Source: European Parliament
MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION
on the protection of the European Union’s financial interests – combating fraud – annual report 2023
(2024/2083(INI))
The European Parliament,
– having regard to Articles 310(6) and 325(5) of the Treaty on the Functioning of the European Union (TFEU),
– having regard to the Commission report of 25 July 2024 entitled ‘35th Annual Report on the protection of the European Union’s financial interests and the fight against fraud – 2023’ (COM(2024)0318) (2023 PIF Report),
– having regard to the European Anti-Fraud Office (OLAF) 2023 annual report[1] and the Activity report of the Supervisory Committee of OLAF – 2023[2],
– having regard to the European Public Prosecutor’s Office (EPPO) 2023 Annual Report published on 1 March 2024,
– having regard to Regulation (EU, Euratom) 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[3] (the Conditionality Regulation),
– having regard to Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law [4] (the Whistleblower Directive) and to the Commission report of 3 July 2024 on its implementation and application (COM(2024)0269),
– having regard to the Commission communication of 5 July 2023 entitled ‘2023 Rule of Law Report – The rule of law situation in the European Union’ (COM(2023)0800), and to the European Parliament resolution of 28 February2024 entitled ‘Report on the Commission’s 2023 Rule of Law report’[5],
– having regard to the Commission’s decision of 16 December 2024 not to lift the measure imposed in application of Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary,
– having regard to the judgments of the Court of Justice of the European Union (CJEU) of 16 February 2022 in Cases C-156/21[6] and C-157/21[7] and to Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary, all of which refer to the Conditionality Regulation,
– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union[8] (the Financial Regulation),
– having regard to Regulation (EU) 2024/1624[9], Regulation (EU) 2024/1620[10] and Directive (EU) 2024/1640[11], all of the European Parliament and of the Council, all adopted on 31 May 2024 and all concerning the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, including through the establishment of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism,
– having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law[12] (the PIF Directive),
– having regard to the Commission report of 16 September 2022 entitled ‘Second report on the implementation of Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law’ (COM(2022)0466),
– having regard to the Commission report of 3 July 2024 on the implementation and application of Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (COM(2024)0269),
– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy[13] (the Common Provisions Regulation),
– having regard to the Commission communication of 24 July 2024 entitled ‘2024 Rule of Law Report – The rule of law situation in the European Union’ (COM(2024)0800),
– having regard to the study entitled ‘Strengthening the fight against organised crime: Assessing the legislative framework’, published in December 2022[14],
– having regard to the study entitled ‘Strengthening the fight against corruption: assessing the legislative and policy framework’, published in January 2023[15],
– having regard to the study entitled ‘Compliance assessment of measures adopted by the Member States to adapt their systems to Council Regulation (EU) 2017/1939 of 12 October 2017 implementing enhanced cooperation on the establishment of the European Public Prosecutor’s Office (‘the EPPO’)’ and its extension, both published in December 2023[16],
– having regard to the joint communication from the Commission and the High Representative of the Union for Foreign Affairs and Security Policy of 3 May 2023 on the fight against corruption (JOIN(2023)0012) and to the Commission proposal of 3 May 2023 for a directive of the European Parliament and of the Council on combating corruption, replacing Council Framework Decision 2003/568/JHA and the Convention on the fight against corruption involving officials of the European Communities or officials of Member States of the European Union and amending Directive (EU) 2017/1371 of the European Parliament and of the Council (COM(2023)0234),
– having regard to the joint Europol-OLAF report of 6 June 2023 entitled ‘Assessing the Threats to the NextGenerationEU (NGEU) Fund’,
– having regard to the European Ombudsman’s closing note of 12 September 2023 on the Strategic Initiative concerning the transparency and accountability of the Recovery and Resilience Facility in relation to Case SI/6/2021/PVV, opened on 24 February 2022,
– having regard to the European Court of Auditors (ECA) report entitled ‘Our activities in 2023’, published on 9 October 2024,
– having regard to ECA Review 04/2023 of 6 July 2023 entitled ‘Digitalising the management of EU funds’,
– having regard to Special Eurobarometer 534 entitled ‘Citizens’ attitudes towards corruption in the EU in 2023’[17],
– having regard to ECA special report 06/2023 of 13 March 2023 entitled ‘Conflict of interest in EU cohesion and agricultural spending – Framework in place but gaps in transparency and detection measures’,
– having regard to 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[18],
– having regard to its resolution of 18 January 2024 on the protection of the European Union’s financial interests – combating fraud – annual report 2022[19],
– having regard to Rule 55 of its Rules of Procedure,
– having regard to the report of the Committee on Budgetary Control (A10-0049/2025),
A. whereas, in line with the obligation laid down in Article 325(5) TFEU, each year, the Commission submits to the European Parliament and to the Council a report drafted in cooperation with the Member States on the measures taken for the implementation of this article (known as PIF reports);
B. whereas PIF reports are based mainly on information provided by the Member States, including data on irregularities and fraud detected, via the Irregularity Management System (IMS), and on data extracted from the Commission’s accounting system (ABAC);
C. whereas effective measures to protect the EU’s financial interests at EU level have to be implemented on the basis of data-based knowledge of the specific situation in each Member State, particularly in cases involving complex criminal activity;
D. whereas the number of irregularities detected and reported demonstrates the results of Member States’ efforts to counter illegal activities in this area and is not to be interpreted, by itself, as an indication of the level of mismanagement or fraud in the Member States;
E. whereas the links between irregularities’ occurrence, their detection and the reporting level require a wider overall assessment;
F. whereas sound management of public resources and protecting the EU’s financial interests across all EU policies should be key to increasing citizens’ confidence by ensuring the proper and effective use of taxpayers’ money;
G. whereas protecting the EU budget involves multiple actors at various levels who can only achieve their mandate through a structured network of relationships and coordination within the anti-fraud architecture (AFA)[20];
H. whereas the diversity of legal and administrative systems in the Member States and their varying levels of digitalisation need to be adequately addressed with the creation of more unified, interoperable and comparable administrative and reporting systems in the EU in order to effectively prevent and counter fraud, corruption, irregularities and other infringements;
I. whereas solid cooperation between authorities conducting administrative investigations and those conducting criminal investigations at both EU and Member State levels should be encouraged;
J. whereas the Early Detection and Exclusion System (EDES) and ARACHNE are effective tools to protect the EU budget from risks of insolvency, negligence, fraud or irregularity committed by private actors, in the case of the EDES, and via a data-mining and risk-scoring approach, in the case of ARACHNE;
K. whereas criminal networks operating in the EU are fully embracing the entire range of cutting-edge information technology, including artificial intelligence (AI), to facilitate their criminal activities, posing an even more complex threat to the EU budget and a new challenge for law enforcement and requiring the AFA to fast-track its exploration of AI use in the fight against fraud;
L. whereas respect for the values on which the EU is founded and for fundamental rights, as well as compliance with the Charter of Fundamental Rights of the European Union, are prerequisites for accessing EU funding;
M. whereas the rule of law conditionality mechanism applies across the entire EU budget as a prerequisite for accessing all EU funds and allows measures to be taken in cases of breaches of the rule of law principles that affect or seriously risk affecting the sound financial management of the EU budget or the EU’s financial interests;
N. whereas Article 22 of Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility[21] (the RRF Regulation) contains provisions concerning the protection of the EU’s financial interests;
General remarks on PIF reporting and on major threats
1. Welcomes the 2023 PIF Report and its analyses on the relevant findings, and endorses its recommendations;
2. Shares the view that effective protection of the Union’s financial interests requires the acceleration of the digitalisation that facilitates knowledge sharing, data accessibility and data processing and that would enhance the governance of the overall AFA; maintains that both the EU and national authorities should intensify the use of digital tools with a view to facilitating cooperation;
3. Reiterates that a more measurable and results-oriented governance of the activities of the AFA’s many components is key both to effectively protecting the Union’s financial interests and to assessing the AFA’s efficiency;
4. Recalls that solid cooperation between the administrative and judicial authorities conducting investigations at both EU and Member State levels is essential; reiterates its concerns over the still suboptimal situation, in particular as regards the detection and reporting of suspected fraud and irregularities and their follow-up, in which there are marked differences between Member States; encourages the Member States, therefore, to take a proactive approach to protecting the Union’s financial interests and to enhance the exchange of information between their national authorities and with EU bodies and agencies, including in order to identify and address emerging risks and fraud trends in a timely manner; underlines the fact that the fight against fraud requires a holistic and comprehensive approach, covering all stages of the anti-fraud cycle and reflecting the multiple, interconnected and interdependent actors and processes in place for the protection of the financial interests of the Union;
5. Notes that the overall number of cases of fraud and irregularities reported by the competent EU and national authorities increased significantly, by 9 %, in 2023 (13 563) compared to 2022 (12 455); regrets the fact that this is an all-time high and is the continuation of a growing trend over the last five years; observes, further, that the overall financing concerned in relation to these cases in 2023 (EUR 1.90 billion) was markedly higher than in 2022 (EUR 1.77 billion), having increased by 7.3 %; acknowledges that the multiannual cycle of implementation of numerous programmes makes comparisons based on a five-year average more appropriate than year-to-year comparisons for identifying real-time situations and obtaining reliable analysis of trends and patterns; appreciates, accordingly, that the 2023 PIF Report refers to the results of the 2019-2023 period; observes that the rise in the number of irregularities and in funding that achieves no positive results highlights the need to correlate budgets with the performance indicators of the competent institutions;
6. Is concerned by the overall scenario depicted by the multiannual analysis in the 2023 PIF Report; emphasises that the current situation justifies the efforts made to ensure more effective deployment of adequate resources and their more efficient use, which requires better governance and cooperation; underlines that fraud, corruption and violations of democracy, justice and the rule of law are deeply interconnected and cannot be tackled in isolation; calls on the Commissioners on budget, fraud and public administration and on democracy, justice and the rule of law to work closely and immediately on launching initiatives to make the actions and the results of the AFA measurable and more tangible and to present them to Parliament, in line with the commitment made at the confirmation hearings; suggests that stronger synergies be created between the Commission’s Directorate-General for Budget and other Commission directorates-general working on the rule of law and the protection of other EU values, particularly the Directorate-General for Justice and Consumers, the Directorate-General for Employment, Social Affairs and Inclusion and the Directorate-General for Regional and Urban Policy, to ensure that all the departments work together, rather than in silos, to address these systemic challenges more effectively;
7. Reiterates the call for a holistic approach in PIF reports, which are also considered an AFA governance tool, in order to provide a comprehensive overview of the synergies between all the relevant actors, identify best practices and address shortcomings; is aware that, as emphasised in the 2023 PIF Report, the operational protection of the Union’s financial interests from fraud, irregularities and other illicit activities is entrusted to national authorities, OLAF and the EPPO, and welcomes the integration of OLAF and EPPO findings in the 2023 PIF Report; asks for a deeper analysis of the interaction between the AFA components, and for the introduction of measures to increase the efficiency of the competent institutions with a view to reducing fraud and irregularities; calls for the further improvement of this holistic approach to provide a clearer, more complete and more concrete picture of the overall state of play of the protection of the Union’s financial interests, encompassing the entirety of anti-fraud action at both national and EU levels;
8. Welcomes OLAF’s investigative performance, in particular the increased number of recommendations issued (309 compared to 275 in 2022) and the overall amount recommended for financial recovery (EUR 1 043.8 million compared to EUR 426.8 million in 2022) against a stable number of cases opened (190 in 2023 and 192 in 2022) and concluded (265 in 2023 and 256 in 2022); points out, in particular, that over the 2019-2023 period, more than 88 % of the irregularities identified as potentially fraudulent and related to expenditure disbursed under direct management were detected following OLAF investigations; regrets that the long duration of the investigations can have a negative impact regarding the consequential late launching of remedial measures; reiterates its request to receive comprehensive and adequately detailed figures on the amounts effectively recovered by the Commission on the grounds of the financial recommendations issued by OLAF; calls on the Commission also to integrate in the next PIF reports ad hoc sections on OLAF in order to develop a more granular analysis and reporting of its activities and of the financial recoveries carried out;
9. Welcomes the way in which the EPPO, operationally active since June 2021, has developed and increased its activities, which is well-reflected in the numbers of opened investigations (1 371 compared to 865 in 2022), of overall currently active investigations (1 927 compared to 1 117 in 2022) and of indictments (139 compared to 87 in 2022); appreciates the level of detail in EPPO reporting, which offers relevant information on many trends and on the situation in the participating Member States; calls for greater EPPO efficiency, with this being reflected in the amounts recovered and not just in the number of investigations;
10. Stresses the added value that EU bodies bring to the protection of the financial interests of the Union and the fight against fraud, especially when it comes to cross-border crime, as shown by the operational results of the EPPO and OLAF in 2023 too; reiterates its call for all relevant EU actors involved in the fight against fraud to be guaranteed adequate resources and, in this regard, reminds the Commission and the Council that every euro spent on investigation and anti-fraud action returns to the EU budget;
11. Is concerned that the substantial financial loss of value added tax (VAT) fraud reported by the EPPO is having a detrimental effect on the national budgets of the Member States while simultaneously threatening fair taxation and fair competition between businesses in the single market; underlines the fact that VAT is an important resource for the Union’s budget too; deems it appropriate to take into account the complexity of the underlying provisions on the system of own resources of the Union when quantifying the financial impact of the EPPO’s activities[22]; points out the concerning number of investigations into the recovery and resilience programmes (233) and the estimated financial loss (EUR 1.86 billion); calls, therefore, for adequate measures to be taken at both national and EU levels;
12. Calls on the Commission to develop and implement solutions allowing a follow-up to OLAF recommendations and EPPO prosecutions, their analysis and the measurability of the actual impact of their actions on the protection of the Union’s budget in terms of recovery of both mismanaged funds and of uncollected resources, with a view to providing additional justification for results-oriented policymaking; calls on the Commission to notify Parliament of the outcomes of EPPO prosecutions;
13. States that communication and transparency are essential to address fraud and corruption; emphasises the importance of engaging civil society, the media and investigative journalism to enhance awareness; underlines the central role played by the media and investigative journalism in the fight against fraud, corruption, conflicts of interest and other misuse of public funds; considers that it is essential to safeguard the media from political pressure and influence to protect its independence and its role as a watchdog of democracy and the sound management of public funds;
14. Underlines that transparency plays an important role in the management of public funds; encourages the Commission and the Member States to maximise transparency in the use of funds, including with regard to information about final beneficiaries;
15. Underlines the importance of the role played by public authorities in fostering a zero-tolerance culture with regard to fraud and states that communication and transparency are essential to address fraud and corruption; emphasises the importance of engaging civil society, the private sector, the media and investigative journalism to enhance awareness; encourages the Commission to provide support to these relevant actors in the form of training programmes, funding and any other measures required to ensure their independence from external influence and from unlawful state surveillance, intimidation and attempts to undermine their legitimacy, in line with EU fundamental rights and the rule of law; invites the Commission to launch an EU-wide public awareness campaign on the risks of fake news, misinformation and deepfake content in fraud cases affecting EU-funded projects;
16. Is concerned about the EPPO’s and Europol’s clear warning on the increasing presence of groups of organised criminals behind the most relevant cases of cross-border fraud; notes that the EPPO’s annual report indicates 209 investigated offences concerning PIF-focused criminal organisations in its active investigations up to the end of 2023; understands that organised crime affects Union resources substantially and that the scale of fraud affecting the financial interests of the Union, in particular on the revenue side of the budget, can only be explained by the heavy involvement of serious organised criminal groups; is aware that the current analysis and reporting tools do not allow its quantification in a way that is satisfactory for evaluating the effectiveness or the shortcomings of the measures and policies in place; calls on the Commission to swiftly launch all necessary actions to address the analysis and reporting issue;
17. Maintains that the fact that the relevant EU legislation has not been transposed efficiently into the national legislation of many Member States and the fact that the Member States’ national laws are not harmonised give organised criminal groups opportunities to conduct a number of illegal cross-border activities in areas affecting the Union’s financial interests; reiterates, therefore, its previous calls for the revision of Council Framework Decision 2008/841/JHA on the fight against organised crime[23] and for the introduction of a new common definition of organised crime, taking into account, in particular, the use of corruption, violence, threat or intimidation to obtain control of economic activities or procurement;
18. Points out the results of the 2023 Eurobarometer survey on ‘Citizens’ attitudes towards corruption in the EU in 2023’, showing that corruption is a serious concern for EU citizens and businesses in the EU; maintains that high-level corruption, including in EU institutions, not only affects the Union’s financial interests and the EU economy as a whole, but also undermines citizens’ trust in democratic institutions, both in the EU and in the Member States; underlines that organised criminal groups are increasingly using corruption to infiltrate public administrations and gain economic advantages;
19. Points out that, in relation to corruption cases, the EPPO reported 131 investigated offences up to the end of 2023 (there were 87 cases in 2022) and that, over the years 2019-2023, 65 cases were reported to the Commission via IMS[24] by 11 countries, and that the reported irregular amounts linked to such cases come to about EUR 50.5 million; calls on the Commission to request that the EPPO inform Parliament of how much of that EUR 50.5 million has been recovered;
20. Acknowledges that anti-corruption strategies are in place in the Member States; calls for an evaluation and a periodical revision of these strategies; emphasises the importance of taking into account and fully addressing country-specific recommendations relating to the fight against corruption;
21. Acknowledges the Commission’s efforts to prevent and address cases of conflict of interest in the management of the Union’s financial resources; observes that, in the 2019-2023 period, 419 cases were reported via the IMS related to conflict of interest (there were 375 in 2018-2022), involving in total about EUR 112 million; stresses that the ECA has indicated in its audit work[25] that the main source of information on conflict of interest is the IMS and that the quantity and quality of the data recorded in the IMS varies between Member States; underlines that where Member States consider a conflict of interest to be a minor component in a wider fraud case, they do not report such cases as relating to conflicts of interest; calls on the Commission to adopt initiatives necessary to ensure consistent and adequately detailed reporting in the IMS of the above situations; calls for the provisions on conflicts of interest to be applied in a way that ensures legal certainty, be based on a clear and proportionate assessment of the risks and allow practical application by the competent authorities;
Revenue
22. Observes that, in 2023, the overall number of fraudulent and non-fraudulent irregularities related to traditional own resources (TOR) (5 118 compared to 4 661 in 2022) was 10 % higher than the five-year average (2019-2023), but that the amount involved decreased by 12 % to EUR 478 million (compared to EUR 783 million bat the end of2022); regrets that while the data show improved recovery for non-fraudulent cases (82 %), the recovery rate for fraudulent cases remains unchanged at 25 %, which is still low and is distributed unevenly across the Member States;
23. Points out that, in 2023, the Commission considered that in only five of the new write-off reports submitted to it by the Member States had it been satisfactorily demonstrated that TOR had been lost for reasons not imputable to the Member States in question and that the latter were not financially responsible for the loss; notes, by contrast, that in 81 cases, amounting to almost EUR 69 million, the Commission considered that the Member States had not satisfactorily demonstrated that TOR had been lost for reasons not imputable to them and that they were therefore financially responsible for the loss; concludes, therefore, that there is actionable room for improvement in the collection of TOR by the Member States;
24 Underlines that it is essential for Member States to live up to their responsibility to collect TOR in order to ensure that the burden of financing EU expenditure is shared fairly among the Member States and maintain a level playing field for economic actors in the single market; calls on the Member States to step up their efforts to improve the effectiveness of their national administrations’ activity in the field of recovery, following the detection of irregularities and fraud relating to VAT, in order to increase the amount of TOR made available to the EU budget; acknowledges that the VAT compliance gap relates to more than just fraud and evasion, but also covers VAT lost as a result of insolvencies, bankruptcies, administrative errors and legal tax optimisation; believes, however, that VAT fraud, such as missing trader intra-Community fraud, contributes meaningfully to VAT non-compliance and reiterates its call for the issue to be addressed through digital means, the fraud-proofing of VAT rules and stronger cooperation between national tax authorities and the competent EU investigative bodies;
25. Acknowledges the current legal framework relating to cooperation with OLAF, the EPPO and Eurofisc; calls on the Commission to speed up the process of revising the current legal framework to provide a clear legal basis for direct cooperation between Eurofisc and the EPPO; encourages OLAF to maximise the possibilities offered by mutual administrative assistance practices to detect and identify customs fraud and related VAT fraud, as well as to report such cases to the EPPO without delay; stresses that, in 2023, the EPPO identified VAT fraud in about 20 % of its active cases (873 cases), making this the second most frequent type of crime after non-procurement expenditure fraud (1 586 cases); is concerned by the increasing participation of groups of organised criminals in VAT fraud operations and by the identified connections between this kind of fraud and other kinds of very serious crimes, such as money laundering;
26. Reiterates its call on the Commission to reconsider the threshold of EUR 10 million set in the PIF Directive, which has a major impact on the EPPO’s activities in VAT fraud cases; maintains that different interpretations of the methodologies for calculating this threshold make the situation unclear; emphasises that the current threshold limits deterrence and allows perpetrators to seek out the weakest jurisdiction to elude the EPPO’s intervention; believes that the revision of the PIF Directive should either remove the threshold or substantially lower it; calls on the Commission, in the meantime, to provide adequate guidance on the calculation method for cases prior to the amendment of the PIF Directive;
27. Stresses the importance of effective and efficient cooperation between OLAF and the EPPO in this specific revenue sector and maintains that adequate detection and data transmission by OLAF to the EPPO could increase the collection of VAT and customs revenue for the EU budget, and would help avoid any overlap between the activities of the two offices;
Expenditure
28. Is concerned by the high levels of fraud and irregularities detected, both in 2023 and in 2022, under the common agricultural policy, both in rural development and in support for agriculture; remarks that the data confirm patterns and risks identified in previous years; observes that, during the 2019-2023 period, fraudulent irregularities reported for rural development increased, mainly owing to a rising number of irregularities detected for the 2014-2020 programming period; notes that during the 2019-2023 period, the number of non-fraudulent rural development irregularities continuously increased in line with the implementation of the programmes;
29. Observes that in cohesion policy the number and financial amounts of non-fraudulent irregularities reported for the 2014-2020 programming period are much lower than those reported during the first 10 years of implementation of the 2007-2013 programming period; points out that the fraud detection rate[26] (0.53 %) for the 2014-2020 programming period is similar to the rate for the 2007-2013 programming period, while the irregularity detection rate (0.67 %) is much lower than the rate recorded for the 2007-2013 programming period (2.5 %); notes that individual irregularities involving large financial amounts have a substantial impact on the fraud detection rate; calls for further clarification of the correlation between the fraud detection rate and the occurrence of fraud;
30. Welcomes OLAF’s analytical report entitled ‘Fraud and irregularities by areas of the cohesion policy – comparing risks’, which refers to information from Member States for the 2014-2020 programming period up until December 2023 and identifies areas particularly exposed to fraud risk (such as investments for the environment, climate change and the transition to a low carbon economy, research, development and innovation); remarks that the largest financial amounts in fraud cases were in environmental protection and research, technology development and innovation;
31. Reiterates its concern over the lengthy administrative procedures for dealing with the fraudulent cases reported; points out that, on average, during the 2019-2023 period, under the common agricultural policy, nearly four years were required from the start of an irregularity to arrive at a suspicion of fraudulent activity, and nearly three more years to close the case after its being reported to the Commission; highlights that, for cohesion, on average and during the 2014-2020 period, it took about a year and a half to arrive at a suspicion that a fraudulent irregularity had been committed and more than two years to close the case after its being reported to the Commission; asks the Commission to intensify dialogue with, and provide advice to, the Member State authorities to reduce the length of administrative procedures;
32. Observes that, for direct management between 2019 and 2023, OLAF was mentioned as the source of detection of fraudulent irregularities for 88.4 % of recovery items, corresponding to 92.1 % of total recovery amounts; asks the Commission to provide clear information on the data and on the actions taken to enhance swift recovery, including data on overall recovery levels for fraudulent and non-fraudulent irregularities;
33. Emphasises that when, despite preventive measures, fraudulent or non-fraudulent irregularities are detected, recovery is the measure that protects the Union’s financial interests, allowing for the correct implementation of EU policies and for the refunding of disbursed expenditure that is non-compliant with the funding requirements; stresses the findings of ECA special report 7/2024[27] when referring to the 2014-2020 period, for which the reported irregular expenditure was EUR 14 billion, which is to be refunded via recovery; stresses the need to speed up the recovery process by establishing clear deadlines and imposing penalties for delays, so that funds are returned to the EU budget as quickly as possible; calls on the Commission to propose adequate measures to provide complete information on irregular expenditure and the associated corrective measures taken;
34. Stresses the importance of follow-up measures after the necessary corrective actions have been taken, with a view to learning from cases of fraud and improving procedures to prevent similar cases from occurring in the future; considers it important, in this regard, that the Member States thoroughly follow up on cases by analysing the enabling factors behind fraud and assessing the need to revise their management and control systems accordingly;
35. Understands that, following a lack of support in the Council for its initiatives in 2004 and 2014, the Commission is not willing to put forward another legislative proposal for mutual administrative assistance in the areas of EU spending that do not currently provide for this practice; encourages the Commission to take advantage of the revision of the OLAF Regulation[28], which already provides OLAF with an enhanced mandate for the coordination of Member States’ actions in order to further develop the current provisions with a view to filling this gap;
36. Notes that civil society organisations are an essential component of a vibrant democratic society, ensuring the broad coverage of diverse views in public debates; recognises that these organisations may receive Union funds to support their work in contributing to democratic dialogue and public engagement; emphasises that transparency in stakeholder meetings is fundamental to democratic integrity and should apply equally to all entities engaging with EU institutions; stresses that clear documentation and disclosure of such interactions strengthens public trust and democratic accountability; stresses that lobbying should be transparent, with full disclosure of all parties involved; takes notes of the allegations that the Commission subsidises NGOs to influence Members of the European Parliament; stresses that, if their existence is confirmed, such practices could distort policy discussions and contravene the principle of separation of powers and should therefore be ended; calls on the ECA to audit the programmes concerned and give its recommendations; expects the future ECA report to bring clarity on these issues; recalls that the ECA asked, in special report 05/2024[29], for more efforts to be made to improve checks on the ground; notes with concern the ECA’s observation that lobbyists can choose to which category they belong, regardless of their legal form, to avoid disclosing financial information; notes that the EU is one of the largest global funders of civil society organisations; underlines the need for the EU Transparency Register Secretariat to enhance its systematic checks of the self-declarations of entities declaring themselves to be ‘NGOs, platforms, networks and similar’; observes that such systematic checks could be based on a set of criteria, including non-profit status, objectives relating to public benefit, and independence, to strengthen the trust in all entities registered in the EU Transparency Register, and should be supported by robust requirements for accountability and transparency;
37. Considers that when assessing delivery models for EU expenditure, the susceptibility of the various options to fraud and other misuse should be taken into account; calls on the Commission to ensure that the lessons learnt from the design and implementation of the RRF, including the recommendations addressed to it by the ECA and Parliament, are taken into account in future EU funding instruments, notably the post-2027 multiannual financial framework (MFF); underlines that the shortcomings identified in the implementation of the RRF, including risks of fraud, double funding, and lack of transparency, must serve as a lesson for future EU financial frameworks; opposes any replication of the RRF model in its current form and stresses that any future performance-based funding must be accompanied by significantly stronger safeguards, transparency requirements and fraud prevention mechanisms to ensure the sound management of EU funds;
NextGenerationEU (NGEU) and the Recovery and Resilience Facility (RRF)
38. Appreciates the efforts made by the Commission in the revision of the 27 recovery and resilience plans (RRPs) to adjust to the energy market disruptions following Russia’s full-scale invasion of Ukraine; notes that the integration into the RRPs of REPowerEU is expected to contribute to reducing dependence on Russian fossil fuels and increasing European self-sufficiency;
39. Recalls, nevertheless, that delays can be observed in the implementation of the RRF and calls on the Commission to remain vigilant, in particular towards the end of the RRF life cycle, in order to ensure that Member States adequately protect the financial interests of the EU and that EU taxpayers’ money is spent appropriately;
40. Underlines the importance of robust management and control systems in preventing fraud as they have the effect of deterring criminals from attempting to defraud public authorities; expresses concerns about the ECA’s repeated observations pointing to persistent weaknesses in the implementation of Member State control systems, as this poses risks to the availability of complete and accurate data underlying payment requests, access to those requests for control purposes, and the effective functioning of Member State control systems to protect the EU’s financial interests; regrets that in several Member States, the control systems were not fully functional when the national RRPs started to be implemented, and underlines that such issues pose risks to the regularity of RRF payments and to the protection of the EU’s financial interests; calls on the Commission to ensure that the Member States remedy the inadequacies identified in their control frameworks without delay, including by implementing the recommendations addressed to it by the ECA;
41. Observes that the Commission’s control framework for the RRF relies primarily on the responsibility of the Member States to protect the EU’s financial interests; calls on the Commission to maintain a high level of attention to the fulfilment by the Member States of the specific audit and control milestones added to those RRPs which had lacked robustness and to continue efforts to close accountability gaps; takes notes of the actions launched by the Commission following the ECA’s recommendations on the identifiable weaknesses of some Member States’ control and reporting systems; urges the Commission to take decisive and swift action whenever necessary and to make full use of the provisions of the RRF Regulation if deficiencies persist in the control systems of Member States;
42. Notes with grave concern that ECA special report 14/2024 found that the climate impact of green spending under the RRF could have been overestimated by up to EUR 34.5 billion, with some projects having minimal impact on the energy transition or even causing environmental harm while also increasing the risk of fraud;
43. Calls for the establishment of clear, measurable criteria for green investments under the EU budget and the RRF to ensure that only projects with significant and proven environmental and economic benefits receive funding, thereby enhancing accountability and long-term sustainability while reducing the risk of fraud;
44. Observes that, for the RRF in 2023, the 2023 PIF Report indicates the number of cases of suspected fraud reported by the Commission (15) and the number of audits (13, compared with 16 carried out in 2022), but it does not include the concerningly high number of EPPO investigations (233 investigations referred to recovery and resilience programmes, with an estimated financial loss of EUR 1.86 billion); is concerned by a possible increase in the number of cases of fraud, corruption, double funding and conflicts of interest in the coming years and urges the Commission and the Member States to act swiftly in order to ensure the sound management and fair distribution of RRF funds;
45. Calls on the Commission to introduce mandatory fraud reporting via the IMS for all RRF-related cases, ensuring that irregularities and fraud affecting RRF funds are systematically recorded and monitored; notes with concern the lack of transparency in reporting fraud linked to RRF funds and insists that all Member States comply with standardised reporting obligations;
46. Asks OLAF to continue its risk analysis, which, in 2023, was made available to Member States along with an updated version of the ‘RRF risk framework’, and with the training and seminars for Member State authorities; endorses the use of the IMS for reporting RRF irregularities; reiterates its call on the Commission, on the specialised EU agencies and bodies, as well as on Member States, to actively cooperate and interact to ensure the protection of the EU’s financial interests when implementing the NGEU;
47. Observes that, as part of the Guidance on RRPs, the Commission has adopted[30] Annex IV on the framework for reduction and recoveries under the RRF; understands that the reduction of a payment is feasible when there are still payments to be effected; recalls that the RRF ends in 2026; points out that recovery is only to be launched whenever no further instalments remain; is concerned by the fact that this recovery procedure, borrowed from the model for implementing cohesion funds, has proved to be extremely ineffective and was abandoned in the current MFF; strongly regrets the fact that by the end of 2023 there were no recovery orders in ABAC concerning the RRF, and that there is still no obligation for Member States to report irregularities related to the RRF via the IMS;
48. Reiterates that transparency plays a vital role in exposing fraudulent schemes and discouraging fraudsters; reiterates its dissatisfaction with the interpretation endorsed by the Commission of the concept of ‘final recipient’ under the RRF; rejects the Commission’s incomplete and misleading interpretation[31]; remarks that, even according to the Commission guidelines[32], the ‘final recipient’ is the ‘last entity’ that receives funds for an RRF measure, and that any initial or intermediary recipient of funding, such as ministries or agencies operating merely as distributors of the funds, should not be considered to be the ‘last entity’; asks the Commission again to request that the Member States provide information on the ‘final recipient’ or ‘last entity’ and not to accept from Member States any information on ‘second-level recipients’ that is not in line with the agreement between the co-legislators; calls on the Commission to review its guidance by providing cases and examples that can clarify the provision and be a solid term of reference for the national authorities, in such a way as to endorse an adequate transparency level and a homogeneous interpretation across all the Member States; stresses that, should the Commission continue to refuse to ensure full transparency, Parliament must consider all available measures to enforce compliance;
49. Is concerned by the ECA’s opinion[33] on the increasing risk of EU funds being spent twice on the same measure and handed out twice for the same action; understands that corresponding measures in similar areas, such as transport and energy infrastructure, are financed from both the EU budget and the RRF, because the EU’s pandemic recovery fund finances actions similar to those covered by standard EU programmes; acknowledges that complementarity between the RRF and other EU instruments is allowed, but observes that this could result in delivering milestones that are fully financed by funds other than the RRF, because the RRF is not linked to the reimbursement of costs effectively incurred, but rather rewards the fulfilment of milestones and targets; emphasises that the several layers of governance, the fragmented IT landscape and the limited exchanges of data or use of data-mining tools such as ARACHNE, prevent the detection of double funding, and therefore the control mechanisms in place may be insufficient to properly mitigate this increased risk; maintains that the absence of direct access to the full list of RRF final recipients limits the Commission’s capacity to detect potential cases of double funding; believes that the precaution adopted by some Member States of avoiding combining the RRF with other EU instruments contributes to mitigating the risk of double funding; calls on the Commission to increase its controls in this regard;
50. Observes that Member States may include measures in their RRPs with no estimated costs or estimated costs of zero[34]; points out also that these ‘cost-free’ milestones are the main term of reference for assessing the correct use of RRF resources for their intended purposes; understands that the payments for these ‘cost-free’ or ‘zero-cost’ milestones are released following the milestones’ achievement, irrespective of the cost sustained, in line with the ‘financing not linked to cost’ approach under the RRF; observes, however, that such milestones make it impossible to verify the sound management of paid RRF resources, because such resources are disbursed in connection with a milestone for which they have not been deployed; calls on the Commission to reconsider its assumption that a ‘zero-cost’ measure cannot induce double funding, irrespective of whether other EU funds are used to implement it; strongly calls on the Commission to strengthen controls on ‘zero-cost’ measures and to give guidance to the Member States on how to address the financial design of the measures concerned in order to prevent such risk;
51. Reiterates its calls on the Commission to maintain adequate ex post audit procedures and to pay close attention to the risk of reversal after payment for the achievement of targets previously audited and assessed as satisfactorily fulfilled;
52. Follows up on the Ombudsman’s strategic initiative, launched in February 2022 and closed in September 2023, conducted on the transparency and accountability of the RRF, whose results it fully endorses; welcomes the ongoing dialogue between the Commission and the Ombudsman to address the suboptimal situations detected, in particular concerning the scoreboard and the proactive publication of documents related to the RRF;
Digitalisation and transparency to enhance the fight against fraud
53. Welcomes the political agreement reached on the proposed recast text of the Financial Regulation; believes that extending the scope of EDES to include shared management, and the adoption of a legal basis to use ARACHNE as a model for an EU-wide data-mining and risk-scoring tool, will strengthen the protection of the EU’s financial interests; recalls the calls made in previous reports to ensure that all Member States make use of data-mining tools, especially ARACHNE, to ensure timely and diligent reporting standards;
54. Shares the view that the IMS, the system through which Member States report to the Commission on irregularities and fraud affecting the EU budget, has potential for greater interoperability with other corporate tools of the Commission, such as ARACHNE and EDES, and with digital tools in Member States; asks to be informed, following the recast of the Financial Regulation, on the progress of the EDES-IMS interface and about the possible use of IMS data within the data-mining and risk-scoring tool (ARACHNE);
55. Reiterates its call for increased interoperability between data systems and for the harmonisation of reporting, monitoring and auditing in the Union; is aware of the crosscutting nature of interoperability and appreciates the adoption of the Interoperable Europe Act[35];
56. Underlines the findings of ECA Review 4/2023 of 6 July 2023 on digitalising the management of EU funds; recalls the positive effects of digitalisation on prevention and detection of fraud and irregularities, as well as on the management, control and auditing of EU funds, by allowing easier and quicker access to data and remote cross-checks, thereby limiting costs by reducing the need for controls and on-the-spot checks;
57. Recognises that taking advantage of a real-time and data-driven economy has significant benefits for the protection of the Union’s financial interests, while reducing the administrative burden on public authorities and businesses operating and trading across borders within the EU; calls for the EU and the Member States to improve the effectiveness of data sharing by creating a digital ecosystem allowing for the seamless, real-time and secure movement of standardised, structured and machine-readable data between businesses and public authorities, in particular national tax administrations, with a view to limiting possibilities for committing fraud and tax evasion;
58. Shares the view that digitalisation should be at the core of every anti-fraud strategy, and in particular that it should be integrated into national anti-fraud strategies to allow coordination between its constituent parts and for the threats posed by new technologies to be factored in;
59. Believes that digitalisation offers opportunities for tangible improvements to the governance of the anti-fraud network and that by facilitating communication and accessibility it helps to improve reporting, thereby allowing for a better understanding of the obstacles that persist and a more timely and comprehensive response by decision-makers and co-legislators; welcomes the fact that over half of the Member States have taken steps to identify and address skills gaps in digitalisation, in particular a lack of information and access to data on digitalisation; encourages the Member States and actors in the AFA to continue addressing skills gaps through measures involving, inter alia, knowledge sharing, training and the broadening of know-how and skills in the field of digitalisation;
60. Welcomes the efforts of many components of the AFA in assessing and further developing the options offered by AI and machine learning in identifying and detecting irregularities and pursuing efficiency gains in both analysis and classic administrative tasks; reiterates that human assessment must remain the pivotal characteristic of every process; adds that AI has the potential to be a game changer in the fight against fraud, allowing the rapid analysis of large data sets, as well as enhancing fraud detection and identification of fraud patterns; recalls that the successful use of AI relies on effective collaboration between all stakeholders and on the availability of high quality data, underpinned by the effective use of ARACHNE; urges the Commission to work towards developing AI in Europe so as to uphold data sovereignty and ensure robust data protection, aligning with the principles outlined in the AI Act[36] and the General Data Protection Regulation[37] (GDPR); calls on all anti-fraud actors to strengthen their cooperation to leverage the use of AI effectively and responsibly in the fight against fraud;
61. Recognises the growing risk of AI-generated content being used to manipulate procurement processes, financial transactions and evidence in fraud investigations; calls on the Commission to prioritise research and policy measures to combat fraudulent activities enabled by artificial intelligence, including deepfake technology and AI-driven disinformation campaigns that could compromise financial and anti-fraud mechanisms; calls on the Commission to propose stricter legal provisions and penalties for entities found to be using AI to commit or facilitate financial fraud, including AI-driven money laundering schemes, falsification of contracts, and digital identity theft in procurement processes;
62. Acknowledges the importance of the use of AI to make improvements in the quality and completeness of data exchanged with Member States; welcomes, in this regard, OLAF’s actions, including recommendations in the annual PIF reports, structured bilateral dialogues with Member States, the revision of the Commission Anti-Fraud Strategy action plan, and interinstitutional exchanges focusing on these matters;
63. Further calls for a dedicated EU-wide initiative to develop AI-driven fraud detection mechanisms within OLAF, the EPPO, and Europol, to increase efficiency in tracking and preventing financial crimes against the EU budget; recommends the establishment of an EU-wide task force composed of representatives from OLAF, the EPPO, Europol and national anti-fraud units, with a dedicated focus on digital fraud threats, including deepfake technology, AI-generated fake documents and synthetic identity fraud; underlines that this task force should develop and share best practices with the Member States;
64. Stresses the need for increased cross-border cooperation and data-sharing mechanisms between Member States to combat AI-enabled fraud, particularly in high-risk areas such as VAT, customs and financial aid distribution; encourages the creation of a joint EU intelligence hub to track fraudulent AI activity in real time; calls on the Commission and the Member States to integrate AI and data analytics into fraud detection systems, ensuring interoperability between national and EU-level databases while maintaining strong data protection safeguards;
65. Calls on the Commission and the Member States to implement strict transparency and audit measures in AI-based fraud detection tools to prevent bias, algorithmic manipulation and misuse in financial oversight systems; urges the development of AI ethics guidelines for anti-fraud institutions to ensure accountability;
66. Calls for a mandatory forensic verification process for all digital evidence submitted in financial fraud cases, ensuring the authenticity of documents and audio and video material used in investigations;
The internal layer of the EU’s AFA – 2023 key measures at EU level
67. Underlines the fact that the EU’s AFA is a composite institutional architecture designed to detect, prevent and combat fraud and other forms of misconduct affecting the EU’s financial interests, built on a multi-layered network of cooperation in which the first layer (OLAF, the EPPO, Europol, Eurojust, AMLA, the Commission, the ECA and the European Investment Bank (EIB)) is grounded on horizontal cooperation between the EU institutions, bodies, offices and agencies, while the other layers are based on vertical relationships between EU and national authorities, and between EU authorities and international organisations; points out that the AFA has evolved over the years through a series of separate decisions that have led to an innovative network of entities; underlines that their coordinated activities in recent years have generated valuable experience that should be considered in the future revision of the relevant regulations; stresses that with the creation of the EPPO, the first European prosecutorial authority was established, enabling prompt and direct criminal law investigations and prosecutions, and that the lessons learnt in the first years of its operational activity need to be adequately integrated in the legislative framework to be able to take full advantage of the available tools and resources; stresses the importance of clear mandates between the various EU institutions, bodies, offices and agencies in order to minimise the risk of overlaps and duplication and thereby ensure the efficiency of the functioning of the AFA;
68. Appreciates the integration in the 2023 PIF Report of the main administrative and judicial results achieved by OLAF and the EPPO, respectively, which follows the many calls from Parliament for more comprehensive reporting of the actions carried out by the components of the AFA; considers, however, that the differences in nature, scope and granularity between the two reports should be addressed and that the areas of cooperation should be indicated clearly; deems the differences in the figures provided by OLAF, the EPPO and the 2023 PIF Report to be justified in the current circumstances; highlights that reporting bodies in the Member States may report on criminal investigations only when the relevant judicial authorities grant the authorisation for them to do so, and this implies that while the EPPO and OLAF report data on active investigations, the reporting bodies are often unable to enter these details in the IMS database because of the need to protect confidentiality and ensure the proper conduct of investigations; understands that these cases result in a divergence in the data (‘delta’) that can only be eliminated when the investigations are completed and the relevant data are included in the reporting to the Commission so they can be included in a future PIF Report;
69. Welcomes the adoption by the Commission, in May 2023, of a package of anti-corruption measures which encompasses a proposal for a directive on combating corruption; believes that prevention and prosecution of corruption need to be stepped up and calls on the Commission to intensify the monitoring of the enforcement of measures in the Member States;
70. Welcomes the establishment of a network against corruption, which met for the first time on 20 September 2023, believes that the mapping of areas at a high-risk of corruption could contribute effectively to the further development of the EU anti-corruption strategy;
71. Underlines the importance of the rule of law as one of the fundamental values of the Union and stresses that the rule of law conditionality mechanism is crucial in order to ensure that Member States continue to respect rule of law principles; reiterates its deep concern regarding the situation concerning the rule of law in certain Member States, which is deeply worrying in its own right and can lead to serious losses for the Union budget; calls on the Commission to ensure the strict and fast implementation of all elements of the mechanism when Member States breach rule of law principles and when this affects, or risks affecting, EU financial interests; further insists on the need for coherence across various instruments when assessing the rule of law situation in Member States;
72. Notes that the fourth Commission Report 2023 on the rule of law, adopted in February 2024, provides a follow-up to the recommendations issued in the previous year’s Rule of Law Report; acknowledges that, in the fight against corruption, various Member States have updated or launched a revision of their national strategies and/or action plans, while others have reformed criminal law to strengthen the fight against corruption; observes that for many Member States the main obstacle to the fight against corruption is the limited resources of prosecution services; calls on the Commission to continue encouraging and supporting the efforts of Member States to reform and improve the efficacy of criminal proceedings and addressing the other challenges identified in the report; reminds the Commission of the effective tools at its disposal to safeguard the rule of law, such as infringement procedures, funding conditionality and the Article 7 TEU procedures, and expects it to make full use of them all; highlights, in this regard, that the new Financial Regulation introduces conditionality linked to the values enshrined in Article 2 TEU and calls on the Commission to start applying it, particularly in cases where infringement procedures have already been launched against a Member State for violations of the values enshrined in Article 2 TEU, as this constitutes a clear recognition of an ongoing breach that could also impact the sound financial management of the Union budget;
73. Takes note of the Commission’s decision not to lift the measure under Article 2(2) of Council Implementing Decision (EU) 2022/2506 of 15 December 2022 on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary[38]; expects the Commission and the Council to lift the adopted measures only where evidence is collected that the remedial measures adopted by the Hungarian Government have proven effective in practice and, in particular, that no regression has been detected on already adopted measures; condemns the threats, such as espionage, to which EU institution staff are exposed, such as OLAF staff during their investigative missions in Hungary; stresses that such actions gravely undermine the rule of law and the integrity of the EU institutions; calls for the swift establishment of robust protection measures to safeguard EU institution staff on missions; calls on the Hungarian authorities to take immediate and concrete steps to safeguard judicial independence, uphold media freedom and fully implement the recommendations of the Commission’s Rule of Law Report to restore democratic checks and balances; urges the Council to continue the Article 7 TEU procedure against the Hungarian Government;
74. Emphasises that respect for the rule of law, including the fight against corruption, is a key determinant of the single market environment that fosters investment, growth, jobs and innovation, and protects small and medium-sized enterprises (SMEs) and economic operators operating across borders; stresses that the Commission is accountable for rigorous verification, as a condition for disbursing funding, of the fulfilment of the rule of law-related milestones integrated in the various Member State RRPs; recalls that the Commissioner for democracy, justice and rule of law, working in close coordination with the recently appointed Commissioner on budget, anti-fraud and public administration, holds primary responsibility for the full application of the general regime of conditionality; calls on the Commission not to use ‘dialogue’ with Member States or the ‘pilot’ procedure as an open-ended means to avoid launching actual infringement procedures; calls, furthermore, on the Commission to prioritise horizontally infringements affecting the EU’s financial interests, in particular regarding the PIF Directive and the EPPO Regulation[39]; welcomes the statement in the Commission Political Guidelines on the importance of the rule of law for EU funds and the commitment by the Commissioner for budget, anti-fraud and public administration to introduce strong safeguards on the rule of law in the next MFF;
75. Considers that the protection of the common EU values enshrined in Article 2 TEU currently included in the Common Provisions Regulation needs to be further strengthened; calls on the Commission to explore how a mechanism equivalent to the horizontal enabling conditions could be developed as a general feature in all areas of the EU budget, with a view to linking a wider range of policies to all the values set out in Article 2 TEU; calls on the Commission to explore means of linking funding to rule of law conditions and the completion of necessary reforms in order to ensure a comprehensive approach, applied horizontally to all EU funds; calls on the Commission to pursue a comprehensive approach and to put forward proposals for further strengthening the Union’s rule of law toolbox as a priority, including strengthened rule of law conditionality for funds deployed in the current programming period;
76. Maintains that corruption is intrinsically linked to money laundering, and that money laundering is one of the most important enablers of illegal activities by organised criminals, as it allows them to transfer the proceeds of their crime into the legal economy; recognises that the heterogeneous national legal systems and fragmented application of the Union’s anti-money laundering framework have made it difficult to prevent, detect and counter money laundering; welcomes, in this regard, the adoption of the ambitious legislative package on anti-money laundering and countering the financing of terrorism, which will unify national rules and thus enhance the collective fight against money laundering across the Union; welcomes the establishment of the new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA); considers that the new agency will play a central role in the new anti-money laundering framework through its coordinating and supervisory responsibilities; recalls that money laundering and terrorist financing are intrinsically linked and calls for the EPPO, OLAF and the ECA to have a stronger role in countering these phenomena;
77. Shares the view that the protection of the EU’s financial interests has been strengthened by the recast Financial Regulation; points out that the scope of EDES has been extended to encompass shared and direct management and provide new grounds for exclusion; welcomes the introduction of a legal basis for a risk-scoring and data-mining tool to be used by all Member States and in all management modes; regrets that both these measures will enter into force only in 2028 and only from the next MFF, resulting in several more years without comprehensive transparency regarding the final recipients of EU funds and missing a crucial opportunity to use these data to strengthen safeguards against corruption and fraud;
78. Appreciates the adoption of an updated action plan[40] for the 2019 Commission Anti-Fraud Strategy; notes that it includes 44 actions distributed over seven themes covering, in particular, digitalisation, cooperation, the RRF, customs fraud, and awareness-raising in ethical and anti-fraud culture matters;
79. Points out that the EU’s anti-fraud programme (UAFP) is the only spending programme specifically dedicated to fighting fraud affecting the EU’s financial interests and that it provides relevant support to all Member States’ authorities as components of the external layer of the AFA, in order to strengthen the fight against fraud; observes that the UAFP has the flexibility needed to adapt to the constantly changing anti-fraud landscape and is aligned with the seven-year period (2021-2027) of the current MFF; notes that, so far, 55 % of the total implementation of the UAFP has contributed to the digital transition;
80. Calls on the Commission to build on the success of the UAFP and encourages the Commissioner on budget and anti-fraud to consider the UAFP as a model to be extended in the next MFF, in line with the task, indicated in the mission letter, of securing support for Member States’ efforts to protect the Union’s financial interests;
81. Welcomes the first UAFP association request received in 2023 from a non-EU country, namely Ukraine, with which an association agreement covering its participation in the programme has been negotiated and was adopted in March 2024;
82. Expresses concern that the Commission’s latest interim evaluation of Hercule III found aspects that may have hampered the programme’s effectiveness, notably that certain Member States’ administrations lacked the resources to enable them to cope with the programme’s administrative requirements;
83. Takes note of the reiterated calls from the EPPO to bolster the detection capacity of the relevant components of the AFA, and recalls that, in line with the Commission Anti-Fraud Strategy, emphasis is to be given to data analysis as a tool for detecting fraud; highlights, in this regard, the importance of harmonising definitions in order to obtain comparable data across the EU; encourages the Commission to strengthen the use of the IMS as a tool to support auditors’ risk analysis when preparing audit activities; invites OLAF to increase its training offer to Commission staff, including auditors and relevant actors in the financial flow circuit;
84. Is aware that the decentralised structure of the EPPO entails an interplay between national law and EU law and between national authorities and the EPPO; understands that the EPPO operates based on the directly applicable EU regulations but that it also requires adequate implementing measures to be adopted via national legislation transposing the PIF Directive and other relevant Union acts; calls on the Commission to ensure that national legislation is fully in line with the EPPO Regulation and the PIF Directive, launch infringement proceedings and propose the revision of these legal acts in order to make the EPPO more effective in the exercise of its mandate;
85. Notes the results of the Compliance assessment of measures adopted by the Member States to adapt their systems to the EPPO Regulation[41], which was presented in September 2023; regrets that many situations are still suboptimal and need to be addressed because they weaken the effectiveness of the protection of the Union’s financial interests by means of criminal investigations; refers, in particular, to the attribution of competence between national prosecution services and the EPPO; stresses also that the EPPO Regulation stipulates the reporting of possible EPPO cases directly and without undue delay; calls on the Commission to verify and monitor Member States’ full compliance with the EPPO Regulation and their prompt reporting of suspicions of fraud in areas within the EPPO’s competence directly to it;
86. Is concerned that in many Member States the designated national authority deciding on disagreements between the EPPO and national authorities on the competence for prosecuting a case is not a ‘court’ or a ‘tribunal’; calls on the Commission to verify and monitor whether Member States are fully complying with Article 25(6) and Article 42(2)(c) of the EPPO Regulation, which requires the possibility of an appeal to the Court of Justice of the European Union (CJEU) against a decision by a national authority on the attribution of competence;
87. Stresses that the current control by national authorities over the ‘necessary’ resources and equipment of the European Delegated Prosecutors (EDPs) and the need to refer to the national authorities’ provisions for ‘adequate arrangements’ on social security, pensions and insurance coverage could constrain the autonomy and independence of the EPPO’s actions; calls on the Commission to propose adequate solutions in the forthcoming revision of the EPPO Regulation;
88. Points out that the transposition of the PIF Directive differs between Member States, which, in some cases, affects the cross-border exercise of EPPO competences; calls on the Commission to ensure proper implementation of the PIF Directive and to propose its revision, based on the experience gathered;
89. Underlines that Article 25(3) of the EPPO Regulation, which elaborates on the exercise of the EPPO’s competence in the event of non-PIF offences inextricably linked to PIF offences, raises legal and practical questions and requires further streamlining in order to make effective use of the EPPO’s legal framework; calls on the Commission to propose suitable solutions in the forthcoming revision of the EPPO Regulation in order to reinforce the EPPO’s ability to investigate cross-border organised crime;
90. Reiterates[42] that the EPPO has an important role in safeguarding the rule of law and in combating corruption in the Union, and encourages the Commission to closely monitor Member States’ level of cooperation with the EPPO in the rule of law reports; welcomes the accession of Poland and Sweden to the EPPO; notes with approval Ireland’s recent announcement of its intention to participate; calls on the Government of Hungary, the sole remaining Member State that has not yet joined the EPPO, despite the absence of any legal or constitutional impediment, to join the EPPO without further delay; recalls that broad public support for Hungary’s accession has been demonstrated by the collection of 680 000 signatures in favour of joining the EPPO, underscoring a strong societal demand for enhanced legal safeguards against fraud and corruption affecting the Union’s financial interests;
91. Reiterates its call for the launch of an exchange of views on the possible clarification of the competence of the EPPO within its mandate, as defined in the Treaty, as regards protecting the financial interests of the Union;
92. Notes that in 2023, cooperation between the relevant actors increased, with the EPPO and Eurojust cooperating on 26 ongoing cases at the end of 2023; observes that also in 2023 the EPPO and Europol cooperated efficiently on various operational matters, and understands that this cooperation almost doubled in 2023, with Europol providing support on 47 cases upon the EPPO’s request; calls on the Commission to request that the EPPO and Eurojust specify the efficiency criteria on the basis of which they conduct their activities;
93. Welcomes the efforts by OLAF and the EPPO to strengthen their cooperation; understands that information is being exchanged between the two offices in order to avoid parallel investigations into the same matters, and that, in 2023, 22 complementary investigations were opened by OLAF and four supporting investigations were requested by the EPPO; is aware that the synergies resulting from the use of complementary investigations (ex Article 12(f) of the OLAF Regulation) and investigations in support (ex Article 12(e) of the OLAF Regulation) are suboptimal; calls on the Commission to address the legal and operational causes of this when reviewing its regulations;
94. Is concerned about the lack of analysis and accurate information on the recoveries to the benefit of the Union’s budget that should follow both OLAF and EPPO investigations; is aware that the impact of the AFA on the security of citizens and on the enforcement of the rule of law in the Union goes beyond the quantification of financial recoveries alone; stresses, however, that the results of the efforts made to create the AFA should tend towards measurability and be tangible at least as regards the budgetary aspects; emphasises that the impact of the activities implemented for the protection of the Union’s financial interests should be assessed and taken into consideration in the allocation of resources and definition of mandates;
95. Understands that the Commission has yet to provide data on the recoveries to the benefit of the Union budget following the EPPO activities reported to the Commission, as provided by Article 103(2) of the EPPO Regulation, and that this matter is included in the mission letter of the Commissioner for budget, anti-fraud and public administration; observes that the freezing of assets is essential to combat crime affecting the EU budget and that a certain amount of time is needed for freezing to be converted into actual confiscations and recoveries; highlights that the amount confiscated is not expected to return by default to the Union’s budget; notes that, in line with Article 38 of the EPPO Regulation, the potential revenue resulting from seizure and confiscation measures taken by EDPs in Member States should flow back into the EU budget and could be accounted for in the EU budget as non-assigned revenue; calls on the Commission to make the necessary arrangements with the relevant national authorities to allow these sums to enter the EU budget;
96. Points out that data on effective recoveries following OLAF financial recommendations are not published in the OLAF Annual Report or in any other official report from the Commission; regrets that only aggregated data are made available and they refer to 2 299 financial recommendations issued by OLAF between 2012 and 2023 for an overall amount of about EUR 9 billion; remarks that the analysis of the available figures suggests considerable room for improvement; observes that a large gap exists between the amounts recommended for recovery by OLAF, the amount established as recoverable by the Commission’s services and the amount eventually effectively recovered; is concerned by the low recovery rates for undue expenditure (for activities implemented under shared and indirect management modes the rate is 34 % and 11 %, respectively, and for recovery under direct management only 22 %); calls on the Commission to provide data with adequate granularity on recovery and to assess the reasons behind the recovery gap; stresses the need for OLAF and the Commission to agree upon, and apply consistently, common evaluation criteria that ensure greater convergence and clarity, thereby improving the efficiency and effectiveness of financial recovery assessment; emphasises that recovery following an OLAF recommendation and the EPPO’s investigations is an important measurement of the efficiency of the AFA and calls for more transparency in this regard;
The external layer of the EU’s AFA – key measures at national level in 2023
97. Understands that the overall level of implementation by the Member States of the Commission’s recommendations issued in the 2022 PIF Report is considered satisfactory; highlights, however, that significant differences between Member States persist; is concerned, in particular, by the cases of inadequate reporting of irregularities by some Member States via the IMS; recalls that reporting is mandatory under the current regulations and encourages OLAF to strengthen its oversight and monitoring actions with a view to achieving uniform reporting across the Union;
98. Calls on the Commission to monitor the comprehensiveness of the reporting in IMS by countries benefiting from pre-accession assistance and welcomes the initiatives of the Directorate-General for Neighbourhood and Enlargement Negotiations to enforce candidate countries’ obligations to report irregularities in the IMS on a regular basis;
99. Encourages the Member States to report in the IMS the irregularities related to the RRF, in line with the ECA recommendations; calls on the Commission to facilitate such use of the IMS by the Member States by providing support in the form of training, seminars and exchange of best practices;
100. Welcomes the participation of Sweden and Poland in the EPPO, decided on in 2024, as well as the objective of the new Irish Government to join the EPPO; insists that Member States that are not yet participating must do so without delay and calls on the Commission to incentivise participation in the EPPO through positive measures;
101. Reiterates that Member States’ ineffective, untimely or lack of cooperation with the EPPO and OLAF constitute grounds for action under the Conditionality Regulation; calls on the Commission to take into due consideration all information from the EPPO and OLAF on situations where Member States fail to comply with their obligations;
102. Maintains that National Anti-Fraud Strategies (NAFS) are the most effective tool for coordination between the various national, regional and sectoral authorities and the many local entities entrusted with the tasks into which the anti-fraud cycle is organised; notes that, in 2023, 21 out of 27 Member States reported having an anti-fraud strategy; observes that out of 21, only 10 Member States had a full national anti-fraud strategy[43] while 11 Member States had only sectoral rather than national anti-fraud strategies in place; recognises that the approach taken by Member States in their anti-fraud strategies today varies widely; regrets that six Member States do not have any anti-fraud strategy at all; strongly regrets this highly unsatisfactory situation, which compromises the integrity of EU spending and undermines citizens’ trust in EU institutions;
103. Maintains that Member States would benefit from a periodic evaluation of their anti-fraud frameworks; calls on the Commission to encourage Member States to run independent or peer reviews of their anti-fraud frameworks to enhance consistency and pursue high standards;
104. Encourages the Commission to propose enforceable initiatives to clarify the relationship and consider establishing a link between the adoption of NAFS by the Member States and the level of financial support they receive;
105. Asks the Commission to launch, in preparation for the revision of the OLAF Regulation, a monitoring exercise on the state of play of the Anti-Fraud Coordination Services (AFCOS) established in the Member States; encourages the Commission to plan for the update and redesign of their structure, role, responsibilities and mandate; regrets the suboptimal staffing level across the majority of the AFCOS in the Member States; underlines the need to ensure sufficient levels of expertise among staff in national anti-fraud coordinating structures; calls on the Commission to encourage and support Member States in addressing these issues as a matter of priority, including in the context of the European Semester cycle;
106. Underlines the role played by public authorities in fostering a zero-tolerance culture against fraud and stresses, in particular, the importance of fraud prevention to ensure that fraud, corruption, conflicts of interest and other misuse of funds do not occur in the first place; recalls that the correct transposition of the PIF Directive, adopted on 5 July 2017, is crucial for the protection of the Union budget, for the implementation of all the EU policies for which EU money is used, including in the context of RRF deployment, and for establishing the scope of investigations and prosecutions by the EPPO, whose competence is established by reference to the PIF Directive, as implemented by national law; expects national authorities, including governments, in all Member States unequivocally to condemn fraud, corruption, conflicts of interest and any other misuse of public funds, taking a proactive approach in protecting the financial interests of the Union through effective measures in areas including risk assessment, communication and information sharing, and training of staff; calls on the Commission to intervene in a timely manner through infringement procedures to ensure the consistent transposition of the PIF Directive and the effective liability of – and sanctions for – legal and natural persons;
107. Reiterates that whistleblowers play a key role in boosting fraud detection, investigation and prosecution; understands that, by the end of 2023, 24 Member States had adopted national legislation to transpose the Whistleblower Directive and declared their transposition complete; regrets, however, that in March 2023, after analysis of the national measures adopted, the Commission was obliged to refer six Member States to the CJEU for their failure to transpose the Directive and failure to notify transposition measures, asking the Court to impose financial sanctions; is concerned by the further infringement proceedings[44] ongoing against six other Member States; calls on the Commission to intensify the monitoring of national transposition measures and report to Parliament accordingly; stresses that Parliament itself must also urgently ensure the proper transposition of the Directive, as confirmed by the CJEU ruling of 11 September 2024, which found that Parliament’s current framework fails to provide balanced and effective protection against retaliation; calls for Parliament to immediately adopt robust rules in line with the Directive to safeguard its own whistleblowers;
108. Notes that the Investigative Division of the European Investment Bank (EIB IG/IN) had made 10 referrals to the EPPO and 17 to OLAF by the end of 2023; is aware that entities which have been found by EIB IG/IN to engage in prohibited practices may be excluded, in other words declared ineligible, for a stated period, from being awarded any contracts or entering into any relationship with the EIB; observes that, in 2023, these exclusion proceedings resulted in the exclusion of five economic operators for a minimum duration of three years, while five other companies reached settlement agreements applying conditionality to their eligibility;
External dimension of the protection of the EU’s financial interests
109. Welcomes the Commission’s reaction to its call to increase the monitoring of, and control over, the funds under the Global Europe, Neighbourhood, Development and International Cooperation Instrument for assistance to non-EU countries, as well as via the joint communication with the High Representative of the Union for Foreign Affairs and Security Policy[45]; appreciates the Commission’s continuous efforts to ensure that anti-corruption measures are mainstreamed into EU external action instruments; reiterates its recommendation to suspend budgetary support and de-commit funds to non-EU countries, including candidate countries, where the authorities clearly fail to take genuine action against widespread corruption, without compromising support for the civil population; emphasises that respect for and commitment to promoting EU values is an essential precondition for all partners aspiring to join the Union; reiterates that accession to the EU is a merit-based process whereby each applicant is assessed on its own merits and its fulfilment of the Copenhagen criteria; considers that when applying the revised enlargement methodology there should be a particular focus on fundamental reforms, and that fair and rigorous conditionality should be applied as well as reversibility where setbacks occur; considers that appropriate tools must be used to ensure that candidate countries show concrete and sustainable compliance with the rule of law, democratic principles and fundamental rights, both before and after joining the Union;
110. Observes that in the context of the Russian war of aggression against Ukraine, Ukraine will continue to require substantial support in the current and next MFF and, in the perspective of a fair and sustainable peace agreement, Ukraine will need support for post-war reconstruction, including for central government services and reforms;
111. Considers that the three pillars of the Ukraine Facility could be reshaped accordingly and that reconstruction should align with pre-accession requirements; emphasises the importance of close coordination and cooperation with the Ukraine coordination mechanism established by the G7; calls for the EU and all Member States to increase their support for Ukraine, while putting appropriate measures in place to protect the financial interests of the EU through the prevention, detection and correction of fraud, corruption, conflicts of interest and irregularities in the use of Union funds, including by performing more thorough checks, in order to ensure that EU funds sent to Ukraine and to its neighbouring countries are adequately monitored and controlled and end up benefiting those most in need;
112. Stresses that the unprecedented volume of financial support received by Ukraine from the EU in recent years, and deployed in the extremely adverse conditions imposed by the ongoing war, imply the adoption of appropriate measures to ensure that such resources are employed as intended, in particular where they are aimed at benefiting infrastructure and people in need;
113. Appreciates the work carried out by OLAF and the EPPO in protecting the financial interests of the Union by providing training to increase administrative capacity and autonomy, carrying out investigations in Ukraine and agreeing on the working arrangement with the National Anti-Corruption Bureau of Ukraine to facilitate cooperation in the investigation of corruption; invites the competent EU offices to continue their cooperation with and support for the Ukrainian authorities;
114. Acknowledges, in this regard, the progress made by Ukraine in advancing reforms related to judicial independence, accountability, anti-corruption and anti-money laundering, despite the difficult conditions caused by Russia’s ongoing war of aggression; encourages Ukraine to continue on the path of reform, including with regard to the influence of oligarchs in politics;
115. Welcomes the enhanced sanctions adopted by the EU against Russia so far, encompassing the banning of Russian nationals and entities from participating in public procurement contracts in the EU and restrictions on EU funding for Russian publicly owned or controlled entities; recognises, however, that despite the current measures, individuals and entities subject to the sanctions against Russia can still find ways to circumvent the sanctions and calls, therefore, for the EU and the Member States to maintain, reinforce and extend the scope and effectiveness of the sanctions policy against Russia and Belarus;
116. Recognises that the Member States and their relevant competent authorities are responsible for the effective implementation and enforcement of EU sanctions, as well as for identifying breaches and imposing appropriate penalties; underlines the role played by customs authorities and the importance of their close cooperation in strengthening the uniform enforcement of sanctions; welcomes, in this regard, the Baltic Customs Initiative;
117. Underlines that the EU is the biggest provider of external assistance to Palestinian refugees; stresses that the Union budget must continue to provide support to build peace and stability in the Middle East region, combat terrorism, hate, fundamentalism and disinformation, as well as promote human rights, fight impunity and strengthen adherence to the rule of law; emphasises, accordingly, that EU budgets must not support, under any circumstances, activities that go against these objectives; notes that, following the heinous terror attacks of 7 October 2023 by Hamas and allegations of misuse of EU funds for terrorism, a funding review has been conducted by the Commission, which, although concluding that no evidence has been found, to date, that money had been diverted for unintended purposes (including for support for incarcerated terrorists) and reporting that the safeguards in place worked well, still called for certain additional measures that were deemed necessary; recalls that all hostages taken by Hamas have to be released; emphasises the importance of ensuring that EU funds are effectively allocated and managed in order to achieve their intended goals, even via scrutiny by the EPPO, OLAF and the ECA where appropriate; recalls the ongoing issue of the destruction of EU-funded projects in Gaza and the West Bank and calls for greater accountability and safeguards in this context;
118. Stresses that suspension of budgetary support in non-EU countries, including candidate countries, is an appropriate measure in the event of failure to take genuine action against widespread corruption; expects priority to be given to the fight against corruption in pre-accession negotiations, with capacity building via the establishment of specialised anti-corruption bodies; asks the Commission to ensure, also in cases where funding is suspended, assistance for civil populations, where possible through alternative channels;
119. Underlines the importance of cooperation with international organisations in combating fraud; regrets the lack of cooperation by some international organisations in providing the ECA with complete, unlimited and timely access to the documents necessary to carry out its tasks; notes that the Commission has stepped up communication with international organisations and calls on it to further intensify efforts to ensure access to all requested documentation;
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120. Instructs its President to forward this resolution to the Council and the Commission.