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Protecting EU interests

The Early Detection and Exclusion System: EDES

Time frame

The EDES in detail

  1. The purpose
  2. The Panel
  3. The database
  4. Data Protection

The EDES is the new system established by the Commission to reinforce the protection of the Union's financial interests and to ensure sound financial management.

It replaces the Early Warning System and the Central Exclusion Database as of 1 January 2016.

The EDES rules are found in the revised Financial Regulation1.

The EDES includes a number of improvements to the current tools by the setting-up of new Panel and the creation of a new database.

Time frame

The new rules will be applicable from 2016 to all contracts, grant agreements, prizes, financial instruments and remunerated experts, as well as for the implementation of the budget under indirect management.

The EDES in detail

1. The purpose

The purpose of the EDES is the protection of the Union's financial interests against unreliable economic operators. In particular, the EDES ensures:

  • the early detection of an economic operator representing risks threatening the Union's financial interests;
  • the exclusion of an economic operator from receiving Union's funds (Article 106(1) of the Financial Regulation);
  • the imposition of a financial penalty on an economic operator (Article 106(13) of the Financial Regulation);
  • the publication, in the most severe cases, on the Commission's internet site of information related to the exclusion and where applicable the financial penalty, in order to reinforce their deterrent effect (Articles 106(16) and 106(17) of the Financial Regulation).

The information on early detection/exclusion/financial penalty may stem from:

  • final judgment or final administrative decisions;
  • facts and findings from the Anti-fraud office of the Commission (OLAF), Court of Auditors, audits or any other check, audit or control performed under the responsibility of the competent authorising officer2
  • non-final judgments or administrative decisions;
  • decisions of the European Central Bank (ECB), the European Investment Bank (EIB), the European Investment Fund or international organisations;
  • cases of fraud and/or irregularity by national managing authorities under shared management;
  • cases of fraud and/or irregularity by delegated entities under indirect management.

The grounds for exclusion are listed under article 106(1) of the Financial Regulation. They concern:

  • bankruptcy and insolvency situations;
  • non-payment of taxes or social security contributions;
  • grave professional misconduct;
  • fraud, corruption, participation in a criminal organisation etc.;
  • serious breach of contract;
  • irregularity.

2. The Panel

A new Panel is set-up to assess requests and issue recommendations for exclusion and financial penalty referred to it by the Commission or other Institutions and bodies and (Article 108 of the Financial Regulation). The competent authorising officer will refer a case to the Panel for a central assessment where there are no final judgments or final administrative decisions related to the exclusion and its duration or to the financial penalty, and their publication.

Where the contracting authority decides to deviate from the recommendation of the panel, it shall justify such decision to the panel.

The Panel will also be competent to ensure the rights of defence of the economic operator.

It is then the competent authorising officer that takes the decision on the basis of the panel recommendation to exclude and or impose a financial penalty and possibly publish the related information on the Commission's website.

The system retains the possibility to assess the remedial measures taken by the economic operator to demonstrate its reliability. In this case, the economic operator should not be excluded (except for the most severe criminal activities).

The Panel will be independent and composed of:

  • a high-level independent chair;
  • 2 representatives of the Commission as owner of the system;
  • one representative of the requester within the Commission or other Institutions and bodies.

3. The database

The above information on early detection or exclusion and/or financial penalty will be entered in a database (the EDES database) by the Commission, its executive agencies, other institutions, bodies or European offices.

The database is set up and operated by the Commission (Article 108 (1) Financial Regulation).

4. Data Protection

The EDES shall comply with Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data.

The privacy statement for the EDES database will soon be published.

1. Regulation (EU, Euratom) 2015/1929 of the European Parliament and of the Council of 28 October 2015 amending Regulation (EU, Euratom) No 966/2012 on the financial rules applicable to the general budget of the Union.

2. Referred to as 'the contracting authority' in the Financial Regulation

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