Member States must step up their work to prevent, detect and report fraud affecting EU funds, according to the Commission's annual report on the protection of financial interests (PIF report). The report sets out detailed recommendations on areas that national authorities should particularly focus on in this respect. The report finds that detected fraud in EU spending accounts for less than 0.2% of all funds. Nevertheless, the Commission believes that greater efforts at national level both on combatting and detecting fraud should be deployed. The annual PIF report therefore recommends, amongst other things, that Member States review their controls to ensure they are risk-based and well-targeted.
On the positive side, the report notes that good progress is being made at national level to implement new rules and policies which will strengthen the fight against fraud in the years ahead. Moreover, at EU level, the past 5 years have seen major advances in shaping a stronger anti-fraud landscape. These initiatives can have a marked impact on fraud levels, once they are fully implemented.
Algirdas Šemeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud, said: “In the last five years, the Commission has taken the fight against fraud to a new level. Our commitment to protect citizens’ money from fraudsters is clear from the tough and ambitious new rules, initiatives and frameworks we have put forward. Now it is time for Member States to play their part more effectively. They need to step up their game in preventing, detecting and prosecuting those who try to de-fraud the EU budget."
According to the report, fraud affecting the EU budget, which was detected by national authorities, decreased slightly in 2013 compared to 2012. On the expenditure side, €248 million in EU funds were affected by fraud, equivalent to 0.19% of the expenditure budget. This compares to €315 million the previous year - a drop of about 21%. On the revenue side, suspected or confirmed fraud amounted to €61 million, representing 0.29% of traditional own resources collected for 2013. This compares to €77.6 million the previous year, also marking a drop of 21%. While the overall financial impact of fraud affecting EU funds decreased last year, the number of cases reported in EU spending increased compared to the previous year. This may be the result of stronger measures to detect fraud at an earlier stage, thereby reducing the overall amount of funds affected. It also may signal better reporting of fraud by some Member States.
Under the Treaty (Art 325), the Commission is required to produce an Annual Report on the Protection of the EU’s Financial Interests, detailing measures taken to counter fraud affecting EU funds. By detailing the level of fraud reported by Member States across the entire EU budget (i.e. both revenue and expenditure), the report also helps to assess which areas are most at risk, thereby helping to better target action at both EU and national level.
In addition to data on reported fraud and irregularities, recoveries and financial corrections, and reporting levels in the Member States, the report normally focusses in-depth on a particular area each year. This year, it provides a state of play on Member States' progress in setting up their national Anti-Fraud Coordination Service (AFCOS), as required under the new OLAF Regulation. The aim of the AFCOS is to actively cooperate and exchange information with OLAF, thereby improving the common fight against fraud. The report provides details on the Member States that have already designated an AFCOS and calls on the remaining four Member States to do so by end of the year.
Today's report also details the large number of initiatives taken by the Commission in 2013 to fraud affecting the EU budget. These measures build on the intense anti-fraud programme that the Commission has driven forward over the last five years. In addition to the implementation of the new Commission anti-fraud strategy (IP/11/783), significant legislative progress was made in 2013, including:
the Commission proposed to set up a European Public Prosecutors' Office (IP/13/709). This new institution will significantly strengthen the investigation and prosecution of crimes affecting the EU budget across Europe.
the new OLAF Regulation entered into force and contributed to reinforcing OLAF's investigative activities (MEMO/13/651);
substantial institutional progress was made on the Commission proposal on the protection of the financial interests of the EU by criminal law (IP/12/767). By harmonising definitions of crimes against the budget, and introducing minimum sanctions to be applied to these crimes, the proposal aims to further help protect funds and deter fraudsters.