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New approach to fraud prevention
The European Commission proposes a new approach to prevention of fraud against the Community budget, based on the investigative and intelligence activities conducted by the European Anti-Fraud Office.
Communication from the Commission of 17 December 2007 to the Council, the European Parliament and the European Court of Auditors - Prevention of fraud by building on operational results: a dynamic approach to fraud-proofing [COM(2007) 806 final – Not published in the Official Journal].
This Communication sets out a new approach to prevention of fraud against the Community budget, which will be based on the investigative and intelligence activities carried out by the European Anti-Fraud Office (OLAF).
This new method replaces the one established in 2001 by the Commission communication on fraud-proofing of legislation and contract management. The previous approach, based on a process of upstream consultation of OLAF, will,however, remain available for legislative proposals identified as high-risk by the Commission's departments. In addition, the consultation process of DG BUDGET for the adoption and revision of standard contracts, as provided for in the 2001 communication, remains applicable.
The proposed new method will make it possible to:
- enhance the impact of investigation results on fraud prevention and other illegal activities affecting the financial interests of the European Union (EU);
- ensure a flow of proactive information that is independent of the interservice consultations;
- broaden the support of OLAF to other Commission departments and services through targeted analyses based on its investigations and intelligence activities.
The new method will be based on both the lessons that can be learnt from OLAF's investigative activities and on intelligence activities enabling risk assessment.
Other sources of information will also be used, such as:
- the results of audits carried out by internal auditors and audit structures, which will inform OLAF of potential systemic irregularities that may constitute a risk of fraud;
- Court of Auditors' reports identifying relevant details for fraud prevention, etc.
All this information will be analysed by OLAF in a structured and multidisciplinary manner in order to identify weaknesses in the legislation, management and control systems or contracts. On this basis, OLAF will make recommendations of a non-binding nature that will be transmitted to the entities concerned (Commission departments, EU bodies and institutions). The latter are required to inform OLAF on the measures implemented to address the problems identified.
In addition to the ad hoc recommendations or those of a more general nature, OLAF will also make available to the Commission a compendium of the most common fraud patterns.
OLAF will pay special attention to structural or systemic irregularities and weaknesses that have not already been analysed by the audit and control bodies nor detected through other systematic controls.
This new approach is designed as a flexible tool capable of adapting quickly to changing realities. It will be evaluated after a trial period of three years.