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Fighting fraud: 31st Annual Report on the Protection of the EU's financial interests
The European Commission adopted this Thursday its 31st annual report on the protection of the European Union’s financial interests (PIF report). Several important steps were taken to protect the EU budget from fraud in 2019, the report shows. As the EU prepares to mobilise unprecedented sums to tackle the coronavirus crisis and its consequences, the positive results achieved in recent years provide a solid basis to meet future challenges for European and national authorities in their fight against fraud.
Ville Itälä, Director-General of the European Anti-Fraud Office (OLAF), commented: “We must ensure that every single euro of the EU budget is spent for its intended purpose. We are well equipped to protect EU taxpayers’ money from inefficiencies, irregularities and fraud, but we must do even more to adapt our tools and structures, both at European and national level, to the new situation. The Commission will soon propose new measures to protect the EU budget and the resources invested in the EU’s recovery from the coronavirus crisis. OLAF, the European Anti-Fraud Office, will continue to pull its weight. We can rely on OLAF’s experience in fighting fraud acquired over the past years and the solid framework of the Commission Anti-Fraud Strategy.”
In 2019, detected fraud and related financial amounts declined in comparison with the previous year. 939 fraudulent irregularities were reported, for a financial value of roughly less than half compared to 2018, confirming an overall declining trend over the last five years. Detected non-fraudulent irregularities remained stable but declined in value by 8%, the 2019 PIF report shows.
According to the report, Member States continued their efforts to strengthen their national systems and procedures, focusing on prevention and detection, but also on measures to enhance transparency, and to fight corruption and conflict of interest. EU institutions continued to counter fraud against both EU revenue and expenditure, including through the investigations of the European Anti-Fraud Office (OLAF), and to improve instruments and policies to protect EU taxpayers’ money.
Highlights of progress made in 2019 include:
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The transposition by EU Member States of the Directive on the fight against fraud to the Union's financial interests by means of criminal law (the ‘PIF Directive’);
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The adoption of the Directive on the protection of persons who report breaches of Union law (the ‘Whistleblowing Directive’);
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The adoption of the new Commission Anti-Fraud Strategy;
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The appointment of Ms Laura Codru?a Kövesi as European Chief Prosecutor.
At national level, Member States adopted a wide array of measures to improve their capabilities to prevent and detect fraud. Most of the reported measures focus on the management and control of EU funds.
As the coronavirus crisis calls for more funding in the years to come, in particular for the health sector, this report also includes an analysis of irregularities in the area of ‘investment in health infrastructure’.
The Commission will step up its fraud prevention work to ensure that EU money continues to receive the highest possible level of protection against fraudsters who may try to take advantage of the current situation, concludes the report. Likewise, Member States must not lower their guard against the risks highlighted in the report, the text recommends.
According to the Report, Romania is the country where the European Anti-Fraud Office (OLAF) concluded the most numerous number of investigations on EU fund embezzlement last year. More than 10% of the total100 files refers to frauds with EU money in our country, according to the 2019 OLAF report.
Last year, OLAF investigated how EU funds had been spent in 42 countries, concluding 100 files overall. 11 of them (over one tenth) refer only to European money spent in Romania. At the same time, 9 in those 11 files have been concluded with recommendations from OLAF.
Romania is ranked on several chapters regarding EU fund embezzlement: aquaculture farms in areas where there is no water, EU funds for preventing forest fires or funds for the waste water management.
Last year, OLAF concluded 181 investigations, issuing 254 recommendations to the relevant national and EU authorities; The Office recommended the recovery of €485 million to the EU budget and 223 new investigations.
Throughout 2019, OLAF investigations have tackled trade in endangered species and illegal logging and import into the EU of wood and timber, sometimes from protected forests. They have uncovered international trade schemes of illicit biodiesel, fraud against forest fire detection funds, and several cases focusing on water and waste management. One case concluded in 2019 involves faking green credentials in order to obtain EU funding.