No 1 DG AGRI Anti fraud Strategy Version 4 0.pdf

Ref. Ares(2020)5099349 - 29/09/2020
Ref. Ares(2022)5427031 - 28/07/2022

EUROPEAN COMMISSION
DIRECTORATE-GENERAL FOR AGRICULTURE AND RURAL DEVELOPMENT

DG AGRI ANTI-FRAUD STRATEGY
Version 4.0
For agreement:

Wolfgang Burtscher
Director-General

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1
BACKGROUND
In June 2011, the Commission adopted a new Anti-Fraud Strategy1 (“2011 CAFS”) and
an  Internal  Action  Plan  for  its  implementation2.  At  the  same  time,  the  Internal  Audit
Service had performed an audit on Fraud Prevention and Detection in DG AGRI, which
resulted in recommendations on how to improve DG AGRI’s activities in this field3.
Based on the 2011 CAFS and the IAS audit, on 12 September 2012 DG AGRI adopted a
specific  Anti-Fraud  Strategy  (“AGRI  AFS”)  to  address  fraud  prevention,  detection  and
correction in the implementation of the Common Agricultural Policy (“CAP”).
Since  2011,  DG  AGRI  has  updated  the  AGRI  CAFS  on  three  occasions.  Whilst  the
general dispositions of the AGRI AFS remained the same,

new  CAP  regulations  were  integrated  and  the  action  plan  needed  update  (AGRI
AFS V 2.0 dated 13 May 2014),


the delegation to the REA of the management of direct expenditure under Horizon
2020  was  incorporated  and  references  to  the  new  Commission  Delegated
Regulation (EU) No 907/2014 and Commission Implementing Regulation (EU) No
908/2014 were introduced (AGRI AFS V 2.1 dated 18 November 2014),


the  fraud  risk  assessment  specifically  for  the  CAP,  finalised  in  November  2015,
was  incorporated  as  were  some  marginal  changes  (AGRI  AFS  V  3.0  dated  18
January 2016).
Further updates of the AGRI AFS have been delayed until the adoption of the revision of
the 2011 CAFS.
The Commission has adopted the revised CAFS on 29 April 20194 (“CAFS 2019”). The
present  version  of  the  AGRI  AFS  is  the  alignment  to  the  CAFS2019,  which  it
complements  for  the  specificities  of  the  CAP.  It  continues  outlining  the  anti-fraud
strategy  for  shared,  decentralised  and  direct  management  of  the  CAP  budget  under  the
responsibility of DG AGRI.


1 Communication from the Commission to the European Parliament, the Council, the European Economic  and
Social Committee and the Committee of the Regions on the Commission Anti-fraud Strategy COM(2011)376
2  Communication  to  the  Commission,  Commission  Internal  Action  Plan  for  the  Implementation  of  the
Commission Anti-Fraud Strategy SEC(2011)787/2
3 IAS Audit Report IAS.B.3-2011-AGRI-001, see Ares(2015)2827890 - 06/07/2015
4 COM(2019) 196 final

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2
GUIDING PRINCIPLES OF THE AGRI AFS
In  implementing  the  CAP,  DG  AGRI  pursues  a  policy  of  zero  tolerance  of  fraudulent
irregularities  and  expects  the  same  from  the  relevant  bodies  in  the  Member  States
(paying  agencies,  managing  authorities  and  competent  authorities)  under  shared
management when implementing the CAP and making payments to its beneficiaries. The
same goal is pursued in the implementation of the IPARD programmes by the Candidate
Countries.
Fraudulent  irregularities  cause  financial  loss  and  reputational  damage  in  public
perception. All actors involved in the implementation of the CAP must act rigorously to
prevent, detect and correct fraudulent irregularities and must be seen to do so.
3
IMPLEMENTATION OF THE AGRI AFS TO DATE
The  following  anti-fraud  actions  have  proven  successful  and  shall  be  continued  in  the
future:
3.1
Anti-fraud seminars5
As the Member State authorities tasked with the implementation of the CAP stand
in  the first  line when it comes to  preventing, detecting and  correcting fraudulent
irregularities,  DG  AGRI  has  offered  to  the  competent  authorities  and  paying
agencies  holding  targeted  anti-fraud  seminars  for  their  staff.  The  offer  was  later
extended  to  the  IPARD  paying  agencies  in  Candidate  Countries  and  potential
Candidate Countries.
The seminars  explained the anti-fraud legal  framework and what  Member States
should do in order to adopt effective and proportionate anti-fraud measures. They
presented the typology of fraudulent irregularities, gave examples of indicators for
fraudulent irregularities (“red flags”) and how to integrate them into management
and control work.
Between  March  2013  and  November  2018,  over  60  such  seminars  have  been
delivered  in  all  Member  States,  Candidate  Countries  and  potential  Candidate
Countries, reaching out to more than 5.000 participants. After the end of 2018, no
further  seminars  have  been  requested  and  DG  AGRI  had  no  reason  to  deliver
more seminars at  its  own initiative. Further seminars shall however be delivered
in the future upon request or at DG AGRI’s own initiative if the need arises (e.g.
should new fraud patterns arise that need to be brought to the attention of Member
States).

5 AGRI AFS V.3.0, Action point 5.

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3.2
Fraud-risk assessment6
In early 2016, DG AGRI published an “Assessment of the risk of fraud and other
serious irregularities to  the detriment of the CAP budget”7. The assessment  was
made  available  to  Member  States  in  25  different  languages  and  was  designed  to
assist Member States in better designing their individual anti-fraud policies and to
provide  intelligence  to  administrative  and  control  staff  in  the  competent
authorities and paying agencies.
The  fraud-risk  assessment  is  an  on-going  exercise  and  it  complements  the  risk
management  in  DG  AGRI  and  the  preparation  of  the  annual  risk  register.  All
appropriate  information  relating  to  fraud  to  the  detriment  of  the  CAP  budget
(OLAF  reports,  DG  AGRI’s  own  audit  work,  ECA  reports,  etc.)  is  evaluated  to
identify  if  new  fraud  patterns  emerge  or  identified  fraud  patters  change,  and  if
therefore  the  fraud-risk  assessment  needs  modifications.  So  far,  this  has  not  yet
proven necessary8.
3.3
Other guidance9
In 2013, DG AGRI drafted guidance notes on fraud detection in areas at specific
risk.  The  subjects  covered  were  manipulated  offers  in  EAFRD  investment
projects,  on  the  artificial  creation  of  funding  conditions  and  on  the  fulfilment  of
the  anti-fraud  parameters  of  the  accreditation  criteria  for  paying  agencies.
Additional  guidance  has  been  provided  by  the  COCOLAF  Fraud  Prevention
Group and has been made available to the Member States through the SFC.
3.4
Arachne
As of 2019, DG AGRI works with Member States to promote the use of the risk
scoring  tool  Arachne  in  particular  for  non-IACS,  i.e.  project-based  measures
under  rural  development  (investment,  diversification,  modernisation,  village
renewal,  etc.).  This  corresponds  to  Action  Point  4  of  the  CAFS  2019  Action
Plan10,  which  reads:  “Review  and  improve  the  ARACHNE  risk  scoring  tool.
Continue  to  promote  its  use  among  Member  State  authorities,  supported  by  an
external legal opinion as necessary.”

6 AGRI AFS V.3.0, Action points 2 and 7.
7 Ares(2016)158697 - 12/01/2016
8 At this point, it is too early to determine if any Covid-19 measures and restrictions at EU or Member State level
have provoked or will provoke new specific fraud risks.
9 AGRI AFS V.3.0, Action points 2 and 7.
10 SWD(2019) 171 final.

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4
IRREGULARITIES  AND  FRAUD  AND  THE  LEGAL  FRAMEWORK  FOR  THE  PROTECTION  OF
FINANCIAL INTERESTS OF THE EU
4.1
Definition of irregularity
Article 1(2) of Regulation  (EC, Euratom) No 2988/199511 defines  an  irregularity
as  "any  infringement  of  a  provision  of  Union  law  resulting  from  an  act  or
omission  by  an  economic  operator,  which  has,  or  would  have,  the  effect  of
prejudicing the general budget of the Union or budgets managed by them, either
by reducing or losing revenue accruing form own resources collected directly on
behalf of the Union, or by an unjustified item of expenditure".
4.2
Definition of fraud
The  Convention  drawn  up  based  on  Article  K.3  of  the  Treaty  on  the  European
Union  on  the  protection  of  the  European  Communities'  financial  interests12
defined fraud, in respect of expenditure, as
“any intentional act or omission relating to
  the use or presentation of false, incorrect or incomplete statements or documents,
which has as its effect the misappropriation or wrongful retention of funds from
the general budget of the European Union or budgets managed by, or on behalf
of, the European Union;
  non-disclosure of information in violation of a specific obligation, with the same
effect;
  the  misapplication  of  such  funds  for  purposes  other  than  those  for  which  they
were originally granted.”
More recently, Article 3 of Directive (EU) 2017/1371 of the European Parliament
and  of  the  Council  of  5  July  2017  on  the  fight  against  fraud  to  the  Union's
financial interests by means of criminal law13 defines fraud as follows:
1.  Member  States  shall  take  the  necessary  measures  to  ensure  that  fraud  affecting  the
Union's financial interests constitutes a criminal offence when committed intentionally.
2. For the purposes of this Directive, the following shall be  regarded as fraud affecting
the Union's financial interests:
(a) in respect of non-procurement-related expenditure, any act or omission relating to:
(i)  the  use  or  presentation  of  false,  incorrect  or  incomplete  statements  or  documents,
which has as its effect the misappropriation or wrongful retention of funds or assets from
the Union budget or budgets managed by the Union, or on its behalf;

11  Council  Regulation  (EC,  Euratom)  No  2988/95  of  18  December  1995  on  the  protection  of  the  European
Communities financial interests, (OJ L 312, 23.12.1995, p. 1–4)
12 OJ C 316, 27.11.1995, p. 49. The Convention remains applicable to the Netherlands only.
13 OJ L189, 28.7.2017, p. 29.

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(ii)  non-disclosure  of  information  in  violation  of  a  specific  obligation,  with  the  same
effect; or
(iii)  the  misapplication  of  such  funds  or  assets  for  purposes  other  than  those  for  which
they were originally granted;
(b)  in  respect  of  procurement-related  expenditure,  at  least  when  committed  in  order  to
make  an  unlawful  gain  for  the  perpetrator  or  another  by  causing  a  loss  to  the  Union's
financial interests, any act or omission relating to:
(i)  the  use  or  presentation  of  false,  incorrect  or  incomplete  statements  or  documents,
which has as its effect the misappropriation or wrongful retention of funds or assets from
the Union budget or budgets managed by the Union, or on its behalf;
(ii)  non-disclosure  of  information  in  violation  of  a  specific  obligation,  with  the  same
effect; or
(iii)  the  misapplication  of  such  funds  or  assets  for  purposes  other  than  those  for  which
they were originally granted, which damages the Union's financial interests; …
It  is  therefore  the  intentionality  of  the  misrepresentation,  which  distinguishes
fraud from an irregularity14.
Since  2006,  when  they  notify  irregularity  cases  to  the  Commission  (OLAF)
through the Irregularities Management System (“IMS”), Member States have been
required to identify whether these cases involved "suspected fraud"15,16.
4.3
Damage to the EU’s reputation
Additionally,  other  misbehaviours  without  direct  impact  on  the  EU’s  financial
interests, but which are nevertheless detrimental to the reputation of the EU and/or
the  organisation,  shall  also  be  covered  by  the  scope  of  this  strategy.  These
misbehaviours  shall  include,  but  not  be  limited  to,  cases  of  document  forgery,
concealment or destruction of material facts, breaches of IT systems, conflicts of
interests  that  intentionally  have  not  been  declared,  so  called  “land  grabbing”,
favouritism and collusion.
4.4
Other instances of infringements
Albeit  without  direct  impact  on  the  EU  financial  interests,  other  instances  of
infringements  are,  for  instance,  the  unlawful  use  of  logos,  not  only,  but  also
pertaining  to  the  "Euro-leaf"  EU  organic  logo,  the  "protected  designation  of
origin" (PDO), the "protected geographical indication" (PGI) and the "traditional
speciality guaranteed" (TSG), and any related use of false certificates in the areas

14  In  order  to  be  categorised  as  fraud,  a  suspected  case  of  fraud  must  be  determined  as  "fraud"  by  a  Court
decision (Res Judicata).
15  Regulation  (EC)  No  1848/2006  defines  "suspected  fraud"  as  an  irregularity  which  has  been  subject  of  a
primary administrative or judicial finding giving rise to the initiation of proceedings at national level in order to
establish the presence of intentional behaviour, in particular fraud…". This definition is reproduced in Article 27
c) of Commission Regulation (EC) No 1828/2006.
16 See also Action Points 2 and 3 of the CAFS 2019 Action Plan (SWD(2019) 171 final).

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mentioned.  This  applies  also  to  the  use  of  specific  slogans  like  ‘Enjoy,  it’s  from
Europe’.  In  order  to  protect  the  confidence  of  consumers  into  such
logos/certificates/slogans  and  to  safeguard  the  reputation  of  the  EU  in  this  area,
the present Anti-Fraud Strategy shall cover, mutatis mutandis, this area as well.
4.5
Legal framework for the protection of financial interests of the EU
Under  Article  317  of  the  Treaty  on  the  Functioning  of  the  European  Union
(TFEU) and Article 36 of the Financial Regulation17, the Commission implements
the EU budget in compliance with the principles of sound financial management.
The  Commission  also  must  apply  effective  and  efficient  internal  control,  which
includes  preventing,  detecting  and  correcting  fraud  and  other  irregularities.  The
Member  States  –  collecting  and  spending  some  80%  of  the  EU  budget  -  shall
cooperate with the Commission.
Therefore, Article 325 (1) of the TFEU requires both the EU and Member States
to counter fraud and any other illegal activities affecting the financial interests of
the EU. The same applies to candidate countries in relation to the management of
pre-accession funds (e.g. IPARD).
More  recent  anti-fraud  legislation  in  the  EU  are  the  PIF-Directive18,  which  sets
stricter common standards for the criminal legislation in Member States to protect
the EU’s financial interests, and the Regulation establishing the European Public
Prosecutor’s Office (EPPO)19.
CAP-specific provisions for the programming period 2014-2020 complement the
provisions  on  sound  financial  management  and  the  fight  against  fraud  in  the
TFEU. In general terms it must be understood that Regulation (EU) No 1306/2013
on the financing, management and monitoring of the CAP ensures the legality and
regularity  of  expenditure  by  Member  States  under  the  CAP  through  adequate
management and control systems. By definition, systems ensuring the legality and
regularity  of  expenditure  offer  as  an  automatic  consequence  a  high  degree  of
protection against fraud and other irregularities.
More  specifically,  Article  58  (1)  of  Regulation  (EU)  No  1306/2013  obliges
Member  States  to  ensure  effective  prevention  against  fraud,  especially  in  areas
with a higher level of risk. They shall prevent, detect and correct irregularities and
fraud, impose penalties and recover undue payments.

17 Regulation (EU, Euratom) 2018/1046 of the European Parliament and the of the Council of 18 July 2018 on
the  financial  rules  applicable  to  the  general  budget  of  the  Union,  repealing  Regulation  (EU,  Euratom)  No
966/2012
18 Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against
fraud to the Union’s financial interests by means of criminal law (OJ L 198, 28.07.2017, p. 29)
19  Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the
establishment of the European Public Prosecutor’s Office (“the EPPO”), OJ L 283, 31.10.2017, p. 1

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Annex  I  of  Commission  Delegated  Regulation  (EU)  No  907/2014  foresees  that
before authorizing a payment claim, the Paying Agency must have inter alia fraud
checks  pursuant  to  Article  58  (1)  of  Regulation  (EU)  No  1306/2013  in  place.
Internal  control  activities  shall  also  cover  monitoring  procedures  to  prevent  and
detect fraud, and training must be delivered to staff to raise fraud awareness.
Commission  Implementing  Regulation  (EU)  No  908/2014  requires  the  pre-
accreditation reviews to verify if risk-based anti-fraud measures are put in place in
the  management  and  control  procedures  and  systems  (Article  1  (3)(c)).  Annex  1
of the same Implementing Regulation requires the director of the Paying Agency
to confirm in the annual management declaration “that effective and proportionate
anti-fraud  measures  under  Article  58  of  Regulation  (EU)  No  1306/2013  are  in
place and take account of the risks identified”.
The Commission’s Proposal for a Regulation of the European Parliament and of
the  Council  on  the  financing,  management  and  monitoring  of  the  common
agricultural  policy  and  repealing  Regulation  (EU)  No  1306/201320  for  the  CAP
post  2020  contains  anti-fraud  provisions  comparable  to  the  provisions  described
above. Article 57 (1) of the proposal obliges Member States to ensure an effective
prevention  of  fraud,  to  detect  and  correct  irregularities  and  fraud  and  to  impose
effective,  dissuasive  and  proportionate  penalties.  In  addition,  the  legislative
proposals  for  the  CAP  post  2020  clarify  certain  legal  concepts  in  order  to  avoid
misinterpretations and irregularities in their practical application. This should also
reduce opportunities for applicants and beneficiaries to commit fraud.
5
THE  CAP  BUDGET  AND  THE  IMPACT  OF  POSSIBLY  FRAUDULENT  AND  OTHER
IRREGULARITIES
5.1
Budget and Beneficiaries
With  around  36%  of  the  total  EU  budget,  the  budget  of  the  CAP  remains  the
largest single policy in budgetary terms.
In  2019,  the  CAP  budget  was  of  €  57,7  billion  with  €  40,6  billion  for  farmers’
income  support  (70%),  €  14,7  billion  for  rural  development  (25,5%)  and  €  2.5
billion for market measures.
These  funds  are  disbursed  to  almost  seven  million  beneficiaries  (6,4  million  for
income  support,  3,3  million  beneficiaries  for  rural  development  and  120.000
beneficiaries for market measures) 21.
Under  the  Multiannual  Financial  Framework  2021-2027  the  future  CAP  will
continue to be an important policy also in financial terms.

20 COM(2018)393 final
21 As a majority of beneficiaries of payments under rural development measures are also beneficiaries of direct
payments  (but  are  only  counted  once  when  considering  total  beneficiary  numbers),  the  total  number  of
beneficiaries, up to 6.9 million for both Agricultural Funds, is lower than the sum of the individual figures.

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5.2
Financial impact of possibly fraudulent and other irregularities
In spite of the large budget of the CAP and the large number of its beneficiaries,
the financial impact of possibly22 fraudulent and other irregularities is low. This is
clearly due to the effective management and control systems in place for the CAP,
which also result in a high level of assurance for the CAP.
In  2017,  the  276  possibly  fraudulent  irregularities  reported  by  Member  States
through  the  Irregularities  Management  System  (IMS)  had  a  potential  financial
impact of € 59,9 million23. This corresponds to around 0,1 % of the expenditure in
2017. Over the period from 2013 to 2017, the image is similar: 0,13 % financial
impact of all possibly fraudulent irregularities with 0,03 % for the 1st Pillar (direct
payments  and  market  measures)  and  0,25  %  for  the  2nd  Pillar24  (rural
development).
Also in 2017, Member States reported 3.054 cases of non-fraudulent irregularities
with a potential impact of € 210,5 million, corresponding to a financial impact of
around 0,37 % of the expenditure in 2017.
For  2018,  Member  States  reported  249  instances  of  possibly  fraudulent
irregularities (less than in 2017) with a financial impact of € 63,3 million (slightly
higher than in 2017).
Also in 2018, Member States reported 2.832 cases of non-fraudulent irregularities
with  a  potential  impact  of  close  to  €  164  million,  corresponding  to  a  financial
impact of around 0,28 % of the expenditure in 2018.
In  2019,  Member  States  reported  235  instances  of  possibly  fraudulent
irregularities (-3% compared to 2018) with a financial impact of € 24,6 million (-
62%  compared  to  2018),  which  corresponds  to  a  financial  impact  of  0,04%  of
CAP expenditure in 2019.
Also in 2019, Member States reported 2.798 cases of non-fraudulent irregularities
with  a  potential  impact  of  some  €  206,1  million,  corresponding  to  a  financial
impact of around 0,35 % of the expenditure in 2019, representing a slight increase
from 0,28% in the previous year.

22 Most of the cases reported by Member States are suspected to be fraudulent, but will in actual fact never be
established as accomplished fraud by a court of justice.
23  Source :  29th  Annual  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the
Protection of the European Union’s Financial Interests – Fight against Fraud 2017; COM(2018)553. Caveat:
The reliability of IMS reporting by the Member States is not unlimited, as it cannot be excluded that not all
relevant cases are reliably reported by Member States.
24 Source : Commission Staff Working Document – Fraud Risk Assessment, p. 10; SWD(2019)171.

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5.3
OLAF investigations
The  limited  impact  of  possibly  fraudulent  irregularities  is  also  reflected  in  the
number of OLAF investigations concerning CAP beneficiaries.
As  at  the  31st  of  December  of  each  year,  OLAF  conducted  41  investigations  in
2015,  32  in  2016,  28  in  2017,  32  in  2018  and  35  in  201925.  Around  80%  of  all
investigations  concerned  non-IACS,  project-based  measures  under  rural
development.
6
FRAUD RISK ASSESSMENT
6.1
1st Pillar (direct payments and market measures)
Direct payments
Structured  and  repetitive  fraud/irregularities  in  direct  payments  to  agricultural
holdings  and  in  most  market  measures  are  seldom.  Where  fraud/irregularities
happen, they are of an anecdotic nature, i.e. generally non-repetitive and therefore
unforeseeable.
The  reason  for  the  low  fraud  likelihood  in  direct  payments  is  the  highly  mature
and reliable administrative and control environment in which they are managed in
all  Member  States.  The  Integrated  Administrative  and  Control  System  (IACS)
including the Land Parcel Identification System (LPIS), which Member States are
obliged  to  set  up  and  operate  according  to  Articles  67-78  of  Regulation  (EU)
1306/2013,  make  it  almost  impossible  to  fraudulently  overstate  the  surface  they
are  cultivating.  Hence  the  extremely  low  fraud  impact  rate  of  around  0,03  %  in
direct payments under the EAGF.
This most likely explains the recent appearance of allegations of “land grabbing”
in a few Member States: As the illicit claim of direct payments (double claims or
claims  for  non-agricultural  land)  are  practically  impossible,  wrongdoers  recur  to
an  illicit  appropriation  of  agricultural  land  for  which  they  then  claim  direct
payments in a legal manner. Such occurrences cannot as such be resolved by CAP
legislation.  They  are  a  matter  of  rule  of  law  in  the  Member  States  concerned,
which  is  also  reflected  in  the  Commission  proposal  on  the  protection  of  the
Union's budget in case of generalised deficiencies as regards the rule of law in the
Member States (COM(2018)324).
Market Measures
Most  market  measures  show  no  significant  exposure  to  fraudulent  irregularities.
Promotion  actions  however,  by  their  structure,  show  an  increased  risk  of
fraudulent manipulations. Several OLAF cases have identified fraudulent schemes

25  It  merits  mention  that  the  majority  of  OLAF  investigations  is  closed  with  financial  recommendations  or  –
more seldom – with administrative recommendations. E.g., of the 16 investigations closed in 2019, 11 cases
(70%) made recommendations for recoveries from final beneficiaries. The ratio is similar for previous years.

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in  which  the  beneficiaries  (associations  of  producers  of  specific  agricultural
products)  cooperated  with  the  implementing  bodies  (commercial  companies
implementing  the  promotion  campaigns)  in  overstating  the  costs  of  campaign
activities or in invoicing costs for activities that in fact had never taken place.
In addition, in 2019 some Member States have reported in the IMS an increase of
possibly fraudulent irregularities in relation to support to producer organisations.
6.2
2nd Pillar (rural development)
The exposure to  fraudulent  irregularities of the  funds allocated to  the EAFRD is
divided.  All  surface  related  payments  (e.g.  agri-environmental  and  climate
measures or compensation for areas with natural constraints) are managed through
the  IACS  with  the  LPIS  (see  6.1  above)  and  are  therefore  little  concerned  by
fraudulent irregularities. The same is true for animal related measures.
The  situation  is  however  different  for  investment  measures  under  rural
development.  Measures  to  modernise  agricultural  holdings  and  diversification
measures  (i.e.  subsidies  paid  towards  the  creation  of  non-agricultural  businesses
like micro-enterprises of rural tourism) are more complex in nature and therefore
threatened by fraudulent manipulations. It is difficult to assess if applications for
such subsidies are honest and if the costs set out in the application are reasonable.
Where the reasonableness of costs is ensured through private procurement (the so-
called  three-offer-rule),  falsifications  of  offers  are  difficult  to  detect.  The
employment  of  alternative  methods  may  considerably  reduce  the  risk  of
fraudulent manipulations (reference databases  for prices,  simplified  cost  options,
flat-rate contributions, etc.), but cannot completely exclude it.
In numerous  cases  of  diversification projects  it  has been observed  ex post that a
micro-enterprise was not created for the sake of starting a business for itself, but
rather as an artificial, pro-forma creation to help an already existing beneficiary to
circumvent  funding  limitations  that  prevented  it  to  apply  for  subsidies  under  the
EAFRD  more  than  once  in  a  given  period.  Such  artificially  created  funding
conditions are often visible only ex post, i.e. after the artificially created business
has been established and is up and running and it has proven difficult for Member
States  to  gather  enough  evidence  to  establish  both  objective  and  subjective
artificial creation.
6.3
Conflicts of interests
Article  61  of  the  Financial  Regulation  obliges  national  authorities  to  prevent
conflict of interests. In accordance with Articles 63(2) and 36(3) of the Financial
Regulation,  Member  States  managing  EU  funds  in  shared  management  must
prevent,  detect  and  correct  irregularities  and  fraud  with  respect  to  the  Union
budget  and  set-up  internal  control  systems  capable  of  avoiding  conflict  of
interests.  Where  such  a  conflict  exists  (including  situations  that  may  objectively
be perceived as conflict of interests), they shall ensure that the person in question
ceases all activities in the matter and should take any further appropriate action in
accordance with the applicable law. A conflict of interests prejudicing the Union
budget  and  not  handled  in  line  with  the  above  obligations  constitutes  an
irregularity.  The  Commission  services  are  preparing  Guidelines  on  avoidance  of

13

conflicts  of  interest  under  the  Financial  Regulation  addressed  to  the  Members
States authorities.
Article 61 applies to all types of support under shared management, including the
two CAP funds (EAGF and EAFRD). The risk of conflict of interests is higher for
project-based support, where they may take the very different  forms: individuals
with political mandates benefiting directly or indirectly from CAP payments when
they  have  the  (theoretical)  possibility  to  influence  administrative  decisions  to
grant  such  payments;  the  owner/manager  of  a  company  benefiting  from  an
investment  measure  under  rural  development  is  also  the  owner/manager  of  the
company that supplier the investment goods. Many variations are imaginable here.
In  some  cases,  such  situations  may  lead  to  fraud  (e.g.  through  overpricing  of
investment goods with the aim to reduce the beneficiary’s own contribution to the
investment).
On the other hand, for EAGF Direct Payments there is very limited discretion at
national  level  concerning  decisions  on  the  disbursement  of  these  funds.  The
eligibility conditions for DP are set out in EU law, there is no selection procedure
or award decision (like for investment projects), and the allocation of payments to
beneficiaries is directly linked to the area farmed.
According  to  the  accreditation  criteria  in  Annex  I  of  Regulation  (EU)  No
907/2014, the Paying Agencies shall ensure that appropriate measures are taken to
avoid conflict of interests. The Certification Bodies assess on an annual basis the
compliance  of  the  Paying  Agencies  with  the  accreditation  criteria,  including  the
measures in place to avoid conflict of interests.
DG  AGRI  monitors  the  PAs’  compliance  with  the  accreditation  criteria  by
assessing the annual certification reports prepared by the Certification Bodies and
the Management Declarations made by the heads of the Paying Agencies. In case
there  are  findings  related  to  the  compliance  with  the  accreditation  criteria,  DG
AGRI opens conformity enquiries to protect the EU budget.
It is difficult to cover all possible figures of conflicts of interest by EU legislation.
However,  in  many  cases  the  use  of  the  IT-tool  Arachne26  can  help  competent
authorities and paying agencies to identify projects, beneficiaries and contractors
in a situation of conflict of interests.
6.4
Fraud risks in the context of the COVID-19 pandemic
The  lockdown  in  almost  all  Member  States  of  the  EU  may  have  affected  the
efficiency of both management and control of legal and regular spending of CAP
funds,  in  particular  in  relation  to  non-IACS  measures  under  rural  development.
The financial difficulties which also the farming sector and rural communities are
enduring may – after the lockup - lead to an increased pressure on Member States

26 See section 3.4 above

14

to  pay  subsidies  quickly  to  the  detriment  of  quality,  value  for  money  and
control27.
Fraudsters may try to take advantage of this situation, e.g. by submitting falsified
offers  for  investment  goods,  by  creating  artificial  funding  conditions,  etc28.  To
which extent this risk may materialise, cannot be assessed at this point. Member
States are required to be particularly diligent in this situation in order to minimise
this risk.
7
ROLES  AND  RESPONSIBILITIES  IN  THE  PREVENTION,  DETECTION,  CORRECTION  AND
INVESTIGATION OF FRAUD AGAINST CAP FUNDS
7.1
Member States
Under shared management, Member States are the most important players when it
comes to preventing, detecting and correcting fraud against the CAP funds. Their
bodies  entrusted  with  the  implementation  of  the  CAP  are  in  the  front  line.
Fraudulent manipulations are set up to deceive them and their staff. The Member
States therefore become the victims of fraud in the first place.
According to Article 63 of the Financial Regulation29 and the sectorial legislation
in  force30,  under  shared  management  the  Commission  has  delegated
implementation  tasks  to  the  Member  States,  which  are  thereafter  responsible,  in
the first instance, for preventing, detecting and correcting fraud and irregularities.
In order to ensure that the funds are used in accordance with the applicable rules
and  principles,  the  Member  States  shall  take  all  the  legislative,  regulatory,
administrative  or  other  measures  necessary  for  protecting  the  EU  financial
interests and in particular to prevent, detect and correct irregularities and fraud. In
addition, according to Annex I to the Delegated Regulation (EU) No 907/2014 31,
paying agencies must take measures to prevent and detect fraud and irregularity in
the context of their activities.
Member  States  are  obliged  to  report  fraudulent  and  non-fraudulent  irregularities
potentially  exceeding  a  financial  impact  of  EUR  10  000  to  the  Commission  via
the  Irregularities  System  (IMS)32.  This  reporting  is  an  important  tool  to  detect

27 See ECA Opinion 4/2020, https://www.eca.europa.eu/lists/ecadocuments/op20_04/op20_04_en.pdf
28 See section 6.2 above
29 See fn. 16
30  Articles  4,  5,  58  of  Regulation  (EU)  No  1306/2013  on  the  financing,  management  and  monitoring  of  the
common agricultural policy
31  Commission Delegated Regulation (EU) No 907/2014 supplementing Regulation (EU) No 1306/2013 of the
European  Parliament  and  the  Council  with  regard  to  paying  agencies  and  other  bodies,  financial
management, clearance of accounts, securities and use of euro
32  Commission  Delegated  Regulation  (EU)  2015/1971  and  Commission  Implementing  Regulation  (EU)
2015/1975

15

trends in beneficiaries’ wrongdoing and is a building block for the Commission’s
yearly report on the protection of the EU’s financial interests.
Member  States  have  a  strong  incentive  to  recover  undue  payments  from  the
beneficiaries  as  soon  as  possible  because  of  the  automatic  clearance  mechanism
("50/50"  rule)  introduced  through  Article  33  of  Regulation  (EC)  No  1290/2005
and  maintained  by  Article  54  (2)  of  Regulation  (EU)  No  1306/2013.  This
mechanism  provides  that  if  a  Member  State  fails  to  recover  an  unduly  paid
amount  from  a  beneficiary  within  four  years  of  the  primary  administrative  or
judicial  finding  (MFF  2007-2013)  or  the  reception  of  a  control  report  by  the
paying  agency  stating  that  a  fraudulent  or  non-fraudulent  irregularity  has  been
committed  (MFF  2013-2020)),  50%  of  the  non-recovered  amount  is  charged  to
the budget of the Member State concerned. In case of proceedings before national
courts, the recovery period is eight years.
In recent  years, cases of possibly irregular or criminal acquisition of agricultural
surfaces  in  some  Member  States  have  shown  that  the  fraudulent  declaration  of
surfaces to obtain direct aid are not attractive to fraudsters. They therefore recur to
other forms of obtaining surfaces in an allegedly illegal way for which they then
claim  direct  aid  in  a  regular  and  legal  way  under  CAP  regulations.  Remedies
against  such  actions  is  however  a  question  of  rule  of  law  in  the  Member  States
concerned,  which is  also  reflected in  the Commission  proposal  on the protection
of the Union's budget in case of generalised deficiencies as regards the rule of law
in the Member States (COM(2018)324).
7.2
Candidate Countries and potential Candidate Countries
Candidate  Countries  and  potential  Candidate  Countries  have  the  same
responsibilities  in  preventing,  detecting  and  correcting  fraudulent  irregularities
against  the  IPARD  funds  assigned  to  them  as  Member  States  in  relation  to  their
CAP funds.
The  Commission  has  conferred  the  management  of  IPARD  funds  to  specific
agencies  to  be  established  and  accredited  by  each  applicant  country.  They  are
responsible to put an effective management and control system in place, covering
also the fight against fraudulent irregularities.
The  Candidate  Countries  are  strongly  encouraged  to  recover  undue  payments
from  beneficiaries.  Claims  against  beneficiaries  must  be  registered  in  a  debtors'
ledger  as  at  the  date  of  the  first  judicial  or  administrative  findings.  Where
recovery  has  not  taken  place  within  2  years  counting  from  the  date  of  the
registration  of  the  amount  receivable  in  the  debtors'  ledger,  the  full  amount
receivable shall be reimbursed to the EU budget.
7.3
DG AGRI
Although  Member  States,  Candidate  and  potential  Candidate  Countries  play  the
most exposed part in preventing, detecting and correcting fraudulent irregularities,

16

DG AGRI remains in a key role in the protection of the financial interests of the
European  Union.  The  Financial  Regulation33,  the  sectoral  legislation34  and  the
internal  control  principles  for  effective  management35  require  implementation  of
the EU budget in accordance with the principles of sound financial management
and  with  an  effective  and  efficient  internal  control,  providing  reasonable
assurance  of  achieving  prevention  and  detection  of  fraud  and  irregularities.  In
particular,  principle  n°  8  of  the  Commission  Internal  Control  Framework  states
‘The  Commission  considers  the  potential  for  fraud  in  assessing  risks  to  the
achievement of objectives’.
As  for  funds  implemented  under  shared  management,  DG  AGRI  shall  ensure
that the Member States  have set  up  and effectively  run management  and control
systems  making  sure  funds  are  efficiently  and  correctly  used  to  guarantee  the
legality and regularity of expenditure.
As  regards  funds  managed  through  direct  management,  which  represents  less
than  0.5%  of  total  EU  expenditure  under  the  DG  responsibility36,  DG  AGRI
implements  the  specific  rules,  tools  and  recommendations  in  relation  to  fraud
prevention, detection and investigation developed by the Commission's Horizontal
Services  (SG,  BUDG,  OLAF,  LS,  IAS).  This  includes  the  use  of  the  Early-
detection and Exclusion System (EDES) in appropriate cases37. DG AGRI has put
in  place  financial  circuits  with,  for  example,  a  second  ex-ante  control
implemented by an independent unit as well as an internal control system in view
of  addressing  fraud  related  issues.  Finally,  direct  management  is  also  included,
although  to  a  lesser  extent,  in  the  annual  audit  plan,  which  provides  for  the
possibility of including ex-post controls based on a risk analysis.
7.3.1
Policy development
DG AGRI is responsible for ensuring that the design and detailed rules
of the various CAP support schemes duly take into account the inherent
risk of fraud and the necessity to reduce it as much as possible.
For  the  CAP  in  the  currently  applicable  Article  58  (1)  of  Regulation
(EU) No 1306/2013 contains specific provisions to prevent, detect and
correct fraud. Art. 57 (1) of the proposed Regulation for the CAP post
2020 contains the same provisions.

33 Regulation 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules
applicable to the general budget of the Union
34 Regulation (EU) No 1306/2013 of the European Parliament and of the Council on the financing, management
and monitoring of the common agricultural policy, Article 58 (MFF 2013-2020).
35 Communication to the Commission from Commissioner Öttinger, Revision of the Internal Control Framework
(C(2017) 2373 of 19.4.2017).
36 This includes expenditure under H2020.
37 Art. 135 and 136 of the Financial Regulation ((EU) 2018/1046).

17

7.3.2
Policy implementation
DG  AGRI  carries  out  accreditation  and  conformity  audits  in  the
Member  States  to  verify  the  effective  functioning  of  national  internal
control  systems  and  the  specific  management  and  control  systems  in
place for the various aid measures. The conformity clearance system is
designed to exclude expenditure from EU financing which has not been
executed  in  compliance  with  EU  rules,  thus  protecting  the  EU  budget
from expenditure which should not be charged to it. However, it is not
a  mechanism  by  which  individual  cases  are  followed-up  and  irregular
payments  to  beneficiaries  recovered,  which  according  to  the  principle
of shared management is the responsibility of the Member States.
DG  AGRI's  Assurance  and  Audit  Directorate  conducts  an  annual
Central Risk Analysis as a common and unique approach for planning
conformity audits. One of the seven risk factors used in this analysis is
the "OLAF risk". For each Member State/audit field pairing, the fraud
risk  is  assessed  by  the  audit  teams  considering  any  denunciations  and
communications  of  irregularities  under  Regulation  (EU)  No
1306/201338.
These  actions  contribute  to  fraud  prevention  through  promoting  well-
functioning  internal  control  systems  in  the  Commission  and  in  the
Member States, which can prevent, detect and correct irregularities.
NB! The CAFS 2019 Action Points 1, 2 and 3 explicitly reinforce the
use  of  the  Irregularities  Management  System  (IMS)  for  strategic  and
operational analysis.
7.3.3
Responsibilities in DG AGRI
Whereas  the  Anti-Fraud  Strategy  is  a  responsibility  shared  by  all
services  within  the  DG39,  in  order  to  ensure  overall  coordination,  an
Anti-Fraud  Correspondent  (AFC)  in  DG  AGRI  will  ensure  the
implementation and follow-up of the actions identified in annex to this
strategy.  Moreover,  the  AFC  shall  receive  and  evaluate  all  incoming
information  potentially  relating  to  external  and  internal  fraud,  and
coordinate  external  and  internal  cases  with  OLAF  and  the  competent
units within DG AGRI.

38  See  also  Commission  Delegated  Regulation  (EU)  1971/2015  with  specific  provisions  on  the  reporting  of
irregularities  and  Commission  Implementing  Regulation  (EU)  1975/2015  setting  out  the  frequency  and
format of the reporting.
39  With  direct  responsibility  for  the  Director-General  (as  Authorising  Officer  by  Delegation),  the  Resources
Director,  the  Deputy  Director-General  for  Risk  Management  and  Internal  Control  (RMIC),  all  Authorising
Officers  by  Sub-delegation  +  units  AGRI.R.2  –  Direct  Financial  Management  and  Accounting,  AGRI.R.5  –
Document  Management,  Security  and  HR  Business  Correspondent,  AGRI.I.2  –  Strategic  programming,  ,
Internal  Control  Inter-institutional  relations,  AGRI.H.1  –  Competency  Centre  for  Assurance  and  Audit,
AGRI.H.5 – Assurance and financial Audit.

18

For each Directorate, the Director will be the contact point for the AFC.
These  contact  points  will  ensure  that  the  necessary  information  is
provided  to  the  AFC  and  that  the  follow-up  required  in  order  to
implement the actions foreseen in this strategy is carried out at the level
of their Directorate.
The  AFC  will  contribute  to  Management  and  Strategic  Plans  of  DG
AGRI,  its  Annual  Activity  Report,  its  Internal  Control  annual
Assessment and the DG's management reports to the Commissioner. In
addition,  the  AFC  will  communicate  once  a  year  to  Directorate  H
relevant information for the Central Risk Assessment. Finally, the AFC
will  –  up  until  the  end  of  each  month  of  March  –  draft  an  annual
activity  report  summarising  the  state  of  implementation  of  the  AGRI
AFS.
Detailed "Internal rules for the handling of allegations of external fraud
and other irregularities, and of OLAF cases" have been adopted by the
Director-General  of  DG  AGRI  and  been  published  in  the  AGRI
intranet.
7.4
OLAF and the EPPO
Art.  325  (2)  TFEU  lays  down  that  the  Member  States  shall  take  the  same
measures  to  counter  fraud  affecting  the  financial  interests  of  the  Union  as  they
take to counter fraud affecting their own financial interests.
On  the  basis  of  Regulation  (EU,  EURATOM)  No  883/2013,  the  main  task  of
OLAF  is  to  carry  out  administrative  investigations  on  allegations  of  fraud  and
other  serious  irregularities  to  the  detriment  of  the  EU  budget.  In  addition,
according  to  Article  1(2)  of  the  same  Regulation,  OLAF  shall  contribute  to  the
design and development of methods to prevent and fight fraud.
Against  this  background,  the  CAFS  201940  foresees  a  proactive  and  reinforced
role for OLAF as  far as  fraud prevention  and detection are concerned and, more
importantly,  it  provides  that  OLAF  will  cooperate  with  the  DGs  in  the
development of sector-specific anti-fraud strategies.
OLAF also assists Member States in this area, e.g. through regular meetings of the
COCOLAF, ad hoc trainings, etc.
The  EPPO41  will  exercise a  central  role  in  conducting  and  coordinating  criminal
investigations in the Member States that have adhered to the EPPO42. If and how a

40 Communication from the Commission to the European Parliament, the Council, the European Economic  and
Social Committee, the Committee of the Regions and the Court of Auditors “Commission Anti-Fraud Strategy:
enhanced action to protect the EU budget (COM(2019) 196 final).
41 Established by Regulation (EU) 2017/1939
42 See CAFS 2019 Action Point 53 on cooperation with the EPPO.

19

Commission  service  like  DG  AGRI  will  cooperate  with  the  EPPO  is  not  yet
determined.  Once  there  is  more  clarity  in  this  regard,  DG  AGRI  will  adapt
accordingly.
In order to ensure that the present AGRI Anti-Fraud Strategy and the CAFS 2019
are aligned both in relation to the their objectives and the relevant action points of
the CAFS 2019, the AGRI  Anti-Fraud Strategy  provides for additional activities
to  complement  OLAF's  activities  in  the  framework  of  its  fraud  prevention  work
with the Member States (e.g. action points 4 and 5 in the DG AGRI internal action
plan).
7.5
Research Executive Agency (REA)
DG  AGRI  is  in  charge  of  Societal  Challenge  2  "Food  security,  sustainable
agriculture and forestry, marine and maritime and inland water research and the
bioeconomy"  within  the  research  and  innovation  programme  Horizon  2020.
However,  its  operational,  administrative  and  financial  implementation  has  been
delegated to the REA.
Within  the  remit  of  its  duties  concerning  the  administrative  and  financial
implementation of the actions under Societal Challenge 2, the REA will apply its
Anti-Fraud Approach in its version of September 201943.
The  REA  will  include  possible  cases  of  suspected  fraud  and  other  serious
irregularities  in  its  dedicated  quarterly  report  on  such  matters,  which  it  will  also
circulate to DG AGRI.
7.6
Consumers, Health, Agriculture and Food Executive Agency (CHAFEA)
Furthermore,  some  tasks  and  activities  related  to  promotion  of  agricultural
products  are  entrusted  to  the  CHAFEA.  However,  as  of  2021,  these  promotion
activities will be entrusted to the REA.

8
STRATEGIC OBJECTIVES
In order ensure an optimal alignment between the CAFS 2019 and DG AGRI's Anti-fraud
Strategy,  the  strategic  objectives  of  DG  AGRI's  Anti-fraud  Strategy  are  as  follows  and
will be implemented through five main action areas:
(1)
Continuous fraud risk assessment
(2)
Guidance and support for Member States and Candidate Countries to
increase  their  fraud  awareness  and  their  capabilities  for  fraud  prevention
and detection
(3)
Cooperation with OLAF

43 Ares(2019)6519167 – 22/10/2019.

20

(4)
Maintaining fraud awareness in DG AGRI
(5)
Monitor the implementation of the recommendations of OLAF
following investigations

The actions to achieve these objectives are set out below.

21

ACTIONS TO IMPLEMENT THE CAFS 2019 AND THE AGRI AFS
This section sets out the actions planned to implement the AFS. It provides an overview
of  these  actions,  indicating  the  lead  service(s)  in  the  DG,  the  expected  outputs  and  the
target deadlines.

ACTION 1:  CONTINUOUS  FRAUD  RISK  ASSESSMENT  AND  UPDATE  OF  THE
ANTI-FRAUD STRATEGY44
DG  AGRI  has  carried  out  an  assessment  of  the  risk  of  (external  and  internal)  fraud
against  the  CAP  budget45.  The  assessment  has  taken  into  account  the  relevant  OLAF
guidance  and the implementation guide  on risk  management in  the Commission  by DG
BUDG.
Its  updating  is  an  on-going  process  based  on  OLAF  Final  Reports,  DG  AGRI’s  own
audits,  audits  by  the  European  Court  of  Auditors,  and  other  information  from  Member
State authorities. Since its first draft, no new fraud patterns46 have emerged.
Output/Deliverable
Chef de
Baseline
Indicator
Timing
File
Update of the
AFC
Fraud risk
Updated
Continuous.
existing fraud risk
assessment
version of
Information on
assessment as
Ares(2015)5175278  fraud risk
on-going fraud
required by
– 18/11/2015
assessment
risk
emerging new
assessment in
fraud patterns
AAR of the
AFC
Update of the
AFC
AGRI AFS Version  Updated
31/12/2021
AGRI AFS
4.0
version of the
AGRI AFS
Contribution to
AFC
Directors
AFC
Continuous
DG AGRI Risk
contribution to the
contribution to
Management
Risk management
Director R
exercise on
exercise 2020
fraud related
risks relevant at
DG level


44 CAFS 2019 Action Point 11 « Further improve service-level anti-fraud strategies and their implementation”
45 Ares(2015)5175278 – 18/11/2015
46 The phenomenon of ‘land-grabbing’ is not fraud against the CAP as such.

22

ACTION 2: GUIDANCE AND SUPPORT FOR MEMBER STATES47
Article  58  (1)  of  Regulation  (EU)  No  1306/2013  on  the  financing,  management  and
monitoring  of  the  common  agricultural  policy  stipulates  inter  alia  that  Member  States
shall
  ensure  effective  prevention  against  fraud,  especially  in  areas  with  a  higher  level  of
risk, and which will act as a deterrent, having regard to the costs and benefits as well
as the proportionality of the measures;
  prevent, detect and correct irregularities and fraud.
To  this  end,  Annex  I  to  the  Delegated  Regulation  (EU)  No  907/201448  foresees  –  as
accreditation criteria - the following in the operations of paying agencies:
1.  Before  authorising  a  claim  for  payment,  the  paying  agency  shall  inter  alia  carry
out checks as required by Article 58 of Regulation (EU) No 1306/2013 to prevent
and  detect  fraud  and  irregularity  with  particular  regard  to  the  risks  incurred
(Section 2 (A) (iii) of Annex I).
2.  The  paying  agencies  internal  control  activities  shall  cover  inter  alia  monitoring
procedures  to  prevent  and  detect  fraud  and  irregularity  with  particular  regard  to
those  areas  of  CAP  expenditure  under  its  competence  which  are  exposed  to  a
significant risk of fraud or other serious irregularities (Section 4 (A) (iv) of Annex
I).
3.  Finally,  the  paying  agency  shall  ensure  that  staff  training  is  appropriate  at  all
operational levels, including fraud awareness (Section 1 (B) (iv) of Annex I).
In addition, according to Art. 1 (3)(c) of Commission Implementing Regulation (EU) No
908/2014 the audit body appointed by the competent authority in the sense of Art. 1 (1)
of the same Implementing Regulation shall examine in the context of its pre-accreditation
review the extent to which the procedures and systems put in place by the Paying Agency
are apt to safeguard the Union budget including risk-based anti-fraud measures49.
Last, the management declaration of the directors of Paying Agencies shall also give the
assurance  that  effective  and  proportionate  anti-fraud  measures  are  in  place  and  take
account of the risks identified50.

47  CAFS  2019  Action  Point  37  “Encourage  Member  States  to  put  in  place  national  anti-fraud  strategies,  and
provide  advice  and support in this respect”;  Action Point   38  “Where  appropriate  and possible, reinforce
Member  States’  obligations  for  the  post-2020  MFF  throughout  the  anti-fraud  cycle”;  Action  Point  39
“Explore  the  possibility  of  applying  the  underlying  rationale  of  Action  Point  36  to  financial  instruments
under shared management” [Action Point 36 “Obtain assurance about internal control of entrusted entities,
financial (sub-) intermediaries, fund managers, etc.]
48  Commission Delegated Regulation (EU) No 907/2014 supplementing Regulation (EU) No 1306/2013 of the
European  Parliament  and  the  Council  with  regard  to  paying  agencies  and  other  bodies,  financial
management, clearance of accounts, securities and use of euro
49 Commission Implementing Regulation (EU) No 908/2014  supplementing Regulation (EU)  No 1306/2013 of
the  European  Parliament  and  the  Council  with  regard  to  paying  agencies  and  other  bodies,  financial
management, clearance of accounts, rules on checks, securities and transparency
50 Annex I to Commission Implementing Regulation (EU) No 908/2014

23

Compliance  with  the  accreditation  criteria  is  reviewed  on  an  annual  basis  by  the
Certification  Bodies,  their  reports  are  reviewed  by  DG  AGRI  and  audit  missions  are
carried out on a risk basis by DG AGRI.
DG AGRI has drafted guidelines on the three points aforementioned that complement the
accreditation  criteria.  They  have  been  made  available  to  Member  States  in  February
2014.
DG  AGRI  has  provided  all  paying  agencies  with  dedicated  anti-fraud  seminars.  The
seminars addressed the anti-fraud obligations of Member States, gave an overview of the
typology  of  fraud  in  the  areas  at  risk  and  provided  detailed  information  of  fraud
indicators (‘red flags’). Member States have also been provided with DG AGRI’s fraud
risk assessment in their respective national language.
Such initiatives shall be continued as appropriate.

Output/Deliverable  Chef de File
Baseline
Indicator
Timing
Sharing of updates  AFC
Fraud risk assess-
Updated
Within 3
of the existing
ment
version of fraud  months of
fraud risk
Ares(2015)5175278  risk assessment
updated
assessment as
– 18/11/2015
version of
required by
the fraud
emerging new
risk
fraud patterns
assessment
Anti-fraud training  AFC in
Anti-fraud seminars  Requests for
Continuous
to staff of paying
cooperation
delivered to
training or
agencies in the
with OLAF
Member States
newly identified
Member States
as
until 2018
need for
appropriate
training
Sharing of specific  AFC/Dir. H
Information
Information
Continuous
fraud issues with
delivered in
delivered
paying agencies on
training seminars
through
an ad-hoc basis
until the end of
CIRCA-
where training for
2018
BC/conferences
staff would not be
of directors of
appropriate
paying
agencies, etc.
Use of Arachne by  Dir. H
Number of Member  Increase of
Continuous
Member States
States using
number of
Arachne at the end
Member States
of 2019
using Arachne

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ACTION 3: COOPERATION WITH OLAF51
DG  AGRI  has  established  internal  rules  on  how  to  deal  with  and  follow-up  on
denunciations and OLAF operational cases52.
As  far  as  financial  follow-up  is  concerned,  the  Communication  to  the  Commission  of
27.11.2007 establishes the provisions applicable to all OLAF operational activities53. DG
AGRI has implemented this communication through Note D(2009)287904 of 30.09.2009
on Financial Follow-up of irregularity cases by Directorate H.
The cooperation between DG AGRI and OLAF will also be extended to the publication
of a case-compendium on CAP-related OLAF investigations.
Output/Deliverable
Chef de File
Baseline
Indicator
Timing
Transmission of
AFC
Allegations
100% of
Continuous
allegations of
received by
allegations
fraud and other
DG AGRI
received by DG
serious
AGRI
irregularities
transmitted to
received by DG
OLAF
AGRI to OLAF
Operational
AFC/Dir.
Requests by
100% of
Continuous
meetings with
H/other DG
OLAF
requests
OLAF
AGRI units
honoured (ratio
investigation units
concerned
of requests
before closure of
received and
investigations
requests
honoured)
Participation in
AFC
Invitations by
Participation in
Continuous
networking and
OLAF
meetings
training events by
OLAF (FDPNet
and sub-group on
shared
management,
COCOLAF, etc.)


51  CAFS  2019  Action  Point  56  on  the  optimisation  of  the  cooperation  between  services/other  EU  bodies  and
OLAF.
52 "Internal rules for the handling of allegations of external fraud and other irregularities, and of external OLAF
cases", adopted by the Director-General on 4 February 2014
53  Division of responsibilities between OLAF and the AODs in the Commission concerning the financial follow-
up of irregularities  in the domain of  Community expenditure under shared  management in the agricultural and
structural actions area.

25

ACTION 4: MAINTAINING FRAUD AWARENESS IN DG AGRI54
Fraud  prevention  is  a  responsibility  for  all  the  services  within  the  DG.  Systematic
awareness  raising  actions  for  all  staff  and  for  selected  target  groups  would  ensure
continuous  information  and  increased  consciousness  on  prevention  and  reporting  of
fraud.  Such  actions  will  be  closely  linked  with  other  training  actions  on  ethics  and
whistleblowing.
Output/Deliverable
Chef de File
Baseline
Indicator
Timing
EUlearn training
AFC
Training
Creation of
1 event before
events for all staff
delivered until
training event
end of each
on fraud detection,
the end of
calendar year
prevention and
2019
correction

ACTION 5:  MONITORING THE IMPLEMENTATION OF RECOMMENDATIONS
FOLLOWING OLAF INVESTIGATIONS55
Under  shared  management  with  the  Member  States,  DG  AGRI  does  not  follow  up  the
correction  of  individual  irregularities  in  detail.  However,  as  concerns  OLAF
investigations and their recommendations, DG AGRI – since the 2nd semester of 2018 –
gives OLAF cases a specific follow-up and requires Member States to report in detail on
the state of play of implementing OLAF recommendations.
Output/Deliverable
Chef de
Baseline
Indicator
Timing
File
Transmission of
AFC
Reception of
Transmission
Continuous
OLAF Final
OLAF Final
to Member
Reports to the
Reports and
State
Member State
Recommendations
concerned under
cover of a note
signed by the
Director-General
of DG AGRI


54  CAFS  2019  Action  Point  20  « Analyse  fraud  patterns  and  fraud  risks  using  case  compendiums  of  OLAF
investigations according to needs identified.”
55  CAFS  2019  Action  Point  60  ”Closely  monitor  Member  States’  follow-up  of  OLAF’s  financial
recommendations”

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