COUNCIL CONCLUSIONS of 11 July 1994 concerning the fight against fraud (94/C 292/01)

THE COUNCIL OF THE EUROPEAN UNION,

Recalling that pursuant to Article 209a of the Treaty establishing the European Community Member States shall take the same measures to counter fraud affecting the financial interests of the Community as they take to counter fraud affecting their own financial interests, and without prejudice to other provisions of the Treaty, Member States shall coordinate their action aimed at protecting the financial interests of the Community against fraud and, to this end shall organize, with the help of the Commission, close and regular cooperation between the competent departments of their administrations,

Recalling the conclusions of the Edinburgh and Copenhagen European Councils and Ecofin Councils with regard to the fight against fraud,

Recalling the procedures laid down in Articles 169, 170 and 171 as amended by the Treaty on European Union,

Taking note of the report of the Court of Auditors for the financial year 1992 and of its special reports for financial years 1993 and 1994 and recalling the comments made by the Council during the discharge procedure, all of which stressed the importance of effective financial management and controls both by Member States and the Commission,

Having examined the Commission's report on the fight against fraud in 1993 and its strategy and work programme for 1994,

Having regard to the provisions in the EC, ECSC, Euratom and Treaties as regards combating fraud,

HAS ADOPTED THE FOLLOWING CONCLUSIONS:

The Council of the European Union:

- stresses the need for the utmost vigour in continuing to fight fraud, which constitutes a threat to the Community's financial interests, in the areas of both expenditure and revenue, and to the image of the Community,

- stresses that the fight against fraud is a continuing task requiring sustained efforts at both Community and Member State level in order to protect the Community's financial interests effectively,

- stresses the need for wider understanding of the fight against fraud and its outcome and in this regard considers the Commission's annual report to be a useful tool for assessing the ongoing efforts by the Commission and the Member States,

- welcomes the presentation of the Commission's anti-fraud strategy and work programme for 1994, which are in line with the conclusions of the Ecofin Council on 7 June 1993 and of the Copenhagen European Council in June 1993; supports the themes of the programme but emphasizes the need for precise, verifiable objectives and target dates for action to allow better assessment of progress; takes note that the Commission has undertaken to supplement its 1994 work programme accordingly by 31 July 1994,

- considers that Community legislation must be framed in a simple, clear and verifiable manner so as to minimize as far as possible the risk of fraud and to provide for regular reports by Member States on cases of fraud and irregularity,

- in this context, attaches particular importance to the work under way on improving the regularity and quality of information provided in all areas relating to the execution of the Community budget, in particular in the areas of own resources and the Structural Funds; stresses the importance it attaches both to the adoption and earliest possible implementation of the Regulation on communications regarding the Structural Funds and to the extension of this system to cover all expenditure under the Community budget,

- encourages the Commission in its determination to strengthen partnership - especially by organizing suitable procedures between the Commission and the Member States for financial responsibility - and cooperation between Member States and the Commission in order to raise the level of protection of the Community's financial interests,

- welcomes the setting-up of the Advisory Committee, which is the appropriate specialized forum in which to organize close and regular cooperation between the competent departments of the Member States and the Commission to coordinate anti-fraud operations conducted by the Member States; considers that, in future, this body should also participate in the discussion and evaluation of the annual reports; considers in particular that this body should participate effectively in drawing up the Commission's work programme, i.e. before referral to Council bodies,

- stresses the need, in all areas of the Community budget, as regards both expenditure and revenue, to continue the action intended to ensure a more effective and equivalent level of control in all Member States; notes that the Commission proposals laying down general principles governing control and administrative sanctions are being examined within the Council; calls on the Commission to consider, in accordance with those general principles, strengthening the effectiveness of the control mechanisms and systems of administrative penalties in the various financial fields of the Community,

- ask the Commission to assess no later than the end of 1995 the implementation of Article 209a by the Member States,

- stresses the need for an effective exchange of information, using all available databases, and welcomes the efforts made by the Commission in this area; considers also that specific, targeted anti-fraud training and information activities for Commission and Member State officials are a useful tool which should be strengthened further,

- welcomes the reorganization of Uclaf and encourages the Commission to step up its operational and coordination activities, concentrating on high-risk sectors; points to the importance of increasing the use of risk analysis, on the basis of common bases for selecting methods of control, and to audit-based controls, with the particular aim of optimizing the use of financial and human resources; repeats its call for these methods to be extended to international companies and transactions and to multi-sector activities,

- notes that, in view of the existence of the internal market since 1 January 1993, the control of international undertakings or those operating transnationally and the control of transactions involving several Member States are of particular importance in the fight against fraud; asks the Commission to step up its operational role and its role of coordinator of Member States' investigations and, if necessary, to submit proposals to this effect,

- asks the Commission to strengthen its action to recover the amounts involved in cases of fraud, notably by assisting Member States,

- emphasizes the importance of the Commission's role as a catalyst in ensuring that Member States report all instances of fraud and irregularity without delay; asks the Commission to provide for regular discussion of Member States' reports on the various sectors of activity, on the basis of an analysis of those reports prepared by the Commission,

- asks national administrations to respond swiftly to Commission requests and hopes for proper preparation and execution of inspection visits between the Commission and the Member States,

- notes that the instances of fraud originating in exports to or imports from third countries damage the Community's financial interests because of the amounts involved or the distortion of markets occasioned; asks the Commission to review the relevant legal bases in order to ensure that they provide for effective controls, procedures and cooperation which properly safeguard the Community's financial interests,

- calls on the Commission to include in its work programme the follow-up to actual or presumed instances of fraud and irregularity highlighted in the annual and special reports of the European Court of Auditors,

- emphasizes to the Commission the need for the next annual report to detail legislation revised in 1994 together with a plan for legislation scheduled for revision in 1995,

- calls on the Commission to present its work programme for 1995 next January.