Protection of the financial interest of the EU SZEVER�NYI D by 8ryx1D

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									Protection of the fina
Interest of the EU
--- ANTI-FRAUD MEASURES ---

Budapest, 23/11/2011
                         Anti-Fraud Measures



                 Target of the protection                                              Expenditure – Commitments (MEUR)

                                                                     140,000                                            135,321   141,500   141,900
                                                                                                    128,591   131,487
                                                                                    119,419 123,515
                                                                     120,000

                                                                     100,000

                                                                        80,000

                                                                        60,000

                                                                        40,000

                               Revenues (MEUR)                          20,000

140,000                                                                        0
                                                                                    2005
                                          120,346             122,955     126,527           2006
120,000                 111,969 115,497             116,096                                         2007
              105,684                                                                                         2008
                                                                                                                        2009
                                                                                                                                  2010
100,000                                                                                                                                     2011

 80,000

  60,000

  40,000

  20,000

          0
              2005
                        2006
                                2007
                                          2008
                                                    2009
                                                              2010
                                                                          2011
                Anti-Fraud Measures



          Implementation of the budget
 Where does the money come from?
                          1%

                                  12%
                                                                        EU Budget 2011

                                                11%
                                                                                       6%
                                                                     11%


                                                                                                               46%


        76%
                                                        30%



                                                                                             6%
Customs duties and sugar levies
                                                                                  1%

A uniform rate applied on MSs' VAT harmonised
revenue
                                                      Cohesion and competitiveness for growth and employment
                                                      The EU as a global player
                                                      Citizenship, freedom, security and justice
                                                      Agriculture: direct aid and marketrelated expenditure
                                                      Rural development
                                                      Administrative expenditure
   Anti-Fraud Measures



Why to create OLAF
CORRUPTION!

Findings of the ECA in 1998 and other corruption related
suspicions, together with the errors in the functioning of
UCLAF led to the resignation of the Santer Commission.

The beginning:

Unité de Coordination de La Lutte Anti-Fraude (UCLAF)

Need for a service which main objective is:

to protect the financial interests of the European Union by
combating fraud, corruption and any other illegal
activities, including serious misconduct within the
European Institutions while exercising the investigative
powers conferred on the Commission.
   Anti-Fraud Measures



European Anti-Fraud Office
In the building blocks of the EU:
Treaty on the Functioning of the European Union Article
317 (ex Article 274 TEC) – Responsiblity for the
implementation of the EU budget
Treaty on the Functioning of the European Union Article
325 (ex Article 280 TEC) – Obligation to counter fraud at
Commission and MS level
Legal basis:
1999/352/EC, ECSC, Euratom: Commission Decision
establishing the European Anti-fraud Office (OLAF)
Regulation (EC) No 1073/1999 of the European
Parliament and of the Council concerning investigations
conducted by the European Anti-Fraud Office (OLAF)
Council Regulation (Euratom, EC) No 2185/96 concerning
on-the-spot checks and inspections carried out by the
Commission     in  order   to   protect   the   European
Communities' financial interests against fraud and other
irregularities
   Anti-Fraud Measures



European Anti-Fraud Office

Objective:
Protection of the financial interests and the reputation ot
the EU.
Status:
Special independent status in its operational and
investigation functions;
Director-general may neither seek nor accept instructions
from any Government or any institution;
Director-general appointed by the Commission after
consultations with Parliament and Council;
Director-general opens investigations of his own motion;
Director-general can bring an action against the
Commission before the Court of Justice;
Supervisory Committee to reinforce the Office's
  independence.
          Anti-Fraud Measures



    Focus on serious cases


Serious
   case              OLAF



                                           ECA/DGs




   Less
serious
   case


          Fraud ,               Serious SeriousWeak Formal Misinterpret
          corruption and        miscond error policy error ed rules
          international         uct
       Anti-Fraud Measures



    AFCOS
 The beginning:

•   Recognition of the need for a cooperation partner
    (strategic documents)
•   Candidate Countries’ administrative structures were
    unknown to OLAF
•   Decrease the risks deriving from lack of experience
    in management of public funds
       Anti-Fraud Measures



    AFCOS

 The objective:

•   co-ordinating,    within    the   country,     all  legislative,
    administrative and operational obligations and activities
    related to the protection of the EU financial interests; and
• ensuring co-operation with the Commission (OLAF) and the
  Member States, as required by Article 325 of TFEU (former
  280 of the EC Treaty).
 Presidency intermezzo:

•   Member States shall, for the purposes of this Regulation,
    designate a service (hereinafter "the anti-fraud coordination
    service") to facilitate an effective cooperation and
    information exchange with the Office. Where appropriate, in
    accordance with national law, the anti-fraud coordination
    service may be regarded as "a competent authority" within
    the meaning of this Regulation.
       Anti-Fraud Measures



    AFCOS
 The main functions:

•   taking the lead in formulating, disseminating, co-
    ordinating and implementing a comprehensive national
    anti-fraud strategy, aimed at reinforcing the protection
    of the EU financial interests;
•   identification of possible weaknesses in the national
    system for the management of EU funds;
•   initiation of the necessary legislative, regulatory and
    administrative adaptations, aimed at ensuring an
    effective protection of the EU financial interests
•   dissemination of information to authorities responsible
    for the management of EU funds and revenues,
    concerning obligations and procedures to follow as
    regards the protection of the EU financial interests
     Anti-Fraud Measures



Irregularity, Fraud

Council Regulation (EC, Euratom) No 2988/95 on the protection of the European
Communities financial interests
'Irregularity’ shall mean any infringement of a provision of Community law resulting
from an act or omission by an economic operator, which has, or would have, the
effect of prejudicing the general budget of the Communities or budgets managed
by them, either by reducing or losing revenue accruing from own resources
collected directly on behalf of the Communities, or by an unjustified item of
expenditure
Convention drawn up on the basis of Article K.3 of the Treaty on European Union,
on the protection of the European Communities' financial interests (PIF
Convention)
‘Fraud’ affecting the European Communities' financial interests shall consist of:
• the use or presentation of false, incorrect or incomplete statements or documents
• non-disclosure of information in violation of a specific obligation
• the misapplication of such funds for purposes other than those for which they
  were originally granted;
 Anti-Fraud Measures



The reasons behind Fraud




                       Financial
                       pressure
          Anti-Fraud Measures



Fraud statistics
                          Cohesion Policy FFL and FAL data (% of reported cases)



35

30

 25

 20

 15

 10
                                                                                        FFL
                                                                                        FAL
     5

      0
           2000   2001   2002   2003   2004
                                              2005
                                                     2006
                                                            2007
                                                                   2008
                                                                          2009
                                                                                 2010
   Anti-Fraud Measures



Corruption

Protocol drawn up on the basis of the PIF Convention
‘Passive Corruption’
the deliberate action of an official, who, directly or through
an intermediary, requests or receives advantages of any
kind whatsoever, for himself or for a third party, or accepts
a promise of such an advantage, to act or refrain from
acting in accordance with his duty or in the exercise of his
functions in breach of his official duties in a way which
damages or is likely to damage the European Communities'
financial interests
‘Active Corruption’
the deliberate action of whosoever promises or gives,
directly or through an intermediary, an advantage of any
kind whatsoever to an official for himself or for a third party
for him to act or refrain from acting in accordance with his
duty or in the exercise of his functions in breach of his
official duties in a way which damages or is likely to damage
the European Communities' financial interests
   Anti-Fraud Measures



Corruption
Based on the Protocol, MSs adopted it are obliged to:
take the necessary measures to ensure that in its criminal
law the descriptions of the offences constituting EU fraud
committed by its national officials in the exercise of their
functions apply similarly in cases where such offences are
committed by Community officials in the exercise of their
duties;
take the necessary measures to ensure that in its criminal
law the description of corruptions committed by or against
its high ranking officials in the exercise of their functions
apply similarly in cases where such offences are committed
by or against members of institutions of the EU respectively
in the exercise of their duties;
take the necessary measures to ensure that the forms of
corruption and participating in and instigating the conduct
in question, are punishable by effective, proportionate and
dissuasive criminal penalties, including, at least in serious
cases, penalties involving deprivation of liberty which can
give rise to extradition.
   Anti-Fraud Measures



Irregularity, Fraud and Corruption

INTERINSTITUTIONAL AGREEMENT of 25 May 1999 between
EP, Council and Commission
Institutions agree: to adopt common rules consisting of the
implementing measures required to ensure the smooth
operation of the investigations carried out by the Office
within their institution.
To recognise the need to send to the Office, for an opinion,
any request for the waiver of the immunity from judicial
proceedings of an official or servant relating to any cases of
fraud or corruption or any other illegal activity. If a request
for the waiver of immunity concerns one of their members,
the Office shall be informed.
     Anti-Fraud Measures



 EU level conclusions on Anti-
 Corruption Measures
• Protocol has not yet been ratified and transposed into the
  law of all EU Member States;
• to date there is no mechanism in place monitoring the
  existence, and assessing the effectiveness, of anti-
  corruption policies at EU and Member State level in a
  coherent crosscutting manner
• an estimated 120 billion Euros per year, or one percent of
  the EU GDP, is lost to corruption;
• implementation of the anti-corruption legal framework
  unsatisfactory overall, the EU anti-corruption legislation is
  not transposed in all Member States;
• even where anti-corruption institutions and legislation are
  in place its enforcement is often insufficient in practice;
• a strong need for political commitment on the part of
  leaders and decision-makers to combat corruption in all its
  forms
    Anti-Fraud Measures



EU level solutions

• Commission will set up a new mechanism, the EU Anti-
  Corruption Report
• The establishment of the EU Anti-Corruption Report is the
  Commission's response to the call from Member States, in
  the Stockholm Programme to measure anti-corruption
  efforts within the Union
• the Report will be managed by the Commission and
  published every two years, starting in 2013
• New OLAF regulation 1073/99 requesting           stronger
  cooperation    with   MSs’     authorities and   possible
  consolidation of EU anti-fraud legislation
• Lisbon Treaty made it possible to establish the European
  Public Prosecutor's Office
• Regulation 1302/08 „CED”
Thank you for your kind atte
www.nav.gov.hu

								
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