35 important questions on the fight against fraud and corruption
About this website
Following the Study on Preventing fraud and corruption in the European Structural and Investment Funds – taking stock of practices in the EU Member States from 2018, the European Commission and representatives from Member States asked for more concrete guidelines to prevent and detect fraud in EU funds. This website is the result of a project to gather relevant material, incl. Good Practices from Member states, to answer this need.
The project to create this website was a joint effort of the European Commission, DG REGIO, EIPA (European Institute of Public Administration – EIPA), PwC (PricewaterhouseCoopers) and GOPA Com.
The project was funded by DG REGIO.
The good practices and case studies were identified through desk research and interviews with experts and stakeholders. The ones featured on this website were selected by the European Commission and DG REGIO based on their relevance, proven impact and transferability potential to other Member States.
You can contact the project team via this form. We invite you to give us feedback on the presentation of the material and suggestion on how to further improve. The different Good Practices featured also include contact details to the Good Practices owners.
Fraud in EU funds
It is difficult to put a concrete number on the amounts of EU funds defrauded every year. The European Commission relies on the Member States to correctly report the fraudulent irregularities detected. The number of irregularities reported as fraudulent (which includes cases of suspected or established fraud) and the associated amounts are not a direct indicator of the level of fraud affecting the EU budget.
The threshold for reporting irregularities is 10.000€. It is likely that a lot of fraud goes unreported and undetected.
For 2019, the fraudulent irregularities reported alone related to approx. EUR 461.4 million.
Source: PIF Report 2019
PIF Reports: All PIF Reports under art. 325 TFEU may be found on the following here.
OLAF Reports: All OLAF reports may be found on the following link.
According to art. 325 TFEU the Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union's institutions, bodies, offices and agencies.
Under this Article each year the Commission, in cooperation with Member States, submits to the European Parliament and to the Council a report on the measures taken in the fight against fraud, called the “PIF Report”. The PIF Report hold information on the most important initiative in the fight against fraud and contains an analysis of the notifications provided by national authorities of cases of irregularities and suspected or established fraud.
The European Anti-Fraud office (OLAF) also publishes every year an annual report where information about the investigations of the Office and the recommendations to the MS is given. In this report people may find information about OLAF’s investigative performance, the trends in the anti-fraud investigations, the actions of the Office to protect the revenue side of the budget and information about its contribution to the policies to fight fraud.
The European Public Prosecutor’s office (EPPO) shall publish every year an annual report, according to Article 7 of the EPPO Regulation. The report shall contain information about the general activities of EPPO. The report shall be transmitted to the European Parliament and to national parliaments, as well as to the Council and to the Commission.
PIF Reports: All PIF Reports under art. 325 TFEU may be found on the following here.
OLAF Reports: All OLAF reports may be found on the following link.
OLAF stands for European Anti-Fraud office (French: Office Européen de Lutte Anti-Fraude).
The European Anti-Fraud Office (OLAF) is a EU body mandated to detect, investigate and stop fraud with EU funds in order to protect the financial interests of the European Union.
OLAF fulfils its mission by:
- carrying out independent investigations into fraud and corruption involving EU funds, so as to ensure that all EU taxpayers’ money reaches projects that can create jobs and growth in Europe;
- contributing to strengthening citizens’ trust in the EU Institutions by investigating serious misconduct by EU staff and members of the EU Institutions;
- developing a sound EU anti-fraud policy.
See also: Link to OLAF’s webpage
EPPO stands for the European Public Prosecutor’s office.
The EPPO is responsible for investigating, prosecuting and bringing to judgment the perpetrators of, and accomplices to, criminal offences affecting the financial interests of the Union which are provided for in Directive (EU) 2017/1371 and determined by the EPPO Regulation. In that respect the EPPO shall undertake investigations and carry out acts of prosecution and exercise the functions of prosecutor in the competent courts of the Member States, until the case has been finally disposed of.
The European Public Prosecutor’s Office will operate as a single office across all participating EU countries and will combine European and national law enforcement efforts in a unified, seamless and efficient approach. The European Public Prosecutor’s Office will be built on two levels: the central and the national level. The central level will consist of the European Chief Prosecutor, its two Deputies, 22 European Prosecutors (one per participating EU country), two of whom as Deputies for the European Chief Prosecutor and the Administrative Director. The decentralised level will consist of European Delegated Prosecutors who will be located in the participating EU countries. The central level will supervise the investigations and prosecutions carried out at the national level. As a rule, it will be the European Delegated Prosecutors who will carry out the investigation and prosecution in their EU country.
Source: Art. 4 of EPPO Regulation 2017/1939
Yes. Here you may find some of the Special reports of the European Court of Auditors on the topic.
- Special Report 1/2019 - ‘Fighting fraud in EU spending: action needed’.
- Special Report 6-2019 Tackling Fraud in EU Cohesion Spending
- Special report 24/2015 – ‘Tackling intra-Community VAT fraud: More action needed’.
- Special report 2/2011 - Follow-up of special report 1/2005 concerning the management of the European Anti-Fraud Office (OLAF); Opinion No 6/2005, Opinion No 7/2006, Opinion No 6/2011.
The process of increasing the knowledge of experts is known as capacity building. This website was created to help you build your capacities relating to the fight against fraud. By browsing through the definitions, relevant guidelines, videos and other parts of this website, you will become familiar with the most important terms.
Another good way to do this is to use the tools provided by the European union for exchange of expertise and information between practitioners. The instrument TAIEX PEER-2-PEER was created with this exact goal. Civil servants across the European Union may exchange knowledge, good practice and practical approaches. This way they upgrade their administrative capacity, thereby improving EU investment outcomes.
All public bodies that are part of the management and control system are eligible, namely:
- managing authorities
- intermediate bodies
- audit authorities
- certifying authorities
- national coordinating bodies
- joint technical secretariats.
For more information on TAIEX REGIO PEER-2-PEER, click here.
Prevention and Detection of Fraud
Fraud prevention is about reducing the opportunities for fraud to happen. This can be achieved by implementing effective procedures and controls, e.g. related to tenders, and raising people’s awareness about common fraud schemes and their negative impacts for organizations and individuals.
Fraud prevention is important because it aims at preventing damages caused by fraud. It is about ensuring that money is spent in an efficient, effective and fair way and doesn’t end up in the pockets of criminals. It is also about reducing the amounts that might be spent on investigating fraud or recovering assets.
Unfortunately, fraud can never be avoided in absolute terms. However, the risk of fraud can be considerably lowered through the implementation of preventive measures. Effective anti-fraud measures, incl. fraud detection methods and the investigation and sanctioning of fraudulent behaviour can also significantly deter fraudster and reduce fraud and the financial and reputational damages related to it.
Stay vigilant and cautious, especially when a situation or request doesn’t feel quite right. Make sure to apply set procedures and understand their necessity – if you don’t understand why a certain control or documentation is necessary, ask your colleagues or supervisors. If you feel unsure about whether a certain kind of behaviour is correct or if you witness potentially fraudulent behaviour, speak up to your supervisor or contact the police or OLAF.
First and foremost, it is important to stay vigilant and cautious in order to detect fraud. Whenever a situation seems not quite right or a counterparty acts in a way that is not understandable, you should be careful and maybe consult with a supervisor.
There are also various systems and tools that can help to detect fraud, e.g. programs that detect anomalies in payments or tender procedures. A review of documents submitted and a confirmation of the presented facts via publicly available data might also lead to spotting fraudulent behaviour. For instance, one can analyse if applicants applying for financing are actually experienced by checking for past projects and references; one can also review submissions of project costs by comparing the costs to similar projects or reaching out to the persons involved in a project to receive a confirmation.
It can be very difficult to unmask a fraudster, as they can be very good at hiding their true intention. However, whenever you have the feeling that a situation is not quite right, you must be cautious and definitely not shake off that thought.
When counterparts ask you to skip certain steps in a procedure, speed up a process, offer you gifts or make other promises, you should directly alert your supervisor, your Compliance or Legal Department or the police.
Specific so called “red flags” could relate to the background of a person or company applying for funds, e.g. a lack of experience for the services offered or a referral by/close relations to a government official or someone deciding about the funding of the project (especially if the official or deciding person insists on collaborating with a specific counterpart). Other red flags are about the requests made linked to payments, e.g. requesting payments to banks in other countries than the country of incorporation/operation or to shell companies/companies with post office boxes. Missing or contradicting documentation, making payments or gifts during the tender process or demanding urgent payments during the project are also warning signs.
Reporting of Fraud
If you have suspicions or reasonable grounds for knowing of or suspecting any fraudulent activity, please report this to your supervisor, a dedicated department (e.g. Legal or Compliance), a dedicated national whistleblowing institution, the national police or OLAF. Please do not try to gather evidence – this might make the evidence invalid for later investigations or trials and might put you in danger. Do not ty to catch, confront or otherwise tip-off the person you suspect of wrongdoing to protect yourself and prevent any destruction of evidence.
You can report to OLAF, your supervisor, dedicated departments or the police:
- fraud or other serious irregularities with a potentially negative impact for EU public funds, whether EU revenue, expenditure or assets held by the EU institutions.
- serious misconduct by Members or staff of EU Institutions and bodies.
For fraud with no financial impact on the EU public funds or corruption which doesn’t involve members or staff of EU Institutions and bodies, please report to the national police. For further information refer to the OLAF website.
An irregularity is an act which doesn’t comply with EU rules and which has a potentially negative impact on EU financial interests, but which may be the result of genuine errors committed both by beneficiaries claiming funds and by the authorities responsible for making payments. If an irregularity is committed deliberately, however, it’s fraud. (See more in Article 1 ofCouncil Regulation 2988/95). For further information refer to the OLAF website.
A number of Member States have introduced the notion of an ‘irregularity signal’ in their internal reporting procedures. It should be stressed that this notion is not provided for in the EU Regulations, therefore not binding on Member States.
An irregularity signal is to be understood as ‘any information received from any source about the existence of an irregularity before the assessment of this information’ (e.g. an allegation of irregularity).
The information available in an irregularity signal may or may not be sufficient to definitely confirm the existence of an irregularity or a suspected fraud and needs to be assessed, as the obligation to report starts from the ‘first written assessment’
In order to be considered an irregularity, the behaviour of the perpetrator must result in an infringement/breach of EU or national law. The main factor in identifying ‘fraud’ is ‘deliberate intent’ to commit an irregularity. This deliberate intent is the line between and administrative infringement (irregularity) and a criminal offence. (See more in Article 1 ofCouncil Regulation 2988/95). For further information refer to the OLAF website.
Member States reporting irregularity cases to the Commission have been required to identify whether these cases involve ‘suspected fraud’. A definition of ‘suspected fraud’ is inserted in the reporting provisions in Regulation 2015/1970, Regulation 2015/1971, Regulation 2015/1972 and Regulation 2015/1973
According to the definition given in the abovementioned regulations, “Suspected fraud” means an irregularity that gives rise to the initiation of administrative or judicial proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud, as referred to in Article 1(1)(a) of the 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’.
The main factor in identifying ‘fraud’ is ‘deliberate intent’ to commit an irregularity. Therefore, an irregularity should always be treated as ‘suspected fraud’ if it is submitted to a prosecution service
Yes. “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 EU 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, according to the definition in the area of ESIF funds provided by Art. 2 (36) of CPR Regulation 1303/2013.
The wording “breach of national law relating to application of EU law” is not present in the definition of irregularity provided by Art. 1 (2) of Regulation 2988/95, the Court of Justice had the possibility to interpret this provision in its practice, such as for example in the Cases C‑260/14 and C‑261/14.
PACA abbreviation stands for “Primary administrative and judicial finding” (French: Premier acte de constat administratif ou judiciaire).
Primary administrative or judicial finding means a first written assessment by a competent authority, either administrative or judicial, concluding on the basis of specific facts that an irregularity has been committed, without prejudice to the possibility that this conclusion may subsequently have to be revised or withdrawn as a result of developments in the course of the administrative or judicial procedure.
Source: Art. 2 (b) of Regulation 2015/1970
Source: Art. 2 (b) of Regulation 2015/1971
Source: Art. 2 (b) of Regulation 2015/1972
Source: Art. 2 (b) of Regulation 2015/1973
If you are an EU staff member you have an obligation to report possible cases of fraud, corruption, other illegal activity, or professional conduct which may constitute a serious failure to comply with the obligations of EU staff members. You can either inform a member of management in your institution or OLAF about your suspicions. For further information refer to the OLAF website.
For the protection of the financial interests of the Union, EU legislator has adopted reporting requirements as regards the shared management funds. Member States and third country beneficiaries of EU funding under the asylum fund, pre-accession and neighbourhood policy instruments must send regular reports of the detected irregularities and the amount concerned to the European Anti-Fraud Office (OLAF), and update relevant information concerning their administrative/judicial and financial procedures.
The general purpose of the reporting of irregularities and fraud cases is to provide support in ascertaining the nature of irregular practices and the financial effects of irregularities, including suspected and established fraud, in recovering sums wrongly paid and in preventing irregularities. This exchange of information is also intended for the reinforcement of cooperation between the reporting countries and the Commission and the enhancement of risk analysis for fraud prevention and detection in the fields mentioned above. In addition, the reporting of irregularities contributes for transparency, statistics and analytical data.
Yes. According to the general obligation, Member States shall prevent, detect and correct irregularities and shall recover amounts unduly paid, together with any interest on late payments. They shall notify the Commission of irregularities that exceed EUR 10 000 in contribution from the Funds and shall keep it informed of significant progress in related administrative and legal proceedings.
This means that any cases under this threshold are not to be reported. In addition to this, the Member States shall not notify the Commission of irregularities in relation to the following:
(a) cases where the irregularity consists solely of the failure to execute, in whole or in part, an operation included in the co-financed operational programme owing to the bankruptcy of the beneficiary;
(b) cases brought to the attention of the managing authority or certifying authority by the beneficiary voluntarily and before detection by either authority, whether before or after the payment of the public contribution;
(c) cases which are detected and corrected by the managing authority or certifying authority before inclusion of the expenditure concerned in a statement of expenditure submitted to the Commission.
In all other cases, in particular those preceding a bankruptcy or in cases of suspected fraud, the detected irregularities and the associated preventive and corrective measures shall be reported to the Commission.
When amounts unduly paid to a beneficiary cannot be recovered and this is as a result of fault or negligence on the part of a Member State, the Member State shall be responsible for reimbursing the amounts concerned to the budget of the Union. Member States may decide not to recover an amount unduly paid if the amount to be recovered from the beneficiary, not including interest, does not exceed EUR 250 in contribution from the Funds.
See also: Article 122 of Regulation 1303/2013
The citizens of the European Union are often the first to know about threats or harm to the public interest which arise in the spending of EU funding. By reporting irregularities and fraud with EU funds such persons act as ‘whistleblowers’ and thereby play a key role in exposing and preventing such breaches and in safeguarding the welfare of society.
Each Member State has undergone a designation procedure for managing authority, certifying authority and audit authority for the respective operational programme, according to Article 123 of Regulation 1303/2013. These are the respective authorities responsible for the control of EU spending in your country. Each of them has implemented channels for reporting of irregularities, such as on their webpage, and may exercise the respective control.
In addition to this, the national AFCOS services [HYPERLINK TO DEFINITION № …], the police authorities and any other authority shall assist you in receiving the information and, if they are not responsible for the check on the allegations, forward the information to the respective national authority.
When a citizen or a public official suspects that fraud has been committed, he/she has to report it as fast as possible, because the time is of the essence for the public authorities to take measures. From the point of view of the competent authorities, the definition of ‘suspected fraud’ is a procedural definition: all irregularities for which a public authority has taken specific procedural steps are categorised as ‘suspected fraud’.
In that case, you are of course neither obliged nor expected to report your suspicions internally. You can either contact the police or OLAF. Some countries also have dedicated whistleblowing institutions, e.g. the Netherlands with the Dutch Whistleblowers Authority.
Each national authority is there to help you, according to its mission and functional competence. If you want, however, to notify the European Anti-Fraud Office (OLAF), you may do so here. You can report anonymously, if you wish so, and in any of the 24 official EU languages.
Yes. The European Parliament and the Council adopted on 23 October 2019 Directive 2019/1937 (Whistleblower’s Directive) on the protection of persons who report breaches of EU Law. The purpose of the Whistleblower’s Directive is to enhance the enforcement of Union law and policies in specific areas by laying down common minimum standards providing for a high level of protection of persons reporting breaches of Union law. The so called “Whistleblower’s Directive” contains common minimum standards ensuring that whistleblowers are protected effectively.
Until the transposition period of the Directive is over (17 December 2021), whistleblowers are protected by virtue of the current valid national legislation.
The Directive is particularly important for the fight against fraud and corruption with EU funds since the implementation of all EU policies may affect the financial interests of the Union.
In addition, the Directive envisaged protection expressly to people who report breaches affecting the financial interests of the Union as referred to in Article 325 TFEU and as further specified in relevant Union measures, Art. 2, par, 1 (b).
The material scope of EU policies covers also:
(a) breaches falling within the scope of the Union acts set out in the Annex that concern the following areas:
(i) public procurement;
(ii) financial services, products and markets, and prevention of money laundering and terrorist financing;
(iii) product safety and compliance;
(iv) transport safety;
(v) protection of the environment;
(vi) radiation protection and nuclear safety;
(vii) food and feed safety, animal health and welfare;
(viii) public health;
(ix) consumer protection;
(x) protection of privacy and personal data, and security of network and information systems;
(b) breaches affecting the financial interests of the Union as referred to in Article 325 TFEU and as further specified in relevant Union measures;
(c) breaches relating to the internal market, as referred to in Article 26(2) TFEU, including breaches of Union competition and State aid rules, as well as breaches relating to the internal market in relation to acts which breach the rules of corporate tax or to arrangements the purpose of which is to obtain a tax advantage that defeats the object or purpose of the applicable corporate tax law.
Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 17 December 2021.
Source: Whistleblowing Directive (DIRECTIVE (EU) 2019/1937 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 23 October 2019 on the protection of persons who report breaches of Union law)
Your report will be reviewed to see whether the reported case constitutes fraud and if there is enough evidence to open an investigation. You might be contacted again (unless you chose to stay anonymous) for further information. In order to protect the investigative process and the persons involved, you will not receive information about the status of the investigation.
In case you have reported an allegation to OLAF, you can find out more about the process on the OLAF website.
If OLAF contacts you with regards to an allegation you made, this is to receive further information about the case.
If OLAF contacts you for other reasons, this does not mean necessarily that you are being investigated. OLAF does not conduct criminal investigations but administrative investigations and recommends actions to the EU institutions and national governments concerned. You can find out more about the process on the OLAF website.