Brussels, 10/05/2010 (Agence Europe) - The financial impact of irregularities fell from €1,024 million in 2007 to €783.2 million in 2008, with reductions being recorded in all spending areas except direct expenditure and pre-accession funds, but improvement is still needed in tackling harmful tax practices, monitoring of direct expenditure and improving public procurement markets, the European Parliament said on Thursday 6 May in adopting the report by Andrea Cozzolino (S&D, Italy) on the protection of the Communities' financial interests and the fight against fraud (annual report 2008).
Parliament regrets that “a large amount of EU funds is still wrongly paid”, and calls on the Commission to take appropriate action to recover those funds.
Own resources. MEPs are pleased that the estimated amount affected by irregularities was 12.5% lower than in 2007. They note, however, that, as in previous years, the highest number of irregularities was recorded for television sets and monitors. The EP considers it essential to enact effective legislation to improve administrative cooperation in tackling harmful tax practices and ensure the smooth functioning of the internal market. It stresses the importance of making member states more accountable, starting with the quality of the information entered into the databases, and calls on the Commission to verify the accuracy of that information and to ensure that all VAT amounts payable are collected.
Agricultural expenditure. The EP welcomes the fact that the estimated amount affected by irregularities was 34% lower than in 2007. It emphasises the importance of fulfilling irregularity reporting requirements and deplores the failings recorded in respect of Austria, Sweden, Slovakia and Hungary. It endorses the Court of Auditors' view that the Integrated Administration and Control System (IACS) is only effective in limiting the risk of error or irregular expenditure if it is properly used and deplores the major failings identified in the systems used by the United Kingdom (Scotland), Bulgaria and Romania.
Structural initiatives. The financial impact of irregularities was 27% lower than in 2007. Parliament is concerned that Italy, Poland, the United Kingdom and Spain reported the largest amount of irregularities.
Pre-accession funds. The estimated amount affected by irregularities reported by the EU10 grew by 8%, while that for the EU2 (Romania and Bulgaria) increased by 152%, and while amounts recovered were 15.6% down on 2007, MEPs note. Bulgaria and Romania are called on to improve the supervision and transparency of public procurement procedures at central, regional and local levels.
Direct expenditure and OLAF. The EP points out that external aid is a sector which is increasingly affected by irregularities and fraud. It requests that the Commission pay attention to the problem of double financing of projects. MEPs underline that the EU has been contributing more than €1 billion annually to the United Nations over the last five years and reiterate, therefore, the necessity to reinforce OLAF's mandate in an international context and the need to provide OLAF with all the necessary legal means to carry out its duties of controlling this increasing direct expenditure.
Increasing transparency and combating fraud, corruption and financial crime. The EP notes that the public procurement sector is the one most open to risks of mismanagement, fraud and corruption and that “such unlawful activities distort the market, increase the prices and fees paid by consumers for goods and services and spread mistrust toward the European Union”. It calls, therefore, on the Commission and the member states to consider the current rules on public procurement carefully and make proposals on how they may be improved (it acknowledges, too, that progress has been made towards greater transparency concerning the beneficiaries of EU funds). MEPs call on the Commission to “begin early discussions and consultations … on all aspects” related to the creation of the European Prosecutor's Office responsible for combating crimes affecting the financial interests of the EU, as provided for in Article 86 of the TFEU. The Council Presidency is urged to give the Commission a mandate to negotiate and complete in the shortest possible time anti-fraud agreements with Andorra, Monaco and San Marino and to negotiate a new, further-going agreement with Switzerland. The Commission is called on to: - develop a proposal on the mutual recognition of disqualifications, in particular for professions in the financial area, so as, for example, to exclude fraudulent offenders from acting as chief executives; - consider banning companies which operate through offshore havens from making business agreements with companies residing in the European Union if their offshore location will unilaterally delay the adoption of cooperation agreements with the Union; - develop an impact assessment and a proposal to extend the EU acquis on common definitions of offences in the area of financial and economic crime. (L.C./transl.rt)