Protection of the EU's Financial Interests: Commission welcomes European Parliament’s call for increased cooperation by Member States

“I strongly welcome the constructive and focused approach taken by the European Parliament in its report on the protection of financial interests”, Vice-President Siim Kallas, Commissioner responsible for Administration, Audit and Anti-Fraud, said. “The Parliament shares the Commission's commitment to more transparency and an increased accountability in the administration of Community funds. A good flow of information between the Member States and the Commission is essential for effective joint action against fraudsters” he added.

The Musotto Report emphasises the necessity for the Member States and Commission to co-operate closely in the fight against fraud affecting the EU budget. As the Parliament points out, Member States bear an important part of the responsibility for the control of EU monies, as it is the Member States who collect revenue and spend about 80 % of the EU funds under shared management (Common Agricultural Policy, Structural Funds). Community law requires Member States to notify the Commission of cases of irregularities (including cases of suspected fraud) that are detrimental to its financial interests.

A correct, complete and timely communication of data on irregularities is essential for effective recovery and joint action to counter misspending. The report highlights that for some Member States there is still room for improvement. The Commission, with the welcome support of the European Parliament, does not shy away from reminding Member States of their responsibility. A high number of irregularities does not necessarily mean a high incidence of fraud, but can be a good indicator of effective and thorough controls.

The Commission fully supports the invitation expressed in the report for the Council to consider the reports on the protection of the financial interests at the level of ministers.

A whole chapter of the Report is dedicated to the issue of VAT fraud. The Commission welcomes ongoing support by Parliament in a matter where Member States show a certain reluctance to cooperate with the Commission and OLAF.

Background

According to article 280 of the EC Treaty, Member States shall take the same measures to counter fraud affecting the Community financial interests as they take to counter fraud affecting national budgets. The Commission reports annually about notifications of irregularities received from the Member States.

It is important to distinguish between irregularities and fraud: fraud is defined as an irregularity committed intentionally, which constitutes a criminal act that only a court may define as such. Only a very limited proportion of notified irregularities is suspected fraud..

For the 2007 and previous reports please visit the OLAF website: http://ec.europa.eu/anti_fraud/reports/index_en.ht...

See also press release IP/07/1034 of 9 July 2007.