What changed between the draft committee report and the plenary report

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

Changed:on the Protectionprotection of the European Union’s financial interests -– combating fraud -– annual report 2022

7 unchanged paragraphs

(2023/2045(INI))

The European Parliament,

– having regard to Articles 310(6) and 325(5) of the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Commission report of 27 July 2023 entitled ‘34th Annual Report on the protection of the European Union’s financial interests and the fight against fraud – 2022’ (COM(2023)0464) (PIF Report 2022),

– having regard to the European Anti-Fraud Office (OLAF) Report 2022 and the 2022 Annual Report of the OLAF Supervisory Committee,

– having regard to the European Public Prosecutor’s Office (EPPO) 2022 Annual Report published on 1 March 2023,

– having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget (the Conditionality Regulation),

Added:– having regard to the judgments of the Court of Justice of the European Union (CJEU) of 16 February 2022 in Cases C-156/21 and C-157/21 and the CJEU’s conclusions that the rule of law conditionality mechanism is in line with EU law,

Added:– having regard to the Commission proposal of 18 September 2022 for a Council implementing decision on measures for the protection of the Union budget against breaches of the principles of the rule of law in Hungary (COM(2022)0485),

4 unchanged paragraphs

– having regard to Regulation (EU) 2021/1060 of the European Parliament and of the Council of 24 June 2021 laying down common provisions on the European Regional Development Fund, the European Social Fund Plus, the Cohesion Fund, the Just Transition Fund and the European Maritime, Fisheries and Aquaculture Fund and financial rules for those and for the Asylum, Migration and Integration Fund, the Internal Security Fund and the Instrument for Financial Support for Border Management and Visa Policy (the Common Provisions Regulation),

– having regard to the Commission proposal of 16 May 2022 for a regulation of the European Parliament and of the Council on the financial rules applicable to the general budget of the Union (Financial Regulation recast) (COM(2022)0223),

– having regard to 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 (PIF Directive),

– having regard to the Commission report of 16 September 2022 to the European Parliament and the Council entitled ‘Second report on the implementation 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 law’ (COM(2022)0466),

Added:– having regard to Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law,

4 unchanged paragraphs

– having regard to the Commission communication of 13 July 2022 entitled ‘2022 Rule of Law Report’ (COM(2022)0500),

– having regard to the study entitled ‘Strengthening the fight against organised crime: Assessing the legislative framework’, published in December 2022,

– having regard to the report entitled ‘Assessing the Threats to the NextGenerationEU (NGEU) fund – A Joint Europol-OLAF Report’, made public on 6 June 2023,

– having regard to the European Ombudsman’s ‘Closing note on the Strategic Initiative concerning the transparency and accountability of the Recovery and Resilience Facility’ of 12 September 2023 in relation to Case SI/6/2021/PVV, opened on 24 February 2022,

Changed:– having regard to the European Court of Auditors (ECA) Review 04/2023 of 6annual Julyactivity 2023report entitledfor ‘Digitalising2022 thepublished managementon of4 EUMay funds’,2023,

Changed:– having regard to the ECA Special ReportReview 06/202304/2023 of 136 MarchJuly 2023 entitled ‘Conflict‘Digitalising ofthe interestmanagement inof EU cohesion and agricultural spending – Framework in place but gaps in transparency and detection measures’,funds’,

Added:– having regard to the ECA Special report 06/2023 of 13 March 2023 entitled ‘Conflict of interest in EU cohesion and agricultural spending – Framework in place but gaps in transparency and detection measures’,

– having regard to Regulation (EU) 2021/785 of the European Parliament and of the Council of 29 April 2021 establishing the Union Anti-Fraud Programme and repealing Regulation (EU) No 250/2014,

– having regard to its resolution of 23 November 2021 with recommendations to the Commission on digitalisation of the European reporting, monitoring and audit,

Added:– having regard to the Commission communication of 14 December 2020 on the review of the European Union under the Implementation Review Mechanism of the United Nation Conventions against Corruption (UNCAC) (COM(2020)0793),

Added:– having regard to its recommendation of 17 February 2022 to the Council and the Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy concerning corruption and human rights,

– having regard to its resolution of 19 January 2023 on the protection of the European Union’s financial interests – combating fraud – annual report 2021,

– having regard to Rule 54 of its Rules of Procedure,

Changed:– having regard to the report of the Committee on Budgetary Control (A9-0000/2023),(A9-0434/2024),

A. whereas, in line with the obligation laid down in Article 325(5) TFEU, each year the Commission, in cooperation with the EU Member States, submits a report to the European Parliament and to the Council on the measures taken for the implementation of the article (known as the PIF Report);

B. whereas sound public spending and the protection of the EU’s financial interests should be key elements of EU policy in order to increase citizens’ confidence by ensuring that taxpayers’ money is used properly and effectively;

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Changed:C. whereas the PIF Report is based on information provided by the Member States, including data on irregularities and fraud detected; whereas the PIF Report must take into account the financial specifics of each Member State and provide the necessary flexibility in this regard;

D. whereas the number of fraudulent irregularities detected and reported demonstrates the results of Member States’ efforts to counter fraud and other illegal activities and should not be interpreted as an indication of the level of fraud in the Member States;

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Added:E. whereas all Member States should be treated in a correct and objective manner;

F. whereas there are different levels and actors involved in the protection of the EU budget through prevention (interruption and suspension of payments), detection, financial corrections and the recovery of money unduly paid;

G. whereas the Early Detection and Exclusion System protects the EU budget from risks of insolvency, negligence, fraud or irregularity committed by private actors;

Change 3

Changed:G.H. whereas the rule of law conditionality mechanism applies to the entire EU budget and allows measures to be taken in cases of breaches of the rule of law principles that affect or seriously risk affecting the sound financial management of the EU budget or the EU’s financial interests;

Change 4

Removed:H. whereas the Article 22 of Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (the RRF Regulation) contains provisions concerning the protection of the EU’s financial interests;

Added:I. whereas respect for the values on which the Union is founded and for fundamental rights, as well as compliance with the Charter of Fundamental Rights of the European Union are prerequisites for accessing EU funding;

Removed:I. whereas the varying levels of digitalisation in the Member States needs to be addressed by the creation of more unified, interoperable and comparable administrative and reporting systems in the EU, which are functional and necessary for a solid comprehensive analysis and for the effective prevention of irregularities and countering of fraud and corruption;

Added:J. whereas fraud and corruption represent a constant danger to the integrity of decision-making;

Removed:J. whereas cooperation with international partners is crucial to protect EU funds spent outside Europe and the revenue side of the EU budget;

Added:K. whereas Article 22 of Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (the RRF Regulation) contains provisions concerning the protection of the EU’s financial interests;

Added:L. whereas the varying levels of digitalisation in the Member States needs to be addressed by the creation of more unified, interoperable and comparable administrative and reporting systems in the EU, which are functional and necessary for a solid comprehensive analysis and for the effective prevention of irregularities and countering of fraud and corruption; whereas the Member States must be encouraged, in parallel, to make use of EU-wide data mining tools such as Arachne or the Early Detection and Exclusion System (EDES);

Added:M. whereas Arachne is voluntary tool and, although already largely used in cohesion policy and being introduced for agricultural spending, making it mandatory – as repeatedly requested by Parliament – would be a major step forward;

Added:N. whereas the diversity of legal and administrative systems in the Member States is a disadvantage and whereas it needs to be adequately addressed to be able to create more unified, interoperable and comparable administrative and reporting systems in the EU to effectively prevent and fight fraud and corruption and overcome irregularities;

Added:O. whereas cooperation with international partners and global financial institutions is crucial to protect EU funds spent outside Europe and the revenue side of the EU budget;

General remarks

1. Welcomes the PIF Report 2022 and the analyses presented therein;

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Changed:2. Shares the Commission’s view that fraud prevention and detection and the monitoring of the return mechanisms for misappropriated funds must rely on further digitalisation and the use of cutting-edge technology based on machine learning in order to increase the accessibilityaccessibility, andinteroperability, use and management of data;data relating to potential fraud; points out that efficient anti-fraud governance and effective result-oriented processes and adequately equipped structures must be in place to ensure cooperation and coordination between all the components of the anti-fraud architecture and the relevant actors; believes that, to this end, the necessary digital and procedural knowledge must be provided to the officials responsible for the various components of the anti-fraud architecture;

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Added:3. Recalls that in order to ensure a high level of protection to the EU's financial interests, solid cooperation between the authorities conducting administrative investigations and those conducting criminal investigations at both EU and Member State levels is essential;

4. Appreciates the efforts made by the Commission to anticipate the publication of the annual PIF Report, which allows Parliament’s resolution to be adopted within year n+1 and makes the remarks and recommendations contained therein more topical;

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Changed:4.5. Appreciates the improved overall coherence of the anti-fraud legislation across the EU, following the actions undertaken by Member States to transpose the EU rules into national systems correctly; observesexpresses concerns that, in some respects, the situation is still sub-optimal, in particular as regards the detection and reporting of suspected fraud and irregularities and their follow-up, for which the differences between Member States are still very notable;

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Added:6. Stresses that prevention and communication are key to combat fraud and corruption, and that the Commission should support the Member States in implementing effective measures in these areas;

7. Shares the Commission’s view that fraud risk analysis should be enhanced in order to assess whether reporting low levels of fraud is a consequence of a genuinely low occurrence of misconduct or a consequence of weak detection;

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Changed:6.8. Regrets the fact that in many Member States national authorities do not always follow up on the Commission’s and OLAF’s recommendations, report exhaustively or adopt acknowledged good practices in a timely manner; points out that in many Member States, the percentage of irregularities that are still classified as suspected fraud many years after they were initially reported is extremely high, even in relation to cases indicated as closed; believes that such situations might suggest a lack of adequate follow-up, insufficient or inadequately trained resources, communication gaps or inefficient reporting channels, weak cooperation and coordination, or even the unjustified postponement of reclassifying irregularities as fraudulent in order to adjust the statistical reporting;

Change 10

Removed:7. Notes that the number of cases of fraud and irregularities reported by the competent EU and national authorities – 12 455 in total – slightly increased in 2022 compared to 2021; observes that the affected financing related to these cases in 2022 decreased to EUR 1.77 billion (from EUR 3.24 in 2021);

Added:9. Highlights that in such cases, the Commission should support the Member States in the debureaucratisation of the fraud detection, follow-up and reporting process;

Added:10. Suggests that both the EU and national authorities should enhance cooperation and promote greater utilisation of digital tools to combat fraud;