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PE 521.833v03-00 A7-0195/2014

on the Annual Report 2012 on the Protection of the EU’s Financial Interests – Fight against fraud


Committee on Budgetary Control

Rapporteur: Inés Ayala Sender



on the Annual Report 2012 on the Protection of the EU’s Financial Interests – Fight against fraud


The European Parliament,

–   having regard to its resolutions on previous annual reports of the Commission and of the European Anti-Fraud Office (OLAF),

–   having regard to the report from the Commission to the European Parliament and the Council of 24 July 2013 entitled ‘Protection of the European Union’s financial interests – Fight against fraud – 2012 Annual Report’ (COM(2013)0548) and its accompanying documents (SWD(2013)0283, SWD(2013)0284, SWD(2013)0285 and SWD(2013)0286 and SWD(2013)0287),

–   having regard to OLAF’s 2012 annual report,

–   having regard to the annual report of the Court of Auditors on the implementation of the budget concerning the financial year 2012, together with the institutions’ replies(1),

–   having regard to the proposal for a Council regulation on the establishment of the European Public Prosecutor’s Office (COM(2013)0534),

–   having regard to the Commission Communication of 17 July 2013 entitled ‘Improving OLAF’s governance and reinforcing procedural safeguards in investigations: a step-by-step approach to accompany the establishment of the European Public Prosecutor’s Office’ (COM(2013)0533),

–   having regard to the Commission Communication of 17 July 2013 entitled ‘Better protection of the Union’s financial interests: setting up the European Public Prosecutor’s Office and reforming Eurojust’ (COM(2013)0532),

–   having regard to the Commission Communication of 26 May 2011 on the protection of the financial interests of the European Union by criminal law and by administrative investigations – An integrated policy to safeguard taxpayers’ money (COM(2011)0293),

–   having regard to the Commission Communication of 24 June 2011 on the Commission Anti-Fraud Strategy (COM(2011)0376),

–   having regard to the Commission Communication of 6 December 2012 entitled ‘An Action Plan to strengthen the fight against tax fraud and tax evasion’ (COM(2012)0722),

–   having regard to the Commission Communication of 30 September 2013 entitled ‘Protection of the European Union budget to end 2012’ (COM(2013)0682),

–   having regard to the Commission Communication of 13 December 2013 entitled ‘Application of net financial corrections on Member States for Agriculture and Cohesion Policy’ (COM(2013)0934),

–   having regard to the report from the Commission to the Council and the European Parliament entitled ‘EU anti-corruption report’ (COM(2014)0038),

–   having regard to Council Directive 2013/43/EU of 22 July 2013 amending Directive 2006/112/EC on the common system of value added tax, as regards an optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud(2)1,

–   having regard to Council Directive 2013/42 of 22 July 2013 amending Directive 2006/112/EC on the common system of value added tax as regards a quick reaction mechanism against VAT fraud(3),

–   having regard to the Commission proposal for a directive of the European Parliament and of the Council on the fight against fraud to the Union’s financial interests by means of criminal law (COM(2012)0363),

–   having regard to Regulation (EU) No XXX/2014 of the European Parliament and of the Council of XX/XX/2014 establishing a programme to promote activities in the field of the protection of the financial interests of the European Union (Hercule III programme) and repealing Decision No 804/2004/EC(4),

–   having regard to Directive 2014/.../EU of the European Parliament and of the Council on the award of concession contracts,

–   having regard to Article 325(5) of the Treaty on the Functioning of the European Union,

–   having regard to Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999(5),

–   having regard to Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union(6),

–   having regard to Opinion No 1/2014 of the Supervisory Committee of the European Anti‑Fraud Office (OLAF) on OLAF Investigation Policy Priorities,

–   having regard to Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities’ financial interests(7),

–   having regard to its resolution of 3 July 2013 on the Annual Report 2011 on the protection of the EU’s Financial Interests – Fight against fraud(8),

–   having regard to its resolution of 15 September 2011 on the EU’s efforts to combat corruption(9),

–   having regard to its declaration of 18 May 2010 on the EU’s efforts in combating corruption(10), and to the Commission Communication of 6 June 2011 entitled ‘Fighting corruption in the EU’ (COM(2011)0308),

–   having regard to its resolution of 23 October 2013 on organised crime, corruption and money laundering: recommendations on action and initiatives to be taken(11),

–   having regard to Rule 48 of its Rules of Procedure,

–   having regard to the report of the Committee on Budgetary Control (A7-0195/2014),

A. whereas, according to Commission estimates, EUR 1 000 000 000 000 of potential tax revenue is lost to tax fraud, tax evasion, tax avoidance and aggressive tax planning in the EU every year, representing an approximate annual cost of EUR 2 000 for every European citizen;

B.  whereas protection of the financial interests of the EU is a key element of the EU policy agenda to strengthen and increase the confidence of citizens and ensure that their money is used properly;

C. whereas the Treaty of Lisbon has substantially strengthened the instruments available to protect the financial interests of the EU, requiring both the EU and its Member States to combat all forms of illegal activity affecting the financial interests of the EU;

D. whereas the wide diversity of legal systems and traditions within the EU means that protection of its financial interests against fraud and any other illegal activity is a particularly demanding and unavoidable challenge;

E.  whereas, to protect the financial interests of the Union and combat fraud it is necessary to adopt an integrated approach, including strategies for fighting fraud and corruption by means of legal, effective, consistent and equivalent measures throughout the Union; whereas this is a responsibility shared by the EU and the Member States and close cooperation between the Commission and the Member States is even more essential at a time of budgetary constraint;

F.  whereas the European Anti-Fraud Office (OLAF) has the responsibility to protect the Union’s financial interests by investigating fraud, corruption and any other illegal activities and whereas its supervisory committee was established in order to reinforce and guarantee OLAF’s independence by regularly monitoring the implementation of OLAF’s investigative function;

G. whereas the Member States have primary responsibility for implementing approximately 80 % of the Union budget;

H. whereas the Member States are responsible for calculating the harmonised basis of assessment for value added tax (VAT), amending the VAT rates applied and collecting the Union’s own resources, and whereas these three functions impact on its budget;

I.   whereas, at Parliament’s request, the Commission has recently taken a number of important initiatives on strategic anti-fraud measures;

J.   whereas the scale of fraud and tax avoidance in any form and of corruption in the EU undermines citizens’ trust and confidence in the Union; whereas greater guarantees of integrity and transparency with regard to public spending are necessary;

Strengthening the European Union’s anti-fraud machinery

1.  Emphasises that it is incumbent on both the Commission and the Member States to do everything in their power to fight fraud, corruption and all other forms of illegal activity detrimental to the Union’s financial interests, in accordance with the provisions of the Treaty on the Functioning of the European Union; points out that close cooperation and coordination between the Commission and the Member States are essential in order to ensure that the Union’s financial interests are protected effectively, and hence such cooperation and coordination must, as a matter of priority, be strengthened and made as effective as possible; points out that protecting the Union’s financial interests demands an equally vigilant approach to both resources and expenditure;

2.  Stresses that fraud is a deliberate unlawful act, which may constitute a criminal offence, while an irregularity is a failure to comply with a rule; finds it regrettable that the Commission’s report fails to consider fraud in detail and focuses largely on irregularities; points out that Article 325 of the Treaty on the Functioning of the European Union (TFEU) relates to fraud, not irregularities, and calls for a distinction to be made between fraud and errors or irregularities;

3.  Takes note of the report from the Commission to the European Parliament and the Council on the Protection of the European Union’s financial interests – Fight against fraud – Annual Report 2012 (‘the Commission’s annual report’); notes that, in response to a request from the European Parliament, the report includes two new elements:

(i)  a re-evaluation of the linkage between the detection of irregularities and Member States’ reporting of them, and

(ii)  closer analysis of irregularities reported as fraudulent;

notes that the aim of this approach is to afford insight into the extent and nature of the irregularities and how the Member States deal with them;

4.  Calls on the Commission, at the time of initiating the procedure for submission of the annual PIF report, to submit to Parliament a report on the monitoring and implementation of the recommendations adopted by Parliament following the PIF report of the previous year, and give a reasoned explanation regarding those which it has not considered or with which it has been unable to comply; calls on OLAF to do the same in respect of measures being sought by Parliament in this report;

5.  Welcomes the main initiatives taken by the Commission, at Parliament’s request, to shape a new EU legislative landscape for anti-fraud policy, and in particular the proposal for a directive on the fight against fraud to the Union’s financial interests by means of criminal law, which aims to clarify and harmonise Member States’ provisions in criminal law on offences related to the EU budget (COM(2012)363), the proposal for a Council regulation on the establishment of the European Public Prosecutor’s Office (COM(2013)0534), and the proposal for a regulation on the European Union Agency for Criminal Justice Cooperation (Eurojust) (COM(2013)535), as well as the amendment to Regulation (EC) No 1073/1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and stronger legal rights for persons concerned by OLAF investigations; recognises the importance for these different pieces of legislation to be well calibrated and thoroughly evaluated; calls on the Council to take the necessary time and not to finalise negotiations in a rush, in order to develop a robust European legal framework and strengthen the existing institutional tools for protecting the Union’s financial interests; stresses that a premature transition to the enhanced cooperation procedure should be avoided; welcomes also the action plan to step up the fight against tax fraud and tax evasion, as well as VAT reform in the EU, both efforts having been initiated in 2011;

6.  Notes that there was virtually no change in 2012, compared with 2011, in the number of fraudulent irregularities, with 1 231 cases of irregularity reported as fraudulent, while their financial impact decreased slightly to a total of EUR 392 million; notes that the incidence of fraud was highest in the areas of cohesion policy and agriculture – especially as regards rural development and fisheries – which remain the two sectors of greatest concern, suffering an estimated financial impact from fraud of EUR 279 million and EUR 143 million respectively; highlights, however, the general point that the number of fraudulent irregularities reported and the corresponding sums of money reflect the notion of fraud in its broadest sense and should not be seen as a reliable yardstick for levels of fraud; calls for clear distinctions to be made between cases of fraud, cases of error and cases of irregularity in the 2013 Annual Report on protection of the European Union’s financial interests – Fight against fraud;

7.  Notes that the number of cases of non-fraudulent irregularity reported to the Commission in 2012 increased by approximately 6 % compared with 2011, with an associated financial impact of approximately EUR 2 900 000 000 (more than double the corresponding figure for 2011 and affecting in particular cohesion policy and direct expenditure); is concerned that while the increase is chiefly due to the impact of irregularities involving large sums of money, it also reflects systemic irregularities reported when programmes close;

8.  Notes the considerable increase in 2012, to a value of EUR 3 700 000 000, in corrective measures adopted by the Commission vis-à-vis Member States, chiefly in the field of cohesion policy, and the fact that this reflects, inter alia, the close of the 2000-2006 programming period;

9.  Observes that the recommendations made by the Commission to Member States in 2011 – in particular on reported fraudulent and non-fraudulent irregularities, the recovery of amounts improperly paid, the monitoring of the results of criminal investigations and the improvement of national fraud statistics – were generally appropriate, and regrets that a number of concerns were not fully addressed; calls on Member States to follow-up on the Commission’s recommendations made in 2011 and 2012 and to ensure that recommendations made to them in its 2012 report are followed in full, and that where action on recommendations cannot be taken they submit a reasoned explanation;

10. Proposes looking into the possibility of establishing a team of European customs officials specialised in combating fraud to work alongside national customs authorities;

11. Acknowledges that in the area of traditional own resources the amount to be recovered following fraud and other irregularity cases in 2012 reached EUR 444 million, of which EUR 208 million had already been recovered by the Member States; notes that a further EUR 83 million was recovered in 2012 relating to cases detected between 1989 and 2011;

Revenue – own resources

12. Regrets that own resources are no longer the main source of EU budget revenue, making up 20 % of it, with the result that the proper collection of VAT and customs duties has direct repercussions not only on Member States’ economies and the Union budget, but also on European taxpayers; recalls that, according to Commission estimates, tax evasion and tax fraud are costing the EU around EUR 1 trillion annually, that is to say around EUR 2 000 for every EU citizen;

13. Welcomes the Commission action plan to step up the fight against fraud and tax evasion; stresses that both the Commission and the Member States should continue to give absolute priority to combating fraud and tax evasion, for which it is necessary to develop a strategy for strengthened and multidimensional cooperation and coordination between Member States themselves and with the Commission to allow for better use of existing instruments, consolidation of existing legislation, adoption of pending proposals and administrative cooperation; notes that enhanced cooperation between the tax, police and legal authorities within a single country is likewise essential; calls for special attention to be paid to the development of mechanisms for prevention and early detection, evaluation of results, improved revenue collection and more effective customs transit monitoring, this being one of the areas still affected by the highest rates of systemic corruption in Europe; calls on the Commission and the Member States to be more active at international level so as to establish standards of cooperation based chiefly on the principles of transparency, good governance and exchange of information;

14. Calls on the Commission periodically to carry out a comparative analysis of differences in the effectiveness of national systems for the collection of traditional own resources, including the identification and dissemination of best practices regarding efficient recovery process in all Member States, and to propose suitable measures where necessary;

15. Expresses concern that although the number of non-fraudulent irregularities reported to be affecting income from traditional own resources in 2012 has remained stable, the total remains 20 % above the average for the period 2008-2012;

16. Calls for a closer analysis of the shortfalls between estimated levels of VAT revenue and the actual levels of revenue collected, and for this to be included in the Commission report in order to give a clearer picture of the loss to the Union envelope; reiterates that the Commission and the Member States must make combating tax evasion and the underground economy a constant objective;

Excise Movement Control System (EMCS)

17. Is satisfied that 98 % of total identified traditional own resources is collected in accordance with the rules, but asks the Commission to sustain its efforts in pursuing the 2% affected by fraud and irregularities;

18. Notes that increased abuse of the Excise Movement Control System (EMCS) by criminal groups has been observed by enforcement agencies; believes that there is a lack of physical controls of goods being transported under the EMCS; stresses that additional investment in controls may result in an increase in collected taxes, and an increase in prevented tax evasion; notes, furthermore, that according to Articles 21(3) and 24(3) of Council Directive 2008/118/EC, the competent authorities of the dispatching and destination Member State will carry out an electronic verification of the data in the draft e-AD and in the report of receipt; strongly believes that criteria should be established according to which goods which are ready for dispatch and/or received must be inspected physically by the competent institution of the Member State;

19. Understands that increased inspections might also have the additional benefit of removing those businesses, or front companies, that were created by criminals only to facilitate their fraud; notes that up-to-date information on dispatch and receipt of excise goods is confirmed under the EMCS by business actors themselves; asks the Commission to take initiative in tightening the access rights of the EMCS to include a comprehensive history of compliance before trading so that it is possible to grant business actors the status of ‘empowered economic operator’ (‘trusted business actors’) so that only these actors could operate under EMCS directly by themselves; asks the Commission to present the results of current investigations concerning the need to amend Directive 2008/118/EC;

20. Demands that verification checks conducted by Member States on people and companies applying to the register be more robust and comprehensive; understands that goods can be easily mis-declared in order to evade excise duties; demands, in this connection, a higher degree of cooperation with tax authorities;

21. Considers that time limits allowed for the excise movements between authorised warehouses are unrealistically long; understands that such time limits allow for multiple movements on the same declaration and diversion before the delivery date is entered in the system; demands that the competent authority of the Member State declared as the destination and the new destination must be informed about changes immediately by the consignor; demands, furthermore, that the maximum allowed time for submission of the report on the receipt of the excise goods be one working day and, furthermore, that journey time be calculated and established for each delivery in accordance with the type of the means of transport used and distance between places of dispatch and destination;

22. Finds that the guarantees required to establish bonded warehouses are too low in comparison with the value of the excise goods; believes that a variable should be established depending on the type of goods and the level of trade that actually occurs;

23. Is concerned that Member States have implemented their own EMCS systems based on broadly defined requirements by the Commission; asks the Commission, in this connection, to take initiative for a more uniform system across the EU;


24. Takes note that, according to the new study on the VAT gap published in 2013 and financed by the Commission as part of its drive to reform the VAT system in the Union and put a stop to tax avoidance, EUR 193 000 000 000 in VAT revenue (1.5 % of GDP) was lost in 2011 through non-compliance or non-recovery; stresses, however, that the VAT gap is the product not only of fraud but also of other factors, including bankruptcy and insolvency, statistical errors, late payment and tax evasion; points out, in this connection, that effective action to close the VAT gap obviously requires a concerted, multidisciplinary approach; stresses the importance of implementing new strategies and making more efficient use of existing EU structures in order to combat VAT fraud more vigorously;

25. Welcomes the fact that the VAT reform process launched in December 2011 has already delivered important tools for ensuring better protection against VAT fraud; welcomes, in this regard, the fact that the directives on a quick reaction mechanism against VAT fraud and on an optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud were finally adopted in July 2013, and calls on Member States to implement them without delay;

26. Believes also that there should be a focus on the need to simplify the VAT system for companies throughout Europe; welcomes, in this connection, the new measures designed to facilitate electronic invoicing and the special provisions for small companies, which came into force in 2013, and looks forward to the introduction of the standard VAT declaration form for the entire EU; hopes that the one-stop shop for e‑services and telecoms businesses, which will become operational in 2015, will have a real effect in promoting compliance by simplifying VAT procedures for these businesses;

27. Calls on Member States to reform their national tax systems, making them simpler, fairer and more effective so as to facilitate compliance, prevent, deter and sanction tax fraud and evasion, and boost the efficiency of tax collection; also asks Member States to take heed of the country-specific recommendations made by the Commission in 2013; welcomes the Commission’s renewed call to Member States to extend their national tax bases and to restrict tax exemptions and deductions, thus enabling them not only to simplify their tax systems but also to avoid increasing their standard VAT rates;

Irregularities reported as fraudulent and detrimental to the European Union budget

28. Notes that, in terms of both numbers of cases and impact, the levels of fraudulent irregularity reported in 2012 were virtually the same as those of the previous year;

29. Notes that it takes on average two years and seven months from the start of a fraudulent practice until the moment it is detected; notes, furthermore, that another seven or eight months lapse before the irregularity is reported to the Commission; is concerned that guidelines on the times at which Member States report fraudulent irregularities and/or other irregularities to OLAF, if such guidelines exist in a Member State at all, differ not only across the individual Member States, but also across policy areas; expects the Commission to draw up Europe-wide guidelines for the reporting of fraudulent irregularities and/or other irregularities to OLAF; recalls that the staff of the European institutions are required, without delay and without any risk of their responsibility being called into question as a result, to notify OLAF of any fraud which has come to their attention in the fulfilment of their duties;

30. Notes that, on the revenue side, the number of cases of fraud reported in 2012 was 20 % below the average for the years 2008 to 2012; welcomes the fact that the Commission’s analyses show a clear downward trend in the numbers of fraud cases over that period;

31. Observes that, on the expenditure side, both the number of cases of irregularity reported as fraudulent and their value are low, that they involve already identified forms of irregularity and that over the period 2008 to 2012, fraud accounted for 5 % of the cases reported; notes that, as in previous years, cohesion policy was the field in which most of the fraudulent irregularity – 50 % of all cases and 63 % in terms of value – was detected; stresses that, out of the 1 194 cases of irregularity reported as fraudulent, 9 related to corruption and that all cases were detected in the cohesion policy area; is concerned that the incidence of such cases is rising; highlights with concern the trend towards simpler forms of fraud, probably reflecting the phenomenon of beneficiaries who would not normally break the law engaging in attempted fraud because of the economic crisis; believes that those trends should be monitored and studied in the years ahead;

32. Calls for corruption with an impact on the financial interests of the EU to be considered as fraud for the purposes of Article 325(5) TFEU and to be included in the Commission’s annual report on the protection of the European Union’s financial interests – fight against fraud;

33. Notes that, in the area of natural resources (agriculture, rural development and fisheries), there was an increase from 2011 to 2012 of almost 50 % in cases of irregularity reported as fraudulent, as the result of a single country reporting 56 cases, all involving the same modus operandi and linked to the same inquiry, and affecting the European Agricultural Guarantee Fund exclusively; notes that the rate of established fraud is slightly higher in agriculture – approximately 6 % of all cases reported in the 2008-2012 period – than it is overall;

34. Acknowledges that in the agriculture and rural development area, Member States recovered EUR 169.4 million from beneficiaries during the financial year 2012, while EUR 1 216.8 million remains to be recovered from beneficiaries from the end of that financial year; notes that the recovery rate of 43 % is significantly affected by the low recovery rates (below 30 %) displayed by six Member States(12); calls on those Member States to take adequate measures to ensure a significantly higher rate of recovery;

35. Recognises that cohesion policy has, over several financial years to date, proven to be the most critical sector, with regional development policy in particular being affected, but that at least the number of irregularities reported as fraudulent has been stable for the past three years; notes that the proportion of cases of established fraud – 4 % over the period 2008-2012 – is lower than the overall average; welcomes the fact that the efforts made by the Commission with the national authorities in recent years to raise awareness about fraud in this sector appear to have borne fruit and that Union legislation contributed in 59 % of cases to the detection of fraudulent irregularity; asks the Commission to step up and consolidate the joint anti-fraud strategy initiated in 2008; welcomes also the fact that cases of fraud are being reported sooner after they are detected;

36. Regrets, however, the lack of information on the amounts to be recovered and the recovery rates related to cohesion policy for the financial year 2012; calls on the Commission to provide detailed information in this respect in its future annual report;

37. Welcomes the fact that the number of cases of irregularity reported in relation to pre‑accession assistance (PAA) has fallen steadily over the past three years and notes that EU‑12 Member States have made a phased exit from PAA programmes, which are virtually complete; observes, however, that there was a significant increase in monetary terms, due to two cases reported by the same Member State; notes also that that there has been a slight decrease in the current programming period in the reported incidence of fraudulent irregularity in connection with the Instrument for Pre-accession Assistance (IPA), most likely a reflection of the delay in its implementation;

38. Highlights the ever-increasing wide divergence in Member States’ approaches to fraud, reflecting chiefly legal and organisational differences, both among Member States and between administrations in the same country, but also the fact that fraud detection is approached in a variety of ways; is greatly concerned that in cases of fraudulent irregularities some Member States limit their actions to the application of financial corrections instead of investigating the potential criminal offence; emphasises that such failure to investigate criminal offences could encourage fraudulent behaviours, thereby undermining the fight against fraud and fraudsters; calls on those Member States concerned to invest more resources to combat fraud, including through criminal proceedings; asks the Commission to continue to monitor closely the workings and effectiveness of Member States’ current surveillance and control systems and stresses how important it is that the Commission should establish uniform reporting principles for all of the Member States; calls on the Member States to implement the Commission’s recommendations, in particular with regard to early detection, simplification of rules and rapid reporting;

39. Points out, furthermore, that Member States are still failing to forward data on time or are supplying inaccurate data; recalls, moreover that Member States use different definitions for similar types of offence and do not all collect similar and detailed statistical data following common criteria, thereby making it difficult to collect reliable and comparable statistics at EU level, thus impeding comparison and objective country-by-country evaluation of the scale of fraud; reiterates its regret that as a consequence, Parliament, the Commission and OLAF cannot properly fulfil their task of assessing the actual overall scale of irregularities and fraud in individual Member States and formulating recommendations; regrets that this situation prevents the identification and discipline of those Member States with the highest level of irregularities and fraud, as has been repeatedly requested by Parliament; notes that the Commission invited Member States to improve upon their fraud statistics and committed itself to placing greater emphasis on the issue; stresses how important it is that the Commission establish uniform reporting principles in all Member States in order to ensure that the data collected are comparable, reliable and sufficient; calls, therefore, on the Commission to inform Parliament on the measures initiated to introduce a higher degree of uniformity and comparability between the statistical data gathered at national level; urges the Member States to submit in a timely manner exhaustive information which adequately reflects the actual level of fraud; asks the Court of Auditors to follow up on its previous special reports on the performance of OLAF in order to determine the effects of the reorganisation;

40. Underlines the fact that greater transparency allowing for proper scrutiny is key to detecting fraud schemes; recalls that in previous years Parliament urged the Commission to take action to ensure one-stop transparency for all beneficiaries of EU funds from all Member States by publishing on the Commission’s site a list of all beneficiaries, independent of the administrator of the funds and based on standard categories of information to be provided by all Member States in at least one working language of the Union; calls on the Member States to cooperate with and provide full and reliable information to the Commission regarding the beneficiaries of the EU funds managed by Member States; regrets that this measure has not been implemented and calls on the Commission to implement it as a matter of urgency;

41. Notes that in 2012 OLAF made 54 recommendations for judicial action which were sent to national authorities and it was recommended that roughly EUR 284 000 000 be recovered; regrets the lack of information on the number of judicial proceedings launched and the amounts actually recovered based on OLAF recommendations, as well as the conviction rate for cases involving offences detrimental to the Union’s budget; reiterates its call on the Commission and the Member States to ensure the effective and timely implementation of the recommendations made as soon as cases have been investigated by OLAF;

42. Is, however, seriously concerned that in some instances OLAF dismissed cases and transferred them back to directorate-generals for appropriate action to be taken, even though the latter do not have any investigative competencies;


43. Is satisfied that the reform of the rules governing the functioning of OLAF has finally been adopted, and welcomes the Commission Communication on ‘Improving OLAF’s governance and reinforcing procedural safeguards in investigations: a step-by-step approach to accompany the establishment of the European Public Prosecutor’s Office’; notes the initial effects of the reorganisation and restructuring of OLAF’s investigative procedures which are supposed to lead to a clarification of the procedural rights of those who are subject to investigation, better cooperation and dialogue with OLAF’s partners, more efficient investigation procedures and a shortening of the average length of time for processing investigations, in particular at the stage of case selection; notes, nevertheless, that on 1 February 2012 a total of 421 cases were opened all at once and later closed during 2012, with most of them not carrying any recommendations; notices, furthermore, that many cases older than 24 months were closed in 2012, with the risk that recommendations may not have been made at the time of closing; notes, furthermore, that this one-time effect is responsible for a shorter average duration of investigations;

44. Notes that since 2012 OLAF has established investigation policy priorities (IPPs) on a yearly basis in order to improve its investigation selection procedure; observes significant changes between the IPPs selected in 2012, 2013 and 2014, and is therefore concerned over the risk of a lack of consistency in the overall investigation selection procedure; is of the opinion that future IPPs should always be subject to a thorough evaluation based on concrete needs, measurable indicators and lessons learnt from past IPPs; calls on OLAF to provide detailed information on the way in which it decides on IPPs;

45. Takes note of the OLAF 2012 annual report and notes that, over this period, OLAF opened 431 investigations and 287 coordination cases, closed 465 cases, recommended legal proceedings to the national authorities in 54 cases and recommended the recovery of almost EUR 284 million (EUR 165.8 million in revenue and EUR 118.2 million in expenditure), and:

(i)     calls for closer analysis of the sources of the information received at the case selection stage, so as to provide for a clearer breakdown of information input between the public and private sectors, as well as insight into the Member States’ highly variable levels of reporting;

(ii)     recognises that the increase in the amount of information coming from the public sector may be a positive sign of improved cooperation with Member States; notes that OLAF changed the way in which it accounts for incoming information; notes that due to the lifecycle of the programming period, a greater number of fraudulent irregularities were reported in 2012 by public authorities given that programmes were closed;

(iii)    reiterates its request for exhaustive information on the nature of follow-up to OLAF recommendations, including on the number of OLAF cases in which follow-up by national courts was not possible, on account of (a) insufficient evidence, (b) low-level priority, (c) lack of legal basis, (d) absence of public interest, (e) limitation of actions (f) procedural errors, (g) other reasons;

(iv)    reiterates its request to receive further information on the number of on‑the‑spot checks that were carried out in each of the Member States;

(v)    reiterates its request to receive information on the number of investigations that were carried out in each investigation area (agriculture, cigarettes, customs, internal EU policies, external aid, internal investigations, structural funds, VAT) for each Member State;

(vi)    reiterates its request to include in the annual reports detailed information on the duration of investigations, broken down by external, internal, coordination and criminal assistance cases, and further grouped into ongoing cases and those closed at the year’s end;

(vii)   reiterates its request to receive information on the number of ongoing and closed investigations in each EU institution;

46. Takes note of Opinion 1/2014 of the supervisory committee on OLAF’s IPPs and endorses its recommendations, especially with regard to establishing guidelines on the application of financial indicators as a proportionality criterion which would provide the unit responsible for case selection with clearer guidance in this respect; expects, furthermore, that the future evolution of the IPPs will involve regular dialogue between the Director-General of OLAF and the directors-general whose policy areas are covered by the IPPs and the financial indicators therein;

47. Takes note of the supervisory committee’s remarks as regards OLAF’s de minimis policy; recalls that the de minimis policy is not the only criterion for case selection and that its objective is to ensure that OLAF concentrates its efforts and resources on more serious and complex cases, and that human resources are allocated in order to maximise the recovery of the amounts unduly spent from the EU budget; calls on the Director-General to take the supervisory committee’s views into consideration when reviewing OLAF’s de minimis policy; expects to be duly informed of the Director-General’s decision in this respect;

48. Calls for an improvement in OLAF’s governance through the continual revision and consolidation of its core investigative processes; emphasises, in this connection, that it attaches particular importance to monitoring the observance of procedural safeguards and the fundamental rights of persons affected by investigations;

New-look European anti-fraud policy and programmes

49. Welcomes all of the Commission initiatives to fight fraud in a generally more effective manner, with innovative actions to be taken as regards penalties, complementing the efforts directed at prevention and detection; sees the introduction of anti-fraud clauses in international agreements, administrative cooperation agreements and in the field of public procurement as a further significant step in terms of defending the Union’s financial interests and combating corruption;

50. Recalls that under Article 5 of Commission Regulation (EC) No 1848/2006 of 14 December 2006, Member States must provide information on the initiation or abandonment of any procedures for imposing administrative or criminal sanctions related to the reported irregularities as well as of the main results of such procedures; recalls, furthermore, that this information must also indicate the character of the sanctions applied and/or whether the sanctions in question relate to the application of Community and/or national legislation, including a reference to the Community and/or national rules in which the sanctions are laid down; requests to be informed in detail with a comprehensive analysis on the reports received under Article 5 of Commission Regulation (EC) No 1848/2006; notes that Member States must introduce anti-fraud monitoring procedures and that statistics regarding criminal cases and their outcome are incomplete, making it difficult to evaluate fraud investigation and prosecution procedures in the Member States and the effectiveness of future basic policies;

51. Welcomes the publication in February 2014 of the first EU anti-corruption report by the Commission, which indicates that corruption affects all Member States in very different ways and costs the EU economy around EUR 120 billion annually, and also welcomes all of the suggestions for intensifying exchanges of current good practice and identifying relevant new measures to be taken at EU level; stresses, in this connection. that European citizens require guarantees of total integrity and transparency in public spending, especially given the current challenges arising from the underlying economic and financial crisis; agrees with the Commission that the results of the initiatives are very much uneven and that more should be done to prevent and punish corruption; regrets, however, that the content of the report presents a limited overview of corruption in the EU; calls for further efforts to be made, commensurate with the major social and economic issues at stake, to prevent and sanction efficiently corruption, which corrodes the European economy and social model, harms Member States’ revenue from taxation and undermines citizens’ trust in their institutions;

52. Stresses, in this connection, that faced with the current challenges arising from the underlying economic and financial crisis, European citizens are calling for guarantees of total integrity and transparency in public spending;

53. Calls on the Court of Auditors to study the problem and make recommendations based on its own perspective and experience, in the form of one or more reports on the main issues identified by the Commission report on corruption, taking account, in particular, of findings for individual countries;

54. Welcomes the proposal for a regulation on the establishment of the European Public Prosecutor’s Office; stresses the need to establish a consistent, complementary system for protecting the Union’s financial interests; urges the Commission to provide a clear EU-level definition of the roles of the future European Public Prosecutor’s Office, Eurojust and OLAF, delimiting their respective remits;

55. Welcomes the publication of the Commission study entitled ‘Identifying and Reducing Corruption in Public Procurement in the EU’, upon Parliament’s request, which develops a methodology to measure the costs of corruption in public procurement as regards EU funds; notes that the overall direct costs of corruption in public procurement for 2010 was estimated at EUR 1.4  to 2.2 billion for the five sectors studied in 8 Member States (13); underlines the fact that the study recommended, inter alia, further transparency in public procurement, improved audit and evaluation mechanisms, the development of a central collection system for public procurement data, an update of the Tenders Electronic Daily database, and enhanced protection for whistle blowers; calls on the Commission to provide information on the policies and measures implemented in order to address those recommendations;

56. Notes that according to official estimates, Member States lose over EUR 11 billion per year in tax revenue as a result of cigarette smuggling to the benefit of organised crime networks, and insists that the levels of resources and expertise applied in this area in the past within OLAF should be restored; supports strongly the Commission and OLAF on the introduction of an action plan to combat cigarette smuggling; demands, in this connection, better cooperation between OLAF and Europol;

57 Considers essential the development of OLAF’s network of liaison officers for the countries at highest risk from smuggling;

58. Requests to be informed of any developments in the discussions of possible re‑negotiation of the existing agreements, and calls for an independent study of the agreements with the tobacco industry, with a view to quantifying the impact of illicit tobacco sales on own resources, and a possible extension of the existing agreements to include manufacturers not currently covered by them, with the aim of making tobacco products more easily traceable from manufacture to distribution;

59. Welcomes the adoption of the regulation establishing the Hercule III programme for the financial period 2014-2020; notes that with a budget of over EUR 104 million, the programme will provide co-finance for measures such as scanning equipment for the identification of smuggled goods in trucks, automated container-code and number‑plate recognition systems in order to reinforce the fight against smuggling and counterfeiting; regrets the lack of transparency observed during the implementation of the Hercule II programme on the purchase and utilisation of technical equipment by the beneficiaries and recalls that the situation led Parliament to hold in reserve a certain amount of OLAF’s appropriations from the Union’s budget for 2013 and 2014, pending the receipt of appropriate information on the matter; calls on OLAF to continue providing this information, including details on the current status and impact of the financed equipment and to demonstrate greater transparency in the implementation of Hercule III;


o       o

60. Instructs its President to forward this resolution to the Council, the Commission, the Court of Justice of the European Union, the European Court of Auditors, the OLAF Supervisory Committee and OLAF.


OJ C 331, 14.11.2013, p.1.


1 OJ C 201, 26.7.2013, p. 4.


OJ L 201, 26.7.2013, p. 1.


Not yet published in the Official Journal.


OJ L 248, 18.9.2013, p. 1.


OJ L 298, 26.10.2012, p. 1.


OJ L 312, 23.12.1995, p. 1.


Texts adopted, P7_TA(2013)0318.


OJ C 51 E/15, 22.2.2013, p. 121..


Texts adopted, P7_TA(2010)0176.


Texts adopted, P7_TA(2013)0444..


Belgium (23%), Bulgaria (4%), Greece (18%), France (22%), Slovenia (25%) and Slovakia (26%)


Road and rail, water and waste, urban and utility construction, training and research & development in France, Hungary, Italy, Lithuania, the Netherlands, Poland, Romania and Spain.


Date adopted





Result of final vote







Members present for the final vote

Marta Andreasen, Jean-Pierre Audy, Zuzana Brzobohatá, Martin Ehrenhauser, Jens Geier, Gerben-Jan Gerbrandy, Ingeborg Gräßle, Rina Ronja Kari, Monica Luisa Macovei, Jan Mulder, Eva Ortiz Vilella, Paul Rübig, Petri Sarvamaa, Bart Staes, Georgios Stavrakakis, Derek Vaughan

Substitute(s) present for the final vote

Amelia Andersdotter, Philip Bradbourn, Markus Pieper

Substitute(s) under Rule 187(2) present for the final vote

Thomas Ulmer

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