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Protection of the financial Interest of the EU --- ANTI-FRAUD MEASURES --- Budapest, 23/11/2011 PowerPoint PPT Presentation


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Protection of the financial Interest of the EU --- ANTI-FRAUD MEASURES --- Budapest, 23/11/2011. Anti-Fraud Measures. Target of the protection. CORRUPTION. Anti-Fraud Measures. Implementation of the budget. Anti-Fraud Measures. Why to create OLAF. CORRUPTION!

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Protection of the financial Interest of the EU --- ANTI-FRAUD MEASURES --- Budapest, 23/11/2011

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Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Protection of the financial

Interest of the EU

--- ANTI-FRAUD MEASURES ---

Budapest, 23/11/2011


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Target of theprotection

CORRUPTION


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Implementation of thebudget


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Whytocreate OLAF

CORRUPTION!

Findings of the ECA in1998 and othercorruptionrelatedsuspicions, togetherwiththeerrorsinthefunctioning of UCLAF ledtotheresignation of theSanterCommission.

The beginning:

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

Needfor 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 InstitutionswhileexercisingtheinvestigativepowersconferredontheCommission.


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

European Anti-Fraud Office

Inthe building blocks of the EU:

Treaty on the Functioning of the European Union Article 317 (ex Article 274 TEC) – Responsiblityfortheimplementation of the EU budget

Treaty on the Functioning of the European Union Article 325 (ex Article 280 TEC) – Obligationtocounterfraud at Commission and MS level

Legalbasis:

1999/352/EC, ECSC, Euratom: Commission Decision establishing the European Anti-fraud Office (OLAF)

Regulation (EC) No 1073/1999 of the EuropeanParliament andof the Councilconcerning 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

Council Regulation (EC, Euratom) No 2988/95 on the protection of the European Communities financial interests


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

European Anti-Fraud Office

Objective:

Protection of thefinancialinterests and thereputationotthe 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.


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Focusonseriouscases

OLAF

ECA/DGs

Seriouscase

Less seriouscase

Fraud , corruption and internationalrelation

Seriouserror

Formalerror

Seriousmisconduct

Weakpolicy

Misinterpretedrules


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

AFCOS

  • The beginning:

  • Recognition of the need for a cooperation partner (strategicdocuments)

  • Candidate Countries’ administrative structures were unknown to OLAF

  • Decrease the risks deriving from lack of experience in management of public funds

AFCOS


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

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.


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

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


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

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 informationinviolationof a specificobligation

  • the misapplication of such funds for purposes other than those for which they were originally granted;


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

The reasonsbehindFraud

Opportunity

Rationalization

Financial

pressure


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Fraudstatistics


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Corruption

Protocol drawn up on the basis of the PIF Convention

‘PassiveCorruption’

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

‘ActiveCorruption’

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


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Corruption

BasedontheProtocol, MSsadopteditareobligedto:

takethenecessarymeasurestoensurethatinitscriminallawthedescriptions of theoffencesconstituting EU fraudcommittedbyitsnationalofficialsintheexercise of theirfunctionsapplysimilarlyincaseswheresuchoffencesarecommittedbyCommunityofficialsintheexerciseoftheirduties;

takethenecessarymeasurestoensurethatinitscriminallawthedescription of corruptionscommittedbyoragainstitshighrankingofficialsintheexercise of theirfunctionsapplysimilarlyincaseswheresuchoffencesarecommittedbyoragainstmembersofinstitutionsofthe EU respectivelyintheexercise of theirduties;

takethenecessarymeasurestoensurethattheforms of corruption and participatinginandinstigatingtheconductinquestion, arepunishablebyeffective, proportionateanddissuasivecriminalpenalties, including, at leastinseriouscases, penaltiesinvolvingdeprivation of libertywhichcangiverisetoextradition.


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

Irregularity, Fraud and Corruption

INTERINSTITUTIONAL AGREEMENTof 25 May 1999between EP, Council and Commission

Institutionsagree: to adopt common rules consisting of the implementingmeasures required to ensure the smoothoperation of the investigations carried out by theOffice within their institution.

To recognise the need to send to the Office, for anopinion, any request for the waiver of the immunityfrom judicial proceedings of an official or servantrelating to any cases of fraud or corruption or anyother illegal activity. If a request for the waiver ofimmunity concerns one of their members, the Officeshall be informed.


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

EU levelconclusionsonAnti-CorruptionMeasures

  • Protocol has not yet been ratified and transposed into the law of all EUMember States;

  • to date there is no mechanism in place monitoring the existence, and assessing theeffectiveness, of anti-corruption policies at EU and Member State level in a coherent crosscuttingmanner

  • an estimated 120 billion Euros per year, or one percent of the EUGDP, is lost to corruption;

  • implementation of the anti-corruption legal frameworkunsatisfactory overall, the EU anti-corruption legislationis not transposed in all Member States;

  • even where anti-corruptioninstitutions and legislation are in place its enforcement is often insufficient in practice;

  • a strongneedforpolitical commitment on the part of leaders and decision-makersto combat corruption in all its forms


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

Anti-Fraud Measures

EU levelsolutions

  • 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 callfrom Member States, in the Stockholm Programmeto measure anti-corruption efforts within the Union

  • the Report will be managed by the Commissionand published every two years, starting in 2013

  • New OLAF regulation 1073/99 requestingstrongercooperationwithMSs’ authorities and possibleconsolidation of EU anti-fraudlegislation

  • LisbonTreaty made itpossibletoestablishthe European Public Prosecutor's Office

  • Regulation 1302/08 „CED”


Protection of the financial interest of the eu anti fraud measures budapest 23 11 2011

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