EUROPEAN COURT OF AUDITORS - THE EFFECTIVENESS OF EU SUPPORT IN THE AREA OF FREEDOM, SECURITY AND JUSTICE FOR BELARUS, MOLDOVA AND UKRAINE

8/9/2019 EUROPEAN COURT OF AUDITORS - THE EFFECTIVENESS OF EU SUPPORT IN THE AREA OF FREEDOM, SECURITY AN

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2008

THE EFFECTIVENESS OF EU SUPPORT IN THE

AREA OF FREEDOM, SECURITY AND JUSTICE

FOR BELARUS, MOLDOVA AND UKRAINE

EUROPEAN COURTOF AUDITORS

S

pecialReportNo

9

EN


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THE EFFECTIVENESS OF EUSUPPORT IN THE AREAOF FREEDOM, SECURITYAND JUSTICE FOR BELARUS,MOLDOVA AND UKRAINE

Special Report No 9 2008

EUROPEAN COURT OF AUDITORS

(pursuant to Article 248(4), second subparagraph, EC)


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EUROPEAN COURT OF AUDITORS

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E-mail: [email protected]

Internet: http://www.eca.europa.eu

Special Report No 9 2008

More information on the European Union is available on the Internet (http://europa.eu).

Cataloguing data can be found at the end of this publication.

Luxembourg: Office for Official Publications of the European Communities, 2009

ISBN 978-92-9207-139-4

DOI 10.2865/43014

European Communities, 2009

Reproduction is authorised provided the source is acknowledged.

Printed in Belgium


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CONTENTS

Paragraph

ABBREVIATIONS

IV EXECUTIVE SUMMARY

17 INTRODUCTION

810 AUDIT SCOPE AND APPROACH

1162 OBSERVATIONS

1152 TO WHAT EXTENT HAS THE EU SUPPORT FOR FREEDOM, SECURITY AND JUSTICE PROJECTS IN BELARUS,MOLDOVA AND UKRAINE BEEN SUCCESSFUL?

1119 BORDER MANAGEMENT: SATISFACTORY ACHIEVEMENTS

2027 MIGRATION AND ASYLUM: POOR PROGRESS IN A DIFFICULT CONTEXT

2844 FIGHT AGAINST ORGANISED CRIME: MIXED RESULTS

4552 JUDICIARY AND GOOD GOVERNANCE: MIXED RESULTS

5357 WHAT ARE THE MAIN REASONS FOR UNDERPERFORMANCE?54 LIMITED ACHIEVEMENT TYPICALLY DUE TO A COMBINATION OF FACTORS INVOLVING ALL MAIN PARTIES

5556 SHORTCOMINGS IN COMMISSIONS MANAGEMENT OF PROJECTS

57 SHORTCOMINGS IN MANAGEMENT OF PROJECTS BY INTERNATIONAL ORGANISATIONS

5862 TO WHAT EXTENT HAS THE COMMISSION A LEARNING PROCESS IN PLACE TO TAKE INTO ACCOUNT LESSONSFOR THE CONTINUED ASSISTANCE IN THE AREA OF FREEDOM, SECURITY AND JUSTICE?

6061 NOT ALL POSSIBILITIES EXPLOITED TO COLLECT INFORMATION

62 EXPERIENCE GAINED NOT ALWAYS REFLECTED IN NEW PROJECTS

6373 CONCLUSIONS AND RECOMMENDATIONS

ANNEX I MAP

ANNEX II JHA PROJECT OVERVIEW COMMITTED UNDER PROGRAMMES 200005

ANNEX III OVERVIEW OF AUDITED CONTRACTS

ANNEX IV EUBAMS AREA OF OPERATION

REPLY OF THE COMMISSION


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ABBREVIATIONS

Aeneas : programme for f inancial and technica l ass istance to third countries in the areasof migrat ion and asylum

BUMAD : drug control multisectoral assistance and institution building in Ukraine, Moldovaand Belarus

DG : d irectorate-general

DG JLS : Directorate-General for Just ice , Freedom and Security

EN P : European neighbourhood policy

E U B A M : European Union border ass istance miss ion to Moldova and Ukraine

E u r o p e A i d: EuropeAid Cooperat ion Off ice

FI U : F inancial Intel l igence Unit

NGOs : non-governmental organisat ions

T A C I S : technical ass istance for the Commonwealth of Independent States


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EXECUTIVESUMMARY

I .Following the enlargements of 2004 and 2007,the EU became a direct neighbour of Belarus ,Mo ld o va an d U kra in e . Th e C o mmis s io n mad econsiderable EU funds avai lable to these coun-tr ies (166 mil l ion euro in the period 200005)to improve their capacity in the areas of : bor-d e r co n t ro l ; migrat io n /as y lu m man age me n t ;f igh t again s t o rgan is e d cr ime ; an d j u d ic iaryand good governance. The Commission l imitedassistance to Belarus due to a lack of respectf o r d e mo c rac y an d h u man r igh t s . Th e E U h asdeployed dif ferent instruments , the most s ig-n i f ican t b e in g t h e TA C I S p ro gramme an d t h egre at e r p art o f t h e as s is t an ce w as d e l ive re dthrough internat ional organisat ions (see para-graphs 1 to 7) .

I I .The purpose of the Court s audit was to deter-mine the success of the EU support , to estab-lish reasons for possible underperformance andt o s e e t o w h at e x t e n t t h e C o mmis s io n h ad aprocess in place to take into account lessonslearned for cont inued ass istance in this f ie ld .Th e au d it e x amin e d 40 co n t ract s w it h a t o t a lvalue of 100 mil l ion euro (see paragraphs 8 to10 an d A nnex I I I ) .

I I I .T h e g r e a t e r p a r t o f t h e a u d i t e d s u p p o r tach ie ve d s at is f act o ry re s u lt s , p art ic u lar ly inthe area of Border management. Progress waslargely unsat isfactory in the area of Migrat ionan d as y lu m . Mix e d re s u lt s w e re ach ie ve d inthe Fight against organised crime and Judi-ciary and good governance (see paragraphs 11

to 52).

IV .Th e l imit e d ach ie ve me n t s w e re t y p ica l ly d u eto a combinat ion of factors involving the Com-miss ion, the internat ional inst itut ions and thev a r i o u s a u t h o r i t i e s o f t h e t h r e e c o u n t r i e s .E x t e rn al f act o rs s u ch as t h e co n t in u e d p o l i t -ical instabil ity in Ukraine also diminished theproject results . Despite having very competents t af f , t h e De le gat io n in K ie v w as o ve r lo ad e d ,dealing with a rapidly growing policy area withprojects not only in Ukraine but also in Bela-rus and Moldova. The Delegat ion in Moldova,opened in October 2005, took nearly two yearsto start operat ional project management . Theco-existence of several f inancing instrumentsfor the same purpose and the lack of coherenceb e t w e e n t h e m h amp e re d a q u al i t y ap p ro ach .Th e re w e re a ls o ce rt a in s h o rt co min gs in t h e

joint management with the internat ional inst i-tut ions. In general the coordinat ion of the EUsupport with other donors was not developedenough. F inally the Commission has not ful lyexploited opt ions to learn lessons, and experi-ence gained was not always ref lected in newly-started projects (see paragraphs 53 to 62).

V.On the basis of these observat ions, the Courtmakes detai led recommendat ions which couldhelp the Commission to increase the effect ive-ness of the assistance given to Belarus, Moldovaan d U kra in e in t h e f ie ld o f f re e d o m, s e cu r i t yand just ice (see paragraphs 63 to 73).


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INTRODUCTION

1. One of the fundamental objectives of the European Union ( EU) is to offer itscit izens an area of freedom, security and just ice 1. This object ive has animportant external dimension. Following the enlargements of 2004 and2007, the EU became a direct neighbour of Belarus , Moldova and Ukraine,s h ar in g a co mmo n b o rd e r an d f ac in g co mmo n ch al le n ge s in t h e f igh tagainst organised crime, terrorism and other i l legal act ivit ies (see mapin A nnex I ) .

2.The EU has been making specif ic efforts to ass ist these three countries inimproving their capacity in the areas of border control , migrat ion/asylummanagement , the f ight against organised crime and judiciary and goodgovernance2. In the period 200005 the Commission f inanced 89 projectswith a total EU contribut ion of 165,7 mil l ion euro (see A nnex I I ) .

3. The primary channel for EU support has been the TACIS programme3. Projectshave been financed through its various arms: national action programmes,regional act ion programmes and cr oss-border co-operat ion programmes.Created in 1991, TACISs overal l object ive was to ass ist the t ransit ion toa free market economy and to re inforce democracy and the rule of lawin t h e p art n e r s t at e s . TA C I S w as p h as e d o u t in 2006 b u t p ay me n t s w i l lcont inue at least unt i l 2010. From 2007 onwards, ass istance to Belarus ,Mo ld o va an d U kra in e h as b e e n p ro gramme d u n d e r t h e n e w E u ro p e anneighbourhood and partnership instrument (ENPI) 4.

4. In addition to TACIS the EU has used other instruments to assist these threecountries in the area of freedom, security and just ice .

P re p arat o ry act io n f o r t h e c o o p e rat io n o n migrat io n ( f in an ce d b y(a)specif ic budget l ine).

Programme for f inancial and technical ass istance to third countries(b)

in the areas of migrat ion and asylum (Aeneas) 5.

Rapid react ion mechanism(c) 6.

European init iat ive for democracy and human rights(d) 7.

1 The old name used by the

Commission for this policy area was

Justice and Home Affairs (JHA).

2 Already in 2003, an EU action

plan on justice and home affairs

was published for Ukraine

(OJ C 77, 29.3.2003). This action plan

was revised in 2007.

3 Technical assistance programme

for the countries of the

Commonwealth of Independent

States. 12 countries have benefited

from TACIS: Belarus, Moldova,

Russian Federation and Ukraine

in Eastern Europe, Armenia,

Azerbaijan and Georgia in Caucasus,

Kazakhstan, Kyrgyz Republic,

Tajikistan, Turkmenistan and

Uzbekistan in Central Asia.

4 Regulation (EC) No 1638/2006

of the European Parliament and

of the Council of 24 October 2006

laying down general provisions

establishing a European

neighbourhood and partnership

instrument (OJ L 310, 9.11.2006,

p. 1).

5 Regulation (EC) No 491/2004 of

the European Parliament and of the

Council (OJ L 80, 18.3.2004, p. 1).

6 Council Regulation (EC)

No 381/2001 (OJ L 57, 27.2.2001,

p. 5).

7 Council Regulation (EC)

No 2242/2004 (OJ L 390, 31.12.2004,

p. 21).


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5. Following devolution8 in 2003, the Commissions Delegation in Kiev was giveno ve ral l re s p o n s ib i l i t y f o r imp le me n t at io n o f E U as s is t an ce in a l l t h re ecountries . A new Delegat ion was opened in Moldova in October 2005 andbecame responsible for project implementation in summer 2007. The non-TACIS projects are usually managed by the Commissions headquarters(EuropeAid and DG JLS).

6. The greater part of the assistance in the area of freedom, security and justiceis delivered through internat ional organisat ions: United Nat ions develop-ment programme (UNDP), United Nations High Commissioner for Refugees(UNHCR), Internat ional Organisat ion for Migrat ion ( IOM) or the Council of Europe (CoE). On the basis of standard contribut ion agreements s ignedwith the Commission, these internat ional organisat ions are in charge of ce rt a in as p e c t s o f p ro j e ct imp le me n t at io n , in c lu d in g p ro cu re me n t an dpayment procedures (so-cal led joint management mode).

7. The situation in Belarus was specific. A partnersh ip and cooperation agree-ment between Belarus and the EU was s igned in 1996 but its rat i f icat ionwas frozen due to a lack of respect for democracy and human rights . Thus,during the period covered by the audit , ass istance to Belarus was l imitedto humanitarian, cross-border and regional cooperat ion projects , supportfor the needs of the populat ion, and to projects support ing direct ly andindirect ly democrat isat ion and democrat ic forces (e .g. support to inde-pendent media; scholarships for youth). The freedom, security and just iceprojects in Belarus are most ly mult i-country projects incl uding Moldovaand Ukraine.

8 Giving management responsibility

to the Commissions in-country

Delegations.


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AUDIT SCOPE AND APPROACH

8. The objective of the audit was to assess the effectiv eness of EU support in thearea of freedom, security and just ice for Belarus , Moldova and Ukraine.The audit addressed three quest ions.

To what extent has the EU support for freedom, security and just ice(a)projects in Belarus , Moldova and Ukraine been successful?

What are the main reasons for possible underperforma nce?(b)

To what extent has the Commission a learning process in place to take(c )into account lessons for cont inued ass istance in the ar ea of freedom,security and just ice?

9. The Court audited 40 contracts, judgementally selected, with a total EU con-tr ibut ion of 99,3 mil l ion euro (out of the total of 89 projects 9 co ve r in g165,7 mil l ion euro in 200005), compris ing 24 completed and 16 on-goingcontracts ( Annex III ) . Most of these ongoing contracts fol lowed up earl ierEU-funded projects , al lowing an assessment of the Commissions learningprocess (main quest ion (c) above). The audit i nvolved an examinat ion of :t h e re s u lt s o f t h e p ro j e c t s an d co mp ar is o n w it h t h e s t at e d o b j e ct ive s ;f act o rs s t an d in g in t h e w ay o f t h e ach ie ve me n t o f t h e o b j e ct ive s ; an dle s s o n s le arn t an d w h e t h e r t h e y w e re t ake n in t o acco u n t in f o l l o w - u pprojects or programmes.

10. The 40 contracts examined fe l l within four sub-areas :

border management(a)

migrat ion and asylum(b)

f ight against organised crime(c)

judiciary and good g overnance.(d)

The audit team examined the projects on the spot during the period Novem-b e r 2006 t o J u ly 2007, in c lu d in g v is i t s t o imp le me n t in g in t e rn at io n alorganisat ions and nat ional bodies as well as to monitoring units10 .

9 A project is implemented through

one or more contracts .

10 The Commission contracts a

consortium to carry out regular

monitoring of the projects.


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OBSERVATIONS

TO WHAT EXTENT HAS THE EU SUPPORT FOR FREEDOM,SECURITY AND JUSTICE PROJECTS IN BELARUS,MOLDOVA AND UKRAINE BEEN SUCCESSFUL?

B O R D E R M A N A G E M E N T : S A T I S F A C T O R Y A C H I E V E M E N T S

11. Belarus and Ukraine are facing major problems in border management due tothe total length of their external borders (about 3 000 km and 7 000 kmre s p e c t ive ly ) an d t h e lack o f o f f ic ia l b o rd e r d e marcat io n , in p art icu larwith Russia. Hardly any border and customs controls are carr ied out atthe Russian-Belarusian border. This permeabil ity of borders encouragesboth cross-border cr iminal act ivity and i l legal migrat ion.

12. Border management between Moldova and Ukraine is complicated by thee x is t e n ce o f t h e s e l f - p ro c la ime d R e p u b l ic o f Tran s n is t r ia w h ich i s n o trecognised internat ionally . The Moldova-Ukraine state border is 1 222 kmlong of which 472 km on the Moldovan s ide is under control of the Tran-snistr ian authorit ies . Transnistr ian authorit ies control the region east of the Dniestr River and are act ing de facto independently from the rest of Moldova (see Box 1) .

BACKGROUND TO THE TRANSNISTRIA CONFLICTB O X 1

In parallel with Moldovas process o emancipation rom the Soviet Union, rom 1989 onwards, protestmovements in the regions with predominantly non-Moldovan populations began to resist Moldovasindependence efforts. As a response to Moldovas declaration o sovereignty, a separate ransnistrian

Moldovan Republic was proclaimed in 1990. Clashes took place and fighting culminated in 1992, caus-ing several hundreds o deaths and some 100 000 reugees.

Since 1995 Moldova and ransnistria, assisted by the OSCE, Russia and Ukraine as internationalmediators, have discussed a possible settlement o the rozen conflict. Te arrival in power o the admin-istration o President Yushchenko in Ukraine created a window o opportunity or urther progressin resolving the conflict. Since September 2005, the EU and the US have participated as observers inthe negotiation process. Te EU has been represented by a special representative or Moldova sinceMarch 2005.


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13. The Commission has substantiall y helped to improve the border managementcap aci t ie s o f Be laru s , Mo ld o va an d U kra in e . Bo rd e r man age me n t i s t h efinanciall y most significant area for freedom, security and justice projects.63,2 % of the EU support (104,7 mil l ion euro) under 20000 5 programmesh as b e e n a l lo cat e d t o t h is f ie ld . Th e C o u rt au d it e d 10 co n t ract s w it h atotal value of 51,8 mil l ion euro.

14. Most of the projects audited achieved sat isfactory results (see A nnex I I I ) .The use of modern equipment and improved technology as well as t rain-ing for border guards led to enhanced border controls and survei l lance(s e e e x amp le s in Bo x 2) . Th e S t at e Bo rd e r G u ard C o mmit t e e o f Be laru sin part icular showed great commitment , us ing their mil itary structure toimp le me n t s t r ic t ly a l l co n t ract s t ip u lat io n s . Maj o r p ro b le ms , h o w e ve r ,were noted in the works contract for the construct ion of the Koslovichi I IBorder Terminal 11 (see Box 3) .

EXAMPLE OF SATISFACTORY RESULT:USE OF MODERN EQUIPMENT STRENGTHENS BORDER CONTROL

B O X 2

Te projects Border management improvement Ukraine (EU contribution o 4,0 million euro) andStrengthening border management in the republic o Belarus (EU contribution o 13,3 million euro)delivered among other things cameras, microscopes, document verification devices, vehicles, I equip-

ment including automated telephone exchanges or border units and hardware or checking online,e.g., blacklisted persons and stolen vehicles. All investment items checked were in place according tothe inventory log-book, properly labelled, operational and used or the intended purpose.

11 The Kozlovichi international

border terminal (located near

Brest in the Republic of Belarus) is

the main road crossing for freight

vehicles between the Republic of

Belarus and Poland (Pan-European

Transport Corridor II).


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EXAMPLE OF UNSATISFACTORY RESULT: REDUCED SCOPE OF WORK AND DELAYSB O X 3

At the end o 2006, the original completion date, the Koslovichi II Border erminal (EU contribu-tion o 14,0 million euro) still resembled a huge construction site where most o the buildings wereonly hal-finished and roads, parking areas and pavement still needed to be built. ax exemption

problems, together with an under pricing at tender stage, led to an addendum to the contract whichgreatly reduced the scope o works (e.g. some buildings will be lef incomplete, to be finished only asshells). Substantial extra unding is needed to complete the international border terminal as originallyplanned and contracted.

15. The financially most significant project in the area of freedom, security and just ice , the European Union border ass istance miss ion to Moldova andUkraine 12 (EUBAM, total EU contribut ion of 19,1 mil l ion euro) contributedgreat ly to building capacity in the Moldovan and Ukrainian border guardand custom services (see map in A nnex I V) . For example EUBAM aidedthe effect ive implementat ion and monitoring of a new customs regimeb e t w e e n Mo ld o va an d U kra in e , t h u s h e lp in g t o co mb at s mu ggl in g an dil legal cross-border act ivity . As a result s ignif icant smuggling involvingTransnistr ia was detected. The i l legal evasion of taxes and customs dut iesconcerned e .g. vehicles , f ruit and vegetables and poultry meat . For poul-t ry meat alone, EUBAM calculated losses of up to 43 mil l ion euro for theUkrainian state budget or up to 18 mil l ion euro for the Moldovan statebudget (period October 2005 to May 2006).

12 EUBAM is in place since

1 December 2005. EUBAM

operations are based on a

memorandum of understanding

concluded between the European

Commission and the governments

of Ukraine and the Republic of

Moldova. A motivating factor was

security threats originating from the

Transnistria region with its assumed

high level of cross-border criminal

activities. EUBAM is implemented

by the United Nations development

programme (UNDP). 16 EU Member

States contribute in kind through

the secondment of professional

personnel to the mission (about

100 customs and border guards

officials). EUBAM established its

operational headquarters in Odessa

(Ukraine) and has created one

field office in Chisinau (Moldova)

and a further five field offices

alongside the Ukrainian/Moldovan/

Transnistrian border as well as a

field office/logistics base in Odessa

and Illichevsk seaports.


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16. EUBAM detected major difficulties in securing criminal prosecutions for smug-gl in g 13 ( in s u f f ic ie n t le gis lat io n ; in e f f ic ie n t in t e ract io n /u n cle ar ro le s o f t h e s t at e cu s t o ms s e rv ice , s t at e b o rd e r gu ard s e rv ice , t ax p o l ice an dsecurity service ; poor demarcat ion of green border) . Most cases were notprosecuted as cr iminal , but only as administrat ive i nfr ingements withoutobligatory confiscat ion of the goods involved 14 . EUBAM reported also thatdue to the level of corrupt ion in the prosecutors off ices and judiciary ,smugglers have been re leased and the smuggled goods returned to thesmugglers .

17. When EUBAM started in November 2005 it was financed for its first six monthsby the rapid reaction mechanism15 . The mechanism was applied to respondin a rap id an d f le x ib le man n e r t o t h e o p p o rt u n it y w h ich aro s e in 2005f o r ad van c in g t h e re s o lu t io n o f t h e Tran s n is t r ian co n f l ic t (s e e Bo x 1) .The project s assumption is that improved border and customs controlsand border survei l lance along the whole border are crucial e lements to apeaceful resolution. Whether this assumption is valid can only be assessedin the very long run.

18. Subsequently the financing of EUBAM was characterised by the use of severalshort term contracts f inanced from different TACIS regional act ion pro-grammes. As a consequence, staff contracts or rental ag reements had tobe renewed every few months. The Commissi on had not foreseen such amajor long-term project (nearly 1 mil l ion euro per month) when program-ming its act ivit ies in the region.

19. To complement the support delivered by EUBAM, the EU is f inancing thepurchase of border equipment under the project Improvement of bordercontrols at the Moldova-Ukraine border (Bommoluk project ; EU contribu-t ion of 9,9 mil l ion euro). This addit ional act ivity raises a number of chal-lenges to be addressed in the future , such as complex tender processes 16 ,

choosing the best physical location for the equipment given the length ofthe borders and ensuring complementarity with the equipment funded byother donors 17 . Also the Governments have to provide suff ic ient nat ionalfunds for running costs and maintenance.

13 Based e.g. on a case of high-value

alcohol products smuggled from the

Transnistrian region to Ukraine.

14 Burden of proof the difficulty of

securing criminal prosecutions for

smuggling cases in Ukraine, special

report by EUBAM.

15 This mechanism may be

triggered in situations when in the

beneficiary countries concerned

there occur situations of crisis or

emerging crises, situations posing a

threat to law and order, the security

and safety of individuals, situations

threatening to escalate into armed

conflict or to destabilise the

country.

16 In an earlier project for Ukraine

field radar equipment and a radio

communication network (total

value of 5,0 million euro) could not

be procured and delivered due to

unsuccessful tendering procedures.

17 The US Government has allocated

28 million dollars to improve the

fight against the proliferation of

weapons of mass destruction at the

Ukrainian-Moldovan state border.


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M I G R A T I O N A N D A S Y L U M : P O O R P R O G R E S S I N A D I F F I C U L T C O N T E X T

20. EU policy aims to assist third countries in their efforts to improve their capac-ity for migration management and refugee protection, prevent and combati l le gal immigrat io n , p ro vid e in f o rmat io n o n le gal ch an n e ls f o r migra-t ion and resolve refugee s ituat ions by providing better access to durablesolut ions.

21. Belarus , Moldova and Ukraine are s ituated on the eastern border of theenlarged EU. Al l three are seen as t ransit countries for large-scale i l legalmigrat ion westwards. Ukraine in part icular faces an increase in migratorymovements of persons (both legal and i l legal) entering and crossing itst e rr i t o ry . Th o u s an d s o f i l le gal migran t s t rave rs e t h e co u n t ry an n u al ly ,largely via the border with Russia.

22. Ukraine is chronically short of accommodation, particul arly for longer-termi l le gal migran t s . R e p at r iat io n re q u ire s id e n t i f icat io n o f t h e p e rs o n s b ythe Ukrainian authorit ies and cooperat ion from the re levant embassiesor consulates which are not always helpful . Another solut ion would bereadmission, i .e . acceptance of the detained persons by the country fromwhich they i l legally entered Ukraine. However, a readmission agreementh as n o t b e e n s ign e d b e t w e e n U kra in e an d R u s s ia , t h e p r ime s o u rce o f Ukraines i l legal migrants .

23. The need for adequate accommodation for i l legal migrants has recent lyb e co me mo re p re s s in g, w it h t h e e n t ry in t o f o rce o n 1 J an u ary 2008 o f a readmission agreement with the European Community . In 2010, aftera t ransit ional period of two years , Ukraine wil l face the requirement tohouse hundreds or even thousands of i l legal migrants from third coun-

tr ies , current ly being held in the neighbouring EU countries of Hungary ,Slovakia and Poland, who reached the EU i l l ic it ly via Ukraine.


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24. The projects in the sub-area of migration and asylum received a total EU-con-t r ib u t io n o f 16 ,8 mi l l io n e u ro (10 ,2 % o f t o t a l s u p p o rt ) f ro m 200005programmes. The Court audited 10 contracts with a total EU contribut ionof 13,8 mil l ion euro.

25. The project results achieved in this area of migration and asylum were unsat-is factory mainly in respect of infrastructure (see A nnex I I I ) . A key goal of the EU is to help provide accommodation centres meet ing internat ionalhumanitarian standards for i l legal migrants as well as for asylum seek-ers . In Ukraine, despite the EU support , this object ive is far f rom beingachieved:

the detent ion and accommodation condit ions for(a) i l legal migrants ine x is t in g ce n t re s w e re o f t e n ve ry f ar f ro m acce p t ab le in ge n e rali l legal migrants in Ukraine suffer severely from over-crowded l ivingcondit ions, insuff ic ient sanitat ion and poor diet (see Box 4) ;

the construct ion/refurbishment of (b) new faci l i t ies for i l legal migrantsdid not advance as planned (see Box 5) ;

newly constructed temporary accommodation centres for(c) asylum seek-ers were under ut i l ised or not used at al l (see Box 6) .

DESPITE ALLEVIATION BY EU SUPPORT, LIVING CONDITIONS FOR ILLEGAL MIGRANTSIN EXISTING ACCOMMODATION CENTRE STILL UNACCEPTABLE

B O X 4

Te project Establishment o migration management system in Zakarpattya, Ukraine18 (EU contribu-tion o 2 million euro or two contracts) essentially delivered basic help to the migrants: distribution oood and hygiene packages, medical assistance, distribution o clothes, provision o bedding and legal

advice. Moreover urgent repair, construction works and all kinds o running costs were also financed.Te project is above all an action o humanitarian aid and not o capacity building as its title mightsuggest.

Afer nearly a year o operation, the Delegation monitored the project on the spot (April 2005). Itreported that the conditions o the detention centres in Pavchino and Chop (the old part o the build-ing) were inhuman and degrading, not meeting the minimum standards set by the Council o Europe,the European Court o Human Rights and the Committee or the Prevention o orture and Inhu-man reatment. Furthermore the Delegation ound evidence that the humanitarian aid delivered bythe project did not always reach the targeted migrants. Tis led to corrective action by the Ukrainianauthorities.

18 The Zakarpattya region borders with Hungary, Poland, Romania and Slovakia and is a transit corridor in Ukraine for migrants

on their way to Western Europe.


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B O X 4

At the time o the audit in November 2006 the capacity (320) in Pavchino was exceeded by about100 people. Te local project partners reported that in summer time overcrowding had been ar worseand reached 700 people with corresponding negative consequences or hygiene and health.

Te migrants interviewed by the Court hesitated to speak openly. Complaints were still expressed,concerning medicine not passed on and the practice o searches by masked persons. It also becameclear that the project still did not cover basic needs (e.g. suffi cient heating, suffi cient clean and hot watersupply, adequate clothing including shoes). Furthermore, there was insuffi cient interpretation availablein the camps, making communication diffi cult between the migrants and the authorities.

26. The sustainability of detention and accommodati on centres is jeopardisedin Ukraine by the lack of state funds for running and maintenance costsand because there is an unclear divis ion of r esponsibi l i t ies between theState Border Guard Service and the Ministry of Interior .

27. Difficulties with regard to project registration, tax exemption, land ownershipand funding were also found in the construct ion of a temporary accom-modation centre for asylum seekers (25 people) in Belarus 19 . On the otherhand, in Moldova the s ituat ion was better . A temporary accommodationcentre in Chis inau was already ful ly operat ional in November 2005, offer-ing 160 places .

19 The centre is located in Gomel,

close to Ukraine where there is

a thriving community of Afghan

refugees.


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POOR PROGRESS IN ESTABLISHING NEW ACCOMMODATION CENTRES FOR ILLEGAL MIGRANTSB O X 5

Te core o the project Capacity building o migration management-CBMM I, Ukraine (EU-con-tribution o 3,8 million euro) was to reurbish and equip two ormer military sites as migrant accom-modation centres or 1 260 persons. Te project steering committee decided in June 2006 to devote

project money only to reurbishing one o the sites. By the time o the audit (November 2006) no workscontracts were concluded and no money had been spent or reurbishment, some three months afer theprojects original finishing date (1.9.2006). Discussions were still ongoing about undamental aspects othe reurbishment, e.g. how the site would be heated and what solution would be ound or waste water.Te steering committee also decided to limit the numbers to be housed to 250. Tis means that the EUunded capacity would be reduced by around 1 000 places in comparison to the original planning.

F I G H T A G A I N S T O R G A N I S E D C R I M E : M I X E D R E S U L T S

28. The general post-communist t ransit ion process in the countries of centraland eastern Europe was accompanied by a considerable r ise in organisedcr ime s u ch as t raf f ick in g in h u man b e in gs , d ru g t raf f ick in g an d mo n e ylaundering.

29.Ukraine and Moldova are major source countries for the trafficking of womenand children for the purpose of forced prosti tution in Europe. Recent yearshave seen also a growth in the t raff icking of men, who are compelled, forinstance, to work as labourers . The ful l scale of the pract ice remains re la-t ively unknown, due to the very nature of organised crime, and becausefew people are willing or able to report what has happened to them to theauthorit ies . This is aggravated by a lack of witness protect ion measures .C o n c e rn in g d ru g t raf f ick in g, Be laru s , U kra in e an d Mo ld o va are s e e n astransit routes towards EU Member States . The banking systems have beenincreasingly used to launder the proceeds of serious cr ime.

30. The f ight against organised crime accounted for 19,2 mil l ion euro (11,6 %)of the total funds al located for the area of freedom, security and just icefrom programmes for the period 200005. The Court audited 10 contractswith a total EU contribut ion of 18,6 mil l ion euro.


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UNDERUTILISATION OF NEWLY CONSTRUCTED CENTRES FOR ASYLUM SEEKERSB O X 6

In Ukraine, at the end o 2006, only some 65 additional persons could be housed in temporary accom-modation centres (ACs) instead o the planned 350 (EU contribution o 1,6 million euro or Strength-ening the asylum systems o Ukraine and Moldova). Te main reason was that the centre in Odessa

was only hal-used because o a lack o state-unded running costs, and that the 80-person centrein Mukachevo remained completely unoccupied or more than one year and a hal, in act since itsopening in April 2005. Tis wasteul situation in Mukachevo resulted rom the persistent ailure totranser ownership o the building rom the border guards to the responsible project partner institu-tion. Meanwhile, those asylum seekers lacking private means were living in tents and other short-termacilities run by the border guards.

31. In spite of several successes, overall progress is still insuffi cient in the fightagainst organised crime (see Annex III ). The projects to combat traffickingin human beings had weak criminalisat ion and prosecut ion components 20(see paragraphs 34 and 35). Overlapping is a major feature , s ince manydonors are keen to fund projects in this area (see paragraph 36). Concern-ing drug control, projects progr essed slowly in the areas of legislation andof police intel l igence (see paragraph 40). As regards prevent ing moneylaundering and terrorist f inancing, a major challenge is to achieve suc-cessful prosecut ion (see paragraph 44).

Combating trafficking in human beings

32. The Governments of Ukraine and Moldova expressed their commitment toco mb at in g t raf f ic k in g in h u man b e in gs in n at io n al p o l icy p ap e rs . O n eproject was audited in Ukraine (EU contribut ion of 1,9 mil l ion euro) andthree projects ( including a rehabil itat ion centre for vict ims of t raff icking)in Moldova (total EU-contribut ion of 1,2 mil l ion euro).

20 The anti-trafficking projects

had three standard components:

protection and reintegration;

criminalisation and prosecution;

and raising awareness. The term

criminalisation is commonly used in

the project documentation.


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33. With the help of the projects, large-scale public awareness campaigns werecarried out in Moldova and Ukraine (e .g. theatre performances, numer-o u s p u b l icat io n s , t o l l - f re e h o t l in e s ) , an d h u man it ar ian as s is t an ce w asdelivered to hundreds of vict ims of t raff icking (e .g. legal support , medicalass istance, housing al lowance, t ransport ass istance, vocat ional t raining, in-kind grants for smal l business start -up). Thus the aspects of preven-t ion and re integrat ion were well covered by the projects .

34.Results were less posit ive regarding the criminalisat ion and prosecut ionco mp o n e n ts , in p art ic u lar as re gard s in f o rmat io n s h ar in g b e t w e e n lawenforcement agencies. In Ukrai ne, the TACIS monitors noted that the StateBorder Guard Service was not cooperat ing in information exchanging ini-t iat ives . The measure to equip border checkpoints with the i24/7 system 21f a i le d w h e n t h e t e n d e r in g p ro ce s s w as can ce l le d d u e t o t h e U kra in ianstakeholders ins ist ing on a supplier whose prices were far higher thanthe market rate .

35. Gett ing evidence is a major challenge, s ince the criminal act often occurso u t s id e Mo ld o va o r U kra in e . N at io n al au t h o r i t ie s b lame d t h e s lo w n e s sof other countries to respond to requests for mutual ass istance. To helpcircumvent such procedural blockages, the projects paid for networkingvis its for law enforcement off icers to countries of t ransit and dest inat ionof victims. In addition, police officers took part in workshops on investiga-t ive techniques and ant i-t raff icking legis lat ion was reviewed. Weaknessespers ist in mutual ass istance arrangements .

36. There are concerns relating to efficiency and economy. As many donor organi-s at io n s are re ad y t o f u n d t h e f igh t again s t t raf f ick in g in p e rs o n s , i t i sa ch al le n ge t o avo id u n n e ce s s ary d u p l icat io n o f act io n s an d t o e n s u recost effect ive use of resources . In Moldova, for instance, certain projectact ivit ies had to be changed, and an unusually high rent was pai d for the

Rehabil itat ion Centre s premises in Chis inau 22 . In addit ion, i t is not alwayspossible to dist inguish clearly the r esults of the EU support from that of other organisat ions, making i t dif f icult to assess the effect iveness of theEU spending.

21 Interpol global police

communications system operating

24 hours a day.

22 The amount budgeted for

food and lodging was more than

double the amount budgeted

for comparable services at the

equivalent Rehabilitation Centre

in Kiev.


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Drug control

37. Another s ignif icant project in the f ight against organised crime is cal l edDrug control multisectoral assistance and institution building in Ukraine,Moldova and Belarus (BUMAD). BUMAD is a mult i-annual act ivity in threephases which started in 2003 and is expected to f inish a t the end of 2008(overal l EU-contribut ion of 6,5 mil l ion euro).

38.This programme, covering Ukraine, Moldova and Belar us , is the third in aseries of EU-funded regional programmes design ed to f i lter the t raff ic of heroin f lowing westwards from Afghanistan towards the EU 23 . The over-al l object ive is to reduce drug-traff icking from, and through, the threecountries towards EU Member States .

39. Most of the activit ies foreseen under the different sub-projects were carriedout (e .g. legal ass istance, seaport control (Ukraine), l and border control ,p o l ic e an d c o mmu n it y p re ve n t io n ) . Th e ge n e ral p ict u re at t h e e n d o f the second phase (January 2007) is that good progress has been madein s e t t in g u p n at io n al an t i - d ru gs s t ru ct u re s , f o r e x amp le t h e n at io n aldrugs observatories , courses in drugs prevent ion in the respect ive policeacademies or t raining in drugs demand reduct ion to numerous NGOs inthe three countries .

40. Slow progress was noted in the components of legis lat ion and of policeintelligence. The necessary cooperation between customs, border guards,police and secret services for effect ive criminal invest iga t ions is not yetsuff ic ient ly developed in the three countries . Sett ing up nat ional systemsto support the criminal invest igat ion of drug traff ickers requires not onlyappropriate analytical tools, but also a high degree of cooperation amongagencies which have not been accustomed to share operat ional data in asystematic way. Imbalances in invest igat ive powers are a further compli-

cat ion. A part icular obstacle in Belarus is the security service s apparentreluctance to accept foreign analyt ical software. The Commission, whenplanning the project , underest imated the t ime needed to change wayso f o p e rat io n al t h in kin g an d t o o ve rco me r iva l ry b e t w e e n e n f o rce me ntbodies .

23 The first programme, CADAP,

began in Central Asia in 2000, the

second, SCAD, in the Southern

Caucasus in 2001.


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41. Up to the completion date of BUMAD 2 (January 2007), heroin and cocaines e iz u re s w e re mo d e s t . O n ly t w o in t e rn at io n al at t e mp t s t o t raf f ic h e ro -in e in U kra in e w e re u n co ve re d , w it h t h e h e lp o f s o f t w are d e l ive re d b yt h e p ro j e ct . S e iz u re s o f d ru gs in a l l t h re e co u n t r ie s co n ce rn e d main lylocally-produced poppy seed and cannabis . However the Ukrainian Secu-rity Service reported in July 2007 that in cooperat i on with the U.S. DrugEnforcement Agency and Turkish law enforcement organisat ions 174 kgof heroin were confiscated in I l l ichevsk seapor t .

Projects against money laundering/terrorist f inancing

42. The overall objective of the Project against money laundering in Ukrai ne(EU-contribut ion of 1 mil l ion euro) was to prevent the use of the f inancialsystem to launder the proceeds of serious cr ime and to enable Ukrainianauthorit ies to cooperate in f ight ing money laundering.

43. The project helped to achieve Ukraines very s ignif icant removal from theNon-cooperative countries and territories 24 l ist in February 2004 and theacceptance of Ukraine as a member by the Egmont Group 25 in June 2004.Furthermore by the end of the project the State Committee for F inancia lMo n it o r in g (S C F M) w as f u n c t io n in g as U kra in e s F in an cia l I n t e l l ige n ceUnit (F IU) 26 . Indeed, over the years unt i l 2006, the number of case refer-rals , submitted by the SCFM to law enforcement authorit ies , increasedconsiderably (18 in 2003; 446 in 2006).

44. Setting up a FIU is only a first important condition for combating money laun-dering. There is also the need for effect ively operat ing law enforcementagencies and trained judges. A major problem is the lack of successfulprosecut ion. Unt i l the end of 2006 only three verdicts for money laun-dering were made by the courts . The lack of a modern regime of se izureand confiscat ion of assets was also ident if ied as a serious gap in the ant imoney laundering system. However Ukraine is more advanced in the f ight

against money laundering and terrorist f inancing than Moldova, whereserious concerns exist regarding the effect iveness of the system in place(e.g. weaknesses in the Centre for Combating Economic Crime and Corrup-t ion or insuff ic ient use of provis ions to seize , f reeze and confi scate) 27 .

24 The Non-cooperative countries

and territories (NCCT) initiative

was developed by an inter-

governmental financial action task

force (FATF) to ensure that measures

for the prevention, detection and

punishment of money laundering

according to internationally

recognised standards are applied.

25 Many countries around the

world have created specialised

governmental agencies, known

as financial intelligence units

(FIU). Recognising the benefits

inherent in the development of a

FIU network, in 1995, a group of

FIUs at the Egmont Arenberg Palace

in Brussels decided to establish an

informal group for the stimulation

of international cooperation. Now

known as the Egmont Group, these

FIUs meet regularly to find ways to

cooperate, especially in the areas

of information exchange, training

and the sharing of expertise. There

are around 100 countries with

recognised operational FIUs.

26 It is the responsibility of a FIU to

collect and analyse suspicious and

threshold transactions. Investigative

powers lie with law enforcement

agencies.

27 Third Round Mutual

Evaluation Report on Moldova,

September 2007, prepared by

moneyval (Committee of Experts

on the Evaluation of Anti-money

Laundering Measures, under the

auspices of the Council of Europe).


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J U D I C I A R Y A N D G O O D G O V E R N A N C E : M I X E D R E S U L T S

45. EU policy supports reforming the judiciary in order to ensure its independ-ence, impartiality and effici ency. In addition it aims at strengthening legalcooperation with the EU in civi l and criminal matters . I t also gives supportto encourage good governance which refers to the structure , funct ioningand performance of public authorit ies/inst itut ions at al l levels .

46. The projects in the sub-area of judiciary and good governance received a totalEU-contribut ion of 24,8 mil l ion euro (15,0 % of total support) f rom pro-grammes for the period 200005. This sub-area concerned only Moldovaand Ukraine. The Court audited 10 contracts28 with a total EU contributionof 14,2 mil l ion euro.

47. Achievement has been mixed (see Annex III ) . Some projects showed sat is-factory overal l results , for example improvements in the applicat ion of c ivi l and commercial law in Moldova (EU contribut ion of 2,2 mil l ion euro)o r b e t t e r in t e rn at io n al c o o p e rat io n in cr imin al mat t e rs in U kra in e (E Ucontribut ion of 1,5 mil l ion euro) . By contrast , the results achieved in theproject Reform of arbitration courts and support to court administration(EU contribut ion of 2,5 mil l ion euro) were less sat is factory , in part icularregarding the provis ion of IT equipment . Nothing had been delivered bythe original deadline.

Anti-corruption

48. Results achieved to date in projects combating corruption are very modest.Corrupt ion is one of the most press ing problems in M oldova and Ukrainethreatening the whole sub-area of judiciary and good governance. Bothcountries are deeply affected, with a considerable impact on society 29 .The legal and administrative systems are deeply flawed (e.g. lack of public

trust , impaired independence of judges, insuff ic ient salaries , high levelof perceived corrupt ion) 30 .

28 Including one contract which

was finally not signed, see

paragraph 52(c).

29 Position 111 for Moldova,

position 118 for Ukraine in the

2007 corruption perceptions

index compiled by Transparency

International.

30 See e.g. Ukraine Governance

Assessment, performed in

February 2007 by SIGMA (Support

for improvement in governance and

management), a joint initiative of

the OECD and the European Union.


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49. In 1999 and 2002 the Moldovan Government had already adopted ambitiousnat ional programmes for combating crime and corrupt ion. However suc-cess was very limited because of insufficient resources and the absence ofan efficient control mechanism. In December 2004 the Parliament adopteda n e w an t i - co rru p t io n s t rat e gy t o ge t h e r w it h a n e w act io n p lan f o r i t simplementat ion. At that moment the Commission intervened with its f i rstant i-corrupt ion project in Moldova.

50.The EU contribut ion was a re lat ively small pi lot act ivity (250 000 euro). Asits interim results were sat isfactory , the Commission decided to fund afol low-up project for three years unt i l 2009 ( EU contribut ion of 3 mil l ione u ro31 ) . Th e n e w p ro j e c t p ro gre s s e d mo re s lo w ly t h an p lan n e d an d i t sachievement after the f irst year was very l imited. Progress on key issues 32or in the delivery of equipment had not been achieved. The projec t gainedmomentum only after March 2007.

51. The United States s igned a 25 mil l ion dollar agreement to support ant i-co rru p t io n in i t iat ive s in Mo ld o va 33 . Th e W o r ld Ban k i s a ls o p lan n in g t oaid ant i-corrupt ion measures . Coordinat ing the EU efforts with the ass ist -ance of other internat ional donors is now a major challenge. There areal re ad y p ara l le l mo n it o r in g s t ru c t u re s , u n d e rmin in g t h e co n ce p t o f as ingle nat ional ant i-corrupt ion strategy.

52. Numerous donors have been active in the field of anti-corruption in Ukraine.The f irst s ignif icant EU f inanced project in this area (EU contribut ion of 1,5 mil l ion euro) started in 2006. One year into this three-year EU projectthe number of act ivit ies carr ied out was substant ial ly lower than init ial lyforeseen:

t h e U kra in ian au t h o r i t ie s d e ve lo p e d a d raf t a n t i - co rru p t io n act io n(a)plan, without using specif ic draft ing support offered by the project 34 .

Only at a late stage, in June 200 7, did the Ministry of Just ice requestan expert assessment of the draft . The experts cr i t ic ised the lack of t ransparency of the draft ing process and concluded that the draftact ion plan was far f rom sat isfactory ;

31 The project has two components,

one on anti-corruption and one on

anti-money laundering/financing of

terrorism.

32 Revision of monitoring structure

for strategy and action plan;

reduction of the conflict of

competences among the main

enforcement bodies in investigation

and prosecution; elaboration of risk

analyses within judiciary, police, tax

inspectorate, customs and health

and education institutions.

33 Millennium Challenge Corporation

(MCC) threshold program

agreement.

34 See second progress report of 26

June 2007.


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no act ivit ies took place with regard to a monitoring mechanism for(b)t h e f u t u re imp le me n t at io n o f t h e act io n p lan . I t i s n o t c le ar w h ichinst itut ion wil l have the lead in the ant i-corrupt ion f ight . The issue of monitoring the f inancing of polit ical part ies and electoral campaignswas not tackled. Also a general public opinion survey on corrupt ionwas not carried out despite extensive preparatory work for this survey(defining a methodology, expert meet ings);

while the Commission established the clear need to promote public(c )involvement in the ant i-corrupt ion effort , i t abandoned the plan of developing a grant programme open to non governmental organisa-t ions (NGOs) and other civi l society organisat ions aimed at promotingpublic involvement in the ant i-corrupt ion effort . The alternat ive solu-t ion, to support the creat ion of an advocacy and legal advice centrewas also not real ised due to procedural problems.


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WHAT ARE THE MAIN REASONSFOR UNDERPERFORMANCE?

53. While many projects delivered satisfactory results, this section presents rea-sons for underperformance of those that did not .

L I M I T E D A C H I E V E M E N T T Y P I C A L L Y D U E T O A C O M B I N A T I O NO F F A C T O R S I N V O L V I N G A L L M A I N P A R T I E S

54. The audit showed that limited achievements are typically due to a combinationo f f ac t o rs in vo lv in g a l l main p art ie s (C o mmis s io n , n at io n al au t h o r i t ie s ,internat ional inst itut ions) . For example, in the ant i-corrupt ion project forUkraine (see paragraph 52):

weak needs assessment by the Commission in a dif f icult context an d(a)insuff ic ient coordinat ion with other donors : substant ial parts of thep ro j e ct , e s p e c ia l ly t h e as s is t an c e t o d raf t in g le gis lat io n , w e re n olonger real ly wanted by the Ministry of Just ice . Other organisat ions,part icularly American ones, also provide ant i-corrupt ion legis lat iveassistance;

lack of commitment and of cofinancing by the national a uthorities(b) : th eMinistry of Just ice fai led to provide an adequate off ice to the projectteam, thus breaking not only the contract condit ions but also its com-mitment expressed in a separate statement of endorsement ;

weak management by the contractor(c) which struggled to set up andmaintain the project team;

e x t e r n a l f a c t o r s(d) : t h e d i f f i c u l t p o l i t i c a l s i t u a t i o n f o l l o w i n g t h e2 Apri l 2007 president ial decree on early e lect ions combined with afrequent change of leadership in the Ministry of Just ice caused thesuspension of al l legis lat ive act ivity surrounding the ant i-corrupt ion

draft laws.


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S H O R T C O M I N G S I N C O M M I S S I O N S M A N A G E M E N T O F P R O J E C T S

55. Two factors made the Commissions management more difficult and increasedthe r isk of fai lure :

the majority of the projects lay under the responsibil ity of the Delega-(a)tion in Kiev. This Delegation has been responsible for project manage-ment not only in Ukraine but also in Belarus and Moldova. Staff in thearea of freedom, security and justice are very competent, however theKiev Delegat ion had too few project managers to deal with a rapidlygrowing policy area with an increasing number of projects . Althougha n e w De le gat io n t o Mo ld o va w as o p e n e d in O ct o b e r 2005, i t o n lys t art e d t o b e c o me o p e rat io n al w it h re gard t o p ro j e ct man age me n tin summer 2007;

the co-existence of dif ferent sources of f inancin g to support the area(b)of freedom, security and just ice (see paragraphs 3 and 4) . The TACISinstrument proved to be insuff ic ient to meet the gr owing demand forfunding of projects . Dif ferent instruments , procedures and Commis-s ion services were sometimes used for the same intervent ion, causingineff ic ient contract management (see Box 7) .

EXAMPLE OF INEFFICIENT CONTRACT MANAGEMENTB O X 7

Te support o phase III in the cross-border co-operation between the western New Independent Statesand the EU (Sderkping process) was artificially divided into two contracts running in parallel withthe same contractor. One contract is financed rom ACIS and managed by the Delegation in Kiev

and the other is financed rom Aeneas and managed by Commissions HQ in Brussels (EuropeAid).DG JLS, the previous manager, is no longer involved.

Te co-existence o two legal bases with different rules or the same action is not coherent. For examplethe Aeneas contract fixed the maximum allowed co-financing rate at 80 % whereas the ACIS con-tract co-finances 90 % o the total eligible costs. In addition the ACIS contract is subject to externalmonitoring whereas the Aeneas contract is not. Tus the external monitors, who indicated a numbero deficiencies in the intervention logic (e.g. lack o measurable indicators), cannot give a completepicture o the action.

Te artificial division into two projects is also not effi cient. Te administrative burden is doubled oreach implementation step on the Commissions and the contractors side (parallel procedures orproject selection, contracting, cost verification, payment requests, payments, reporting). Te need or

coordination to avoid double unding is high.


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56. These two structural problems led to failings in the Commission s planningand implementat ion procedures . Requirements were not always assessedthoroughly enough (see example in paragraph 52(a)) or f inancing deci-s ions were taken without an in-depth analys is of the fulf i lment of basicprecondit ions. For example, in the case of two accommodation centresfor asylum seekers , quest ions of land al locat ion or ownership were notclari f ied (see Box 6 and paragraph 27). The Commissions supervis ion of project reporting requirements was not strong enough (see paragraph 60).A major concern is the lack of exchange of information with other donororganisat ions with regard to their planned projects to avoid unnecessaryduplicat ion in programming and later in implementat ion. With regard toproject extensions, a convincing anal ys is of the need for extra t ime and,in one case, for extra money was not always made.

S H O R T C O M I N G S I N M A N A G E M E N T O F P R O J E C T SB Y I N T E R N A T I O N A L O R G A N I S A T I O N S

57. For most of the contracts, the Commission opted for grants awarded directlyt o in t e rn at io n al o rgan is at io n s , b e c au s e o f t h e i r p art icu lar co mp e t e n cein the area of freedom, security and just ice and their geographical pres-ence in the countries . As a consequence, the internat ional org anisat ionsare in charge of the day-to-day project implementat ion (so-cal led jointmanagement , see paragraph 6) , although the Commission retains overal lre s p o n s ib i l i t y f o r s o u n d man age me n t . W h e re as ge n e ral ly t h e p e rf o rm-an ce o f t h e in t e rn at io n al o rgan is at io n s w as s at is f act o ry , t h e f o l lo w in gshortcomings were noted in re lat ion to this form of management :

after contract s ignature , internat ional i nst itut ions often faced prob-(a)lems in putt ing a funct ioning project team in place, delaying the startof the project by several months;

in other cases delays were caused by lengthy procurement processes .(b)Contracts with internat ional organisat ions usually st ipulate that thep ro cu re me n t o f an y go o d s , w o rks o r s e rv ice s i s carr ie d o u t b y t h e

organisat ion in accordance with i ts own rules and procedures . In onecase the contract stated that the procedures applied by the interna-tional organisa tion should not be less stringent than the EU rules. Thisclause caused lengthy clari f icat ion procedures , hindering an eff ic ientprocurement process ;


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in one internat ional organisat ion dealing with a number of contracts ,(c )le n gt h y ad min is t rat ive p ro ce d u re s cau s e d lat e p ay me n t s t o lo calsuppliers ;

t h e p o s s ib i l i t y o f carry in g o u t d e t a i le d ch e cks o n e x p e n d it u re in(d)projects implemented by an internat ional organisat ion is not def inedclearly enough. In one instance, the verif icat ion clause in the f inan-cial and administrat ive framework agr eement (FAFA) with the UnitedNat ions was interpreted dif ferent ly by the Commission and its coun-terparts , hindering controls and a t i mely closure of the contract ;

EU vis ibi l i ty was not achieved in some projects managed by interna-(e)t ional organisat ions in Moldova. Beneficiaries are not always awarethat projects received EU funding. Projects are then perceived onlyas those of the managing internat ional organisat ions. This is due totheir direct implementat ion role and also to the fact that project webpages are usually only to be found under their address .

TO WHAT EX TENT HAS THE COMMISSION A LEARNINGPROCESS IN PLACE TO TAKE INTO ACCOUNT LESSONSFOR THE CONTINUED ASSISTANCE IN THE AREAOF FREEDOM, SECURITY AND JUSTICE?

58. The Commissions learning process is of utmost importance in the area of freedom, security and justice as a sustainable change can only be expectedwith a long-term gradual approach. A new project has to build upon theachievement and experience gained in earl ier projects and repet it ion of mistakes has to be avoided. Several examples showed that lessons wereindeed learnt : for example, in the new project Increased independence,transparency and eff ic iency of the just ice system of Moldova (EU contri-but ion of 3 mil l ion euro) the Commission focused on a narrower spectrumo f in t e rre lat e d p ro j e ct p u rp o s e s , avo id in g t h e d is p e rs io n f o u n d in t h eforerunner project .


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59. In l ine with the needed gradual approach, the Commi ssion has f inancedprojects sequential ly , e .g. three consecut ive projects in the area of drugcontrol . The projects f iches prepared by the Commission within new pro-grammes usually have sect ions Lessons learnt into which informationflows from progress report ing, evaluat ion and monitoring.

N O T A L L P O S S I B I L I T I E S E X P L O I T E D T O C O L L E C T I N F O R M A T I O N

60. However in some cases the sections Lessons learnt were weak. The Commis-s ion had not suff ic ient ly exploited the possibi l i t ies to gather informationfor the learning process because progress reports were late or of a poorquality or planned evaluat ions had not been carr ied out . These shortcom-ings point to a lack of supervis ion by the Commission of the respect ivecontract st ipulat ions by contractors .

61. It is positive that the Commission has a contract with extern al consultantsto monitor projects , including on-the-spot vis its and interviews with thedifferent stakeholders . In general the external monitors performed welland often correct ive act ion in the dai ly management took place fol lowingtheir remarks . However the Court notes two weaknesses :

s o me p ro j e c t s w e re n o t co ve re d b y e x t e rn al mo n it o r in g, n o t ab ly(a)p ro j e ct s co mp ris in g w o rks o r s u p p ly co n t ract s an d t h e n o n - TA C I Sp r o j e c t s m a n a g e d f r o m B r u s s e l s 35 . M a n a g e m e n t f r o m a d i s t a n c ealready hinders a closer fol low up. The absence of monitoring wors-ened the problem. The result ing lack of up to date information led inone case to the Commission retroact ively agreeing to a substant ialbudget change as well as to the extension of the contract one monthafter the expiry of the original gra nt agreement ;

t h e aggre gat e mo n it o r in g s c o re s f o r s o me o f t h e au d it e d p ro j e ct s(b)were overly posit ive .

35 Generally projects below a

1 million euro threshold were also

not covered.


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E X P E R I E N C E G A I N E D N O T A L W A Y S R E F L E C T E D I N N E W P R O J E C T S

62. In some cases experiences gained in earl ier projects were insuff ic ient lyreflected in new projects. This happened especially when project manage-ment changed from one Commission service to another. As a result newprojects faced sometimes the same problems as projects from previousprogrammes, errors were repeated or there was no cont inuity betweenproject phases (see Box 8) .

EXPERIENCES MADE INSUFFICIENTLY TRANSFERRED INTO NEW PROJECTSB O X 8

Concerning the project Establishment o migration management system in Zarkapattya (Ukraine)(a)the specific experience o the first project was not a decisive actor in the Commissions process oevaluating the proposal or the second project. While the proposal briefly explained how the action

was intended to build on the results o the previous action the Commission evaluated it as i it werea new action. Tey did not assess i the planning documents took into account risks materialisedin the orerunner project. For example, the role, the conduct and also the budget problems o theborder guards service in running the centres were not considered. Te question as to how the projectshould better build up capacity should have been dealt with in more detail;

the project Capacity building o migration management-CBMM II (Ukraine) was prepared with-(b)out suffi cient consideration o the experience o the previous project. Although substantial imple-mentation problems appeared in this first project, the Commission signed a grant agreement or aollow-up project at an early stage. It was not logical to replicate more or less a project which wasacing severe implementation challenges, especially when the timetable or completion was tight;

Te Koslovichi II Border erminal project (see Box 3) revealed diffi culties in obtaining bids within(c)

tender budgets and obtaining exemption rom value added tax. Tese two problems had been high-lighted in a Special Report rom the Court o Auditors published in November 200136 concerningthe ACIS cross-border cooperation programme.

36 Special Report No 11/2001 concerning the TACIS cross-border cooperation programme together with the Commissions replies

(OJ C 329, 23.11.2001).


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CONCLUSIONSAND RECOMMENDATIONS

TO WHAT EXTENT HAS THE EU SUPPORT FOR FREEDOM,SECURITY AND JUSTICE PROJECTS IN BELARUS,MOLDOVA AND UKRAINE BEEN SUCCESSFUL?

63. The greater part of the audited projects Belarus37 , Moldova and Ukraineach ie ve d s at is f act o ry re s u lt s (s e e A nnex I I I ) . Ho w e ve r t h e i r s co p e w asl imited compared to the scale of the problems they had to address ands u cc e s s var ie d , e ve n b e t w e e n c o mp o n e n t s w it h in t h e s ame p ro j e ct . I ngeneral progress was s lower than expected by the Commission, the greatmaj o r i t y o f p ro j e c t s b e in g e x t e n d e d b y s e ve ra l mo n t h s , s o me e ve n b yover a year.

64. The best performance was in the area of Border management. The EU sup-port substantially enhanced the border management capacities of Belarus,Moldova and Ukraine. However the long term goal of a modern system of border management approximating European good pract ice is st i l l someway off . The key issue is to convert the init ial success into sustainableoperat ional improvement (see paragraphs 11 to 19).

65. The European flagship project in the area of border assistance, EUBAM, per-formed well . The peaceful resolut ion of the Transnistr ian confl ict is , how-ever, a long-term task needing policy measures beyond better border andcustoms controls and border survei l lance (see Box 1 ) .

66. The performance was unsatisfactory in the area of Migration and asylum,mainly in respect of infrastructure. Progress in providing adequate shelterfor i l legal migrants and asylum seekers respect ing interna t ional humani-t ar ian s t an d ard s h as b e e n e s p e c ia l ly s lo w in U kra in e . Th e d iv is io n o f re s p o n s ib i l i t ie s at n at io n al le ve l re main s u n cle ar an d t h e G o ve rn me n tallocated insufficient funds for infrastructure and running costs (see para-

graphs 20 to 27).

67. Mixed results were achieved in the area Fight against organised crime. Inspite of several successes , project achievements have been insuff ic ientin respect of securing effect ive prosecut ion and improved cooperat ionbetween customs, border guards, police and secret services for effect ivecriminal invest igat ions (see paragraphs 28 to 44).

37 Due to a lack of respect for

democracy and human rights,

assistance to Belarus was limited

to humanitarian, cross-border

and regional cooperation projects

(see paragraph 7).


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68. In the area of Judiciary and good governance the results are also mixed.Despite democrat ic reforms and improvements brought about by EU sup-p o rt , Mo ld o va an d U kra in e are s t i l l d e e p ly af f e ct e d b y co rru p t io n (s e efootnotes 31 and 32). The Court considers that a fundamental , l ong termchange in polit ical wil l , mental it ies , behaviour and att itudes is requiredt o ac h ie ve a s ign i f ican t re d u ct io n in t h is h igh le ve l o f co rru p t io n (s e eparagraphs 45 to 52).

R E C O M M E N D A T I O N

The Commission should:

with the aim of achieving sustainable operat ional im provement in(a)b o rd e r man age me n t , s e e k ad vice f ro m t h e E u ro p e an A ge n cy f o rthe Management of Operat ional Cooperat ion at the External Bor-d e rs (F ro n t e x ) ; w i t h re gard t o f u rt h e r s u p p o rt f o r b o rd e r e q u ip -ment ensure complementarity with equipment provided by otherdonors ;

b e f o r e r e l e a s i n g f u r t h e r f u n d s f o r c e n t r e s f o r i l l e g a l m i g r a n t s(b)a n d a s y l u m s e e k e r s , m a k e s u r e o f t h e r e c i p i e n t g o v e r n m e n t sc o mmit me n t t o p ay f o r at l e as t t h e ru n n in g co s t s , t h u s e n s u r in gsustainabil ity ;

in t h e f igh t again s t o rgan is e d cr ime , f o cu s t h e p ro j e ct act iv i t ie s(c)mo re o n t h e i s s u e o f e f f e c t ive p ro s e cu t io n ( in c lu d in g a mo d e rns y s t e m o f s e iz u re an d co n f is cat io n o f as s e t s ) an d p ro mo t e mo resystematic information sharing between law enforcement bodies ;

continue to explore possibilit ies for promoting more public inv olve-(d)ment in the anti-corruption policy by supporting civil society organ-isat ions and advice centres .

WHAT ARE THE MAIN REASONSFOR UNDERPERFORMANCE?

69. Whereas the Commission has the ultimate r esponsibility for the projects, theaudit showed that where l imited achievements were found they could betypical ly attr ibuted to the act ions or omiss ions of al l the main part ies : theCommission, nat ional authorit ies in the recipient states and contractorswhich in this area were often internat ional organisat ions. External fac-tors such as polit ical instabil ity also diminished the project results (seeparagraph 54).


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70. The Commission did not allocate sufficient manpower to the Delegation in Kievto deal with a rapidly growing, labour- intensive policy area in the threecountries. And it took nearly two years to start operational project manage-ment in the Delegation in Moldova (established in 2005). The co-existenceof several EU f inancing instruments for the same purpose, and a lack of consistency between them, hampered a quality approach. Furthermore,the Commission did not take rigorous action whenever it b ecame apparentthat the quality of the EU assistance was lowered by shortcomings in theproject management of the grant contractors (see paragraphs 55 to 57).

71.The recipient governments and the Commission did not sufficiently coordi-nate EU act ivit ies with the massive support given by other donors . Theuncoordinated f low of funds from different sources causes unnecessaryduplicat ion of efforts , inconsistent approaches and reduced incent ive tokeep costs low (see paragraphs 36, 51, 54(a)) .

72. In the recipient countries a lack of commitment at project level was notede s p e c i a l l y i n t h e s u b - a r e a s o f m i g r a t i o n / a s y l u m a n d j u d i c i a r y / g o o dgovernance. The Commission also underest imated the extent to whichexternal factors , such as polit ical f ragi l i ty , d iscont inuity of governmentstructures and, potentially, lack of EU accession perspective could preventthe fulf i lment of project object ives . These factors lay beyond the Com-miss ions direct responsibi l i ty but were not adequately and real ist ical lyevaluated in its r isk assessment (see paragraphs 54(b) and (d)) .


The Commission should:

strengthen its personnel in the area of freedom, security and jus-(a)t ice in the Delegat ions in Moldova and Ukraine and hav e suff ic ientexpert ise for dealing with procurement and works e lements ;

str ive to use the new ENP instrument as a(b) s ingle and f lexible toolfor support to the sector;

exercise more r igorous control over the internat ional inst itut ions(c)acting as contractors in respect of project management procedures,such as mobil isat ion of personnel, procurement , payments , report-ing, expenditure control and requirement for EU vis ibi l i ty ;

take appropriate steps to encourage and support the recipient coun-(d)tr ies to establish and exercise effect ive donor coordinat ion;

support the projects where the real interest of recipient countries(e)is c lear and evidenced by, among other things, nat ional funding; atthe same t ime be more real ist ic in terms of object ives and considerlonger implementat ion periods for individual projects .


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TO WHAT EX TENT HAS THE COMMISSION A LEARNINGPROCESS IN PLACE TO TAKE INTO ACCOUNT LESSONSFOR THE CONTINUED ASSISTANCE IN THE AREAOF FREEDOM, SECURITY AND JUSTICE?

73. The Commission has not fully exploited options to learn lessons, and experiencegained was not always reflected in newly-started projects which in somecases led to the repetit ion of old mistakes (see paragraphs 60 to 62).


When preparing new projects the Commission should take into accountmore systematically the experiences of earlier projects. Lessons learntsect ions should be more ful ly developed in preparatory documents .They should also become a standard element in grant applications frominternat ional organisat ions.

This report was adopted by the Court of Auditors in Luxembourg at its meet-ing of 19 November 2008.

Fo r th e C o ur t o f A udi to r s

Vtor Manuel da Si lva CaldeiraP r esi den t


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A N N E X I

Source : European Commission.


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A N N E X I I I

OVERVIEW OF AUDITED CONTRACTS

N Title of the contractEU

contributionCountry

Status

(July 2007) 1Contractor / Source

of financing

Overall judgment

on results2

BORDER MANAGEMENT

1EU border assistance mission to Moldova

and Ukraine EUBAM I4 000 000,00 UA, MD

completed on

21.5.2006

UNDP / Rapid reaction

mechanism

Satisfactory


and Ukraine EUBAM II4 000 000,00 UA, MD

completed on

31.10.2006UNDP / RAP 2004


and Ukraine EUBAM III2 200 000,00 UA, MD

completed on

31.1.2007UNDP / RAP 2003


and Ukraine EUBAM IV8 885 000,00 UA, MD

ongoing since

1.2.2007UNDP / RAP 2006

5Strengthening border management in the

Republic of Belarus BOMBEL I4 500 000,00 BL

completed on

31.12.2006UNDP / RAP 2001

Satisfactory

6Strengthening border management in the

Republic of Belarus BOMBEL II8 800 000,00 BL

ongoing since

1.9.2006UNDP / RAP 2003

7 Kozlovichi II Border Terminal works 14 000 000,00 BLongoing since

30.12.2004

Works contract / CBC

2000; CBC 2002Unsatisfactory

8Border management improvement,

Ukraine Lot 1,22 223 738,00 UA

completed on

17.7.2005 Supply contracts /

TACIS NAP 2001Satisfactory

9

Border management improvement,

Ukraine Lot 5 1 770 555,00 UA

completed on

17.7.2005

10Reform and modernisation of the customs

in Ukraine1 372 500,00 UA

completed on

15.1.2005

Service contract / NAP

2001 (Small projects

programmes)

Satisfactory, however

underperformance in component

New computerised transit system

MIGRATION AND ASYLUM

11Establishment of migration management

system in Zakarpattya1 278 186,41 UA

completed on

31.12.2006

Grant agreement /

Budget line B7-667 Unsatisfactorywith regard

to capacity building (action

of humanitarian aid)12

Enhancing capacities in the area

of protection and treatment of refugees

and asylum seekers in Zakarpatia

699 942,43 UAongoing since

1.1.2007

Grant agreement /

Aeneas

13Capacity building of migration

management CBMM I3 781 505,00 UA

ongoing since

1.3.2005International

Organisation for

Migration / TACIS NAP

2003

Unsatisfactory in its core activity

(MACs); corrective action launched

after audit visits14Capacity building of migration

management (Phase II) CBMM II

2 767 000,00 UAongoing since

22.7.2006

15Strengthening the asylum systems

of Ukraine and Moldova1 635 000,00 UA, MD

completed on

31.12.2006 UNHCR / TACIS RAP

2002

Unsatisfactory in its core activity

(temporary accommodation

centres) for Ukraine and Belarus,

Satisfactory for Moldova16Strengthening the national asylum system

in the Republic of Belarus365 000,00 BL

completed on

31.12.2006

17The cross-border cooperation process

(Sderkping process) Secretariat147 479 ,00 B L, UA, MD

completed on

3.5.2004UNHCR / ATA

Satisfactory, however delays.

Exit strategy to be designed.


(Sderkping process) Sderkping I762 488 ,00 B L, UA, MD

completed on

28.2.2006

Swedish Migration

Board / Budget line

B7-667


(Sderkping process) Sderkping II a1 307 898 ,00 B L, UA, MD

ongoing since

1.3.2006

UNHCR (subcontractors

IOM & Swedish

Migration Board) /

Aeneas


(Sderkping process) Sderkping II b1 026 000 ,00 B L, UA, MD

ongoing since

1.3.2006

UNHCR (subcontractors

IOM & Swedish

Migration Board) / RAP

2004

1 Last mission on the spot took place in July 2007.2 Unsatisfactory: denotes significant parts of the specific objectives not achieved (finished contracts) or current progress far below expectations (ongoing contracts).


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contributionCountry

Status

(July 2007)1Contractor / Source

of financing

Overall judgment

on results2

FIGHT AGAINST ORGANIZED CRIME

21

Drug control multisectoral assistance

and institution building in Ukraine,

Moldova and Belarus BUMAD 1

2 000 000, 00 B L, UA, MDcompleted on

30.4.2005UNDP/ RAP 2001

Satisfactory for setting new

anti-drug structures,

Unsatisfactory for legislation

and police intelligence

22




2 500 000, 00 B L, UA, MDcompleted on

21.1.2007UNDP/ RAP 2002

23




2 000 000, 00 B L, UA, MDongoing since

1.1.2007UNDP/ RAP 2004

24Combati ng traffi cking in women

in Moldova599 408,00 MD

completed on

23.6.2004

International

Organisation for

Migration / RAP 2000 Satisfactory, however concern

as to effi ciency (o verlappin g

with other donors)25

Fighti ng traffi cking in perso ns

in the Republic of Moldova300 000,00 MD

completed on

18.12.2006

International

Organisation for

Migration / TACIS RAP

2002

26

IOM Rehabilitation Centre for Victims

of Traffi cking Chisinau, Moldova: recovery,

rehabilitation and reintegration through

comprehensive care

308 000,00 MDcompleted on

3.3.2006

International

Organisation for


2002

Satisfactory, however concern

as to economy (high rent)

27Combating traffi cking in human beings

in Ukraine1 892 000,00 UA

completed on

18.6.2006

InternationalOrganisation for


2002

Satisfactory for protection/reintegration and raising

awareness. Unsatisfactory

for criminalisation and prosecution

28

Project against money laundering,

terrorist financing and corruption

in Moldova

3 000 000,00 MDongoing since

2.8.2006

Council of Europe/

NAP 2005

Unsatisfactorystart;

but improvement

in anti-corruption component

29Project against money laundering

in Ukraine MOLI-UA-1974 502,00 UA

completed on

1.7.2005

Council of Europe /

RAP 1999

Satisfactory

30

Follow-up project against money

laundering and terrorist financing

in Ukraine MOLI-UA-2


1.5.2006

Council of Europe /

NAP 2005

A N N E X I I I

1 Last mission on the spot took place in July 2007.2 Unsatisfactory: denotes significant parts of the specific objectives not achieved (finished contracts) or current progress far below expectations (ongoing contracts).


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contributionCountry

Status

(July 2007)1Contractor / Source

of financing

Overall judgment

on results2

JUDICIARY AND GOOD GOVERNANCE

31Civil and commercial judiciary project

NIS, Moldova2 194 015,00 MD

completed on

29.7.2005GTZ/ NAP 2001 Satisfactory

32Support to the national anti-corruption

strategy of Moldova (PACO Moldova)250 000,00 MD

completed on

14.1.2006

Council of Europe/

NAP 2003Satisfactory (pilot action)

33

Joint programme between the European

Commission and the Council of Europe

for Moldova: Support to continued

democratic reforms 200406

800 000,00 MD

completed on

15.12.2006

Council of Europe/

NAP 2003

Satisfactory, howeve r ineffi cient

design

34

Increased independence, transparency

and effi ciency of the justice system

of the Republic of Moldova

3 000 000,00 MDongoing since

1.10.2006

Council of Europe/

NAP 2005

Satisfactory, however lack

of lessons learnt

35Reform of arbitration courts and support

to court administration2 476 000,00 UA

completed on

31.12.2005UNDP/ NAP 2000 Unsatisfactory

36Ukraine international cooperation

in criminal matters (UPIC)1 500 000,00 UA

ongoing since

1.12.2005

Council of Europe/

Nap 2004Satisfactory

37

Ukraine Judicial selection and

appointment procedure, training,

disciplinary liability, case management

and alternative dispute resolution

methods


31.5.2006

Council of Europe/

NAP 2003

Unsatisfactorystart; more

satisfactory since 2007

38Support to good governance: Project

against co

Documents

EUROPEAN COURT OF AUDITORS - THE EFFECTIVENESS OF EU SUPPORT IN THE AREA OF FREEDOM, SECURITY AND JUSTICE FOR BELARUS, MOLDOVA AND UKRAINE