The European Anti-Fraud Office (OLAF)
The improper use of funds provided by the EU budget or the evasion of the taxes, duties and levies, which fund the EU budget directly harms European citizens. The European Anti-Fraud Office investigates fraud against the EU budget, corruption and serious misconduct within the European institutions, and develops anti-fraud policy.
OLAF is part of the European Commission, but has operational independence. It receives information about possible fraud and irregularities affecting the EU financial interests from a wide range of sources, and can investigate matters relating to fraud, corruption and other offences concerning:
- all EU expenditure: the main spending categories are Structural Funds, agricultural policy and rural development funds, direct expenditure and external aid;
- some areas of EU revenue, mainly customs duties;
- suspicions of serious misconduct by EU staff and members of the EU institutions.
The Early Detection and Exclusion System (EDES)
The Early Detection and Exclusion System is the system established by the Commission in 2016 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. The EDES rules are applicable to all contracts, grants, agreements, prizes, financial instruments and remunerated experts, as well as to the implementation of the budget under indirect management.
Its purpose is to protect the Union's financial interests against unreliable economic operators by detecting and excluding them from receiving funds, and by imposing financial penalties on them. The grounds for exclusion 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).
The EDES database is set up and operated by the Commission, and the information on early detection or exclusion and/or financial penalty is provided by the Commission, its executive agencies, other institutions, bodies or European offices.