2020/2246(INI) | [ParlTrack]

Motion for a resolution
Paragraph 1

Amendment 100 #

Motion for a resolution
Paragraph 30 a (new)

30 a. Reiterates that the ‘revolving door’ effect can be detrimental to relations between the institutions and interest representatives; calls for the EU institutions to develop a systematic approach to this challenge;

Amendment 101 #

Motion for a resolution
Paragraph 30 b (new)

30 b. Notes that following a full EU membership in GRECO, the EU institutions may be monitored and evaluated by GRECO; underlines that the GRECO evaluation system should take into account the specific nature of the EU, as a Union based on the principle of conferred competences, and its institutions, as well as the special features of EU law; emphasises that the EU’s rights and obligations in GRECO and the practical arrangements for its membership as a distinct legal entity, alongside all its Member States, should be clarified in advance in the Agreement on the modalities of membership;

Amendment 102 #

30 b. Reiterates its call to the Commission to set up an internal evaluation mechanism of corruption for the EU institution;

Amendment 103 #

Motion for a resolution
Paragraph 30 c (new)

30 c. Is concerned about the Czech Chief Prosecutor General citing permanent pressure by the Justice Minister as reasons for his recent resignation; asks the commission to look into vulnerabilities of the Czech judicial system and carefully examine whether any other cases involving members of the Czech government have been withdrawn or prematurely closed potentially following pressure or unjustified interference; calls on the Commission to conduct such an analysis for all other Member States as well and keep Parliament informed about its findings and conclusions;

Amendment 104 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 31

31. Reiterates its call on the Commission to establish a digital and interoperable uniform system for the collection of comparable data on irregularities and cases of fraud from the Member States in order to standardise the reporting process and ensure the quality and comparability of the data provided and underlines the importance of harmonising definitions to obtain comparative data across the EU;

Amendment 105 #

Motion for a resolution
Paragraph 32

32. Calls on the Commission to ensure the full transparency and quality of data reported by Member States in the Irregularity Management System (IMS); urges Member States to report complete data in a timely manner; calls on the Commission and the Member States to link IMS with EDES and ARACHNE and provide access to all Member States and the Commission;

Amendment 106 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 32 a (new)

32a. Considers it advisable for Member States to cooperate more closely with regard to exchanges of information, in order both to improve data collection and enhance the effectiveness of controls;

Amendment 107 #

Motion for a resolution
Paragraph 33

33. ~~Stresses the importance of~~Emphasizes that the Early Detection and Exclusion System (EDES)~~; invites the Commission to analyse the impact of a possible extension of EDES to~~, as the EU’s Blacklist, has a huge potential flagging people and companies that misuse EU funds; invites the Commission to initiate the change of the Financial Regulation in order to allow EDES to be operational not only in direct management but also in indirect and shared management;

Amendment 108 #

Motion for a resolution
Paragraph 33

33. Stresses the importance of the Early Detection and Exclusion System (EDES); invites the Commission to ~~analyse the impact of a possible extension of EDES to shared management~~request an extension of EDES to shared management in the upcoming review of the Financial Regulation; asks the Commission to provide this system with the necessary financial and staff resources to operate on a full time basis;

Amendment 109 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 33

33. Stresses the importance of the Early Detection and Exclusion System (EDES); invites the Commission to ~~analyse the impact of a possibl~~include the extension of EDES to shared management in its proposal for the revision of the Financial Regulation;

Amendment 11 #

Motion for a resolution
Paragraph 1

1. Welcomes the 31st Annual report on the protection of the EU’s financial interests and the fight against fraud, which underlines the achievements of 2019 with regards to the consolidation of the institutional framework on the fight against fraud and irregularities at Union level achieved by the transposition into national law by 12 Member States of the measures provided for in the Directive on the fight against fraud to the Union’s financial interests by means of criminal law (‘the PIF Directive’) with ~~the~~22 Member States doing so by June 2020; calls on all remaining 22 Member States ~~doing so by June 2020~~to take all necessary measures and ensure the full and correct transposition of the Directive within the shortest time possible; calls on the Commission to closely monitor the transposition process in all Member States, as well as to make use of its prerogatives for launching infringement procedures, where Member States fail to comply with the transposition process;

Amendment 110 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 33

33. Stresses the importance of the Early Detection and Exclusion System (EDES); notes the Judgment of the General Court of 13 May 2020 in Case T-290/18, "AGMIN" v Commission, in which the Court of Justice has confirmed the validity of the respective roles of the panel and the authorising officers, and that the adversarial procedure led by the panel had fully respected the right to be heard of the entity concerned; invites the Commission to analyse the impact of a possible extension of EDES to shared management;

Amendment 111 #

Motion for a resolution
Paragraph 33 a (new)

33 a. Deplores the fact that there are more than 290 monitoring and reporting systems for the CAP and the Cohesion Fund which makes it impossible to verify the final beneficiaries of those funds, to prevent and effectively investigate fraud and corruption; calls on the Commission and the Member States to establish a harmonised or unified reporting system with timely and accurate data in order to remedy the situation;

Amendment 112 #

Motion for a resolution
Paragraph 34

34. Recalls the need for a more incisive and effective response and coordination at both Union and national level in the fight against corruption and organised crime with particular focus on transnational and cross-border aspects, in order to tackle, also through the use of Artificial Intelligence tools, while respecting the protection of personal data, fraudsters’ constant ability to adapt to new technologies and scenarios;

Amendment 113 #

34. Recalls the need for a more incisive and effective response and coordination at both Union and national level in the fight against corruption and organised crime with particular focus on transnational and cross-border aspects, in order to tackle, also through the use of Artificial Intelligence tools, data-mining and other relevant digitalised tools, fraudsters’ constant ability to adapt to new technologies and scenarios;

Amendment 114 #

Motion for a resolution
Paragraph 34

34. Recalls the need for a more incisive and effective response and coordination at both Union and national level in the fight against corruption and organised crime, including mafia-style crime, with particular focus on transnational and cross- border aspects, in order to tackle, also through the use of Artificial Intelligence tools, fraudsters’ constant ability to adapt to new technologies and scenarios;

Amendment 115 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 34 a (new)

34a. Points out that many Member States do not have specific laws against organised, mafia-style crime, while its involvement in cross-border activities and sectors affecting the EU’s financial interests is constantly growing;

Amendment 116 #

Motion for a resolution
Paragraph 35

35. REmphasises the particular importance of EU and national anti-fraud institutions and bodies in the context of increased EU resources through the Recovery and Resilience fund; recalls the importance of supporting and strengthening cooperation among the EU institutions, the EPPO, OLAF, the EU agencies, in particular Europol and Eurojust, and national authorities, in order to detect and tackle fraud and corruption more effectively; reiterates its call to ensure adequate resources for the EPPO, OLAF and relevant EU agencies in ~~this regard~~next years’ budgets, and that the EPPO be able to use the financial resources in the 2021 budget for additional staff recruitment, as requested by Parliament;

Amendment 117 #

David LEGA

Motion for a resolution
Paragraph 35

35. Recalls the importance of supporting and strengthening cooperation among the EU institutions, the EPPO, OLAF, the EU agencies, in particular Europol and Eurojust, and national authorities, in order to detect and tackle fraud and corruption more effectively; reiterates its call to ensure adequate resources for the EPPO, OLAF and relevant EU agencies ~~in this regard~~, especially in view of the increased workload arising from the adoption of the EU’s new long-term budget, NextGenerationEU and other cost-driven projects;

Amendment 118 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 35

35. Recalls the importance of supporting and strengthening cooperation among the EU institutions, the EPPO, OLAF, the EU agencies, in particular Europol and Eurojust, and national authorities, in order to detect and tackle fraud and corruption more effectively; reiterates its call to ensure ~~adequate~~further strengthened resources for the EPPO, OLAF and relevant EU agencies in this regard;

Amendment 119 #

Motion for a resolution
Paragraph 35

35. Recalls the importance of supporting and strengthening cooperation among the EU institutions, the EPPO, OLAF, the EU agencies, in particular Europol and Eurojust, and national authorities, in order to detect and tackle fraud and corruption more effectively, avoiding overlapping of roles and promoting the exchange of information; reiterates its call to ensure adequate resources for the EPPO, OLAF and relevant EU agencies in this regard;

Amendment 12 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 1 a (new)

1 a. Emphasises that respect for the rule of law is a precondition for sound financial management including the efficient and effective allocation and management of European funds as well as the fight against corruption and mismanagement; strongly welcomes in that regard the adoption of Regulation 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget;

Amendment 120 #

Motion for a resolution
Paragraph 35 a (new)

35 a. Calls on the Commission to consider updating its anti-fraud strategy in order to fully reflect the operationalisation of the EPPO and its role in fighting fraud;

Amendment 121 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 35 b (new)

35 b. Urges the Commission to strictly monitor the Member States that have not yet nominated the European Delegated Prosecutors or have not adapted their national legislation for the operationalisation of the EPPO, where necessary, by suspending their funding on the basis of article 63.2 and 8 of the Financial Regulations and the sector specific rules, and/or by launching infringement proceedings;

Amendment 122 #

Motion for a resolution
Paragraph 36

36. Highlights the importance of structured information exchange among competent authorities for the 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; reiterates its request to the Commission for including in its working programme a legislative proposal for an horizontal Regulation on mutual administrative assistance in the area of EU expenditures; emphasises that the exchange of information should occur in a digital format and through interoperable or shared IT systems and tools to facilitate a more timely and efficient cooperation;

Amendment 123 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 37

37. ~~Note~~Regrets that only 13 Member States made use of ARACHNE during their risk analysis; reiterates the importance of this tool, as well as of interoperability of IT systems and databases for fraud risk analysis and fraud detection purposes; reiterates its call on the Commission to ~~consider making~~make the use of ARACHNE mandatory;

Amendment 124 #

Motion for a resolution
Paragraph 37

37. Notes that only 13 Member States made use of ARACHNE during their risk analysis; reiterates the importance of this tool, as well as of interoperability of IT systems and databases for fraud risk analysis and fraud detection purposes; reiterates its call on the Commission to ~~consider making th~~make use of ARACHNE mandatory for Member States; calls on Member States to provide the system with timely and reliable data; is of the opinion that the Commission and OLAF need to have access to these data;

Amendment 125 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 37

37. Notes that only 13 Member States made use of ARACHNE during their risk analysis; reiterates the importance of this tool, as well as of interoperability of IT systems and databases for fraud risk analysis and fraud detection purposes; reiterates its call on the Commission ~~to consider~~and particularly, the Member States in the Council, to move towards Parliament’s position of making the use of ARACHNE mandatory;

Amendment 126 #

Motion for a resolution
Paragraph 37 a (new)

37 a. Notes that 16 Member States have strengthened risk analysis to detect fraud and irregularities via the use of IT tools; calls on the Commission to facilitate exchanges of good practices between these countries and Member States without experience;

Amendment 127 #

Motion for a resolution
Paragraph 38

38. Notes with concern that no information is provided on the analysis of cases of conflicts of interest, despite the relevance of the new provision adopted in 2018 in the Financial Regulation and the well-known importance and impact of this phenomenon and calls on the Commission to fill this gap in the next PIF Report, as well as to pay further attention to frauds related to public procurement;

Amendment 128 #

Motion for a resolution
Paragraph 38 a (new)

38a. Expresses concern regarding checks relating to financial instruments managed by intermediaries and weaknesses revealed in verification of beneficiaries’ registered offices; reiterates the need to make the disbursement of direct and indirect funds conditional on the disclosure of information on beneficial ownership by the beneficiaries and financial intermediaries involved in financing operations;

Amendment 129 #

Motion for a resolution
Paragraph 38 a (new)

38 a. Highlights that, with a view to effectively counter corruption, in order to protect the EU’s financial interests, the Commission should adopt a holistic and coherent approach, fostering enhanced rules on transparency, incompatibilities and conflicts of interest, internal control mechanisms, lobbying and revolving doors;

Amendment 13 #

Motion for a resolution
Paragraph 1 b (new)

1 b. Welcomes that the Commission has immediately started its work on a clear methodology and the analysis of potential cases; acknowledges that the Commission has clearly stated on several occasions that it will fulfil its role as “Guardian of the Treaties" and apply the regulation from the date it entered into force without undue delay, so that no case is lost during the necessary preparation work in the first half of 2021; recalls that Regulation 2020/2092 is applicable to all commitments and payments from 1 January 2021, while providing safeguards for final beneficiaries and recipients;

Amendment 130 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 39

39. Invites the Commission to explore new avenues for the PIF report to be shared and analysed alongside other annual reports, including the Rule of law report, and sources of information, including through an enhanced dialogue between Europol, Eurojust and EPPO, to help identify trends in fraudulent and non- fraudulent irregularities, to detect weaknesses and to provide useful lessons learnt to enhance the adoption of fraud- proofing measures by all stakeholders;

Amendment 131 #

Motion for a resolution
Paragraph 39 a (new)

39 a. Welcomes the specific events organised by OLAF in 2019 in support of non-EU countries; strongly encourages the Commission, OLAF and all the other institutions and bodies of the Union entrusted with the protection of the financial interests of the Union to actively engage and collaborate with partner authorities in candidate, potential candidate and EaP countries, promoting measures to effectively address possible fraud cases; calls on the Commission to develop specific and regular mechanisms to effectively prevent and combat fraud with EU funds in these states;

Amendment 132 #

Motion for a resolution
Paragraph 39 a (new)

39 a. Regrets that Parliament repeatedly has to address several of its recommendations without receiving any clear response by the Commission; notes that on some observations and recommendations, Commission regrettably has not taken any tangible action or measures; asks the Commission to provide a clear explanation to Parliament whenever it decides to not follow one of its recommendations;

Amendment 14 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 2

2. Notes that the total number of fraudulent and non-fraudulent irregularities reported in 2019 amounted to 11 726 cases overall 2% fewer than in 2018), and involved a value of approximately EUR 1.6 billion, representing a decrease of 34 % with respect to the previous year; notes in this respect that the data regarding the number of cases and the value involved for each year are continuously assessed and updated and should be considered into a ~~5-year average~~long term perspective ~~at least~~;

Amendment 15 #

Motion for a resolution
Paragraph 3

3. Notes that the number of detected irregularities reported as fraudulent is an indication of the level of detection and of the capacity to intercept potential fraud by Member States and Union bodies, and recalls that it is not a direct indicator of the level of fraud affecting the Union budget or a specific Member State; recalls that in 2019, two special reports of the European Court of Auditors highlighted the shortcomings of the Commission with regards to its insight into the scale, nature and causes of fraud, identifying weaknesses in the Commission’s strategic approach towards managing risks of fraud, calling on the Commission to take more proactive measures in order to address these issues; notes that the detection and reporting of an irregularity implies that corrective measures have been taken in order to protect the Union’s financial interests and that, whenever relevant, criminal proceedings have been launched;

Amendment 16 #

Motion for a resolution
Paragraph 3 a (new)

3 a. Nevertheless notes that it is unclear how many fraudulent irregularities remain unreported every year, making it very difficult to evaluate the effectiveness of the anti-fraud activities put in place; calls on the Commission therefore to develop a methodology to improve the reliability and provide for more accurate estimations of the scale of fraud in the EU;

Amendment 17 #

Motion for a resolution
Paragraph 4

4. Notes that the number of fraudulent irregularities reported in 2019 (939 cases) and their related financial amounts (approximately EUR 461.4 million) decreased significantly compared to 2018; notes that, looking at a5-year period (2015-2019), the number of reported fraudulent irregularities was 40% less than in 2015, and 25% below the 5-year average; notes that in 2019, 514 irregularities reported as fraudulent relating to expenditure represented 0.3% of 2019 payments, and 425 reported as fraudulent on revenue corresponded to 0.3% of gross amount of Traditional Own Resources collected for 2019;

Amendment 18 #

Motion for a resolution
Paragraph 4

4. Notes that the number of fraudulent irregularities reported in 2019 (939 cases - 8% of all irregularities) ) and their related financial amounts (approximately EUR 461.4 million - 28% of all financial amounts affected by irregularities) decreased significantly compared to 2018; notes that in 2019, 514 irregularities reported as fraudulent relating to expenditure represented 0.3% of 2019 payments, and 425 reported as fraudulent on revenue corresponded to 0.3% of gross amount of Traditional Own Resources collected for 2019;

Amendment 19 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 5 a (new)

5 a. Emphasises that the change of detected fraudulent or non-fraudulent irregularities represents a momentary snapshot that has to be seen in the context of other relevant factors; reported decreases in the total number of cases of both fraudulent and non-fraudulent irregularities can either be indicative of a positive development of an overall decrease in fraudulent activity or a negative development of a reduction in the level of detection of fraudulent activity;

Amendment 2 #

Motion for a resolution
Recital B

B. whereas the Commission should fulfil its respective responsibilities under shared management for supervision, control and audit, however the Commission is capable of monitoring approximately 10% of all expenditures;

Amendment 20 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 5 a (new)

5a. Stresses the seriousness of the current situation concerning fraud involving the failure to pay VAT, in particular so-called carousel fraud; calls on all Member States to participate in all EUROFISC’s fields of activity so as to facilitate the exchange of information to help combat fraud;

Amendment 21 #

Motion for a resolution
Paragraph 5 a (new)

5 a. Highlights that, in particular for fraudulent irregularities, detections were concentrated in a few Member States, suggesting different approaches to the use of criminal law in protecting the EU budget; calls on the Commission to address these differences and consider new harmonizing measures;

Amendment 22 #

Motion for a resolution
Paragraph 5 a (new)

5 a. Deeply regrets and points to the fact that many Member States do not have specific laws against organised crime, while its involvement in cross-border activities and sectors affecting the EU’s financial interests is constantly growing;

Amendment 23 #

Ramona STRUGARIU, Olivier CHASTEL, Katalin CSEH, Alin MITUȚA

Motion for a resolution
Paragraph 5 b (new)

5 b. Recalls that deficiencies in the validity and comparability of data and reporting technologies with varying degrees of digitalisation in the Member States continue to severely hamper the quality and reliability of information available to the Commission in the IMS and OWNRES systems; regrets that the detection of misuse, fraud and embezzlement of EU funds is mostly limited to incidental discoveries by the Commission and the European Court of Auditors (ECA) during their sample- based audits or investigations by OLAF; is concerned by the ECA’s repeated findings that the work of some national authorities is considered too error-prone and therefore unreliable; emphasises that these deficiencies impact the quality of data reported by the Member States to the Commission regarding the number of detected fraudulent and non-fraudulent irregularities; notes that three Member States did not report any fraudulent irregularities in 20191a; is particularly concerned by the lack of adequate staffing and qualifications of certain national authorities and the lack of internal audits; _________________ 1a Cyprus, Luxemburg, Malta

Amendment 24 #

Motion for a resolution
Paragraph 5 b (new)

5 b. Underlines the increased risks associated to the implementation of the Union budget, incurred by the COVID -19 crisis; highlights that in 2019, fifteen Member States reported irregularities in actions related to health infrastructures, with seven reporting fraudulent irregularities; notes with concern that more than half of the fraudulent irregularities were reported by two Member States; calls on the Commission to pay particular attention to these cases, monitoring and taking action for ensuring the full protection of the EU budget, especially under exceptional crisis circumstances;

Amendment 25 #

Motion for a resolution
Paragraph 6

6. Urges Member States together with the Commission to cooperate more closely with regard to exchanges of information, improving data collection, and enhancing the effectiveness of controls; strongly calls on the Commission to conduct a thorough analysis of the underlying reasons and potential structural problems causing the persisting systemic weaknesses in the reliability of the work of some national authorities and pay special attention to any potential country-specific differences; calls on the Commission to address clear country-specific recommendations to the national authorities; asks the Commission to establish a structured dialogue with the national authorities and the ECA to continuously work on capacity building and exchange of best practice to improve the reliability of national authorities’ work and keep Parliament informed about the progress made; calls on the Commission to offer further support to improve the cooperation under EUROFISC;

Amendment 26 #

Motion for a resolution
Paragraph 6

6. Urges Member States together with the Commission to cooperate more closely with regard to exchanges of information, improving data collection, and enhancing the effectiveness of controls; in this regard calls on Member States to publish data on final beneficiaries in an uniform machine-readable format and ensure the interoperability with the Commission monitoring tools;

Amendment 27 #

Motion for a resolution
Paragraph 6 a (new)

6 a. In this regard reiterates its call on the Commission to establish a uniform system for the collection of comparable data on irregularities and cases of fraud from the Member States in order to standardise the reporting process and ensure the quality and comparability of the data provided;

Amendment 28 #

Motion for a resolution
Paragraph 6 b (new)

6 b. Finds it worrisome that some Member States regularly do not report a single case of fraud; invites the Commission to investigate the situation, as it considers the likelihood that no fraudulent activities exist in those Member States to be rather low; calls on the Commission to run random spot checks in these countries;

Amendment 29 #

Motion for a resolution
Paragraph 9

9. Notes from the 2020 VAT Gap Report that in 2018 the EU VAT Gap dropped to EUR 140 billion and could fall below EUR 130 billion in 2019; however, is concerned that the VAT Gap may reach EUR 164 billion in 2020 ~~due~~and asks the Commission for a thorough explanation on whether this increase was anyhow related to the COVID-19 pandemic;

Amendment 3 #

Motion for a resolution
Recital B a (new)

B a. whereas Article 310(6) of the TFEU states that ‘the Union and the Member States, in accordance with Article 325, shall counter fraud and any other illegal activities affecting the financial interests of the Union’; whereas Article 325(2) of the TFEU states that ‘Member States shall take the same measures to counter fraud affecting the financial interests of the Union as they take to counter fraud affecting their own financial interests’; whereas Article 325(3) of the TFEU states that ‘the Member States shall coordinate their action aimed at protecting the financial interests of the Union against fraud’ and that ‘they shall organise, together with the Commission, close and regular cooperation between competent authorities’; whereas under Article 325(4) of the TFEU the European Court of Auditors must be consulted on any measures to be adopted by the legislator in the fields of the prevention of and fight against fraud affecting the EU’s financial interests;

Amendment 30 #

Motion for a resolution
Paragraph 9 a (new)

9 a. Is deeply concerned by the extensive impact of VAT fraud on the EU budget as well as national budgets; finds it very important to step up the fight against the biggest kind of VAT fraud, the missing trader intra-community fraud (MTIC fraud), with an estimated annual cost of 40-60billion EUR; calls on the Commission to assess the strengths and weaknesses of different potential solutions to tackle MTIC fraud, notably the introduction of a real-time digital transaction-based reporting system as developed by researchers (TX++), or a combination of the definitive VAT system with a digital, real-time transaction-based reporting;

Amendment 31 #

Motion for a resolution
Paragraph 10

10. Notes that sixteen revenue anti- fraud measures were reported by the Member States in 2019, in particular eight in the area of customs fraud, five in tax fraud, and three measures concerning both customs and tax fraud; notes that an evaluation process on Regulation 515/97 started in 2019 within the Commission, to determine how useful Regulation 515/97 has been on preventing customs fraud;

Amendment 32 #

Motion for a resolution
Paragraph 11

11. Notes that between 2017 and 2019 the Commission carried out on-the-spot inspections on the control strategy in the field of customs value in all Member States and found that the Union’s financial interests were not effectively protected, leading to significant losses of Traditional Own Resources to the EU budget; Notes that OLAF has issued investigation reports with recommendations to six Member States which have not fully implemented the necessary measures to tackle undervaluation fraud consistently; calls on the Commission to report back to the Parliament specifically naming the Member States which could share their best practice and also those where significant challenges remain;

Amendment 33 #

Motion for a resolution
Paragraph 12

12. Notes that solar panels were the goods most affected by fraud and irregularities in monetary terms in 2019, as was also the case in 2018, and 2017; calls on the Commission ~~and~~to recognise the systemic nature of such fraud, fully informs the Council and together with Member States t~~o t~~akes strong action in this regard;

Amendment 34 #

Motion for a resolution
Paragraph 12 a (new)

12 a. Notes that revenue fraud through undervaluation of goods imported in the EU is and will remain a threat to revenue, posing a significant challenge to be dealt with in the coming years;

Amendment 35 #

Motion for a resolution
Paragraph 13

13. Notes that serious doubts exist about the accuracy of the traditional own resources (custom duties) amounts transferred to the Union budget by the United Kingdom as a consequence of investigations carried out by OLAF on undervaluation fraud concerning textiles and shoes imported from China via the United Kingdom, and those conducted by the Commission within the framework of own resources management; ~~not~~strongly criticises that UK still refuses to make available to the EU budget the TOR amounts lost during the period 2011 - 2017 amounting to EUR 2.679bn (gross); welcomes that in March 2019, the Commission referred to the CJEU its infringement case against the UK concerning the TOR losses due to undervalued imports; asks the Commission to report on any developments in this regard;

Amendment 36 #

Motion for a resolution
Paragraph 13 a (new)

13 a. Is deeply concerned by the non- quantifiable reservation maintained for2019 by DG BUDG, stating that the undervaluation fraud partly moved to other Member States, affecting the collection of TOR to an extent pending final quantification; notes that the Commission has carried out inspections on undervaluation in all Member States and checked how Member States are organised to address issues of undervaluation, particularly concerning textiles and shoes from China; notes that the Commission will follow up and hold Member States financially responsible for any potential losses incurred; is concerned that provisional calculations indicate that the TOR losses in 2019 would reach 1% of the 2019 total TOR; asks the Commission to promptly inform Parliament about the findings and consequences of its inspections and quantification calculations once finalised;

Amendment 37 #

Motion for a resolution
Paragraph 14

14. Reiterates that a combination of different detection methods (release controls, post-release controls, inspections by anti-fraud services and others) is most efficient for detecting fraud, and that the efficiency of each method depends on the Member State concerned, the efficient coordination of its administration, and the ability of the relevant Member State services to communicate with each other; calls on the Commission to inform the Council which member States could share their 'best practice' experience and where significant challenges for improvements remain;

Amendment 38 #

Motion for a resolution
Paragraph 15 a (new)

15 a. Reiterates its assessment on the importance of OLAF’s investigations and its coordination role for the protection of the EU’s financial interests and combatting fraud;

Amendment 39 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 18

18. Notes that regarding the Common Agricultural Policy (CAP), detections of irregularities were concentrated in a few Member States in particular for fraudulent irregularities, suggesting that different approaches to the use of criminal law to protect the EU budget or reporting practices concerning suspected fraud could be significant factors leading to differences among Member States; notes, that in 2019, the overall financial amounts were relatively stable, but amounts with respect to direct support increased whereas rural development decreased; notes in particular that in the area of direct support, most detections indicated the use of falsified documents or requests for aid, and that in rural development, many detections were related to implementation; ~~notes~~is worried that the creation of artificial conditions for receiving financial support is a common type of fraud in direct support indicating a modus operandi in the fraudulent irregularities touching upon ethics and integrity; notes that there was a strong decrease in fraudulent irregularities in rural development, due to the decline in detections related to PP 2007-2013, in line with the programming lifecycle, and a slow start of detections related to PP 2014-2020, and that more fraudulent and non- fraudulent irregularities were still detected in rural development than in direct support; however market measures recorded the highest Fraud Detection Rate (FDR), at 0.87%, more than four-times that of rural development with regard to fraudulent irregularities and, whereas for non- fraudulent irregularities represented nearly double Irregularities Detection Rate (IDR) of that of rural development; moreover, notes from the Courts of Auditors’ annual report 2017 that the manner in which expenditure is disbursed has an impact on the risk of error, and that in particular errors were confined mainly to cost reimbursements, whereas the error rate for entitlement payments was below the materiality threshold of 2 %;

Amendment 4 #

Motion for a resolution
Recital D

D. whereas the diversity of legal and administrative systems in the Member States ~~needs to be adequately addressed in order to overcome~~is not an advantage and whereas it needs to be adequately addressed to be able to create more unified administrative and reporting systems in the EU to effectively prevent and fight irregularities and combat fraud and corruption;

Amendment 40 #

Motion for a resolution
Paragraph 18 a (new)

18 a. Reiterates its call for the introduction of maximum amounts of payments that one natural person can receive from the first and second pillar of the CAP as well as for cohesion funds; is of the opinion that maximum amounts defined per natural person are much harder to circumvent; reminds that beneficiaries can artificially split up their companies or create additional companies that all can receive the maximum amount of funding to circumvent a cap defined per legal person; welcomes the intentions of the proposal for the CAP to count all companies belonging to the same group as one beneficiary, but is of the opinion that this is insufficient: opaque and highly complex company structures often involving entities in several Member States and/or third countries make it very difficult to ensure that all companies belonging to the same group are identified as such and in fact treated as one beneficiary and open other opportunities to circumvent these restrictions; calls on the Commission to include proposals for caps per natural person for CAP and cohesions funds in its proposal for the revision of the Financial Regulation;

Amendment 41 #

Motion for a resolution
Paragraph 18 b (new)

18 b. Repeats its concern that CAP subsidies continue to incentivise land- grabbing by criminal and oligarchic structures; reiterates its urgent call on the Commission to establish a complaint mechanism for farmers and SMEs faced with land-grabbing, severe misconduct by national authorities, irregular or biased treatment intenders or the distribution of subsidies, pressure or intimidation from criminal structures, organised crime or oligarchic structures, or another severe infringement of their fundamental rights to lodge a complaint directly with the Commission; welcomes that such a complaint mechanism has been proposed for the new CAP regulation;

Amendment 42 #

Motion for a resolution
Paragraph 19

19. Notes the complexity of the analysis on cohesion policy’s data and the different phases of PPs 2007-2013, notes that the financial amounts reported are significantly lower than the exceptional year of 2018 but on average are trending upwards for the Cohesion Fund; underlines the importance of cooperation with the judicial authorities and considers the need for closer attention to the unexpected downturn of fraudulent irregularities as well as non-fraudulent, excluding ‘exceptional’ cases, for PP 2014-2020 in 2019 of the financial amounts involved in fraudulent irregularities for all funds and in particular regarding the ERDF; ~~notes, moreover, the~~stresses an urgent need for the Commission, the OLAF and the EPPO to fully investigate if Member States’ different reporting patterns in terms of their tendency to detect fraudulent irregularities with high financial amounts involved are somehow related to possible conflicts of interests of Member States' stakeholders or even criminal activity;

Amendment 43 #

Motion for a resolution
Paragraph 19

19. Notes the complexity of the analysis on cohesion policy’s data and the different phases of PPs 2007-2013, notes that the financial amounts reported are significantly lower than the exceptional year of 2018 but on average are trending upwards for the Cohesion Fund; underlines the importance of cooperation with the judicial authorities and considers the need for closer attention to the unexpected downturn of fraudulent irregularities as well as non-fraudulent, excluding ‘exceptional’ cases, for PP 2014-2020 in 2019 of the financial amounts involved in fraudulent irregularities for all funds and in particular regarding the ERDF; notes with concern, moreover, the Member States’ different reporting patterns in terms of their tendency to detect fraudulent irregularities with high financial amounts involved;

Amendment 44 #

Motion for a resolution
Paragraph 19 a (new)

19 a. Is very concerned by media reports about European co-financed infrastructure investments which were repurposed after the minimum required period of three or five years; regrets allegations of fraud and personal enrichment from this repurposing; regrets that the Commission has not been able to provide additional information to dispel remaining doubts; welcomes the intention of the Commission to properly follow-up on these allegations and calls on the Commission to report its findings to Parliament; further calls on the Commission to analyse in which Member States severe problems exist regarding the repurposing of EU-co-financed infrastructure projects;

Amendment 45 #

19 b. Considers the legal minimum durability requirement of three to five years too short given the significant amounts of co-financing and the longevity of such projects; regrets that the co- legislators did not decide to introduce longer durability requirements during the revision of the Common Provisions Regulation; notes that significant differences exist across Member States in the national rules on durability of infrastructure investments and premature repurposing;

Amendment 46 #

Motion for a resolution
Paragraph 19 c (new)

19 c. Calls on the Commission to conduct a thorough analysis on the different national rules on the durability of appropriation requirements of co- financed investments and premature repurposing both for infrastructure and equipment with a particular focus on whether national rules go beyond the European minimum requirements; calls on the Commission to report its findings to Parliament;

Amendment 47 #

Motion for a resolution
Paragraph 20

20. Reiterates the transparency requirements for CAP and cohesion policies, which oblige the responsible authorities of the Member States to maintain a publicly available list of final beneficiaries; strongly calls on Member States to publish such data in an uniform machine- readable format and ensure the interoperability of the information; ~~calls on~~demands that the Commission to collects and aggregates the data and publish lists of the largest beneficiaries from each fund in each Member State;

Amendment 48 #

Motion for a resolution
Paragraph 21

21. Notes that in 2019 actions related to health infrastructure were affected by breaches of public procurement rules; among the fraudulent irregularities the most common issues detected concerned supporting documents; fifteen Member States reported irregularities in actions related to health infrastructures; seven of these also detected fraud; notes that non- reporting of irregularities in this area by other Member States is not an indication that they awere not affected by such risks and calls on the Commission, the OLAF and the EPPO that fraudulent activities, especially those related to fighting the COVID-19 pandemic do not remain unresolved;

Amendment 49 #

Motion for a resolution
Paragraph 21 a (new)

21 a. Is concerned about continued reports by ECA and the Commission about persisting weaknesses in public procurement in several Member States; calls on the Commission to conduct a thorough analysis of the Member States with noticeable weaknesses about the underlying reasons and specify precisely to what extend these weaknesses are due to formal errors or systemic fraud and corruption; is of the opinion that minor formal errors need to be treated differently and that the Commission should focus more on the more severe issues, such as intentional manipulations in the tender criteria to favour the application of certain or single bidders, corruption in relation to bidder selection, conflicts of interest and other fraudulent misuse;

Amendment 5 #

Motion for a resolution
Recital D

D. whereas the diversity of legal and administrative systems in the Member States needs to be adequately addressed in order to overcome irregularities and combat fraud and corruption; whereas the Commission should further strengthen its efforts to ensure that the fight against fraud and corruption is implemented effectively and produces more tangible and more satisfactory results;

Amendment 50 #

Motion for a resolution
Paragraph 21 a (new)

21a. Points out that complete transparency in accounting for expenditure is essential, especially as regards infrastructure works financed directly through EU funds or financial instruments; calls on the Commission to provide for EU citizens to have full access to information on co-financed projects;

Amendment 51 #

Motion for a resolution
Paragraph 21 a (new)

21 a. Shares the view of the Commission, that countering fraud and irregularities is of the utmost importance in particular in period of crisis;17a _________________ 17aChapter 10.2 of the 31st Annual Report on the protection of the European Union’s financial interests - Fight against fraud - 2019

Amendment 52 #

Motion for a resolution
Paragraph 21 b (new)

21b. Stresses the need for complete transparency in accounting for the transfers and loans provided for under the Recovery and Resilience Facility (RRF) and calls on the Commission to provide for the European Parliament to have full access to information;

Amendment 53 #

Motion for a resolution
Paragraph 21 b (new)

21 b. Invites the Commission to step up its fraud prevention and detection work to ensure that EU money continues to reach the intended beneficiaries and produce effective and measurable effects on citizen’s lives;

Amendment 54 #

Motion for a resolution
Subheading 4 a (new)

Digitalisation as a means to protect the EU financial interests

Amendment 55 #

Motion for a resolution
Paragraph 21 b (new)

21 b. Emphasises that a greater degree of digitalisation, interoperability and harmonisation of the European reporting, monitoring and audit is overdue and indispensable given the cross-border nature of misuse, fraud, misappropriations, conflicts of interest, double-funding and other systemic problems; regrets that under current rules, the lack of information about the ownership structures and beneficial owners of companies and groups of companies significantly contributes to the opaqueness of the current distribution of funds and hamper a more efficient detection of irregularities; emphasises again the crucial importance of comprehensive, reliable and comparable data for the efficient, effective and timely control of European spending and the protection of European tax-payers’ money;

Amendment 56 #

Motion for a resolution
Paragraph 21 c (new)

21 c. Reiterates Parliament’s urgent call on the Commission to propose a legal base in the Financial Regulation for the creation of an interoperable digital reporting and monitoring system to allow timely, uniform and standardised reporting by Member State’s authorities in the area of shared management; encourages a mandatory use of existing data-mining and risk-scoring tools, such as ARACHNE, as one element of the envisaged reporting and monitoring system; underlines that the envisaged interoperable reporting and monitoring system should not only allow for an earlier and more efficient detection of misuse, fraud, misappropriations, conflicts of interest, double-funding and other systemic problems but would also allow for a comprehensive overview of the true distribution of EU funds and potentially unintended concentrations in the hands of few oligarchic or even criminal ultimate beneficiaries;

Amendment 57 #

Motion for a resolution
Paragraph 21 d (new)

21 d. Recalls that this system should not result in a bureaucratic overburdening of the national authorities and avoid creating a data congestion; calls on the Commission to determine which indicators and data are truly relevant, necessary and proportionate for audit and control purposes as well as for reaching the intended programming goals and to decrease the number of indicators and milestones that need to be entered into the system;

Amendment 58 #

Motion for a resolution
Paragraph 21 e (new)

21 e. Notes that the Early Detection and Exclusion System (EDES),established by Art 135 Financial Regulation should ensure effective sanctions on unreliable persons or entities, through an exclusion from award and procurement procedures funded under the EU budget and the imposition of financial penalties; regrets that the database only lists very few economic operators (six as per May 2021); calls on the Commission to review the criteria with a view to decreasing complexity and increase applicability of EDES in practice;

Amendment 59 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 21 f (new)

21 f. Asks the Commission to consider the extension of EDES to application on funds under shared management with respect for the principles of proportionality and appropriateness when proposing the revision of the Financial Regulation; urges Member States and the Commission to guarantee an increased interoperability of the existing European and national databases and data-mining tools; acknowledges that the EDPS sees no general data protection issues on establishing such interoperability as long as they are established on a clear legal basis;

Amendment 6 #

Motion for a resolution
Recital F

F. whereas systematic and institutionalised and high level cases of corruption and deliberate weakening of the checks and balances and of the independence of the institutions responsible for monitoring and controlling finances in certain Member States seriously harm the Union’s financial interests while also representing a threat to the rule of law;

Amendment 60 #

Motion for a resolution
Paragraph 21 g (new)

21 g. Welcomes existing rules on e- procurement, which stipulate that tender opportunities must be published on Tenders Electronic Daily (TED), procurement documents must be accessible electronically and a link must be included in the TED notices, economic operators must submit tenders electronically and contracting authorities must accept electronic invoices;

Amendment 61 #

Motion for a resolution
Paragraph 21 h (new)

21 h. Observes that public procurement is undergoing a digital transformation; welcomes the process of rethinking public procurement with digital technologies in mind; is of the opinion that this reform should go beyond simply moving to electronic tools and should include various pre-award and post-award phases; insists, that the reform should also allow for the integration of data- based approaches at various stages of the procurement process; calls on the Commission to pay particular attention to framework agreements awarded through public procurement procedures, as fraud and corruption related to them represent an increased risk for the financial interests of the Union;

Amendment 62 #

Katalin CSEH, Olivier CHASTEL, Alin MITUȚA, Ramona STRUGARIU

Motion for a resolution
Paragraph 21 i (new)

21 i. Observes that the increasing digitalisation of public services and enhanced transparency rules result in additional information related to EU public finances being available in electronic formats; notes furthermore, that the computing capacity and the software availability allows for complex processing of large amount of data in relatively short time, which creates new potential for the detection of fraud using specialized data analytics techniques such as big data, data mining, and AI technologies on open data; believes that the abundance of open data represents an opportunity to support the creation of reliable "reputation systems", which can help to prevent criminal activities; asks the Commission to carry out a systemic analysis to investigate how the new technologies are being used in the field of fraud detection and prevention, assess their limitations, and make proposals on how to improve their use;

Amendment 63 #

Motion for a resolution
Paragraph 22

22. Welcomes the adoption of the New Commission Anti-Fraud Strategy on 29 April 2019; welcomes the zero tolerance policy towards fraud; welcomes the reintroduction of the Commission’s corporate oversight of fraud issues by giving OLAF a stronger advisory and supervisory role reminds that the CAFS foresees actions only to the Commission, while the majority of responsibilities lie with the Member States; calls for a unified approach for the European Fraud Strategy, which includes the Member States as well;

Amendment 64 #