Urgent action is needed to tackle large-scale fraud involving European Union project funding, according to the European Court of Auditors. Nicola Sharp of business crime solicitors Rahman Ravelli believes that such changes cannot come quick enough.
Governments need to step up efforts to tackle fraud regarding European Union funds, according to the European Court of Auditors.
In its report, the auditors' watchdog says that EU countries' are overly optimistic when assessing their own anti-fraud measures. This, it says, has led to those looking to commit fraud targeting the EU cohesion policy, which determines the financing of hundreds of thousands of European projects by the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the EU Cohesion Fund.
The European Court of Auditors (ECA) believes more than 4,000 potentially fraudulent irregularities affecting the EU's financial interests were identified between 2013 and 2017. These involved €1.5 billion of EU support, 72% of which involved cohesion policy activities aimed at reducing disparities between member states.
The ECA assessed countries' anti-fraud measures. It found that in many cases the impact of prevention and detection measures was not being monitored sufficiently and corrective measures were having a limited deterrent effect. Fraud reporting arrangements were often unsatisfactory, cases were under-reported, suspicions were not effectively communicated to the appropriate bodies and coordination between anti-fraud agencies was weak.
The ECA has recommended that member states adopt formal strategies to tackle fraud involving EU funds. This would appear to be an obvious and rather unsurprising conclusion to be drawn from its findings.
Given the large number of fraud incidents being reported and the sizeable amounts of money involved, it would appear to be to everyone's benefit if the EU as a body and its individual member states took heed of the ECA's stark warnings.
Clearly the current anti-fraud measures put in place by member states are not fully effective and require further strengthening and control in order to both detect and try to prevent fraud.
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