anti-fraud and anti-corruption measures in the european structural and investment funds anti-fraud...
TRANSCRIPT
Anti-fraud and Anti-corruption Measures in the European Structural and
Investment Funds
Financial Crime Investigation Service under the Ministry of the Interior of the Republic of Lithuania
25 February, 2015Ryga
Fields of Cooperation
The creation/implementation of national strategies to protect EU’s financial interests (and promoting the related administrative/legislative changes);Identification of possible weaknesses in national systems for managing EU funds, including pre-accession funds;Dissemination of information and communication;Sufficient human resources capacity, including training fraud-prevention staff;Helping cooperation between national administrations, prosecution authorities and OLAF;Sharing information on irregularities and suspected fraud cases with national administrations and OLAF.
Directions of Cooperation within AFCOS system
Irregularity Reporting System bodies
LawEnforcementInstitutions
OLAF
IRREGULA
RITIES
COOPERATION
CRIMES
Reporting
IMS
Criminal Investigation Experts
FCIS
Verification ExpertsMoF, Agencies
498, 1828, 1848
Reporting ExpertsFCIS IRD
>10.000 €
PA
A, 1681,
1831
Financial Crime Investigation Service (FNTT)
The goal of the Service is to elaborate methods of combating criminal activities against the State and EU financial system.
Presently the priority attention of the Service is paid to the disclosing, investigation and prevention of the criminal acts, related to the money laundering, VAT embezzlement, illegal receipt and use of the funds of the financial support from the European Union and foreign countries.
For the anti-fraud efficiency great importance has the fact that the Service officers participate in the development of the risk management system of administration and control of the European Union support, it closely cooperates with the administrating institutions of the European Union financial support.
The Levels of Cooperation
The Anti-Fraud cooperation process in Lithuania takes place at:
Governmental level
Inter-institutional level
Institutional level
Inter-Institutional Level
Managing Authority (MoF) formed Irregularities officers working group.
This Group comprised of Irregularities officers and headed by the Managing Authority.
In the Group as observers invited Coordinating, Certifying Authorities, Audit Authorities, Ministries, and (or) other state institutions, the Public Procurement Office and the Financial Crime Investigation Service Representatives.
(Nr.1225, 2008-11-12)
The Institutional Level of Cooperation
Each institution has its own arrangements.
Ex. FCIS for the purpose of protection of the EU financial interests has cooperation agreements with MA and IB2 level bodies . These agreements legitimize the exchange and usage of SFMIS information for the criminal intelligence and criminal investigations.With State Tax Inspectorate existed modern form of cooperation – Risk Assessment Center (RAC).
Criminal Code of the Republic of LithuaniaApplicants want to obtain by fraud EU’ funds resources (Art. 182 CC. Swindling Fraud)Falsification of documents, which to be used to get the EU's support (Article 300 CC. Forgery of a Document or Possession of a Forged Document )Beneficiaries of EU aid fraudulently or negligently managed accounts (Art. 222 CC. Fraudulent Management of Accounts , Art. 223 CC. Negligent Management of Accounts )State civil servants abusing the service or negligent performance of their duties (Art. 228 CC. Abuse of Office , Art. 229 CC. Failure to Perform Official Duties)Legalisation of illegally obtained EU funds money (Art. 216 CC. Money or Property Laundering )Illegal financial transactions, the use of not oneself electronic means of payment (Art. 215 CC. Unlawful Use of an Electronic Means of Payment or Data Thereof)
Crime characteristics (1)
The project result is not achieved (not intend to implement the project).One type of equipment is contracted, but other equipment is installed (purchase of used equipment). Additional works are purchased not using public procurement procedures. Discriminatory technical specifications (when conditions make for a single supplier or model of techniques).A simplified procurement procedure is used instead of an international one. Simplified purchase procedure is used without the proper legal basis to do so.The Law on Construction is violated (works are started without a construction permit of state institutions).
Crime characteristics (2)
The price gap between public and private sector (in the private sector same works price 40-60% lower);The tender analysis missing special knowledge (documents submitted by the persons who do not have specific knowledge of construction, land reclamation, computer technology and so on.);Public and private interests conflict (municipal council members are often managed companies which take part in the contest);Suppliers agreed in advance (after the tender unsuccessful participants shall sign the sub-contract – “cartel”);Part of the costs are not justified (used for the acquisition of material without documents, illegal work, and so on.);Falsified documents are provided to the State authorities (applications and payment requests, bill, VAT invoice, and so on.).
Crime characteristics (3)
Unreasonably increase the construction cost estimate (no reason to include all firms costs, business trips and so on.)Provides not detailed estimates (and later the same form drawn up to carry out the works acts);After the competition work carried out not by the estimated costs;Used to justify the expenditure actually a “ghost” companies (without carrying out any work, without the value added) documents;Tax evasion – companies conceals the real corporate profits, income tax;Made financial transactions through offshore companies (spends money for luxury goods, real estate, cars, etc.)
Problems of Investigation Complicated administrative procedures.
Different areas of EU support and different funding periods have different rules, legislation, administration system ( it makes PTI cases multiplex and crowded with
documents). Administrative prevention gap.
The risk assessment and reporting of possible fraud does not guarantee the timely detection of criminal acts (for PTI are important evidence, not assumptions).
Special qualification requirements for officers.Necessary not only legal knowledge, usually required skills for different areas
(agriculture, agronomy, engineering, industry, IT products and so on) PTI proceedings are necessary experts in different areas
Professionals with special training, education, skills and knowledge that can provide detailed findings of research in specific areas (preparation of expert report takes time,
service of experts are very expensive, it’s influence court costs)
Thank you for your attention PaldiesTänan Ačiū
