The EDES is the system established by the Commission to reinforce the protection of the Union's financial interests and to ensure sound financial management.
It replaced the Early Warning System and the Central Exclusion Database as of 1 January 2016.
The EDES rules are found in the Financial Regulation.
The EDES includes a number of improvements to the current tools by the setting-up of a Panel and the creation of a database.
The rules have been applicable since 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 purpose of the EDES is the protection of the Union's financial interests against unreliable persons and entities applying for EU funds or having concluded legal commitments with the Commission, other Union Institutions, bodies, offices or agencies. In particular, the EDES ensures:
- the early detection of persons or entities representing risks threatening the Union's financial interests;
- the exclusion of persons or entities from receiving Union's funds (Article 136(1) of the Financial Regulation);
- the imposition of a financial penalty on a person or entity (Article 138 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 140 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), the European Public Prosecutor's Office (EPPO), Court of Auditors, audits or any other check, audit or control performed under the responsibility of the competent authorising officer;
- 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 136(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;
- entities created with the intent to circumvent fiscal, social or other legal obligations (creation of shell companies).
A Panel is set-up to assess requests and issue recommendations for exclusion and financial penalty on cases referred to it by an authorising officer of a Union institution, Union body, European office or body entrusted with the implementation the of CFSP actions (Article 143(1) of the Financial Regulation). The competent authorising officer will refer a case to the Panel for a central assessment when there are no final judgments or final administrative decisions related to the exclusion and its duration or to the financial penalty, and their publication.
When 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 person or entity concerned.
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 person or entity to demonstrate its reliability. In this case, the person or entity 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.
The above information on early detection or exclusion and/or financial penalty will be entered in a database (the EDES database) on the basis of information transmitted by the Commission, its executive agencies, other institutions, bodies or European offices.
The database is set up and operated by the Commission (Article 142(1) of the Financial Regulation).
The EDES shall comply with Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC.
You may find below the privacy statement for the EDES Database.