Preventing fraud and corruption in the European Structural and Investment Funds – taking stock of practices in the EU Member States
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Study on the implementation of Article 125(4)(c) of the Regulation (EU) No 1303/2013 laying down the common provisions on the European Structural and Investment Fund in Member States
With approximately EUR 460 billion allocated for the 2014-2020 programming period, the European Structural and Investment (ESI) Funds (consisting of the Cohesion Fund (CF), the European Regional Development Fund (ERDF), the European Social Fund (ESF), the European Agricultural Fund for Rural Development (EAFRD), and the European Maritime and Fisheries Fund (EMFF)) represent almost a third of the EU budget.
ESI Funds finance operational programmes (OPs) in Member States (MS), each aimed at achieving specific objectives within the areas defined as EU priorities. 380 OPs are funded through ESI Funds for the 2014-2020 programming period and managed by competent authorities within each EU Member States.
The European Commission (EC) and MS share responsibilities for the implementation and management of ESI Funds, and both must ensure funds are spent properly and achieve the greatest possible impact. Moreover, they must put in place the proper safeguards to limit the risks of fraud and corruption. Fraud affecting the Union's financial interests is defined in detail in Article 3 of Directive (EU) 2017/1371 on the fight against fraud to the Union's financial interests by means of criminal law; in a generalised and simplified manner, fraud may be characterised as the deliberate act of deception intended for personal gain or to cause a loss to another party. A definition of corruption used by the EC is the abuse of (public) position for private gain. Example of fraudulent and corrupt practices can include but are not limited to conflict of interest, double funding, bribery or falsification of documents.
MS authorities have the legal obligation to safeguard EU funds as per Article 325 of the Treaty on the Functioning of the European Union and Article 59(2) of the Financial Regulation. This obligation was specified and reinforced in 2013 via Article 125(4)(c) of the Common Provisions Regulation (CPR). Article 125(4)(c) requires the implementation of risk-based, effective and proportionate measures to prevent fraud when managing and controlling the OPs.
The present study focuses on the implementation of this article in MS.
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