The European Commission's anti-fraud strategy

KEY POINTS

• The strategy aims to strengthen the protection of EU financial interests by improving the entire anti-fraud cycle. It therefore covers prevention and detection, as well as investigations, sanctions and the recovery of misappropriated funds.
• EU countries manage almost all of the revenue of the EU budget. With the Commission, they share the management of 80 % of expenditure, while the remaining 20 % is managed directly by the Commission’s own departments or with other partners.

Prevention and detection

• All entities managing EU funds must prevent irregularities and fraud affecting the EU budget. The Commission, EU countries and other partners (e.g. regional authorities or development agencies) are required to put in place management and internal control procedures to prevent and detect irregularities, errors and fraud.
• Since different actors’ responsibility varies according to the form of management and policy area, sectorial anti-fraud strategies must be adopted by all the Commission’s departments. These strategies need to adapt the prevention, investigation, recovery and sanctions to the specific context of each sector.
• The European Anti-Fraud Office (OLAF) must be proactive and help the Commission to implement these sectorial anti-fraud strategies as well as improve the assessment of the risk of fraud.
• Communication between Commission departments must be strengthened by extended information exchange systems and an early detection and exclusion system, which succeeded the original internal early warning system.
• Commission staff, whether project managers, financial staff or auditors, must be made aware of the risks of fraud and be trained to combat it.

Investigations

• OLAF must investigate any illegal activities affecting the EU’s financial interests. The Commission presented a proposal to reform OLAF, designed to make these investigations more effective. This resulted in Regulation (EU, Euratom) No 883/2013.
• Cooperation between OLAF and other Commission departments, in particular external auditors, must be strengthened, as must the cooperation between OLAF and other institutions’ investigating services in the case of an internal investigation. EU countries must designate contact points to serve as a direct connection with OLAF in investigations, and inform the office as soon as they discover a fraud. Contractors and beneficiaries of EU funds must provide OLAF with access to all information on programme and project implementation.
• The Commission also intends to examine how more people could be encouraged to share information on irregularities and fraud, and how the authorities concerned could ensure that informants receive better guidance and protection.

Sanctions

• The Commission is to streamline and strengthen the use of financial and/or administrative sanctions, including exclusion from EU financing in cases of serious irregularities, fraud and corruption.
• It will also check that sanctions applied by EU countries are effective, proportionate and dissuasive. It considers that disciplinary sanctions should be shared with the other European institutions, national authorities and international organisations. It also encourages EU countries to communicate to the Commission’s central database cases of fraud that can lead to exclusion from EU funding.

Recovery

• In the case of shared management, EU countries must recover funds that should not have been paid out. Under direct management, the Commission services are responsible and must issue recovery orders as soon as possible.