Protecting the EU’s financial interests from fraud and corruption

SUMMARY OF:

Regulation (EU) 2021/785 establishing the Union anti-fraud programme

WHAT IS THE AIM OF THE REGULATION?

It establishes the European Union’s (EU) anti-fraud programme. This runs for the duration of the 2021-2027 multiannual financial framework. It sets out the programme’s:

general and specific objectives;
level, forms and rules of interventions and the funding.

KEY POINTS

The programme’s general objectives are to:

protect the EU’s financial interests;
support overall assistance and cooperation between national administrative authorities and the European Commission in applying customs and agricultural legislation.

These are implemented through three specific objectives:

prevent and combat fraud, corruption and any other illegal activities against the EU’s financial interests (€114.207 million of the programme’s budget);
support, via the Anti-Fraud Information System platform (AFIS), information exchange and operational activities of mutual administrative assistance on customs and agricultural issues (€60 million of the budget);
strengthen reporting of irregularities, including fraud, of the EU’s shared management and pre-accession assistance funds (€7 million of the budget).

The 7-year budget for the programme is €181.207 million (current prices), of which up to 2% may be used for:

technical and administrative assistance, such as preparation, monitoring, control, audit and evaluation, including corporate information technology systems.

The programme may cover certain additional costs, such as the installation and maintenance of permanent technical infrastructure and travel and subsistence expenses (Annex I contains an indicative list).

Non-EU countries may participate in the programme subject to certain conditions. These include the right for the European Anti-Fraud Office (OLAF) to carry out investigations, including on-the-spot checks and inspections, to protect the EU’s finances.

The maximum co-financing rate for grants from the programme is 80% of the eligible costs. In exceptional circumstances, this may increase to 90%.

The following activities are eligible for funding:

providing technical knowledge, specialised and technically advanced equipment and effective IT tools for multinational and multidisciplinary cooperation;
enhancing staff exchanges, ensuring support and facilitating investigations, especially joint teams and cross-border operations;
supplying technical and operational support to national investigations, particularly for customs and law enforcement authorities fighting fraud and other illegal activities;
building IT capacity in EU Member States and non-EU countries, increasing data exchange and developing and providing IT tools to investigate and monitor intelligence work;
arranging specialised training, risk analysis workshops, conferences and studies to improve overall cooperation and coordination;
organising any other activity included in a work programme to meet the regulation’s general and specific objectives.

The following entities* are eligible for EU funding:

public authorities, research and educational institutes and non-profit-making entities — all except the first require one year’s operational pedigree, provided that they:
- contribute to the programme’s general or specific objectives
- are established in a Member State or a non-EU country associated with the programme or listed in its work agenda;
any legal entity created under EU law or any international organisation.

The Commission:

adopts work programmes;
monitors progress based on the indicators set out in Annex II;
reports annually to the European Parliament and the Council of the European Union on the programme’s performance in its annual report on the protection of the EU’s financial interests — fight against fraud;
conducts independent, objective and timely evaluations;
provides an interim evaluation of the programme no later than 4 years after its start and a final evaluation within the same time frame of its completion;
submits the conclusions of the evaluations to the Parliament, the Council, the European Court of Auditors, the European Economic and Social Committee and the Committee of the Regions, and publishes them on its website;
may adopt delegated acts until 31 December 2028;
conducts regular information and communication campaigns on the projects being financed and their results.

The European Parliament may make recommendations for the annual work programme.

Recipients of EU funding must:

provide necessary and timely data to ensure efficient monitoring of the programme, including Member States when relevant;
acknowledge, and give visibility to, the EU funds they receive.

FROM WHEN DOES THE REGULATION APPLY?

It has applied retroactively from 1 January 2021.

BACKGROUND

The new programme is managed and implemented by OLAF. It replaces the Hercule III programme (Regulation (EU) No 250/2014 — see summary) which ran from 2014 to 2020 with a €104.9 million budget.

It improves on its predecessor by combining its activities with those of two of OLAF’s systems:

the Anti-Fraud Information System (AFIS), supporting mutual administrative assistance on operational activities between Member States’ customs authorities;
the Irregularity Management System (IMS), an IT system enabling Member States to report, manage and analyse any irregularities in the use of EU funds.

KEY TERMS

Entity: an individual, company or organisation that has legal rights and obligations.

MAIN DOCUMENT

Regulation (EU) 2021/785 of the European Parliament and of the Council of 29 April 2021 establishing the Union Anti-Fraud Programme and repealing Regulation (EU) No 250/2014 (OJ L 172, 17.5.2021, pp. 110-122)