PracticePeople In PracticeEU anti-fraud measures attacked

EU anti-fraud measures attacked

The Court of Auditors, the European Union's financial watchdog, has criticised controls operated by the European Commission and EU member states, which are supposed to prevent fraud and mismanagement frittering away EU budgets.

It strongly criticised checks to ensure that agricultural products that attract EU export refunds are actually released onto non-EU markets.

The court concluded that there were ‘many cases involving the presentation of false and invalid proofs of arrival’. It added that controls on proofs offered by third countries, supervisory companies and EU embassies were also riddled with ‘serious weaknesses’.

The other critiques focus on structural funds which are spent by the EU on poorer regions and economic sectors, in a bid to raise their general level of prosperity.

One system, Regulation EC2064/97, involves national checks on at least 5% of projects co-financed by the EU. Although, the court said that this was ‘positive’, it added that in many cases member states were not applying the regulation correctly, in part because the Commission ‘had not issued sufficient clear and timely guidance’. The court said Brussels had been too slow to assess its implementation.

More problems were detected in Regulation EC 1681/94, which says how national governments should communicate information about irregularities in structural fund programmes. Here, the court identified weaknesses in its application by the Commission, national and regional governments, and called on member states to ‘review their systems’.

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Fraud busters warn of euro crime surge

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