliance visits and A127 audits to 
these types of ERDF projects where no issues have been identified. 

61