reporting suspected fraud and corruption olaf.d.2 – fraud prevention, reporting and analysis unit...

REPORTING SUSPECTED FRAUD AND CORRUPTION

OLAF.D.2 – Fraud Prevention, Reporting and Analysis UnitRiga – 25 February 2015

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Content

Definitions from legal framework on reporting obligations

Overview of the situation based on the analysis of reported cases (PIF Report)

Fraud detection and reporting obligations – key clarifications

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Legal basis for reporting irregularities and suspected fraud

Cohesion Policy Funds (2007-2013)Council Regulation (EC) No 1083/2006 (Article 70)Commission Regulation (EC) No 1828/2006 as amended by

Commission Regulation (EC) No 846/2009

Structural and Investment Funds (2014-2020)Council and EP Regulation (EC) No 1303/2013 (Article 122)Delegated and Implementing Acts under preparation

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Article 122 of Council and EP Regulation (EC) No 1303/2013

Member States must notify to OLAF all irregularities which exceed EUR 10 000 in EU contribution (Article 122)

DA and IA on the reporting of irregularities ongoing

NB: obligation to report suspected fraud and/or corruption by qualifying the irregularity in the Irregularity Management System (IMS)

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Definition of irregularity(Regulation 1303/2013)

ARTICLE 2

(36) 'irregularity' means any breach of Union law, or of national law relating to its application, resulting from an act or omission by an economic operator involved in the implementation of the ESI Funds, which has, or would have, the effect of prejudicing the budget of the Union by charging an unjustified item of expenditure to the budget of the Union.

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Definition of suspected fraud (Regulation 1828/2006)

An irregularity which has been subject of a primary administrative or judicial finding giving rise to the initiation of proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud as is referred to in […] the Convention […] on the protection of the European Communities’ financial interests […]

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The Convention on the protection of the EU's financial interests, fraud definition

the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities,

non-disclosure of information in violation of a specific obligation, with the same effect,

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

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Corruption definition

Corruption is defined as the abuse of (public) position for private gain.

Bribes and kickbacks refer to the giving (active bribery) or receiving (passive bribery) of a "thing of value" to influence an official act or a business decision.

The "thing of value" need not be money, and often is not (the ambiguity remains and the perpetrator can more easily invent excuses if needed).

As a consequence, the act of bribery is difficult to detect.

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Most common types of irregularities reported as suspected fraud in 2013

Source: Commission Staff Working Document, Statistical evaluation of irregularities reported for 2013 Own Resources, Natural Resources, Cohesion Policy, Pre-accession and Direct expenditure, p. 60

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Programming period 2007-2013, 63 % of the irregularities reported as fraudulent were detected by administrative controls

Previous programming period, under 20 %

Increased effectiveness of administrative controls detecting fraudulent irregularities


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Number of irregularities reported as suspected fraud 2013

Situation in Estonia

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Source: Commission Staff Working Document, Statistical evaluation of irregularities reported for 2013 Own Resources, Natural Resources, Cohesion Policy, Pre-accession and Direct expenditure

Commitments Payments Commitments Payments

EUR EUR EUR EUR % %

ERDF 313 380 647 291 653 919 1 860 211 106 1 469 150 512

Cohesion Fund 209 548 474 322 693 433 1 151 731 446 945 277 056

ESF 97 879 445 64 243 686 391 517 329 351 962 724 0.40% 0.90%

TOTAL 620 808 566 678 591 039 3 403 459 881 2 766 390 291

FDR IDRN EUR N EUR % %

Programming Period 2007-13 - reporting year 2013

2 582 668 74 9 867 403 0.09% 1.45%

ERDF 1 78 357 59 7 891 184 0.03% 2.71%

Cohesion Fund 1 504 311 4 580 661 0.16% 0.18%

ESF 11 1 395 557 0.00% 2.17%

Programming Period 2007-13 - cumulative

7 1 591 340 225 36 409 765 0.06% 1.32%

ERDF 3 532 194 187 33 750 833 0.04% 2.30%

Cohesion Fund 3 1 011 222 7 623 417 0.11% 0.07%

ESF 1 47 924 31 2 035 515 0.01% 0.58%

DetE RepE DetE + RepE

months/average months/average months/average

32 3 35

Suspected fraud Established fraud TOTAL REF

N N N %

6 1 7 14%

EAGF Rural development ERDF Cohesion Fund ESF Other Total 2013 Total 20120 10 1 10 1

0.43% 1.00%

Breakdown-down of 2013 financial corrections implemented under shared management

Period / FundIrregularities reported as fraudulent Irregularities not reported as fraudulent

4. Financial Corrections and recoveries

Detection - Reporting Efficiency

Irregularities reported as fraudulent 2008-13


Ratio of established fraud

Fund

Appropriations 2013 Cumulative PP2007-13 2013 average risk rate

3. Cohesion Policy

cumulative residual risk

Situation in Latvia

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EUR EUR EUR EUR % %

ERDF 436 940 955 327 225 937 2 407 567 364 1 520 280 011

Cohesion Fund 274 414 948 204 852 438 1 539 776 553 914 178 086

ESF 98 424 888 91 576 057 583 103 717 553 948 531 1.50% 0.00%

TOTAL 809 780 791 623 654 432 4 530 447 634 2 988 406 628



27 10 957 478 75 30 466 393 1.76% 4.89%

ERDF 25 10 907 496 60 25 818 638 3.33% 7.89%

Cohesion Fund 0.00% 0.00%

ESF 2 49 983 15 4 647 754 0.05% 5.08%


45 25 522 573 157 38 633 750 0.85% 1.29%

ERDF 37 25 396 260 124 32 859 756 1.67% 2.16%

Cohesion Fund 1 8 512 4 595 203 0.00% 0.07%

ESF 7 117 800 29 5 178 791 0.02% 0.93%



16 9 26


N N N %

44 1 45 2%

EAGF Rural development ERDF Cohesion Fund ESF Other Total 2013 Total 20120 1 19 8 -5 0 24 12

3. Cohesion Policy


Fund

Appropriations 2013 cumulative residual risk




Cumulative PP2007-13

1.94%

2013 average risk rate



Period / Fund

1.58%

Irregularities not reported as fraudulentIrregularities reported as fraudulent

Situation in Lithuania

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EUR EUR EUR EUR % %

ERDF 587 888 142 535 291 797 3 441 950 353 2 735 619 716

Cohesion Fund 438 671 026 360 230 624 2 305 235 743 1 790 889 789

ESF 175 635 692 176 983 235 1 028 306 727 810 820 887 1.60% 1.20%

TOTAL 1 202 194 860 1 072 505 656 6 775 492 823 5 337 330 392



2 106 391 75 21 133 503 0.01% 1.97%

ERDF 1 48 347 58 4 623 501 0.01% 0.86%

Cohesion Fund 1 58 044 14 16 413 387 0.02% 4.56%

ESF 3 96 615 0.00% 0.05%


9 1 091 312 310 81 207 638 0.02% 1.52%

ERDF 2 48 347 180 22 485 112 0.00% 0.82%

Cohesion Fund 4 732 148 121 58 552 874 0.04% 3.27%

ESF 3 310 818 9 169 651 0.04% 0.02%



16 8 24


N N N %

9 9 0%

EAGF Rural development ERDF Cohesion Fund ESF Other Total 2013 Total 20120 8 0 0 0 0 8 10

3. Cohesion Policy


Fund

Appropriations 2013 cumulative residual risk




Cumulative PP2007-13

0.63%

2013 average risk rate



Period / Fund

1.58%

Irregularities not reported as fraudulentIrregularities reported as fraudulent

Reporting fraud and corruption

Law Enforcement (LE) and Jucial Authorities (JA) competent for investigating fraud

Managing Authority (MA) detecting cases of possible fraud or corruption have to report them to competent LE or JA. This implies, suggests and requires: Structured two-way communication (Memoranda, Agreements,

Working arrangements, etc.) establishing• Means of transferring of initial information• Follow-up and feedback by LE or JA• Modalities for nulla osta from JA to enable reporting to EC• Regular updates on evolution of cases to fulfill reporting obligation

Exchange of data, expertise and know-how to further foster fraud detection and enhance the protection of the EU financial interests

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QUESTIONS?

Maria Ntziouni – Deputy Head of UnitOLAF.D.2 – Fraud Prevention, Reporting and Analysis Unit

OLAF - European Anti-Fraud OfficeEuropean CommissionRue Joseph II 30B–1049 [email protected]://ec.europa.eu/anti_fraud

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reporting suspected fraud and corruption olaf.d.2 – fraud prevention, reporting and analysis unit...

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