The Committee on Budgetary Control adopted the report by Georgi PIRINSKI (ALDE, BG) on the Annual Report 2013 on the Protection of the EU’s Financial Interests – Fight against fraud.
The report stressed that the diversity of legal and administrative systems in the Member States presents a challenging environment in which to overcome irregularities and combat fraud. The fight against fraud, corruption and money laundering in the Union must be a priority for political action by the Community institutions, and police and judicial cooperation between Member States is therefore crucial.
The main elements of the report may be summarised as follows:
Detection and reporting of non-fraudulent and fraudulent irregularities: Members stressed that close cooperation and coordination between the Commission and the Member States must be strengthened in order to ensure that the Union’s financial interests are protected effectively. They also noted that number of cases of fraud and errors rose significantly, even though their financial impact decreased. The Commission is called upon to analyse these cases better to prevent further loss of funds.
Members underlined that the current lack of results in the fight against fraud is not due to a lack of regulation but to a lack of implementation and called for the EU funds to be properly managed and used in the most efficient way possible. The Commission is called upon to assume full responsibility for the recovery of funds unduly paid from the EU budget and to establish uniform reporting principles in all Member States for the purpose of collecting the appropriate comparable and accurate data.
The report also noted that the smuggling of heavily taxed goods and trafficking in counterfeit goods causes significant losses of revenue to the budgets of the EU and the Member States.
As regards VAT, the report stated that in many Member States the VAT gap is continuously high owing to VAT fraud and avoidance. Therefore, the Commission is called upon fully use its powers in order to help the Member States in their fight against VAT fraud and tax avoidance.
Expenditure: the report noted the alarming 76 % increase in the number of irregularities reported as fraudulent regarding EU expenditure. Members called for proposals to reduce the number of spending programmes and to target programmes at the Member States who are most in need of support. Members expressed concern that in the agricultural sector the number of both irregularities in general and fraudulent activities in particular increased significantly in 2013 as compared with 2012. Targeted measures are needed to combat this trend.
Problems identified and measures required: the report underlined its concerns as regards the persisting threats to the EU budget, which stem from both failures to comply with the rules (non-fraudulent irregularities) and purposeful wrongdoings and criminal offences (i.e. fraud). Members called on the Commission to develop common guidelines and indicators in order to narrow the gap between the different approaches of the Member States and to develop a unified and comprehensive information bank on irregularities actually instigated and on measures taken, thus providing authorities and citizens with trustworthy, comparable and centralised data for the implementation of effective corrective measures.
Another problem is the delay between the occurrence of an irregularity and its detection. Reporting and management systems should be improved in this regard.
Cooperation with anti-fraud bodies: the Commission is invited to create a mechanism for the exchange of information between the national competent authorities with a view to helping to detect any transnational fraud in the context of the new MFF 2014-2020. Moreover, the Commission is called upon to promote adequate legislation on the protection of whistle-blowers, access to information and the transparency of lobbying, It should also further enhance its supervisory role in respect of EU budget expenditure.
European Public Prosecutor's Office (EPPO): Members reiterated their call for an independent and efficient EPPO, operating as a single office which investigates, prosecutes and brings to court the perpetrators of criminal offences affecting the Union’s financial interests.
Lastly, the report noted that the level of irregularities and fraud caused by non-compliance with public procurement rules remains high. Members called on the Member States to transpose rapidly into national law the recently adopted Directives on public procurement and on the award of concession contracts in order to further mitigate the risk of irregularities and fraud.