Debate: MFF -: fight against oligarch structures, protection of EU funds from fraud and conflict of interest
Date: WEDNESDAY, 23 MARCH 2022
Speaker: Johannes Hahn
Language: EN

The Commission is fully committed to protecting the Union budget from fraud, conflicts of interest or any other offence. The current legal framework is already well equipped to protect the Union budget, and the Financial Regulation also applies, of course, to the funding that is being mobilised for the Recovery and Resilience Facility. As it makes up the majority of the Next Generation EU funds, I would like to highlight a few features of the Recovery and Resilience Facility that are particularly relevant for protecting our budget. As you know, the Commission can disburse funds under the Recovery and Resilience Facility only if the Member States have established robust internal control systems to prevent, detect and correct fraud, corruption and conflicts of interest. The Member States must also collect data on the entities receiving Union funding and on the physical persons behind those entities. The Commission can also recover funds and reduce its contribution where a Member State does not act. The Commission, the European Anti-Fraud Office (OLAF), the European Court of Auditors and the European Public Prosecutor’s Office (EPPO) all have competences and responsibilities to protect the financial interests of the Union under the Recovery and Resilience Facility. Another feature of the Recovery and Resilience Facility is that plans should contribute to effectively addressing all or a significant subset of challenges identified in the country—specific recommendations. This also covers country—specific recommendations that are related to the independence of the judiciary or to the fight against corruption. Some Member States have measures in their plans targeted towards such challenges. The Union budget is also protected from breaches of the principles of the rule of law that affect or seriously risk affecting the budget. That includes, for example, breaches that relate to conflicts of interest, corruption, arbitrary decisions by public authorities, and effective cooperation with OLAF and the EPPO. Under the Conditionality Regulation, the Commission has sent requests for information so far to two Member States and it continues to assess the situation across Member States. The Commission will inform the European Parliament about any written notification under the Conditionality Regulation without any delay. I would also like to highlight that the establishment of the EPPO is a great achievement. The EPPO is in charge of investigating, prosecuting and bringing to judgment criminal offences against the Union budget. The cooperation offered by the Commission, together with the rules protecting the prerogatives of the EPPO, contribute to the effective protection of the Union budget from criminal offences. However, for the Commission, all of the European Court of Auditors and the EPPO to do their work, it is necessary that data in the domain of EU funding are recorded and made available by Member States. We need to always have clear and complete information about the final recipients of the funds. In that respect, we are fully on the same page. This brings me to the next point: the digitalisation of controls and audits and improving the quality and interoperability of the data on recipients of EU funding. The Commission intends to use the upcoming targeted revision of the Financial Regulation as another opportunity and attempt to promote electronic collection of data on recipients of EU funding and the beneficial owners and the use of an integrated IT system for data mining and risk scoring to assess and analyse those data. The Commission stands ready to work closely with the European Parliament to advance as much as possible on this proposal. When it comes to protecting the rule of law, the Commission and the Union have a number of instruments at their disposal. This rule of law toolbox consists, among others, of infringement procedure proceedings, the Article 7 of the Treaty on European Union procedure, the country—specific recommendations in the framework of the European Semester and the annual rule of law report, including assessments of corruption vulnerabilities. These instruments vary because they are tailored to address the specific types of situations in Member States, aiming at preventing or responding to rule of law and corruption issues. Finally, the early detection and exclusion system (EDES) allows the early detection and the possible exclusion of fraudulent or unreliable economic operators, possibly even imposing financial penalties on them. So I have confidence in the comprehensive tools for our management and control of the Union budget. We will never reach literally zero errors, but our multiannual approach allows us to make sure that no EU money is lost, wasted or affected by fraud. We have zero tolerance with regard to fraud and we are fully committed to working for better protection of the Union’s financial interests.