Europaudvalget 2015
KOM (2015) 0386
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EUROPEAN
COMMISSION
Brussels, 31.7.2015
SWD(2015) 153 final
COMMISSION STAFF WORKING DOCUMENT
Implementation of the Commission Anti-Fraud Strategy (CAFS)
Accompanying the document
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND
THE COUNCIL
Protection of the European Union's financial interests - Fight against Fraud
Annual Report 2014
{COM(2015) 386 final}
{SWD(2015) 151 final}
{SWD(2015) 152 final}
{SWD(2015) 154 final}
{SWD(2015) 155 final}
{SWD(2015) 156 final}
EN
EN
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TABLE OF CONTENTS
COMMISSION STAFF WORKING DOCUMENT Implementation of the Commission Anti-
Fraud Strategy (CAFS) in 2014 ....................................................................................................
LIST OF ABBREVIATIONS ..................................................................................................... 3
1.
2.
2.1.
2.2.
2.3.
3.
3.1.
3.2.
4.
4.1.
4.2.
5.
6.
7.
8.
Introduction................................................................................................................... 4
Priorities ........................................................................................................................ 4
Adequate anti-fraud provisions..................................................................................... 4
Anti-fraud strategies for Commission Services ............................................................ 5
Reporting on the anti-fraud strategies in the Annual Activity Reports ........................ 6
Prevention and detection of fraud ................................................................................. 6
Systematic controls and risk analyses........................................................................... 7
Awareness raising and training ..................................................................................... 7
Investigations ................................................................................................................ 8
OLAF investigations ..................................................................................................... 8
Whistleblowing ............................................................................................................. 8
Sanctions ....................................................................................................................... 8
Recovery ....................................................................................................................... 9
Other cross-cutting prevention instruments ................................................................ 10
Conclusion .................................................................................................................. 10
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LIST OF ABBREVIATIONS
TFEU
EUR
DG
EAGF
EAFRD
EFF
CAP
CAFS
AAR
MoU
CED
REGIO
HOME
CNECT
ENV
COMP
NR
EC
CFP
ERDF
ESF
CF
SME
CP
OLAF
Treaty on the Functioning of the European Union
Euro
Directorate General
European Agricultural Guarantee Fund
European Agricultural Fund for Rural Development
European Fishery Fund
Common Agricultural Policy
Commission Anti-Fraud Strategy
Annual Activity Report
Memorandum of Understanding
Central Exclusion Database
Directorate-General for for Regional and Urban Policy
Directorate-General for Home affairs
Directorate-General for Communication Networks, Content and Technology
Directorate-General Environment
Directorate-General Competition
Natural Resources
European Commission
Common Fishery Policy
European Regional Development Fund
European Social Fund
Cohesion Fund
Small and Medium Sized Enterprise
Cohesion Policy
European Anti-Fraud Office (Office
pour la Lutte Anti-Fraude)
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1.
I
NTRODUCTION
On 24 June 2011 the Commission adopted the Commission Anti-Fraud Strategy
(CAFS)
1
with the following objective:
To improve prevention, detection and the conditions for investigations of fraud and to
achieve adequate reparation and deterrence, with proportionate and dissuasive
sanctions, and respecting the due process, especially by introducing anti-fraud
strategies at Commission Service level respecting and clarifying the different
responsibilities of the various stakeholders.
The aim is to reinforce the entire anti-fraud cycle in the Commission, in particular via
the introduction of anti-fraud strategies at Commission Service level.
Last year, for the first time, the Commission reported on the implementation of the
anti-fraud strategy, in accordance with its obligation established in the CAFS. This
Commission Staff Working Document is therefore the second report that provides an
overview of the state of play.
By adopting the CAFS, the Commission envisaged reaching the referenced objective
without creating additional layers of control and administrative burden. That is also
why this report is integrated into the Article 325 report of the Commission on the
Protection of the Financial Interests of the EU, as an annex.
2.
P
RIORITIES
The CAFS provided for anti-fraud measures in the areas of prevention and detection,
investigations, sanctions, recovery and other horizontal fraud prevention policies.
Last year's report on the implementation of the CAFS focused primarily on the three
priority actions established in the CAFS. The priorities established by the
Commission were focused on fraud prevention and had to be addressed by the end of
2013:
(1)
Adequate anti-fraud provisions in Commission Proposals on spending
programmes under the new multi-annual financial framework, in light of impact
analyses.
The development of anti-fraud strategies at Commission Service Level, with the
assistance of OLAF and of the central services, and their implementation.
The revision of the public procurement directives with a view to addressing the
need for simplification while limiting the risks of procurement fraud in the
Member States.
(2)
(3)
These priority actions were completed by the end of 2013, as was reported last year.
In 2014, the activities deployed under these priorities developed further and a short
description of the latest developments will be presented below.
2.1.
Adequate anti-fraud provisions
In 2014, DGs continued to include anti-fraud provisions in new legislative proposals
and related documents.
For example, in the area of the Common Agriculture Policy (CAP) secondary
legislation (delegated and implementing regulations) was adopted in 2014. Delegated
1
COM(2011) 376 final
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Commission Regulation (EU) No 907/2014 and Commission Implementing
Regulation (EU) No 908/2014 contain specific anti-fraud provisions complementing
Art. 58 of Regulation (EU) No 1306/2013. The anti-fraud provisions address the
Paying Agencies for CAP funds in the Member States and cover all areas of CAP
expenditure.
In addition to 'fraud-proofing' legislative proposals by adding efficient anti-fraud
clauses to them, guidelines and policy documents were also fraud-proofed. An
example is the Financial Regulation of the European Schools that was redrafted in
2014. The resulting Decision of the Board of Governors on this matter means that as
from 1st January 2015, OLAF acquired the authority to investigate suspected fraud in
the European School system.
2.2.
Anti-fraud strategies for Commission Services
In last year's report, the Commission reported that all Commission services
(Directorates-General and executive agencies), except one, had developed an anti-
fraud strategy. The last Commission service also adopted its anti-fraud strategy in
2014.
The focus of the Commission services has shifted from the development to the
implementation of their anti-fraud strategies and to updating these strategies. Some
Commission services had already adopted an anti-fraud strategy well before the
deadline of 31 December 2013 and felt the need to update their strategy to reflect the
latest developments in their policy areas.
An example of such an update is the new common anti-fraud strategy for the
Research family (the "RAFS"). The RAFS was adopted by the Research Common
Support Centre's Steering Board on 18 March 2015. This anti-fraud strategy reflects
the integrated approach of the Commission in the research policy area as it is valid
for the spending research Directorate-Generals in the research domain, and also for 4
executive agencies (ERCEA, REA, INEA, EASME) and 5 Joint Technology
Initiatives (JTI), namely IMI, Clean Sky, FCH, BBI, ENIAC.
The Commission services that are working together with EU agencies have brought
the concept of anti-fraud strategies to the attention of their partner EU agencies.
Through the network of EU agencies' correspondents in Directorates-General and
horizontal services, as well as the network of Commission representatives in the
agencies' management boards, the commission services, together with the EU
agencies, have been working on the implementation of the commitments stemming
from the 2012 Roadmap in respect of agencies' anti-fraud activities.
As a result, the second progress report on the implementation of the common
approach of EU decentralised agencies contains a reference to those decentralised
agencies that have already adopted anti-fraud strategies.
Around 30% of the EU agencies have now developed and adopted such a strategy.
Although there is no such legal obligation, the Commission services remain
committed, to have all EU agencies develop and adopt an anti-fraud strategy.
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2.3.
Reporting on the anti-fraud strategies in the Annual Activity Reports
In line with the revised Standing Instructions for the Annual Activity Report (AAR)
for the year 2013 following Article 66 (9)
2
and Article 32(2) point d
3
of the financial
regulation that relates to the prevention, detection, correction and follow-up of fraud
and irregularities as one of the internal control objectives, the authorising officers by
delegation had to report on their anti-fraud strategies.
All Commission Services have developed an anti-fraud strategy in which they
propose anti-fraud activities specific to their policy area; the state of play in terms of
implementation and identified outstanding measures are made public, in so far as it
does not endanger their effectiveness. Quantified indicators reported were essentially
the number of fraud suspicions transferred to, or being investigated by, the European
Anti-Fraud Office (OLAF).
2.4.
Audit on the implementation of the CAFS
In 2015 the IAS finalised an audit on the adequacy and effective implementation of
DGs anti-fraud strategies. The audit broadly acknowledges the positive steps already
taken by OLAF and the five sampled DGs both in the overall management and
oversight of the implementation of the CAFS and in the preparation, or revision of
their anti-fraud strategies. With regard to individual DGs selected for the audit the
IAS acknowledges that all of them have developed or have continued to improve
their AFS, using the guidelines, support and expertise of OLAF.
The report encourages OLAF to go on strengthening its guidance to further improve
the effectiveness of DGs' AFS.
3.
P
REVENTION AND DETECTION OF FRAUD
The CAFS dedicated much attention to the prevention and detection of fraud. It
underlined the importance of an integrated approach by emphasising that the
objectives of the CAFS should be achieved through the internal control process of the
Commission, applicable at all management levels. The Commission has performed
2
3
'
The Authorising Officer by delegation shall report to his or her institution on the performance of his or her duties
in the form of an annual activity report declaring that, he or she has reasonable assurance that: (a) the information
contained in the report presents a true and fair view; (b) the resources assigned to the activities described in the
report have been used for their intended purpose and in accordance with the principle of sound financial
management;(c) the control procedures put in place give the necessary guarantees concerning the legality and
regularity of the underlying transactions.
For the purposes of the implementation of the budget, internal control is defined as a process applicable at all
levels of management and designed to provide reasonable assurance of achieving the following objectives: […]
(d) prevention, detection, correction and follow-up of fraud and irregularities'.
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several actions aimed at the improvement of prevention and detection of fraud which
are described in this paragraph.
3.1.
Systematic controls and risk analyses
In last year's report, the IT tool ARACHNE was briefly mentioned. In 2014, the
Commission continued its efforts to make the tool operational in the Member States
that are implementing the European Structural and Investment Funds. DG EMPL has
promoted the use of the risk scoring tool ARACHNE by the Member States and has
provided training for the use of the tool. So far, 16 Member States have sent
programme data and the roll out of the system is continuing. Eight Member States
already use the ARACHNE tool and DG EMPL continues to monitor its use.
In 2014, a new IT-tool was made available to improve transparency in relations
between external parties and Commission officials. The Commission uses the
BASIS-tool (Briefing And Speeches Information System) to manage requests for
meetings with external stakeholders. DG FISMA has enhanced the BASIS tool with
an event management module. Through this module it is possible to keep track of
contacts and meetings with external parties.
This tool contributes to the newly established EC approach on transparency and
relations with external stakeholders. The tool aims at promoting more transparency
with external stakeholders and coordinating a common approach on topics vis-à-vis
external stakeholders to:
a) give a clear and unambiguous signal against fraud, corruption and bribery;
b) promote an open and structured approach vis-à-vis external stakeholders and
lobbyists;
c) ensure that a Commission service coordinates its messages and positions on the
policy areas under its responsibility.
The use of this recently developed tool will be promoted within the Commission to
include more Commission Services.
Lastly, the Irregularity Management System (IMS) must also be mentioned. Last
year's report outlined the update of the IMS. In 2014, the DGs that implement the ESI
funds have indicated that they have standardised the use of IMS during audits.
3.2.
Awareness raising and training
One of the actions in the CAFS aimed at raising awareness and training was the
creation of the Fraud Prevention and Detection Network (FPDNet). This network met
four times in 2014 (and met 14 times in total from September 2011 until December
2014). The aim of the FPDNet, to share best practices, was pursued with
presentations from various Commission services on their anti-fraud activities, such as
IT-tools, experience with the Early Warning System (see also the paragraph
'sanctions' in this report) and anonymised fraud cases.
Apart from the FPDNet, in which all Commission Services participate, individual
Commission services have been engaged in training and awareness raising actions in
2014. Fraud related topics such as ethics training for newcomers, fraud risk
workshops to include staff in the risk awareness of the DG, and specific training on
financial processes were given. The Commission services organised about 50 training
sessions the topics mentioned above, which involved more than 1500 commission
staff.
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Under the umbrella of the Committee for Fraud Prevention (COCOLAF), the
Commission and Member States' experts cooperated on fraud prevention in the ESI
Funds. For this purpose, a subgroup of the COCOLAF was created which was tasked
with the development of two guidance documents in 2014 (as was the case in 2013).
In November 2014, two guidance documents were presented to the COCOLAF
subgroup. The first guidebook explains the role of auditors in fraud prevention and
detection and a second guidebook provides guidance on the creation of a national
anti-fraud strategy.
4.
4.1.
I
NVESTIGATIONS
OLAF investigations
In 2014, the Commission and OLAF worked on the conclusion of Administrative
Arrangements on co-operation and a timely exchange of information. These
administrative arrangements were signed on 29 January 2015.
The Arrangements concern internal and external investigations, and clarify the flow
of information received from OLAF, as well as the flow and modalities of access to
the information given by the Commission in the framework of OLAF investigations.
4.2.
Whistleblowing
The guidelines on whistleblowing, issued in December 2012, provide ample guidance
on how and when to report serious irregularities. They highlight the protection
afforded to whistleblowers
4
acting in good faith. This protection includes the
confidentiality of the identity of the whistleblower. The guidelines also include
provisions on the consequences of malicious denunciations.
In line with the guidelines, which stipulate a review three years after adptopm, the
guidelines will be reviewed in the autumn of 2015 in a combined effort of DG HR
and OLAF.
5.
A
DMINISTRATIVE SANCTIONS
One of the key actions regarding administrative sanctions in the CAFS is the use of
the Central Exclusion Database (CED). The CED contains the information related to
economic operators which have been excluded from obtaining EU funds for a
determined duration on the basis of the Financial Regulation. The CED is linked to
the Commission's Early Warning System (EWS). On 14 November 2014, the
Commission adopted a new decision
5
on the EWS. This is one of the main tools the
Commission uses to minimise risks to the Union's financial interests and reputation.
The system identifies entities which might pose such a risk.
The Decision makes the rules simpler. It reduces the number of warning categories
from five to two: one for verification, one for exclusion. The aim of the verification
warning is to increase the monitoring of the identified entity. Exclusion warnings are
automatically reflected in the Commission's CED which identifies entities and/or
their management proven to be unreliable or fraudulent. This means they are no
longer entitled to obtain EU funds.
4
5
A whistleblower is a member of staff, acting in good faith, who reports facts discovered in the course of, or in
connection with his or her duties, which point to the existence of serious irregularities. The reporting should be done
in writing and without delay.
Commission Decision 2014/792/EU of 13 November 2014, OJ L 329, 14.11.2014
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The new rules ensure a coordinated approach in assessing cases of verification and
exclusion. Furthermore, they detail the procedure on the right of the entities
concerned to be heard. They also reinforce the cooperation between the European
Anti-Fraud Office (OLAF) and other Commission departments.
The revision of the Commission´s Early Warning System is paving the way for a
creation of a comprehensive system of 'early detection and exclusion', already
proposed by the Commission on 18 June 2014, as part of a partial revision of the
Financial regulation (COM(2014)358) and on which a political agreement was
reached in June 2015:
•
Creation of a more transparent, better organised and more efficient system of
early detection and exclusion of economic operators enhancing fraud prevention
and the protection of the Union's financial interests:
Extended and strengthened list of exclusion grounds
Possibility to take into account the remedial measures
Improved procedure to exclude companies and/or impose a financial penalty: a
decision will be taken after a recommendation by a centralised panel
Possibility for the Commission to intervene on grounds of strong evidence,
without having to wait for a final judgment. When these procedures will be
triggered by information resulting from an OLAF investigation, the service will
be invited to present the evidence to the panel.
Access for the other EU institutions, bodies, European offices and agencies to the
early detection stage.
•
•
•
•
•
The annual report from the Commission to the European Parliament and the Council
on the Protection of the European Union’s financial interests will contain information
on the decisions taken concerning exclusion and financial penalty.
6.
R
ECOVERY
The CAFS underlined the responsibility of Member States’ authorities and
Commission Services in the recovery of sums unduly paid.
The competent authorities of the Member States and of European institutions have to
provide information on the actions they have taken following recommendations made
by OLAF (Recital 32 of Regulation No 883/2013). Following this obligation, the
Commission has set up a reporting system to monitor the recovery of sums unduly
paid, covering both shared management and direct management. Based on the
information provided by the competent authorities, OLAF reports the amounts
recovered following investigations in its annual report.
Table 2 Amounts recovered (*) by the relevant authorities following OLAF’s
recommendations (million EUR)
2012
Customs and trade
Agricultural Funds
Structural Funds
9
2013
76.5
3.2
33.7
2014
135
43
22.7 (**)
33.9
14.3
33.4
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External aid
New financial instruments
EU staff
Centralised expenditure
Total
12.8
0.003
0.05
0.04
94.5
2.5
0.3
0.8
0
117
2.5
2.2
0.9
0.2
206.5
(*) In the context of this report, the term ‘recovery’ includes the results of recovery orders issued by
the Commission or any other institution, body, office or agency, offsetting of debts, de-commitment of
EU finances from projects or programmes, debt liability apportionment between the by Member States
and recoveries of administrative expenditures from officials and other servants of the EU institutions,
bodies, offices and agencies. Not all of these recovery transactions are individually identifiable in the
institutions’ accounting systems. Commission and Member States in certain sectors and recoveries of
EU funds (e.g. import duties) from economic operators
(**) Of which EUR 7.1 million concerned the European Social Fund.
Source: The OLAF report 2014
7.
O
THER PREVENTION INSTRUMENTS
As of 25 March 2015, the Transparency Register contains over 8,000 registrants
(interest representatives). The revised Inter-Institutional Agreement (IIA) on the
Transparency Register entered into force on 1 January 2015 and a new version of the
online tool was launched on 27 January 2015. The Commission Work Programme
2015 foresees a proposal for a mandatory Register based on an IIA covering the
Commission, the European Parliament and the Council.
8.
C
ONCLUSION
After completing the priority actions of the CAFS in 2013, 2014 was a year of
consolidation and further improvement of the anti-fraud cycle in the Commission. By
completing the inclusion of anti-fraud clauses in the legal bases for financing
decisions in the 2014-2020 programming period, a solid legal foundation has been
established in the domain. Work continued in 2014 on the delegated and
implementing acts and other proposals that touch upon the protection of the financial
interests of the EU.
With the establishment of anti-fraud strategies at Commission Service level, the
Commission established a central strategy in each service to address the risks of
fraud. Implementation of action plans and updating of strategies continue. Best
practice in fraud prevention and detection are shared between Services on a case-by-
case basis and through the Fraud Prevention and Detection Network. Conditions for
continuous improvement have thus been created and Commission services have
embarked on this path in the implementation of anti-fraud actions and the updating of
their anti-fraud strategies. Recognising these important first steps OLAF will, in line
with IAS' recommendations, issue further guidance in the coming year to further
improve the effectiveness of DGs' anti-fraud strategies.
Fraud training is critical in communicating anti-fraud policy and to raise fraud
awareness of Commission Staff and was prominent on the agenda of the Commission
in 2014.
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