Protection of Communities' financial interests - fight against fraud (debate) 
President
The next item is the report (Α7-0050/2011) by Mr Cătălin Sorin Ivan, on behalf of the Committee on Budgetary Control, on the protection of the Communities' financial interests - Fight against fraud - Annual report 2009 -.
Cătălin Sorin Ivan
Madam President, this report on the protection of the European Union's financial interests is based on the report drafted by the Commission according to Article 325 of the Treaty of the Functioning of the European Union. This article refers in no uncertain terms to the fight against fraud, while the Commission's report fails to give a very clear indication as to what percentage of the irregularities are due to fraud and what percentage are simple errors.
It is of paramount importance that we define very clearly what is meant by fraud because the use of this term means an act of deliberate infringement. We are talking about corruption in the proper sense of the word, whereas mistakes are unintentional. While we may agree to tolerate errors, we can, in no way, tolerate any act of fraud. There must be zero tolerance of fraud when it comes to European funds and the European Union's budget.
Another major problem relates to the collection of data and information. We must have a very serious discussion about the way in which Member States pass on to the European Union, to the European Commission to be more exact, information about the way in which EU funds are used. In my view, the content of the national management declarations will be of a higher quality when they entail much greater political responsibility at national level. I ask the Commission once again to ensure that these national management declarations are signed by the relevant minister or a minister from the national government.
In another respect, the EUR 16.7 billion contained in the European Union budget are own resources and mainly revenue from customs duties. Seventy per cent of imports come through the simplified procedure. I would like to quote at this point from Special Report No 1/2010 from the Court of Auditors of the European Union, which points out the following: 'the control carried out on these simplified procedures is very limited, while the number of errors identified by the Court is alarming'. It is of paramount importance that, in this case, the Commission evaluates the financial impact of these irregularities.
I wish to congratulate OLAF for the Diablo II operation, aimed not only at protecting the European Union's financial interests but also, at the same time, at combating counterfeit products. Apart from the detrimental impact these counterfeit products have on the European Union's fiscal framework and budget, there is also the risk to European citizens' safety and the adverse effects in the European Union's economy.
I will continue to refer to the costs involved and to mention, on the one hand, the use of European funds and, on the other hand, the recovery of funds which have been allocated without justification. On the subject of the use of European funds, we must mention the Integrated Administration and Control System, which is an excellent system but causes huge problems when it has been implemented because it is based on incorrect databases and is also hampered due to the identification of the parcels to be used.
In addition, on the subject of recovering European funds, the only thing I can say is that I find it worrying that 42% of agricultural funds are recovered and only 50% of the cohesion funds. These are extremely alarming figures and we must keep a very close eye on fund recovery.
Algirdas Šemeta
Member of the Commission. - Madam President, I would like to thank the rapporteur, Mr Ivan, for his constructive report. I will concentrate my remarks on six very important elements of it.
Firstly, the question of the information provided in the report on the protection of financial interests. The 2009 report already includes new detailed information on levels of fraud and irregularities, and indicates the suspected fraud rate per Member State for the 2000-2006 Cohesion programmes. Further improvements are always possible, and I will take due account of your suggestions.
Secondly, on the issue of the Convention on the protection of financial interests, I am preparing a communication for next May, together with Vice-President Reding. It will present a strategy for the protection of EU public money against all forms of illegal conduct, including fraud, and will look at procedures, substantive criminal law and the institutional framework.
Thirdly, turning to own resources, in 2010 the Commission started to visit all Member States to examine simplified customs import procedures. It will report to Parliament as soon as enough information has been gathered for a meaningful analysis of their implementation and performance.
Fourthly, on cigarette smuggling, agreements have now been concluded with four tobacco manufacturers. We will continue to push for a Protocol on the elimination of the illicit trade in tobacco products under the WHO Convention on Tobacco Control.
On the fifth point, I fully agree that failures in applying public procurement rules are an important source of errors and fraud. The Commission vigorously implements financial corrections with rates of up to 100% of the allocated funding, depending on the gravity of the irregularities. We propose simplification and clarification of EU procurements directives by 2012, in line with the Green Paper published earlier this year.
Finally, I share the view that the recovery of unduly paid funds is a key element in protecting the EU's financial interests. For multiannual Cohesion programmes, the Commission is making extensive use of the interruption and suspension of payments, avoiding payments to Member States where management and control systems are found not be effective. In 2010, more than EUR 2.4 billion of payments under the Regional and Social Funds were preventively interrupted. The Commission will continue to push Member States towards more efficient management of recovery from final beneficiaries.
The situation is improving. In the agricultural sector, for example, the recovery rate at the end of 2010 went up to 53% for new 2007 cases, compared to 10% for cases dating from before 2006. Let me stress, however, that for multiannual programmes the full picture is only seen when the programmes are closed, after any irregularities have been satisfactorily dealt with by the Member States.
To conclude, the Commission will endeavour to actively follow up the actions which Parliament has proposed. Thank you for your attention.
Monica Luisa Macovei
on behalf of the PPE Group. - Madam President, I believe we have to talk about what we need to correct, so I will refer to the critical issues. The first of them is the fact that the Commission's report did not provide information on the estimated level of irregularities and fraud in individual Member States. Therefore, we lack a clear picture of the problem at Member State level. In addition, the Commission dealt broadly with irregularities but failed to look at fraud in detail. We expect that to change in the report for the following year.
The second issue concerns public procurement, which, as we all know, is the area with the highest risk of fraud and corruption. What we call for in this report is for the Commission to focus on regulating public procurement: to apply uniform systems of procurement; to define and implement clear conditions for participation in public procurement; to implement criteria for decision-making on public procurement and bring transparency to these decisions; and also to review public procurement decisions and ensure transparency and accountability in public finances. We expect the Commission and the Council to finalise the adoption of the public procurement reform and to consult with us on this.
The third issue concerns the transparency of beneficiaries' funding. There is a page on the Commission's website where we can see some of the beneficiaries of European funds in the Member States. However, we need to improve this greatly. We need one-stop transparency. We need a single website that publishes all the beneficiaries of EU funds on the basis of standard categories of information to be supplied by all the Member States in at least one working language of the Union. Otherwise we will be lost in a lot of diverse information that fails to provide any overall picture and cannot offer transparency.
As the Commissioner said, there is always room for improvement, and I hope to see improvement in the areas I have mentioned.
Jens Geier
on behalf of the S&D Group. - (DE) Madam President, ladies and gentlemen, Commissioner Šemeta, We know that 80% of the EU budget is administered in a shared management arrangement, which means that money is administered and spent in the Member States, which is exactly where the errors, irregularities and fraud occur.
The annual report on the protection of the European Union's financial interests is a bit like the Member States' list of sins, which is why I would like to thank Mr Cătălin Sorin and the shadow rapporteurs from the other groups for their hard work. I found the Commission's report on the protection of the European Union's financial interests contains one remarkable sentence - on page 11 in the German version. It reads: 'For the Objective 2 programmes, the very high irregularity rates of the UK and the Netherlands, which mainly benefit from this type of programmes, may have influenced the overall rate.'
The United Kingdom and the Netherlands are two of the countries that have proposed cutting the European budget. From my position I can only call on them to make sure that European taxpayers' money is spent correctly and to combat the level of irregularities in their countries. I would be very interested to hear whether you have anything else to add in this context, Commissioner.
Bart Staes
on behalf of the Verts/ALE Group. - (NL) Reporting fraud and irregularities is very important for the legislator, as it gives us an insight into how resources are spent. It provides us with an insight into what may be going wrong. It provides us with an insight into what can be improved. In that context, this report is very important indeed.
I think that, following the debate in Parliament's anti-fraud committee, we can stand by the following conclusions.
First of all, the reports need to be more precise. They need to provide a real insight into the actual scope of irregularities and fraud.
Secondly, the Member States need to improve their reporting. This is sub-optimal at the moment, and I use the term advisedly. We therefore need to put pressure on the Member States to improve this, with sanctions if necessary.
Thirdly, those resources that are wrongly spent must actually be recovered, and the Commission must take the necessary steps to ensure that this is the case. We should also discuss this when discussing the granting of discharge in Strasbourg next month. Italy is a problem child in this regard.
Fourthly, we need to better monitor the mandatory notification of irregularities by the Member States. The lack of reports from Spain and France is particularly odd in this regard.
I am the permanent rapporteur for own resources and, as such, I would also like to direct a word of thanks and congratulations to the Commission and, above all, to the European Anti-fraud Office (OLAF) and its anti-cigarettes and tobacco fraud unit, whose results have been quite staggering and very impressive. Operation Diabolo II - it is said - was a peach of a collaborative operation, and the agreements reached with British American Tobacco and Imperial Tobacco were equally outstanding. This will yield us EUR 500 million.
There is just one thing though - it is important that this money does not simply disappear into the national exchequers of the Member States. This money must actually be used - by the Commission, yes, but predominantly by the Member States - to strengthen anti-fraud measures in the Member States. This is really a very important point. The money that results from this agreement must be put to use in the fight against fraud.
Andrea Češková
Madam President, I welcome this report, which strives for greater transparency in the fight against corruption, and which deserves support. In the autumn of last year, at the presentation from the European Court of Auditors, we were already discussing the responsibility of Member States for monitoring the overall issuing of EU funds.
In my opinion, it is right and proper that every Member State should protect the financial interests of the EU by ensuring reliable controls at the national level for the detection of irregularities and fraud. In connection with this, there is also a need for Member States and the Commission to cooperate in the provision of comprehensive and reliable information. The mandatory declaration of a report at the national level must be duly checked by the national monitoring body. The Convention on the Protection of the Financial Interests of the European Communities is surely an appropriate supporting instrument.
However, the Czech Republic, which is mentioned in the report, has not yet ratified the Convention, because it requires the introduction of criminal liability for legal entities. The law of the Czech Republic is traditionally based on the criminal liability only of natural persons. The matter is now under discussion, however, on the floor of the Parliament of the Czech Republic.
Marta Andreasen
on behalf of the EFD Group. - Madam President, the EU tends to term what in many cases is fraud and corruption as errors. Worse, the Commission has decided to move from zero tolerance to tolerable risk. To add insult to injury, the recent revelations about members of this House who agreed to amend or write legislation in exchange for payment further erode the credibility of this Parliament, particularly in its efforts to fight fraud and corruption.
Only two of the four whose names were revealed have effectively resigned. Will this Parliament review the legislation these four MEPs have worked on? One MEP has even gone so far as to question OLAF's power to investigate these cases, declaring - incredibly - that in some countries such action would not be considered illegal and would not even be investigated.
This report should spur the British Government to withhold all payments to the EU until fraud - to use its proper name - is meaningfully tackled by this Parliament.
Csanád Szegedi
(HU) Madam President, ladies and gentlemen, I would like to primarily consider political fraud and political corruption during the time I have available. I very much regret that we are only dealing with this report at a time when three Members of the European Parliament have been entrapped and are suspected of corruption on solid grounds. It does not bear thinking about that the ensnared MEPs are only the tip of the iceberg here in the European Parliament. That is to say, according to some calculations, about 50% of European Union tenders and public procurements, which have been mentioned a lot here, are embezzled, defrauded and lost in corruption, and get into the pockets of certain politicians. Well, this is intolerable.
Moreover, the mere financial aspect of this is secondary, because society is turning away from politics. If people turn away from politics, a mood of resignation will govern which will be unable to prevent school closures, rising food prices and loss of jobs. This is why the European Parliament must set an example and we must waive our privilege of immunity from judicial process. Moreover, Jobbik recommends that sentences be doubled for politicians. Thank you very much for your attention.
Ingeborg Gräßle
(DE) Madam President, Mr Šemeta, ladies and gentlemen, the Commission's report on the Protection of the European Union's financial interests - Fight against fraud - Annual Report 2009 introduces several new provisions. Firstly, the Commission is trying to determine the extent of irregularities and fraud. Unfortunately the report also makes obvious attempts to use statistics to play down the problem of irregularities and fraud at every turn. Commissioner, I was not at all pleased to read this.
The report also offers more important news, namely the implementation of the reporting system for dealing with irregularities, known as IMS. Data can now be entered at 800 offices throughout Europe, rather than 50 offices as before. Accordingly, the proportion of irregularities in the agricultural sector rose by 43% and in the area of structural funds by 23%, while the total figure in the structural funds area actually rose by 109%.
This system needs further improvement. It is painful to see that the Commission is still showing a great deal of patience in relation to implementation in the Member States, which continues to proceed at snail's pace. This is also evident in the report. Hence our call for the full implementation of the IMS. We will only have credible data when the system is up and running correctly, enabling us to deal with quota irregularities and fraud.
We are very unhappy with the situation in Italy. This country is way ahead of the rest when it comes to fraud. The EU accounts up to 2004 were audited and 60% of suspected cases of fraud were attributed to Italy. For this reason it would make sense to help this country with an action plan and a series of special measures.
I would like to express my sincere thanks to OLAF and its staff for the important work completed. You have our backing, which is why we are calling for greater support from the Commission for the European Anti-Fraud Office. Why are problems encountered with access to databases if the Commission claims that it supports the work of OLAF and considers it just as important as we do? Commissioner, we would be grateful to hear some answers and to receive appropriate remedies in the legislation introduced by the Commission.
Monika Flašíková Beňová
- (SK) Madam President, I would like to express my support for the rapporteur in his wholly justified criticism of the Commission's annual report. The Commission has focused only formally on what it was notified of by the Member States.
Commissioner, you should look more deeply, with the help of the specialised bodies. You simply have to make a greater effort, and you must try to apply the latest methodologies for measuring the extent of irregularities and fraud. If we continued with the methodology represented in the Commission's annual report for 2009, we would have only estimates for many of the suspicious items. For example, some large States receiving a high level of funding report a very low level of irregularities and fraud. Is the situation in these States really so positive, or is the national methodology for identifying these aberrations simply lenient in some way?
I fully agree with the rapporteur that the Commission is putting a disproportionately large effort into convincing us in Parliament of the need to introduce a tolerable risk of error, rather than trying to persuade Member States of the need for mandatory national management declarations.
Janusz Wojciechowski
(PL) Madam President, I agree with the rapporteur that we should not confuse serious fraud with accidental errors, because doing so means that the accidental errors divert attention from the most serious matters. I also agree with the criticism levelled at the Commission's report, which is too vague, and which contains too little information about specific instances of fraud and abuse. Our debate on this issue would be much more to the point if we had more specific information.
We are fighting corruption. We should start by fighting corruption ourselves and, when we come to adopt the various legal texts in this Chamber, we should ensure that they are always transparent, that there are clear criteria for taking decisions and that conflicts of interest are avoided, in order to ensure maximum transparency in EU spending and to ensure systematic and ongoing checks. These are the basic tools we should use to fight corruption.
Lucas Hartong
(NL) Madam President, I am pleased with this report. The reason for this is quite sad, however, as it consists of the observation that large amounts of fraud are committed within the European Union.
I quote: the Commission fails to consider fraud in detail and deals with irregularities very broadly. Large amounts of EU funds are wrongly spent. There is a disproportionate rise in irregularities in Poland, Romania and Bulgaria. Spain and Italy are responsible for the highest number of cases of irregularities. Over recent years, only 10% of legitimate recoveries were actually recovered. Finally, Bulgaria perpetrates the most fraud in connection with the Special Accession Programme for Agriculture and Rural Development (SAPARD).
These were just a few facts from the report. It is a good thing that these facts have been noted, but what is the European Union actually going to do about it? How much longer will fraud continue to be tolerated and for how much longer will the citizens have to pick up the tab?
(The speaker agreed to take a blue-card question under Rule 149(8) of the Rules of Procedure).
Bart Staes
(NL) Madam President, I listened carefully to your speech Mr Hartong, but I also listened to Mr Geier, and at one point he said that two net contributors, the United Kingdom and the Netherlands, are also seriously failing. What, after having condemned a whole group of other Member States, will you do in your own country to ensure that the Netherlands, too, does not end up failing.
Lucas Hartong
(NL) Madam President, I thank Mr Staes for his question. If you have read the report thoroughly you will also have been able to observe the facts: namely that the Netherlands - I cannot speak for the United Kingdom but I am speaking now on behalf of the Netherlands - is one of those countries with the lowest percentage of fraud, while it is also stressed that, where fraud occurs, it is to be tackled very hard. Let me be clear - I am a great advocate of this.
Erminia Mazzoni
(IT) Madam President, ladies and gentlemen, I admire the work achieved by the rapporteur, Mr Ivan. I must say that unfortunately this report reveals a certain lack of attention on the part of the Commission in its dealings with Parliament, which even in last year's work had signalled to the Commission several specific measures to be taken in response to this aim that we have set ourselves to protect the financial interests of the European Union and the interests of taxpayers in combating fraud and fighting illegality.
In fact, as Mr Ivan has made clear, concerns over the improper use of European funds have not diminished, and the percentages of irregularity and incidence of suspected fraud are still very high. Therefore, if the objective of our controls is to ensure the recovery of resources, we are bound to admit defeat in the light of the figures reported to us.
As we already stated in the report presented last year, the Commission should take responsibility for intervening in cases of serious concern, which I would group into three categories, as fellow Members before me have also said. In the first instance, Member States must take on responsibility in particular by working on detection and reporting mechanisms. Secondly, the clarity of regulations. It is vital that we arrive at a single and clear definition of fraud, irregularity and error. Finally transparency, which means not only maintaining reliable detection records from which to draw conclusions, but also going ahead with the publication of these data on a website, which is instead experiencing something of a slowdown.
On the first point, in particular that of giving Member States more responsibility, I would also like to draw attention to the fact that the lack of harmonisation between national systems creates significant differences in terms of the amount of time needed to verify cases of fraud and irregularity.
Italy has often been discussed in relation to this subject. Italy is also mentioned in Mr Ivan's document. We certainly have insupportably long verification periods and we are trying to work on the timings involved in legal and criminal justice. However, I must say that if there is no uniform criterion for the definition of fraud and irregularity, it is clear that the time taken to recover losses in states like Italy will seem excessively long.
Edit Herczog
(HU) Madam President, for my part, too, I would like to congratulate the rapporteur. I believe that the activity performed by Parliament, the Court of Auditors and the national audit offices of countries, Member States alike is highly important. It is extremely important that we do our job transparently and, if possible, impeccably. Naturally, the most important concomitant of Parliament's credibility is that we ourselves are all beyond reproach. With regard to itself, Parliament certainly needs to introduce rules for itself that are better and more effective than at present. At the same time, I would like to emphasise that it is very important to distinguish between irregularities and fraud because irregularity is not the same as fraud. Defrauders must be punished. For irregularities a different method must be applied. The goal must be that all spending organisations of all Member States know the rules precisely to ensure that as few mistakes as possible are made. It is no coincidence that we see that in the new Member States, where the debate has now begun and the use of funds has started, inexperience is one of the contributing factors.
Mairead McGuinness
Madam President, can I just congratulate the rapporteur and indeed her shadow, my colleague Monica Macovei, for their work on this report. It is an important one, because taxpayers want to know that their money is well spent.
I think it is important to emphasise, as did the last speaker, the difference between irregularities and fraud. For the public, fraud is carried out with criminal intent, but many people make mistakes which could be classified as errors, or commit major or minor breaches of European Union rules, and they should not all be lumped together. There is a very distinct difference.
In relation to agriculture, which was mentioned by some colleagues, it is important that we have full transparency on payments in the agricultural sector. Huge improvements have been made in this area. But it is important, as we move towards reforming the common agricultural policy, that we continue to make those improvements. I refer in particular to paragraph 24, which talks about the control systems. I know that, in the Member State that I represent, farmers are getting new maps out and have got to resubmit. A huge amount of patience and attention is being paid to this issue, and rightly so.
I will finish by saying that individuals are sometimes caught by the system, whereas major players and others who might be more guilty of an element of fraud are perhaps less likely to be caught. That is something that we need to be aware of. Let us not terrorise the individual.
Zigmantas Balčytis
(LT) Madam President, I would like to thank my colleague Cătălin Ivan for his excellent work preparing this important report. European Union taxpayers' money must be used appropriately and efficiently. To that end, it is necessary to ensure that the Member States have effective control mechanisms and adequate fraud detection capability. It is important for the Commission and the European Anti-Fraud Office (OLAF) to be provided with high quality, accurate, reliable and comparable data on irregularities and fraud. The current recovery rate is very low and intolerable. It is therefore necessary to take action to recover all European Union money that has been misused. In this fight it is crucial for proper attention to be paid by the Council and the Member States to the facts presented in Parliament's report and the Commission's annual reports on the protection of interests, and for OLAF to be able to take all necessary steps to strengthen anti-fraud measures in this area.
Iliana Ivanova
(BG) Madam President, ladies and gentlemen, unfortunately this report still contains worrying findings regarding the high proportion of resources which have been wrongly spent and the inadequately prompt action taken to recover them. Nevertheless, the European Commission's data is not completely adequate either for determining measures to be used to discipline the Member States with the highest rate of irregularities and fraud.
Most fellow Members have already mentioned the difference between fraud and irregularities, which is not emphasised clearly, because the report fails to consider fraud in detail, which is deliberate wrongdoing, while adopting a very general approach to irregularities, which does not give us an opportunity to make any effective recommendations on the issue.
I am pleased with the Commission's conclusion that compliance with reporting requirements in the agricultural sector has already reached 95%. However, at the same time, I find low and zero rates for fraud and irregularities in some Member States suspicious, which could mean that fraud control and detection systems are not operating properly.
I think that control over the spending of European funds would improve considerably if there were specific data and methods available for assessing the management and control systems deployed in the Member States where the national agencies' efficiency is evident. This is why it is totally plausible that countries with a zero irregularity rate simply have a poor control system which fails to detect the problems, whereas countries with efficient national agencies may discover more fraud and irregularities, thereby making the levels for these considerably higher.
According to the data from the Court of Auditors of the European Union, at least 30% of the errors could have been detected and rectified by the national agencies prior to certifying them to the European Commission. I hope that all Member States will make more effort to improve their mechanisms for detecting and rectifying errors.
I want to call on the European Commission to take the necessary measures to guarantee sufficient information about the control and management systems deployed in Member States, as well as adequate measures for promptly removing any deficiencies detected where the control systems are used.
Inés Ayala Sender
(ES) Madam President, I too would congratulate my colleague, Mr Ivan, on the rigorous way that he has set about an issue as controversial and difficult as fraud detection and protecting financial interests.
I would like to thank him for his interest in identifying the definitions of fraud, because, in general, suspicions of fraud and irregularities or errors are often mixed up, leading to figures that cause a fuss without really being rigorous.
I should also like to stress his interest in raising the issue of deadlines. Specifically, the delays being caused by Member States between detection and reporting are also leading to difficult situations.
It should also be remembered that, in the end, the final figures appear when a cycle is finalised and that, at the moment, the last full cycle to have been finalised was that ending in 1999: in the new cycle - 2000-2006 - we have only reached the end of 2004. Therefore, only the final figures for that cycle can be taken into account.
I should, of course, like to support the European Anti-Fraud Office's means for fraud detection in relation to China and Asian countries, within the ethical code.
Andrea Cozzolino
(IT) Madam President, ladies and gentlemen, I would also like to thank the rapporteur, Mr Ivan. The report lists the innovations introduced in the changes to control and reporting systems. These too bring out a greatly varied picture, especially in terms of Member States' reporting of irregularities and fraud.
The report repeatedly highlights the unusually low levels of fraud and irregularity reported by various countries in relation to agricultural expenditure, structural funds and pre-accession funds. It is here that we really must have some clarification on the statistics which have been submitted. The context is made more complicated by the unresolved inefficiencies in recovering losses.
In any case, one figure seems clear and confirms a long-running trend. The struggle for legality and transparency in the expenditure of European resources, in comparison to tax avoidance and evasion, cannot yet count on the full collaboration of Member States and governments with the European institutions.
In this light, it seems that the calls for reform of the EU's public procurement rules and the need for what I would call a public European register for the beneficiaries of EU funds are timely.
Georgios Stavrakakis
(EL) Madam President, I too should like to congratulate the rapporteur on his exceptional work on the annual report on the protection of the Communities' financial interests and on the fight against fraud. The report covers in detail all areas in which the Member States implement the budget, such as agriculture, cohesion, pre-accession funds and collection of the EU's own resources via customs duty.
I absolutely agree that we need to improve supervision of pre-accession funds, given the experience in 2009, and that we need to monitor OLAF's work constantly, not only when the annual report is debated.
Finally, I should like to stress that our report provides important findings which we can use in the debates which have started both on the review of the Budgetary Regulation and for planning political cohesion post-2013.
Ivailo Kalfin
(BG) Madam President, I would like to congratulate the rapporteur for his extremely diligent work on this report. We have proved on several occasions that Parliament is an institution which pays particular attention to the way in which European taxpayers' money is spent.
Many fellow Members raised the issue. I too wish to add my voice to those who are insisting on the Commission adopting much clearer rules for the methodology which Member States are considering, because mixing up the concepts 'abuses', 'errors' and even 'suspected abuses', which appears, produces statistics which cannot be used to make clear-cut decisions in Parliament.
I also support those sections of the report which encourage the Commission to introduce much clearer rules for national accountability to include properly audited national declarations required from Member States. The latter must adopt measures automatically to eradicate the deficiencies.
Elena Băsescu
(RO) Madam President, the level of economic and financial crime must be reduced in every Member State. Large amounts of EU funds are spent on other purposes, while the incidence of VAT recovery fraud is on the increase. I have already mentioned it before and will again: one effective method for possibly eradicating corruption in public procurement is to introduce an online tender system.
As a country located at the EU's border, Romania has increased responsibility for mitigating the impact of illegal activities. In this regard, the country's authorities have carried out large-scale actions during the last two months, aimed at eradicating customs corruption.
Cooperation and exchanges of experience must be stepped up with the Western Balkans region in order to provide more effective protection for the EU's financial interests. I am referring, for example, to cigarette smuggling, which is a major, direct obstacle to the European budget.
Franz Obermayr
(DE) Madam President, errors are made through carelessness or ignorance. However, fraud is not something that just simply happens, but requires a high level of criminal activity. Those who seek financial gain from the Brussels juggernaut by making false claims are sometimes seen as latter-day Robin Hoods rather than as criminals. However, this does not just inflict damage on the EU, but also misuses the taxes paid by our citizens.
We must give new strength to the weak mechanisms for combating fraud. I am thinking of significant financial penalties, as well as exclusion from subsidy schemes as a consequence. In the final analysis, what we need is greater transparency and clear areas of responsibility when there is reason to suspect fraud and negligence. We cannot allow the institutions, in particular the European Parliament and OLAF, to impede one another's investigations.
Finally, a word about our major headaches: cohesion policy, pre-accession aid and agencies. We need to rethink our strategy here and to take decisive action to establish order.
Markus Pieper
(DE) Madam President, let me start by saying that subsidy fraud and the abuse of financial aid are problems that have significantly declined in recent years. Despite all the progress made in terms of transparency and controls, public perception remains critical. This critical attitude is justified when we consider the way that some Member States have dealt with improperly apportioned grant payments. The fact that only a fraction of this money has been returned to the European budget represents a blow against all taxpayers.
The Commission must recover this money immediately. An even better solution would be to pay out a correspondingly smaller level of subsidies to the relevant Member States in the next financial year and to continue to do so until the improperly distributed funds have been returned to Brussels. However, we are equally uneasy when very few irregularities are reported, according to the principle: if I report nothing then I do not need to worry about recovery and the money will remain in my country.
As demanded in the report, I also call on Spain, France and other countries to place their cards on the table, while also calling on the Commission to further strengthen its controls.
Algirdas Šemeta
Member of the Commission. - Madam President, I would like once again to thank Mr Ivan for a very constructive and good report and also all Members for the contributions made during this debate, which will certainly be taken on board by the Commission when preparing the report for 2010.
The Commission will further improve the format and content of the Article 325 annual report on the protection of financial interests and will take into account the suggestions that were made during the debate. As I mentioned, we have already improved the statistics, but of course there is still room for more improvement.
We are asking Member States to present more information and also to distinguish better between fraud and irregularities in order to be able to present clear information on both fraud and irregularities.
I fully agree with Mrs Grässle that we can make improvements in the irregularities management system, and we are working on it very seriously. The issue was raised of transparency of beneficiaries as well. We are improving this and the ideas that were presented here will also be analysed by the Commission.
The Commission also shares the view that, although measures have been taken by the Member States to make control systems in the fight against fraud and corruption more efficient, there is still room for further improvement. Regarding the points made by Mr Geier: fraud has no specific national borders. It is not just a problem for several Member States or new Member States but also for the Member States that you mentioned in your intervention.
Of course, we have to address this issue seriously throughout the European Union and my intention is to really improve the content of the report for 2010. I and my services have been working seriously on it and I believe that the report for 2010 will be of the highest possible quality.
Cătălin Sorin Ivan
Madam President, I too wish to thank the Commissioner and all my fellow Members who contributed to this report, whether today during the debate or through their amendments. I would also like to thank the shadow rapporteurs with whom I enjoyed excellent relations. This report is the result of the collaboration and excellent cooperation I had.
I would like to reiterate that the difference between irregularities and fraud must be clearly defined. While we may agree to tolerate errors and irregularities, there must be zero tolerance of fraud. Secondly, the national management declarations must be signed by the national politician responsible for this, such as the relevant minister.
Thirdly, we are awaiting with great interest the check being carried out by the Commission on the simplified procedure because it is of paramount importance for the European Union's own resources to be collected in the most efficient way possible and for the budget to be consolidated as effectively as possible.
Fourthly, with regard to the public procurement law and bureaucracy relating to the use of European funds at national level, we have to tackle excessive red tape in many Member States, which is intended, on the one hand, to combat fraud but, on the other hand, creates opportunities for corruption and making fraudulent use of European funds. Otherwise, as they are highly politicised, the funds go to political beneficiaries.
Last but not least, and as the final point in my speech, I want to welcome the proposal tabled by my colleague Jens Geier on introducing a system for automatically suspending European funds when any suspicion of fraud arises. I think that this will ensure that Member States too respond much more quickly when we sound the alarm bell.
President
The debate is closed.
The vote on the report by Mr Cătălin Sorin Ivan will take place tomorrow at 12:00.
Written Statements (Rule 149)
Zuzana Brzobohatá
I have already given my support to the submitted report in the Committee on Budgetary Control, but I would still like to point out a number of important findings from the report. I would first like to highlight the appeal made in the report to countries that have not yet ratified the Convention on the Protection of the Financial Interests of the European Communities, in other words Malta, Estonia and the Czech Republic. Unfortunately, the current Czech government has done nothing to intensify the fight against fraud and corruption. On the other hand, I would like to applaud the report for stating that the Czech Republic, along with Estonia, Latvia and Slovenia, had a zero level of fraud in drawdowns from the pre-accession SAPARD fund. I am alarmed by the finding of the Court of Auditors that more than 30% of errors identified by the Court in a sample from 2009 could have been discovered and corrected by the Member States before confirming the payments to the Commission, on the basis of information that the Member States had in their possession. I would like to join the call for OLAF, in accordance with the request raised in last year's report on protecting the financial interests of the Community, to provide a detailed analysis in its next annual report of the strategies and measures introduced by each Member State in the fight against fraud and the prevention and detection of irregularities in the use of European funding, including cases where these resulted from corruption.
