BETA


2016/2097(INI) Annual report 2015 on the protection of the EU's financial interests - Fight against fraud

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead CONT PITERA Julia (icon: PPE PPE) PARGNEAUX Gilles (icon: S&D S&D), VISTISEN Anders Primdahl (icon: ECR ECR), ALI Nedzhmi (icon: ALDE ALDE), DE JONG Dennis (icon: GUE/NGL GUE/NGL), JÁVOR Benedek (icon: Verts/ALE Verts/ALE), VALLI Marco (icon: EFDD EFDD), KAPPEL Barbara (icon: ENF ENF)
Committee Opinion REGI GIUFFRIDA Michela (icon: S&D S&D) Andrew LEWER (icon: ECR ECR), Norica NICOLAI (icon: ALDE ALDE)
Committee Opinion LIBE CHINNICI Caterina (icon: S&D S&D)
Lead committee dossier:
Legal Basis:
RoP 54

Events

2017/09/26
   EC - Commission response to text adopted in plenary
Documents
2017/05/16
   EP - Results of vote in Parliament
2017/05/16
   EP - Decision by Parliament, 1st reading/single reading
Details

The European Parliament adopted by 553 votes to 67, with 56 abstentions, a resolution on the Annual Report 2015 on the protection of the EU’s financial interests – Fight against fraud.

Members expressed concern that the number of all fraudulent and non-fraudulent irregularities reported in 2015 increased significantly, by 36 % , compared with 2014. Moreover, despite the positive drop of 11 % in the number of irregularities reported as fraudulent, the sums involved increased by 18 % from EUR 538 million in 2014 to EUR 637.6 million in 2015.

Revenue : Members are concerned about the losses due to the VAT gap and intra-community VAT fraud , which is responsible for EUR 159.5 billion and EUR 50 billion respectively in lost revenue in 2014.

The Commission should have access to Eurofisc and to the information exchanged between Member States with a view to preventing and combating Missing Trader IntraCommunity (MTIC) fraud, commonly called carousel fraud.

Members States are called upon to recover the amounts of traditional own resources due more quickly, especially those Member States which need to recover the largest amounts such as Greece, Romania, Latvia, Malta and the Netherlands.

Parliament stressed that China is the primary originating country (80 %) for counterfeit goods, followed by Hong Kong, the United Arab Emirates, Turkey and India. It asked the Commission to raise these problems during trade negotiations with these countries. It also noted with concern that tobacco smuggling to the EU has intensified in recent years and, according to estimates, represents an annual loss of EUR 10 billion in public revenue to the EU and Member States’ budgets.

Expenditure : although the number of reported fraudulent irregularities in 2015 for national resources on the expenditure side of the budget was 14 % lower than in 2014, Parliament is deeply concerned that the number of reported fraudulent and non-fraudulent irregularities relating to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) has been growing annually for at least five consecutive years. It urged the Member States with the highest number of non-fraudulent irregularities reported – Romania, Italy, Spain, Poland, Hungary, Portugal and Lithuania – to urgently and efficiently regulate the situation in order to reverse this trend.

Members regretted that the fraudulent and non-fraudulent irregularities linked to the Common Fisheries Policy in 2015 have doubled since 2014, and are the highest ever reported. Cohesion policy also reported a sharp increase in the number of non-fraudulent irregularities.

Faced with the issues highlighted, the resolution suggested that the following measures should be taken:

Better reporting : despite Parliament’s numerous calls for the establishment of uniform reporting principles in all Member States, there are still significant differences in the number of fraudulent and non-fraudulent irregularities reported by each Member State.

The Commission is called on to:

unify the differing approaches by Member States to preventing, detecting and reporting irregularities, and non-homogeneous interpretations when applying the EU legal framework; create a uniform reporting system ; develop a system whereby competent authorities may exchange information , enabling cross-checking of accounting records for transactions between two or more Member States in order to prevent cross-border fraud in respect of the Structural and Investment Funds; supervise more effectively the use of exemptions and the widespread practice of splitting procurement contracts for instance when funds are used in emergency situations and for refugees.

Prevention should involve constant training and support for the staff responsible for the management and control of funds within the competent authorities, as well as exchanges of information and best practices between Member States.

Moreover, Member States should have specific laws against organised crime and step up their efforts in the areas of public procurement , financial crime, conflict of interest, corruption, whistle-blowing and the definition of fraud.

Better controls : Members States are urged to better carry out the ex-ante controls with the assistance of the Commission and to use all information available to prevent errors and irregular payments related to EU funds.

The Commission is called upon to: (i) further enhance its supervisory role through audit, control and inspection activities, remedial action plans and early-warning letters with a view to reducing irregularities; (ii) maintain its strict policy on interruption and suspension of payments as a preventive measure against irregularities affecting the EU budget.

Members also suggested that:

whistle-blowers should have a clear position in the EU and Member States’ legislative frameworks and ensure a minimum level of protection for European whistle-blowers; anti-corruption policies should be evaluated and a corruption index be developed in order to rank the Member States; encourage investigative journalism supported by legal means both in the Member States and in the EU.

As regards tobacco , Members pointed out the Commission’s decision not to renew the Philip Morris International (PMI) agreement, which expired on 9 July 2016. They asked the Commission not to renew, extend or renegotiate the PMI agreement beyond its expiry date. They urged the Commission to put in place, at EU level, all necessary measures to track and trace PMI tobacco products, and to bring legal action against any illegal seizures of this manufacturer's products until all provisions of the Tobacco Products Directive are fully enforceable.

Members also recalled Parliament’s longstanding support for the establishment of an efficient and independent European Public Prosecutor's Office (EPPO) in order to reduce the current fragmentation of national law enforcement efforts to protect the EU budget.

Investigations and the role of OLAF : Members regretted that the duration of its investigative phase has grown continuously since 2012 from 22.5 months to 25.1 months in the case of closed cases and from 17.3 months to 18.7 months in all cases. Concerned at the increase mentioned in OLAF’s most recent annual report in the number of cases of cross-border fraud, Members called on the Commission to assess the use of joint operations in line with methods and procedures already successfully employed on the customs side.

Documents
2017/05/16
   EP - End of procedure in Parliament
2017/05/15
   EP - Debate in Parliament
2017/04/06
   EP - Committee report tabled for plenary, single reading
Details

The Committee on Budgetary Control adopted the own-initiative report by Julia PITERA (EPP, PL) on the Annual Report 2015 on the protection of the EU’s financial interests – Fight against fraud.

Members expressed concern that the number of all fraudulent and non-fraudulent irregularities reported in 2015 increased significantly, by 36 %, compared with 2014. Moreover, despite the positive drop of 11 % in the number of irregularities reported as fraudulent, the sums involved increased by 18 % from EUR 538 million in 2014 to EUR 637.6 million in 2015.

Revenue : Members are concerned about the losses due to the VAT gap and intra-community VAT fraud , which is responsible for EUR 159.5 billion and EUR 50 billion respectively in lost revenue in 2014.

The Commission does not have access to the information exchanged between Member States with a view to preventing and combating Missing Trader IntraCommunity (MTIC) fraud, commonly called carousel fraud. Members States are called upon to recover the amounts of traditional own resources due more quickly.

Expenditure : although the number of reported fraudulent irregularities in 2015 for national resources on the expenditure side of the budget was 14 % lower than in 2014, Members are deeply concerned that the number of reported fraudulent and non-fraudulent irregularities relating to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) has been growing annually for at least five consecutive years.

Members regretted that the fraudulent and non-fraudulent irregularities linked to the Common Fisheries Policy in 2015 have doubled since 2014, and are the highest ever reported. Cohesion policy also reported a sharp increase in the number of non-fraudulent irregularities.

Faced with the issues highlighted, the report suggested that the following measures should be taken:

Better reporting : despite Parliament’s numerous calls for the establishment of uniform reporting principles in all Member States, there are still significant differences in the number of fraudulent and non-fraudulent irregularities reported by each Member State.

The Commission is called on to:

unify the differing approaches by Member States to preventing, detecting and reporting irregularities, and non-homogeneous interpretations when applying the EU legal framework; create a uniform reporting system; develop a system whereby competent authorities may exchange information , enabling cross-checking of accounting records for transactions between two or more Member States; supervise more effectively the use of exemptions and the widespread practice of splitting procurement contracts for instance when funds are used in emergency situations and for refugees.

Prevention should involve constant training and support for the staff responsible for the management and control of funds within the competent authorities, as well as exchanges of information and best practices between Member States.

Moreover, Member States should step up their efforts in the areas of public procurement , financial crime, conflict of interest, corruption, whistle-blowing and the definition of fraud.

Better controls : Members States are urged to better carry out the ex-ante controls with the assistance of the Commission and to use all information available to prevent errors and irregular payments related to EU funds.

The Commission is called upon to: (i) further enhance its supervisory role through audit, control and inspection activities, remedial action plans and early-warning letters with a view to reducing irregularities; (ii) maintain its strict policy on interruption and suspension of payments as a preventive measure against irregularities affecting the EU budget.

Members highlighted that whistle-blowers should have a clear position in the EU and Member States’ legislative frameworks and ensure a minimum level of protection for European whistle-blowers.

Members urged the Commission to publish the second anti-corruption report and to develop a corruption index in order to rank the Member States. They called for investigative journalism to be encouraged and supported by legal means both in the Member States and in the EU.

As regards tobacco , Members pointed out the Commission’s decision not to renew the Philip Morris International (PMI) agreement, which expired on 9 July 2016. They asked the Commission not to renew, extend or renegotiate the PMI agreement beyond its expiry date. They urged the Commission to put in place, at EU level, all necessary measures to track and trace PMI tobacco products, and to bring legal action against any illegal seizures of this manufacturer's products until all provisions of the Tobacco Products Directive are fully enforceable.

Members also recalled Parliament’s longstanding support for the establishment of an efficient and independent European Public Prosecutor's Office (EPPO) in order to reduce the current fragmentation of national law enforcement efforts to protect the EU budget.

Investigations and the role of OLAF : Members regretted that the duration of its investigative phase has grown continuously since 2012 from 22.5 months to 25.1 months in the case of closed cases and from 17.3 months to 18.7 months in all cases. They noted OLAF’s role within different joint customs operations (JCOs) in preventing losses for the EU budget.

Concerned at the increase mentioned in OLAF’s most recent annual report in the number of cases of cross-border fraud, Members called on the Commission to assess the use of joint operations in line with methods and procedures already successfully employed on the customs side.

Documents
2017/03/27
   EP - Vote in committee, 1st reading/single reading
2017/03/01
   EP - Amendments tabled in committee
Documents
2017/01/26
   EP - Committee opinion
Documents
2017/01/18
   EP - Committee draft report
Documents
2016/12/09
   EP - Committee opinion
Documents
2016/06/09
   EP - Committee referral announced in Parliament, 1st reading/single reading
2016/06/03
   EP - PITERA Julia (PPE) appointed as rapporteur in CONT
2016/05/25
   EP - GIUFFRIDA Michela (S&D) appointed as rapporteur in REGI
2016/05/23
   EP - CHINNICI Caterina (S&D) appointed as rapporteur in LIBE

Documents

Activities

Votes

A8-0159/2017 - Julia Pitera - résolution

2017/05/16 Outcome: +: 553, -: 67, 0: 56
DE IT ES RO FR PL BE PT SE HU AT BG CZ NL FI EL SK IE DK LT LV HR SI LU EE CY MT GB
Total
89
67
49
29
64
49
21
19
20
18
18
14
20
23
12
19
13
9
10
9
8
9
8
6
6
5
5
56
icon: PPE PPE
199

Finland PPE

2
3

Denmark PPE

For (1)

1

Luxembourg PPE

3

Estonia PPE

For (1)

1

Cyprus PPE

1

Malta PPE

2
icon: S&D S&D
170

Netherlands S&D

3

Ireland S&D

For (1)

1

Lithuania S&D

1

Latvia S&D

1

Croatia S&D

2

Slovenia S&D

For (1)

1

Luxembourg S&D

For (1)

1

Estonia S&D

For (1)

1

Cyprus S&D

2

Malta S&D

3
icon: ALDE ALDE
62

Romania ALDE

3

Portugal ALDE

1

Austria ALDE

For (1)

1

Bulgaria ALDE

3

Ireland ALDE

For (1)

1

Latvia ALDE

1

Croatia ALDE

For (1)

1

Slovenia ALDE

For (1)

1

Luxembourg ALDE

For (1)

1

Estonia ALDE

3

United Kingdom ALDE

1
icon: Verts/ALE Verts/ALE
50

Italy Verts/ALE

For (1)

1

Belgium Verts/ALE

2

Hungary Verts/ALE

2

Austria Verts/ALE

3

Netherlands Verts/ALE

2

Finland Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Croatia Verts/ALE

For (1)

1

Slovenia Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Estonia Verts/ALE

For (1)

1
icon: GUE/NGL GUE/NGL
45

Sweden GUE/NGL

For (1)

1

Czechia GUE/NGL

2

Netherlands GUE/NGL

For (1)

1

Finland GUE/NGL

For (1)

1

Denmark GUE/NGL

For (1)

1

Cyprus GUE/NGL

2

United Kingdom GUE/NGL

1
icon: EFDD EFDD
35

Germany EFDD

Against (1)

1

Poland EFDD

1

Sweden EFDD

2

Czechia EFDD

Against (1)

1

Lithuania EFDD

For (1)

1
icon: NI NI
15

Germany NI

For (1)

1

France NI

Against (1)

Abstain (1)

3

Poland NI

Against (1)

1

Hungary NI

2

United Kingdom NI

3
icon: ECR ECR
64

Italy ECR

2

Romania ECR

For (1)

1

Bulgaria ECR

For (1)

Abstain (1)

2

Czechia ECR

2

Netherlands ECR

2

Finland ECR

2

Greece ECR

Abstain (1)

1

Denmark ECR

2

Lithuania ECR

Abstain (1)

1

Latvia ECR

For (1)

1

Croatia ECR

Abstain (1)

1
icon: ENF ENF
35

Poland ENF

2

Belgium ENF

For (1)

1

Netherlands ENF

3

United Kingdom ENF

Against (1)

1
AmendmentsDossier
272 2016/2097(INI)
2016/10/25 LIBE 24 amendments...
source: 592.406
2016/11/17 REGI 58 amendments...
source: 594.027
2017/03/01 CONT 190 amendments...
source: 599.861

History

(these mark the time of scraping, not the official date of the change)

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events
  • date: 2016-06-09T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2017-03-27T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
  • date: 2017-04-06T00:00:00 type: Committee report tabled for plenary, single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2017-0159&language=EN title: A8-0159/2017 summary: The Committee on Budgetary Control adopted the own-initiative report by Julia PITERA (EPP, PL) on the Annual Report 2015 on the protection of the EU’s financial interests – Fight against fraud. Members expressed concern that the number of all fraudulent and non-fraudulent irregularities reported in 2015 increased significantly, by 36 %, compared with 2014. Moreover, despite the positive drop of 11 % in the number of irregularities reported as fraudulent, the sums involved increased by 18 % from EUR 538 million in 2014 to EUR 637.6 million in 2015. Revenue : Members are concerned about the losses due to the VAT gap and intra-community VAT fraud , which is responsible for EUR 159.5 billion and EUR 50 billion respectively in lost revenue in 2014. The Commission does not have access to the information exchanged between Member States with a view to preventing and combating Missing Trader IntraCommunity (MTIC) fraud, commonly called carousel fraud. Members States are called upon to recover the amounts of traditional own resources due more quickly. Expenditure : although the number of reported fraudulent irregularities in 2015 for national resources on the expenditure side of the budget was 14 % lower than in 2014, Members are deeply concerned that the number of reported fraudulent and non-fraudulent irregularities relating to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) has been growing annually for at least five consecutive years. Members regretted that the fraudulent and non-fraudulent irregularities linked to the Common Fisheries Policy in 2015 have doubled since 2014, and are the highest ever reported. Cohesion policy also reported a sharp increase in the number of non-fraudulent irregularities. Faced with the issues highlighted, the report suggested that the following measures should be taken: Better reporting : despite Parliament’s numerous calls for the establishment of uniform reporting principles in all Member States, there are still significant differences in the number of fraudulent and non-fraudulent irregularities reported by each Member State. The Commission is called on to: unify the differing approaches by Member States to preventing, detecting and reporting irregularities, and non-homogeneous interpretations when applying the EU legal framework; create a uniform reporting system; develop a system whereby competent authorities may exchange information , enabling cross-checking of accounting records for transactions between two or more Member States; supervise more effectively the use of exemptions and the widespread practice of splitting procurement contracts for instance when funds are used in emergency situations and for refugees. Prevention should involve constant training and support for the staff responsible for the management and control of funds within the competent authorities, as well as exchanges of information and best practices between Member States. Moreover, Member States should step up their efforts in the areas of public procurement , financial crime, conflict of interest, corruption, whistle-blowing and the definition of fraud. Better controls : Members States are urged to better carry out the ex-ante controls with the assistance of the Commission and to use all information available to prevent errors and irregular payments related to EU funds. The Commission is called upon to: (i) further enhance its supervisory role through audit, control and inspection activities, remedial action plans and early-warning letters with a view to reducing irregularities; (ii) maintain its strict policy on interruption and suspension of payments as a preventive measure against irregularities affecting the EU budget. Members highlighted that whistle-blowers should have a clear position in the EU and Member States’ legislative frameworks and ensure a minimum level of protection for European whistle-blowers. Members urged the Commission to publish the second anti-corruption report and to develop a corruption index in order to rank the Member States. They called for investigative journalism to be encouraged and supported by legal means both in the Member States and in the EU. As regards tobacco , Members pointed out the Commission’s decision not to renew the Philip Morris International (PMI) agreement, which expired on 9 July 2016. They asked the Commission not to renew, extend or renegotiate the PMI agreement beyond its expiry date. They urged the Commission to put in place, at EU level, all necessary measures to track and trace PMI tobacco products, and to bring legal action against any illegal seizures of this manufacturer's products until all provisions of the Tobacco Products Directive are fully enforceable. Members also recalled Parliament’s longstanding support for the establishment of an efficient and independent European Public Prosecutor's Office (EPPO) in order to reduce the current fragmentation of national law enforcement efforts to protect the EU budget. Investigations and the role of OLAF : Members regretted that the duration of its investigative phase has grown continuously since 2012 from 22.5 months to 25.1 months in the case of closed cases and from 17.3 months to 18.7 months in all cases. They noted OLAF’s role within different joint customs operations (JCOs) in preventing losses for the EU budget. Concerned at the increase mentioned in OLAF’s most recent annual report in the number of cases of cross-border fraud, Members called on the Commission to assess the use of joint operations in line with methods and procedures already successfully employed on the customs side.
  • date: 2017-05-15T00:00:00 type: Debate in Parliament body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20170515&type=CRE title: Debate in Parliament
  • date: 2017-05-16T00:00:00 type: Results of vote in Parliament body: EP docs: url: https://oeil.secure.europarl.europa.eu/oeil/popups/sda.do?id=29448&l=en title: Results of vote in Parliament
  • date: 2017-05-16T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2017-0206 title: T8-0206/2017 summary: The European Parliament adopted by 553 votes to 67, with 56 abstentions, a resolution on the Annual Report 2015 on the protection of the EU’s financial interests – Fight against fraud. Members expressed concern that the number of all fraudulent and non-fraudulent irregularities reported in 2015 increased significantly, by 36 % , compared with 2014. Moreover, despite the positive drop of 11 % in the number of irregularities reported as fraudulent, the sums involved increased by 18 % from EUR 538 million in 2014 to EUR 637.6 million in 2015. Revenue : Members are concerned about the losses due to the VAT gap and intra-community VAT fraud , which is responsible for EUR 159.5 billion and EUR 50 billion respectively in lost revenue in 2014. The Commission should have access to Eurofisc and to the information exchanged between Member States with a view to preventing and combating Missing Trader IntraCommunity (MTIC) fraud, commonly called carousel fraud. Members States are called upon to recover the amounts of traditional own resources due more quickly, especially those Member States which need to recover the largest amounts such as Greece, Romania, Latvia, Malta and the Netherlands. Parliament stressed that China is the primary originating country (80 %) for counterfeit goods, followed by Hong Kong, the United Arab Emirates, Turkey and India. It asked the Commission to raise these problems during trade negotiations with these countries. It also noted with concern that tobacco smuggling to the EU has intensified in recent years and, according to estimates, represents an annual loss of EUR 10 billion in public revenue to the EU and Member States’ budgets. Expenditure : although the number of reported fraudulent irregularities in 2015 for national resources on the expenditure side of the budget was 14 % lower than in 2014, Parliament is deeply concerned that the number of reported fraudulent and non-fraudulent irregularities relating to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) has been growing annually for at least five consecutive years. It urged the Member States with the highest number of non-fraudulent irregularities reported – Romania, Italy, Spain, Poland, Hungary, Portugal and Lithuania – to urgently and efficiently regulate the situation in order to reverse this trend. Members regretted that the fraudulent and non-fraudulent irregularities linked to the Common Fisheries Policy in 2015 have doubled since 2014, and are the highest ever reported. Cohesion policy also reported a sharp increase in the number of non-fraudulent irregularities. Faced with the issues highlighted, the resolution suggested that the following measures should be taken: Better reporting : despite Parliament’s numerous calls for the establishment of uniform reporting principles in all Member States, there are still significant differences in the number of fraudulent and non-fraudulent irregularities reported by each Member State. The Commission is called on to: unify the differing approaches by Member States to preventing, detecting and reporting irregularities, and non-homogeneous interpretations when applying the EU legal framework; create a uniform reporting system ; develop a system whereby competent authorities may exchange information , enabling cross-checking of accounting records for transactions between two or more Member States in order to prevent cross-border fraud in respect of the Structural and Investment Funds; supervise more effectively the use of exemptions and the widespread practice of splitting procurement contracts for instance when funds are used in emergency situations and for refugees. Prevention should involve constant training and support for the staff responsible for the management and control of funds within the competent authorities, as well as exchanges of information and best practices between Member States. Moreover, Member States should have specific laws against organised crime and step up their efforts in the areas of public procurement , financial crime, conflict of interest, corruption, whistle-blowing and the definition of fraud. Better controls : Members States are urged to better carry out the ex-ante controls with the assistance of the Commission and to use all information available to prevent errors and irregular payments related to EU funds. The Commission is called upon to: (i) further enhance its supervisory role through audit, control and inspection activities, remedial action plans and early-warning letters with a view to reducing irregularities; (ii) maintain its strict policy on interruption and suspension of payments as a preventive measure against irregularities affecting the EU budget. Members also suggested that: whistle-blowers should have a clear position in the EU and Member States’ legislative frameworks and ensure a minimum level of protection for European whistle-blowers; anti-corruption policies should be evaluated and a corruption index be developed in order to rank the Member States; encourage investigative journalism supported by legal means both in the Member States and in the EU. As regards tobacco , Members pointed out the Commission’s decision not to renew the Philip Morris International (PMI) agreement, which expired on 9 July 2016. They asked the Commission not to renew, extend or renegotiate the PMI agreement beyond its expiry date. They urged the Commission to put in place, at EU level, all necessary measures to track and trace PMI tobacco products, and to bring legal action against any illegal seizures of this manufacturer's products until all provisions of the Tobacco Products Directive are fully enforceable. Members also recalled Parliament’s longstanding support for the establishment of an efficient and independent European Public Prosecutor's Office (EPPO) in order to reduce the current fragmentation of national law enforcement efforts to protect the EU budget. Investigations and the role of OLAF : Members regretted that the duration of its investigative phase has grown continuously since 2012 from 22.5 months to 25.1 months in the case of closed cases and from 17.3 months to 18.7 months in all cases. Concerned at the increase mentioned in OLAF’s most recent annual report in the number of cases of cross-border fraud, Members called on the Commission to assess the use of joint operations in line with methods and procedures already successfully employed on the customs side.
  • date: 2017-05-16T00:00:00 type: End of procedure in Parliament body: EP
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  • The Committee on Budgetary Control adopted the own-initiative report by Julia PITERA (EPP, PL) on the Annual Report 2015 on the protection of the EU’s financial interests – Fight against fraud.

    Members expressed concern that the number of all fraudulent and non-fraudulent irregularities reported in 2015 increased significantly, by 36 %, compared with 2014. Moreover, despite the positive drop of 11 % in the number of irregularities reported as fraudulent, the sums involved increased by 18 % from EUR 538 million in 2014 to EUR 637.6 million in 2015.

    Revenue: Members are concerned about the losses due to the VAT gap and intra-community VAT fraud, which is responsible for EUR 159.5 billion and EUR 50 billion respectively in lost revenue in 2014.

    The Commission does not have access to the information exchanged between Member States with a view to preventing and combating Missing Trader IntraCommunity (MTIC) fraud, commonly called carousel fraud. Members States are called upon to recover the amounts of traditional own resources due more quickly.

    Expenditure: although the number of reported fraudulent irregularities in 2015 for national resources on the expenditure side of the budget was 14 % lower than in 2014, Members are deeply concerned that the number of reported fraudulent and non-fraudulent irregularities relating to the European Agricultural Guarantee Fund (EAGF) and to the European Agricultural Fund for Rural Development (EAFRD) has been growing annually for at least five consecutive years.

    Members regretted that the fraudulent and non-fraudulent irregularities linked to the Common Fisheries Policy in 2015 have doubled since 2014, and are the highest ever reported. Cohesion policy also reported a sharp increase in the number of non-fraudulent irregularities.

    Faced with the issues highlighted, the report suggested that the following measures should be taken:

    Better reporting: despite Parliament’s numerous calls for the establishment of uniform reporting principles in all Member States, there are still significant differences in the number of fraudulent and non-fraudulent irregularities reported by each Member State.

    The Commission is called on to:

    • unify the differing approaches by Member States to preventing, detecting and reporting irregularities, and non-homogeneous interpretations when applying the EU legal framework; create a uniform reporting system;
    • develop a system whereby competent authorities may exchange information, enabling cross-checking of accounting records for transactions between two or more Member States;
    • supervise more effectively the use of exemptions and the widespread practice of splitting procurement contracts for instance when funds are used in emergency situations and for refugees.

    Prevention should involve constant training and support for the staff responsible for the management and control of funds within the competent authorities, as well as exchanges of information and best practices between Member States.

    Moreover, Member States should step up their efforts in the areas of public procurement, financial crime, conflict of interest, corruption, whistle-blowing and the definition of fraud.

    Better controls: Members States are urged to better carry out the ex-ante controls with the assistance of the Commission and to use all information available to prevent errors and irregular payments related to EU funds.

    The Commission is called upon to: (i) further enhance its supervisory role through audit, control and inspection activities, remedial action plans and early-warning letters with a view to reducing irregularities; (ii) maintain its strict policy on interruption and suspension of payments as a preventive measure against irregularities affecting the EU budget.

    Members highlighted that whistle-blowers should have a clear position in the EU and Member States’ legislative frameworks and ensure a minimum level of protection for European whistle-blowers.

    Members urged the Commission to publish the second anti-corruption report and to develop a corruption index in order to rank the Member States. They called for investigative journalism to be encouraged and supported by legal means both in the Member States and in the EU.

    As regards tobacco, Members pointed out the Commission’s decision not to renew the Philip Morris International (PMI) agreement, which expired on 9 July 2016. They asked the Commission not to renew, extend or renegotiate the PMI agreement beyond its expiry date. They urged the Commission to put in place, at EU level, all necessary measures to track and trace PMI tobacco products, and to bring legal action against any illegal seizures of this manufacturer's products until all provisions of the Tobacco Products Directive are fully enforceable.

    Members also recalled Parliament’s longstanding support for the establishment of an efficient and independent European Public Prosecutor's Office (EPPO) in order to reduce the current fragmentation of national law enforcement efforts to protect the EU budget.

    Investigations and the role of OLAF: Members regretted that the duration of its investigative phase has grown continuously since 2012 from 22.5 months to 25.1 months in the case of closed cases and from 17.3 months to 18.7 months in all cases. They noted OLAF’s role within different joint customs operations (JCOs) in preventing losses for the EU budget.

    Concerned at the increase mentioned in OLAF’s most recent annual report in the number of cases of cross-border fraud, Members called on the Commission to assess the use of joint operations in line with methods and procedures already successfully employed on the customs side.

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