EU leaders face call for new measures to combat fraud

Date: 07/12/1995

A LONG list of measures which EU governments should take to step up the fight against fraud and waste will be presented to next week's Madrid summit.

The action plan has emerged from an analysis by the European Commission of over 700 pages of data submitted by governments on the different schemes individual member states operate to prevent fraud against the EU budget.

Launched by EU leaders themselves a year ago, the initiative reveals great divergence between national authorities in the procedures and diligence with which they protect the 85-billion-ecu annual EU budget, 80&percent; of which passes through their hands. Some national reports amount to just a few pieces of paper, while the most detailed runs to 78 pages.

Governments will be told that tougher administrative penalties for expenditure fraud are “an obvious necessity” if they are to match those already in place for defrauding the EU's coffers. They are also being urged to harmonise the penalties they inflict to prevent illegal business flows to “softer” countries.

EU leaders will be warned that the general protection given to EU financial interests is unsatisfactory, and that scope exists for specific fraud- prevention controls by specialists in the fight against organised financial crime.

Member states are criticised for failing to provide proper information on the extent to which they recover funds found to have been fraudulently used. The Commission pointedly notes that only half of the national reports contained data on the number of checks carried out.

Other measures which will now be promoted are improved judicial cooperation between magistrates and prosecutors in different countries, and better feedback between national audit institutions and the EU's own financial watchdog, the Court of Auditors.

Further pressure for a stronger campaign against fraud and corruption is coming from the European Parliament. Next week, MEPs in Strasbourg are likely to demand that the Commission produces an anti-corruption programme by the middle of the year. This would be backed by attempts to encourage people accused of corruption to cooperate with police and legal authorities. In addition, there are moves to exclude economic operators convicted of fraud from tendering for public contracts for a limited period.

The complexity of the issues involved was highlighted by the non-governmental organisation Transparency International in a recent call for effective EU action to fight international corruption. It pointed out that, at present, a German businessman who bribes a French official in an EU-wide open tender procedure cannot be prosecuted in Germany.