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BUDGET : MORE IRREGULARITIES, BUT FOR SMALLER AMOUNTS.

In 2008, compared to previous years, there were more irregularities affecting the EU budget and financial interests, although the sums in question tended to be smaller. This is the conclusion derived by the European Commission in its annual report on the protection of the European Communities' financial interests and the fight against fraud, published on 15 July.

The report compliments the annual report of the European Anti-Fraud Office (OLAF), published on 9 July (see Europolitics 3792), by presenting detailed statistics of the irregularities and suspected fraud communicated to the Commission by member states. The Commission warns, however, that the figures are preliminary and purely indicative because some of the figures quoted cover the total amounts of the given action before the exact amount due to irregularity has been established. It also makes a distinction between irregularity and fraud - fraud being defined as intentional irregularity constituting an infringement, which only a judge is qualified to rule on.

The following results are highlighted by the report:

- Own resources (eg customs duties): The number of incidences decreased by 12.5% compared to 2007 and the total amount attributed to irregularities dropped from 401 million to 351 million. The amount attributed to suspected fraud dropped by approximately 40%. The products most commonly suspected of irregularities are electronics and multimedia, particularly televisions and computer screens, and tobacco. The countries most at fault are China, Japan and the United States.

- Agricultural expenditure: The number of communicated incidences has decreased by 27%. The estimated total amount of 102.3 million represents a 34% decrease compared to 2007. Most reported incidences concern the fruit and vegetable, rural development and wine sectors. Cases of suspected fraud represent approximately 0.01% of the funds in the sector (compared with 0.1% in 2007).

- Structural measures: The number of irregularities has risen by 6.7%, compared to the previous year but the financial impact has dropped by 27%, to 585.2 million.

- Pre-accession funds: The number of irregularities has increased by an impressive 58% and the estimated financial impact has grown from 32 million in 2007 to 61 million. The increase in the number of incidences uncovered may be due to better controls.

The report stresses that at EU level, the Commission and the member states are implementing the decision to ensure transparency regarding the beneficiaries of EU funds. Though this measure is mainly intended to enhance democratic accountability and informed policy debates, it also helps dissuading fraud, reads the text.

The report is available at www.europolitics.info > Search = 254524

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Publication:European Report
Date:Jul 16, 2009
Words:420
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