1. Anti-fraud and anti-corruption measures in relation to the use of European Structural and Investment (ESI) Funds DG Regional and Urban Policy Pascal Boijmans Head of Unit "Competence Centre for Administrative Capacity"

2. Outline 1.Rationale 2.Legislative framework 3.Assistance and tools available 4.Anti-fraud and anti-corruption conference and seminars in MS 5.Other on-going initiatives DG Regional and Urban Policy 2

3. National administrative Capacities: Strong correlation between Absorption and Governance 3 Standardized Index based on Absorption data end 2013 for all funds (ERDF, CF, ESF, EAFRD, EFF) and World Bank Governance Index 2012. Croatia is an outlier due to short time for absorption.

4. Regional Policy Strong correlation between Government Effectiveness and Corruption Latest data for all 28 Member States

5. 5  Article 59 (2) of the Financial Regulation  New elements in the Common Provisions Regulation (CPR) governing the implementation of European Structural and Investment (ESI) Funds L EGISLATIVE F RAMEWORK

6. Article 59 (2) of the Financial Regulation "When executing tasks relating to the implementation of the budget, Member States shall take all necessary measures, including legislative, regulatory and administrative measures, to protect the Union's financial interests, namely by: (b) preventing, detecting and correcting irregularities and fraud."

7. Anti-fraud requirements in Article 125.4(c) of the CPR for 2014-2020 For the 1 st time in the Regulation governing the implementation of ESI Funds explicit reference: "As regards the financial management and control of the operational programme, the managing authority shall: - put in place effective and proportionate anti- fraud measures taking into account the risks identified." 7

8. Programming period 2014-2020 for ESI Funds Fight against fraud and corruption is high on the agenda - both in the EU in general, and in the ESI funds in particular; Stronger legal basis provides opportunity to step up the game in fight against fraud and corruption; For the ESI Funds – no business as usual; Zero tolerance to fraud and corruption in ESIF; 8

9. 9 Everybody agrees that fraud and corruption is not acceptable, but what can we do about it? For 2014-2020 the Commission has developed a number of new guidelines and tools: Fraud Risk Assessment Guidance Note ARACHNE A NTI -F RAUD AND A NTI -C ORRUPTION M EASURES – A SSISTANCE AND T OOLS

10. 10 EC Guidance Note on Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures Made available to MSs in mid-December 2013 Provides assistance and recommendations to Managing Authorities for implementation of Article 125.4 c) Provides fraud self-assessment tool - focuses on fraud risks in relation to 3 key processes:  selection of applicants;  implementation and verification of the operations (including public procurement-related fraud risks);  certification and payments.

11. 11 Commission's guidance provides a tool which can mitigate fraud risks Assessing the degree of exposure to specific fraud risks using a self-assessment tool provided by the Commission The type of additional anti-fraud measures to be put in place should take into account already existing mitigating controls Proportional and effective: a higher fraud risk requires that anti-fraud measures are stepped up During the programming period, the fraud risk assessment should be carried out annually or every second year

12. ARACHNE – risk scoring tool 12 Data-mining tool developed by EC and offered for use by Managing Authorities in MSs for free. O BJECTIVE :  Support the Management and Control Systems, to lower the error rate and strengthen fraud prevention and detection  Facilitate the continuous monitoring / overview of the internal and external data regarding projects, beneficiaries and contracts/contractors

13. ARACHNE – risk scoring tool 13 Based on a set of risk indicators and alerts Customized to the nature of OP expenditures Using some key (internal) data of the projects enriched with publicly available information (external data)

14. ARACHNE – benefits 14 In view of limited resources and multiplicity of operations, key actors and systems:  Promote the use of a risk based approach in the verifications of the projects (focus on most risky projects);  Complement the risk assessment with regard to fraud alerts and irregularities;  Identify possible irregular circumstances continuously on the basis of predefined risk criteria;  Build an overall better defence against fraud and errors

15. 15 Conference on anti-corruption and anti- fraud measures in relation to the use of the ESI Funds. Follow-up seminars in selected Member Sates Events organised by OLAF (Greece 26 and 27 February 2014) Anti-fraud and anti-corruption events

16. 16 Conference on anti-corruption and anti-fraud measures in relation to the use of the ESI Funds 3 December 2013, Brussels Organisers: European Commission in co-operation with Transparency International 454 participants 28 EU MS; different EC services: REGIO, EMPL, OLAF, HOME, MARKT, AGRI, MARE Conclusion: there is interest in further sharing of hands-on practice, guidance and promote awareness on the issues

17. 17 S EMINARS IN 6 MS Where? (lowest CPI) SK CZ BG RO IT HR Target group (max 100) MAs, CAs, AAs, IBs anti-corruption bodies PP bodies civil society Objectives Awareness of new reg. requirements New COM guides + tools Discuss planned actions

18. S EMINARS IN MS - D ATES 18 SK Bratislava 13 March CZ Prague 20 March BG Sofia 9 April RO Bucharest May (tbc)

19. S EMINARS IN MS - A PPROACH Co-operative endeavour 19 Commission services Transparency International country chapters Agenda Opening session Broad overview of status quo and future plans Thematic workshops 1. Fraud risk assessment 2. IT tool "Arachne" 3. "Fraud-proofing" public procurement Closing session Reporting suspected fraud and protecting whistleblowers

20. 20 1.New Public Procurement directives:  new provisions on conflicts of interest (Art.21);  illicit behavior by candidates/tenderers (Art.22);  safeguards against undue preference (Art.39);  obligation to transmit the text of concluded high-value contracts to the oversight body (Art.84) 2.Working Group (REGIO, MARKT, AGRI, EMPL, MARE and EIB) on Public Procurement Action Plan: some initiatives  Prepare Practical Guidance on "How to avoid common public procurement errors"  MS specific initiatives (RO & BG Action Plans) O THER ON - GOING INITIATIVES

21. DG Regional and Urban Policy Unit E1 "Competence Centre for Administrative Capacity-Building; Solidarity Fund" 21 Thank you !