Protection of the Union’s financial interests
Article 7
1. The Commission shall ensure that, when actions financed under this Decision are implemented, the financial interests of the Union are protected by the application of measures to prevent fraud, corruption and any other illegal activities, by effective checks and by the recovery of amounts unduly paid and, if irregularities are detected, by effective, proportional and dissuasive penalties, in accordance with Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests ( 9 ) , Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to protect the European Communities’ financial interests against fraud and other irregularities ( 10 ) , and Regulation (EC) No 1073/1999 of the European Parliament and of the Council of 25 May 1999 concerning investigations conducted by the European Anti-Fraud Office (OLAF) ( 11 ) . 2. For the Union actions financed under this Decision, OLAF has the power to carry out investigations on the basis of Regulation (EC, Euratom) No 2988/95 and Regulation (Euratom, EC) No 2185/96, which shall apply to any infringement of a provision of Union law, including infringements of a contractual obligation stipulated on the basis of the Facility, resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the European Union or budgets managed by it, by an unjustified item of expenditure. 3. All implementing measures resulting from this Decision shall include a reference to paragraphs 1 and 2 of this Article and provide, in particular, for supervision and financial control by the Commission or any representative authorised by it, and by audits by the European Court of Auditors, including, if necessary, on-the-spot audits.