Policy developments

The review of the Anti-Fraud Architecture

In summer 2025, the European Commission took a significant step forward by adopting a White Paper on the Anti-Fraud Architecture (AFA) Review⁽³⁾. The rapidly evolving EU anti-fraud landscape—driven by a shift towards performance-based models for the Multiannual Financial Framework (MFF) and the introduction of new actors—underscored the urgent need for this review. President von der Leyen and Commissioner for Budget and Anti-Fraud Serafin recognised this urgency, making the AFA review one of Mr Serafin’s first priorities upon assuming his role. Strengthening coordination and synergies among all anti-fraud partners is paramount.

The review aims to establish a thorough and inclusive process, listening to suggestions from all stakeholders on how to increase protection of EU taxpayers' money against fraud and any other types of wrongdoings. The review is both timely and necessary given the rising threats posed by organised crime and fraudsters exploiting technologies such as artificial intelligence and cryptocurrencies.

Since the publication of the White Paper, consultations were carried out and continued into 2026, underlining its wide scope that extends far beyond examining the cooperation between OLAF and the EPPO. The future anti-fraud landscape will be defined by the way that EU anti-fraud actors work with each other and will substantially affect the way OLAF works with partners like Europol, Eurojust, the Anti Money Laundering Authority (AMLA), the Eurofisc network, the future European Customs Authority, national anti-fraud authorities, and the authorising officers of EU Institutions.

The AFA review provides an important opportunity to deepen cooperation in investigations and prosecutions. Areas for potential enhancement include providing more specialised support at European and national levels to the EPPO, thus improving collective ability to share relevant data and to access databases promptly, fostering interoperability among IT systems of anti-fraud entities, and sharing modern technologies. There is also potential to improve —and ideally automate—the existing hit/no-hit system between the EPPO and OLAF, and to incorporate existing hit/no-hit systems of OLAF and the EPPO with other AFA actors.

Increased efficiency can also be achieved by pooling or sharing investigative resources, not solely in technology but across operations. The ultimate aim is to reclaim greater sums of misused EU money through the investigative and prosecutorial efforts of the various actors. Achieving this requires strengthening synergies between OLAF and the EPPO in administrative and criminal investigations. From the OLAF perspective, the AFA review will include the evaluation – and possible revision – of the Regulation 883.

The European Court of Auditors (ECA) in its report EU bodies fighting fraud proposes concrete actions to enhance the cooperation between OLAF and the EPPO and to strengthen recoveries to the EU budget. While, most importantly, the report finds that the mandates of OLAF and the EPPO are clear and do not overlap, its three recommendations flag specific areas where improvements are needed.

ECA’s findings highlight the importance of the protection of the EU financial interests, and its recommendations will be instrumental in the context of the AFA review, to ensure an optimised and synergistic functioning of the whole anti-fraud architecture.

OLAF’s key priorities in the AFA review include establishing a more coordinated and enhanced cooperation between OLAF and the EPPO - a genuine twin-track system whereby administrative and criminal investigations runs side-by-side - enabling secure and direct information exchange and making full use of new technologies—such as accessible databases, AI tools, automation, and improved interoperability. The ECA special report may also lead to possible amendment of the respective legal frameworks relating to the EPPO, OLAF, Europol and Eurojust.

Anti-fraud actors have already agreed to intensify strategic-level dialogues to identify new trends and exchange best practices. Through this collaboration, we can build a comprehensive understanding of fraud schemes and devise optimal strategies for addressing them.

The AFA review and its evolution are linked to parallel efforts and ongoing holistic policy initiatives at EU level, encompassing the proposal for a Directive combatting corruption, new Regulations against organised crime, the Conditionality Regulation and the monitoring under the Annual Rule of Law Report. Last November, Commissioner Serafin engaged civil society representatives, inviting them to share their perspectives on the AFA review during his 'Implementation and Simplification dialogue'⁽⁴⁾. Their insights will provide novel approaches to bolster collaboration among the AFA actors and thereby enhance the protection of the EU budget.

The AFA review presents an invaluable opportunity for introspection: How can we enhance our capabilities? How can we embrace modernisation? And how can we bolster collaboration? This reflection is set against the broader backdrop of the Commission's Multiannual Financial Framework proposals for 2028-2034. Significantly, OLAF forms part of the Commission's interservice group on the AFA review, which is set to deliver a Communication by the end of 2026, shaping the individual amendments of various legislative acts.

Moreover, the arrival of new leadership at both OLAF and the EPPO is poised to inject fresh impetus into the AFA review process, potentially amplifying its impact.

The new Multiannual Financial Framework (MFF)

Facing new challenges, the EU needs a budget transformation to remain future-fit. To achieve a free, secure, and competitive Europe, we must rethink our financial approach: a simpler, more flexible, and impactful budget. This involves key reforms and investments tailored for each country, developed with local partners. Establishing a European Competitiveness Fund will bolster strategic sectors and critical technologies, while revamped financing of external action will align with strategic objectives. Safeguards for the Rule of Law and modernised revenue streams are essential to guarantee sustainable funding for our shared goals.

In this context, the upcoming Multiannual Financial Framework (MFF)⁽⁵⁾ is an ambitious overhaul of EU funding, with an unprecedented budget envelope approaching €2 trillion. The European Commission envisions this framework as being simpler, more adaptable, and better attuned to local and regional realities. However, it also represents a transformative shift toward a performance-based model, building on features of the RRF, where Member States receive funds subject to the achievement of specific milestones and targets outlined in their national plans. This marks a decisive move from traditional cost-based to result-based funding.

While the new MFF introduces opportunities, it also poses complex challenges for the EU anti-fraud architecture. On the plus side, the number of spending programmes will be reduced from 52 to 16. Moreover, the new structure is designed to be more flexible, reducing the number of budget headings from seven to four and merging numerous existing programmes into larger, integrated funds to improve efficiency. The streamlined and flexible nature of the programmes will certainly alleviate the administrative burden and focus on internal controls, thus minimising vulnerabilities. Fewer programmes mean fewer implementation rules to navigate, potentially simplifying management, oversight and control.

Integral to fraud prevention, the new MFF aims to support reforms that strengthen the Rule of Law in the Member States and mandates comprehensive reporting on the final beneficiaries of EU funds. This approach, alongside obligatory reporting of any suspected fraud, corruption, irregularities, conflicts of interest, double funding etc. promises to bolster anti-fraud actors to thwart financial misdeeds.

Moreover, the inclusion of national and regional partnership plans aligns EU investments with broader national reform agendas, enhancing management, transparency, and sustainability. However, despite these positive features, the new MFF brings several challenges that must be addressed. Foremost among these is the reliance on the effectiveness of national control systems for fraud prevention and detection. Experience gained with the RRF highlights inconsistencies in these systems across Member States, raising concerns about their capability to enforce compliance with public procurement mandates, State aid regulations, conflict of interest rules, and anti-fraud measures in programme management. Without stringent enforcement and integration of anti-fraud checks, EU financial interests will remain vulnerable.

Thus, a key priority is to establish a formally structured and operationally robust anti-fraud framework. This requires strong oversight by the Commission and interoperability between national and EU data systems. Mandatory access to comprehensive information on beneficiaries, final recipients, contractors, and contracts is essential for safeguarding financial integrity.

Additionally, modernising the budget by tying funds to milestone achievements rather than cost reimbursements may inadvertently incentivise result inflation, misreporting, data manipulation, or premature certification of outcomes. The increased reliance on financial instruments, guarantees, and public-private mechanisms introduces more intermediaries, potentially obscuring financial flows and fragmenting control chains.

The broader EU anti-fraud architecture must evolve to ensure thorough verification of results, access to underlying data, transparency of intermediaries, and clear delineation of investigative and recovery responsibilities.

Together, all AFA actors can harness the promising potential of the new MFF while vigilantly safeguarding against fraud and enhancing the protection of EU financial interests.

The National Anti-Fraud Strategies (NAFS)

While much of this overview on policy developments has focused on EU Institutions, it is imperative to highlight the critical role Member States play in the fight against fraud, as they are on the front line of safeguarding the EU budget.

A key element in this perspective is the National Anti-Fraud Strategy (NAFS). OLAF and the European Commission strongly encourage Member States to adopt these strategies, yet the current EU legal framework does not make them compulsory. As a result, only ten Member States⁽⁶⁾ have a dedicated strategy in place, although seven more are actively developing one. Those without NAFS rely on other anti-fraud frameworks or sectoral strategies, which can lead to fragmented efforts.

National strategies play a crucial role in harmonising national and EU anti-fraud initiatives, thus fortifying the overall architecture. They ensure that national actors adopt a unified approach to combating fraud and enhance collaboration at the EU level. With the growing prominence of national plans like the RRF plans and national agricultural plans, the relevance of NAFS continues to rise.

It is therefore important that the Commission's proposal on the MFF includes specific provisions on anti-fraud strategies as a key requirement for management and control systems within future National and Regional Partnership Plans. OLAF is prepared to support Member States by providing guidance and expert advice on developing robust NAFS frameworks. Together, we can ensure that every Member State is equipped with effective strategies to protect the EU budget from fraud.

Enlargement

A key response to Russia’s aggression against Ukraine was to accelerate the European Union’s enlargement agenda; candidate countries and potential candidates have consequently become a focal point also for OLAF in terms of their alignment with financial control standards as recipients of higher overall levels of EU funding.

The Union has pledged approximately €58 billion in the coming years to bolster the transformation efforts of enlargement countries. Also in this policy area, performance-based funding instruments impose greater responsibility on national authorities to protect against misappropriation of EU funds. This model is actively employed in the Facilities for the Western Balkans, Ukraine, and Moldova.

Within this broader context, securing the appropriate allocation of EU financial support to Ukraine is a cornerstone of the EU’s assistance strategy. Upholding integrity and transparency in the utilisation of these funds is crucial, enhancing both the efficacy of financial aid and the foundational trust that underpins EU-Ukraine relations. This partnership is built upon a resilient framework of accountability and strategic cooperation, ensuring the credibility of EU interventions and bolstering Ukraine’s governance reform initiatives.

Ukraine’s efforts to maintain a transparent budget and align with EU financial standards are crucial not just for safeguarding EU financial interests but also for securing political support for EU assistance in the long term. OLAF plays a key role by collaborating closely with Ukrainian authorities, providing training, conducting investigations, and ensuring adherence to EU standards. This aids Ukraine's integration into EU structures and strengthens transparency in funds allocation.

The Union Anti-Fraud Programme (UAFP)

OLAF plays a crucial role in strengthening the EU's fight against fraud by managing the Anti-Fraud Programme(UAFP), a vital initiative that integrates and enhances various anti-fraud actions across the EU. Spanning seven years and concluding in 2027, the UAFP is supported by a budget of €181 million.

The programme is structured into three distinct components. The first, formerly known as Hercule, allocates funds to Member States for safeguarding the EU’s financial interests, including financing for specialised anti-fraud equipment and devices. Noteworthy examples of this strand of funding include the acquisition of a submarine drone in Spain and of a powerful patrol boat in Ireland, both instrumental in combating smuggling activities. Hercule also supports specific training initiatives and conferences.

The second component focuses on the Irregularity Management System, operating under the Anti-Fraud Information System. Utilised by 35 countries, this system streamlines the reporting of financial irregularities and suspected fraud, enhancing transparency and accountability.

The third component invests in the advancement, operation, and upkeep of the Anti-Fraud Information System platform. This platform is crucial for the secure exchange of information related to mutual assistance and supports activities like joint customs operations, practical courses, and preparatory or evaluation meetings for operational actions.

Under the next Multi-Annual Financial Framework for 2028-2034, anti-fraud funding will undergo transformative changes transitioning into the proposed Regulation for a Single Market and Customs Programme⁽⁷⁾. This initiative aims to consolidate existing forms of Union funding covering policy areas like internal market, company law, competition policy, financial services, consumers, European statistics, customs, taxation cooperation, and anti-fraud.

Merging these policy areas into a single financing programme presents substantial opportunities for synergy, budgetary flexibility to address unforeseen challenges, streamlined access to funding for applicants, and reduced administrative burdens. In line with this vision, the Commission has proposed to double the anti-fraud programme's budget to €362 million, enhancing current activities and enabling greater financial support for combating fraud and illegal activities impacting the EU’s financial interests.

In 2025 Revenue Ireland launched its new Customs vessel Cosaint (the Irish for protection). The €8.5 million cutter was co-financed by the UAFP to the tune of €1.8m (the largest financial programme contribution so far in one project). Cosaint now patrols Ireland’s 3,173km coastline, significantly enhancing the ability of Revenue’s Maritime Unit to undertake effective patrol duties and combat smuggling.

€720 000 was awarded to the Central Operating Unit (UCO) of the Spanish Guardia Civil to develop new technological ways to fight against large criminal organisations’ increasingly complex fraud and smuggling activities. This project allowed for the development and purchase of such tools as specialised equipment for surveillance, new patrol and surveillance vehicles and a 3D printer.

80% funded by the UAFP DOCK2 supplies specialised technical equipment to strengthen the technical capabilities of Greece’s Drug Enforcement Sub-Directorate of the Directorate for Combating Organised Crime. DOCK2 helps Greek authorities address smuggling into the EU particularly through its largest Ports of Piraeus and Thessaloniki. The equipment is used in collaboration with other services of the Greek Police, as well as public services of the country such as Customs and Port Authorities during investigations of the activity of criminal networks at National, European and International levels.

Spain is a gateway to the rest of Europe for legitimate trade. However, it is also a gateway for smugglers. Especially tobacco smugglers. One hive of smuggling activity is in the bay of Algeciras, near the Spain/Gibraltar border. As a result, the AEAT used UFAP funds buy two semi-rigid boats, equipped with a powerful engine, that have been successfully used to combat tobacco smuggling in the area.

Direct access to VAT data

The European Commission recently presented a proposal for a Council Regulation⁽⁸⁾ to enhance cooperative efforts between the EPPO, OLAF, and Member States in combating cross-border VAT fraud more effectively. The main aim of the proposal is giving OLAF and the EPPO access to IT systems with relevant VAT information at Union level.

This initiative intends to facilitate speedier investigations through near-real-time digital reporting of cross-border trade, granting the EPPO and OLAF direct and centralised access to VAT data. Additionally, the proposal establishes direct communication channels between the EPPO, OLAF, and Eurofisc, the European network of national officials dedicated to combating VAT fraud.

The disparity between anticipated and actual VAT receipts in the EU amounted to approximately €89.3 billion in 2022, with carousel fraud, or Missing Trader Intra-Community (MTIC) fraud alone costing between €12.5 and €32.8 billion annually. Often orchestrated by criminal organisations, this type of fraud poses substantial challenges to financial integrity and efficient collection of tax revenues.

The above-mentioned proposal requires further adoption by unanimity by the Council. It is consistent with the legislation of the VAT in the Digital Age package, which was adopted in March 2025⁽⁹⁾. Among its provisions are the extensive use of electronic invoicing and near-real-time digital reporting for intra-EU B2B trade, set to be implemented from July 2030. This strategic package aims to modernize VAT systems and close loopholes exploited by fraudsters.