Identifying and preventing fraud & corruption in ESI funds ... · Identifying and preventing fraud & corruption in ESI funds Building Anti-Fraud measures Lessons learned in the fight

Identifying and preventing fraud & corruption in ESI funds

Building Anti-Fraud measures Lessons learned in the fight against fraud

Case study: On-the-spot-checks with OLAF on the territory

of the EU

Workshop on innovative methods to combat fraud

This training has been organised by EIPA under the Framework Contract Nr 2018CE16BAT060. The

opinions expressed are those of the contractor only and do not represent the EC's official position

Andon Tashukov,

Legal Adviser

AFCOS BG

➢ Practical examples: ➢ EU Policies in fighting fraud ➢ Member-state policies in fighting fraud ➢ Practical Guide on conducting On the spot checks (OTSC) with OLAF in 10 steps to identify fraud, corruption or other illegal activity.

➢ Case Study – A case study worth 32 million euro.

➢ Workshop: Innovative methods to combat fraud.

Presentation content

This training has been organised by EIPA under the Framework Contract Nr

2018CE16BAT060. The opinions expressed are those of the contractor only and do not

represent the EC's official position

European union law

Art. 325 TFEU and Commission

decision establishing OLAF

PIF Convention and PIF Directive -

Directive 2017/1371

Regulation 2988/95 on the protection

of the EC financial interests

Regulation 2185/96 concerning on

the spot checks and inspections

Regulation 883/2013 – OLAF

concerning the investigations of

OLAF

EPPO Regulation - Regulation

(EU) 2017/1939

CAFS Commission Anti-Fraud

Strategy

Hercule Programme/Pericles

Programme – Single Anti-

Fraud Programme

NAFS, AFCOS – together with

MS




Policies of the EU in fighting fraud

Definitions: Irregularity and Fraud. Suspicions.




Irregularity: Regulation

2988/95, CPR and

Sectorial Regulations

Suspected fraud: DR

for Reporting,

2015/1970-1973.

Fraud: PIF Convention,

PIF Directive

Member State experience in MCS

Identifying the problems

Adoption of Anti-Corruption

Convention and creation of AFCOS

Creation of AFCOS Council

Adoption of National Ant-Fraud

Strategy

Implementation of Working

plan of the NAFS

Working groups Mechanism

on National Level

Fighting corruption

Additional measures




Policies of the MS in fighting fraud

➢ The Council had not carried out a risk analysis and had not developed a national antifraud Strategy.

➢ The Council had not forwarded reporting guidelines on irregularities to

partner institutions, accompanied by additional guidance and/or training

➢ The Council could not take care of daily operations (meetings 2/3

times a year). ➢ There was a need for an active secretariat/service staffed by people

with technical expertise and language skills who could provide the link between national institutions and OLAF and also act as a help desk in order to bridge the gap between national institutions and OLAF

Lessons learned: 1. Why Anti-Fraud didn’t work




2. AFCOS Council Council for coordination in the fight against infringements

affecting EU`s financial interests




➢ High political level to discuss and support measures, taken by the national authorities in the fight against fraud with EU funds

➢ Interaction and cooperation with the Prosecutor`s Office

Functions:

➢ 1. Suggests to the Council of Ministers projects of new legislative acts, strategy and action plan regarding fight against fraud with EU funds

➢ 2. Annual report for the activities to the Council of Ministers

➢ 3. Discusses issues regarding EU`s financial interests, makes decisions and takes measures for optimization of the process of the fight against fraud with EU funds

2. AFCOS Council – Mechanism for dealing with problems regarding EU funding

Chairperson: The Minister of Interior. Deputy-chairperson: The Deputy Minister of Interior.

Members are high officials, such as ministers, deputy ministers, executive directors, heads

of control bodies, i.e. everyone who has a part in the process of managing, spending or controlling EU funds, such as:

• Deputy Ministers of Interior; Finances; Agriculture and Foods; Environment and Water; Labor and Social Policy; Transport, Information Technologies and Communication; Economy, Energy and Tourism; Regional Development and Public Works;

• Heads of the State Fund Agriculture, Public Procurement Agency, Road Infrastructure Agency, National Agency of Fisheries and Aquaculture; Customs Agency, the Audit of European Union Funds Executive Agency, Public Financial Inspection Agency, Financial Intelligence Directorate within the State Agency for National Security, National Revenue Agency

• Representatives of law enforcement bodies.




3. National Anti Fraud Strategies

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

2015 2016 2017 2018 2019

First NAFS

Accession to the EU

Expand the activity of AFCOS

Council

European Commission

Strategy - CAFS

Project for NAFS 2014-2020 in CM

Political crisis

Final Approval after

amendments

Implementation of NAFS and first

Action plan

At each point of the timeline there is valid strategy in force




4. Action plans as a measure for combating irregularities and fraud




Structural and Cohesion Funds

Analysis of Irregularities Reported 2007 – 2013 EAGF and EAFRD

Analysis of Irregularities Reported 2007 – 2013

5. Working groups on National Level

Council of Ministers Decree 85/2007 creates a national mechanism of coordination on the EU matters

In it, the Ministers and Heads of Institutions create interinstitutional working groups to help the Council of European matters within Council of ministers.

The working groups draft, agree upon positions for the participation in the EU Council, Council of EU, informal ministers meetings and EU bodies.

There are around 36 working groups




Council of EU

Council EU matters

Working group 1

Working group 1

Working group 1

6. Fighting corruption and Judicial Reform




https://www.transparency.org/cpi2018

7. Additional measures

Commission for ascertainment and prevention of conflict of interests (2011)

Center for Prevention and Countering Corruption and Organized crime (2010)

Commission for Illegal Assets Ascertainment/confiscation (2005/2011)

NEW Commission for combating corruption and confiscation of illegal assets (2018)

Fraud Risk Assessment and Effective and proportionate antifraud measures

Art. 125, par. 4 CPR Regulation




Case Study on OTSC with OLAF to identify fraud, corruption or other illegal activities with ESIF Funds




General provisions

of on-the-spot checks (OTSC)

Aimed to protect the financial interests of the EU.

OTSC shall be prepared and conducted by the Commission in close cooperation with the competent authorities of the MS.

The competent national authorities shall be promptly informed of the object, purpose and legal basis of controls in place.

OTSC are carried out on economic operators to whom can be applied administrative measures and sanctions under Regulation 2988/95 and on other concerned economic operators.

Provide evidence for the purpose of the investigation through making reports according to national law.




MAIN Functions on

OLAF-AFCOS Cooperation

1. National contact point to OLAF and to the relevant competent authorities in the other Member-States and in third countries.

2. Realizes the operational cooperation with OLAF and exchanges information.

3. Performs operative cooperation with OLAF in conducting the on-the-spot checks on the territory of Bulgaria.




MAIN Functions on

OLAF-AFCOS Cooperation

4. Receives signals concerning irregularities affecting the financial interests of the EU, and performs an analysis, evaluation and checks on them;

5. Conducts administrative investigations on its own initiative or due to request made by OLAF.

6. Provides, monitors, controls and coordinates the reporting of irregularities by the national institutions to the European Commission;




PRACTICAL GUIDE ON-THE-SPOT CHECKS




1. Gathering and expanding information

2. Provision of participants 3. Update of the information of the on-going pre-trial proceedings and prosecution checks

- AFCOS and Ministry of Interior

databases

- Commercial Register

- Irregularity Register

- Address visit

- Logistical support – with

computers, technics, cars

- Economic operator

- Prosecution’s office

- Local police authorities

- Public Financial Agency Inspection

- Other competent authorities

4. Interview preparation

5. Final On-the-spot Check Plan

6. Work meeting at AFCOS Directorate





By AFCOS

By the Managing authority

Collection of documents

Must be communicated to the

Minister of Interior

Between OLAF inspectors,

head of Unit OC and AFCOS

7. Starting the on-the-spot check

8. On-the-spot check core activities

9. Finalizing the On-the-spot Check

10. Analysis on the results





- Written authorization

- Identity of team

- Purpose and scope of OTSC

- Operative center and instant support

- All kind of documentation;

- computer data;

- physical checks as to nature of

quantity of goods;

- budgetary and accountant documents,

- documentation of the project etc.

- Report of the OTSC

- Objection and Comments

- Work meeting in AFCOS

OLAF Anti-Fraud

Services

Public Financial Inspection Agency Prosecution and

Judicial Authorities

Customs authorities

Police authorities Managing authorities and other national authorities

Member-States and third country authorities




YEAR

REQUESTS FOR

ASSISTANCE FROM

OLAF TO AFCOS

REQUESTS

FROM AFCOS TO

OLAF

ON-THE-SPOT

CONTROLS AND

MISSIONS

COMPLAINTS

RECEIVED IN

AFCOS

2007 6 10 2 24

2008 28 12 1 82

2009 46 4 7 54

2010 58 5 12 87

2011 98 4 2 116

2012 75 5 1 80

2013 82 8 9 104

2014 88 10 20 147

2015 77 8 35 213

2016 71 8 30 166

2017 104 9 4 98

2018 92 5 10 (22 OTSC) 97




Source: Public annual reports of AFCOS Council, www.afcos.bg

http://www.afcos.bg/

C R I M E




Workshop on identifying innovative methods to combat fraud and corruption




Andon Tashukov

MINISTRY OF INTERIOR

“Protection of the European Union’s financial interests” Directorate -

AFCOS Bulgaria

Sofia, blvd. “Rakovski” № 112

email: [email protected]

website: http://afcos.bg

tel. +359888409979




mailto:[email protected]

http://afcos.bg/

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Identifying and preventing fraud & corruption in ESI funds ... · Identifying and preventing fraud & corruption in ESI funds Building Anti-Fraud measures Lessons learned in the fight