Definitions
For the purposes of this Chapter the following definitions shall apply:
(a)
‘economic operator’: any natural or legal person or other entity taking part in the implementation of assistance from the EFF, with the exception of a Member States exercising its prerogatives as a public authority;
(b)
‘primary administrative or judicial finding’: a first written assessment by a competent authority, either administrative or judicial, concluding on the basis of specific facts that an irregularity has been committed, without prejudice to the possibility that this conclusion may subsequently have to be revised or withdrawn as a result of developments in the course of the administrative or judicial procedure;
(c)
‘suspected fraud’: an irregularity giving rise to the initiation of administrative or judicial proceedings at national level in order to establish the presence of intentional behaviour, in particular fraud, as defined in Article 1(1)(a) of the Convention drawn up on the basis of Article K.3 of the Treaty of the European Union, on the protection of the European Communities' financial interests ( 23 ) ;
(d)
‘bankruptcy’: insolvency proceedings as defined in Article 2 (a) of Council Regulation (EC) No 1346/2000 ( 24 ) .
Initial reporting — derogations
1. Without prejudice to the obligations under Article 70 of basic Regulation, within two months following the end of each quarter, Member States shall report to the Commission any irregularities which have been the subject of a primary administrative or judicial finding.
In that report, Member States shall in all cases give details concerning the following:
(a)
the EFF, the objective, the operational programme, the priority axis and the operation concerned and the Common Identification Code (CCI) number;
(b)
the provision which has been infringed;
(c)
the date and source of the first information which led to a suspicion that an irregularity has been committed;
(d)
the practices employed in committing the irregularity;
(e)
where appropriate, whether the practice gives rise to a suspicion of fraud;
(f)
the manner in which the irregularity was discovered;
(g)
where appropriate, the Member States and third countries involved;
(h)
the period during which, or the moment at which, the irregularity was committed;
(i)
the national authorities or bodies which drew up the official report on the irregularity and the authorities responsible for the administrative or judicial follow-up;
(j)
the date on which the primary administrative or judicial finding on the irregularity was established;
(k)
the identity of the natural and legal persons involved or of any other participating entities, except where such information is irrelevant for the purposes of combating irregularities, given the nature of the irregularity concerned;
(l)
the total budget and the public contribution approved for the operation and the distribution of its co-financing between Community and the national contribution;
(m)
the amount of the public contribution affected by the irregularity and the corresponding Community contribution at risk;
(n)
where no payment of the public contribution has been made to the persons or other entities identified under point (k), the amounts which would have been unduly paid had the irregularity not been identified;
(o)
the suspension of payments, where applicable, and the possibilities of recovery;
(p)
the nature of the irregular expenditure.
2. By way of derogation from the paragraph 1, the following cases need not be reported:
(a)
cases where the irregularity consists solely in the failure to execute an operation, in whole or in part, included in the co-financed operational programme owing to the bankruptcy of the beneficiary;
(b)
cases brought to the attention of the managing or certifying authority by the beneficiary voluntarily and before detection by either of them, whether before or after the payment of the public contribution;
(c)
cases which are detected and corrected by the managing or certifying authority before any payment to the beneficiary of the public contribution and before the inclusion of the expenditure concerned in a statement of expenditure submitted to the Commission.
However, irregularities preceding a bankruptcy and cases of suspected fraud must be reported.
3. Where some of the information referred to in paragraph 1, and in particular information concerning the practices employed in committing the irregularity and the manner in which it was discovered, is not available, Member States shall as far as possible supply the missing information when submitting subsequent quarterly reports of irregularities to the Commission.
4. If national provisions provide for the confidentiality of investigations, the communication of the information shall be subject to the authorisation of the competent court or tribunal.
5. Where a Member State has no irregularities to report under paragraph 1, it shall inform the Commission of that fact within the time limit set out in that paragraph.
Urgent cases
Each Member State shall immediately report to the Commission and, where necessary, to the other Member States concerned, any irregularities discovered or supposed to have occurred, where it is feared that:
(a)
they may very quickly have repercussions outside its territory;
or
(b)
they show that a new malpractice has been employed.
Reporting of follow-up and non-recovery
1. Within two months following the end of each quarter, Member States shall inform the Commission, with a reference back to any previous reports made under Article 55, of the procedures instituted with respect to all irregularities previously notified and of any important changes resulting from them.
That information shall include at least the following:
(a)
the amounts which have been, or are expected to be, recovered;
(b)
any interim measures taken by Member States to safeguard the recovery of any sums unduly paid;
(c)
any judicial and administrative procedures instituted with a view to recovering any sums unduly paid and to imposing sanctions;
(d)
the reasons for any abandonment of recovery procedures;
(e)
any abandonment of criminal prosecutions.
Member States shall report to the Commission administrative or judicial decisions, or the main points thereof, concerning the termination of such procedures and shall state in particular whether or not the findings are such that fraud is suspected. In the case referred to in point (d), Member States shall, as far as possible, notify the Commission before a decision is taken.
2. Where a Member State considers that an amount cannot be recovered or is not expected to be recovered, it shall inform the Commission, in a special report, of the amount not recovered and the facts relevant to the decision on apportionment of the loss under Article 70(2) of basic Regulation.
That information shall be sufficiently detailed so as to allow the Commission to take such decision as soon as possible, after consulting the authorities of the Member States concerned.
It shall include at least:
(a)
a copy of the award decision;
(b)
the date of the last payment made to the beneficiary;
(c)
a copy of the recovery order;
(d)
in the case of bankruptcies subject to the reporting under Article 55(2), a copy of the document attesting the beneficiary's insolvency;
(e)
an outline description of the measures taken by the Member State, with an indication of their dates, to recover the relevant amount.
3. In the case referred to in paragraph 2, the Commission may expressly request the Member State to continue the recovery procedure.
Electronic transmission
The information referred to in Articles 55 and 56 and Article 57(1) shall be submitted, whenever it is possible to do so, by electronic means, using the module provided by the Commission for this purpose via a secure connection
Reimbursement of judicial costs
Where the competent authorities of a Member State decide, at the express request of the Commission, to initiate or continue judicial proceedings with a view to recovering amounts unduly paid, the Commission may undertake to reimburse the Member State all or part of the judicial costs and costs arising directly from the proceedings, on presentation of documentary evidence, even where the proceedings are unsuccessful.
Contacts with Member States
1. The Commission shall maintain appropriate contacts with the Member States concerned for the purpose of supplementing the information supplied on the irregularities referred to in Article 55, on the procedures referred to in Article 57, and, in particular, on the possibility of recovery.
2. Independently of the contacts referred to in paragraph 1 the Commission shall inform Member States where the nature of the irregularity is such as to suggest that identical or similar practices could occur in other Member States.
3. The Commission shall organise information meetings at Community level for representatives of the Member States in order to examine with them the information obtained pursuant to Articles 55, 56 and 57, and paragraph 1 of this Article. The examination shall focus on the lessons to be learned from the information in connection with irregularities, preventive measures and legal proceedings.
4. At the request of a Member State or the Commission, the Member State and the Commission shall consult with one another for the purpose of closing any loopholes prejudicial to Community interests which become apparent in the course of the enforcement of provisions in force.
Use of information
The Commission may use any information of a general or operational nature communicated by Member States under this Regulation to perform risk analyses, and may, on the basis of the information obtained, produce reports and develop early-warning systems serving to identify risks more effectively.
The provision of information to Committees
The Commission shall regularly inform the Member States, in the framework of the advisory committee for the coordination of fraud prevention set up by Commission Decision 94/140/EC ( 25 ) , of the order of magnitude of the funds involved in the irregularities which have been discovered and of the various categories of irregularity, broken down by type and number. The committee referred to in Article 101 of the basic Regulation shall also be informed.
Irregularities under the reporting threshold
1. Where the irregularities relate to amounts of less than EUR 10 000 chargeable to the general budget of the European Communities, Member States shall not submit to the Commission the information provided for in Articles 55 and 57 unless the latter expressly requests it.
However, in accordance with Article 60(f) of the basic Regulation, Member States shall keep accounts of amounts below that threshold that are recoverable and of amounts recovered or withdrawn following cancellation of the contribution to an operation and shall repay the recovered amounts to the general budget of the European Communities.
Without prejudice to the obligations arising directly out of Article 70(1)(b) of the basic Regulation, the Member State and the Community shall share any losses arising from amounts below the threshold that cannot be recovered in accordance with the co-financing rate applicable to the operation concerned. The procedure set out in Article 57(2) of this Regulation shall not apply unless the Commission decides otherwise.
The third subparagraph of this paragraph shall also apply to cases of bankruptcy exempted from the reporting obligation provided for in Article 55(1).
2. Member States which have not adopted the euro as their currency by the date the irregularity is established shall convert expenditure paid in national currency into euro, in accordance with Article 95 of the basic Regulation. Where the expenditure has not been registered in the accounts of the certifying authority, the most recent accounting exchange rate published electronically by the Commission shall be used.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
