Committee on Budgetary Control Ordinary meeting
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CONT European Parliament
Follow its sittingsExcellent.
Caterina Chinnici
Yes, indeed. We've received all your declarations. So, I think we can now move to the denomination of Andreas Schwab. I'll work on pronouncing your surname, but we can do it by acclamation, I think, to elect Mr. Schwab as the chair of the committee. Congratulations.
Caterina Chinnici
At this juncture, I'd like to thank Mr. Haupt once again for the work he's done in this committee. And I'd like to congratulate Mr. Schrab, and I'll immediately cede the seat at the top table to him.
Andreas Schwab
So, good morning, colleagues. It's a new feeling for me, and I hope that you hear me well. And, you will forgive me today if I make some errors. But I think it's very easy because we start today's meeting with the vote on the committee's opinion on the batch of guidelines for the 2027 sections rebudget. Before starting the vote, and I hope that you all have your voting cards ready, I would like to announce that I have been informed about the replacement of the following committee members by members from other committees.
It's just Mr.
Rodriguez.
Andreas Schwab
It's just that Mister Rodriguez has already been mentioned before. And like that, I propose that we immediately start with the proceedings. We have only one vote to get that done. If the groups are ready to vote, unless the rapporteur would like to add something, I will immediately proceed with the vote. Mister Freund, do you want to have the floor?
Very good. Then, we go directly to the vote. So we have the required quorum, which is eight MEPs, and we can therefore immediately proceed with the vote. So, please start the vote. Still, one member is missing.
Okay. And the vote is closed. And it's clear. 16 members in favor, 6 against. And therefore, to Mr. Freund.
It's done. Thank you very much for this. I hope that all the votes will be as unproblematic and fast as this one, and I count on my vice presidents to help me with this. I'm looking forward. We come then to item number 6, the special report of the European Court of Auditors on EU bodies fighting fraud.
We will have, first of all, a presentation by the reporting member, Katrina Casasova. I don't know where she is, but I think she will have the floor from over there. Very good. We will do that. Good morning.
We will.
Andreas Schwab
Do that in the presence of our commissioner, Piotr Seraphin, responsible for budget, anti-fraud, and public administration. There is also the European chief prosecutor, Laura Kövesi, and the director general, Petr Clement, from Olaf. We have invited the members of the esteemed Committee on Civil Liberties, Justice, and Home Affairs. And like that, I would like to give the floor immediately now to you for the European Court of Auditors' opinion. Please start your presentation.
Speaker 5
Okay. Good morning, Chair, and congratulations. And, also, good morning, members of the committees. Fighting fraud against the EU financial interests, which covers all EU revenue, spending, and assets, is a joint responsibility of the EU and its member states. And I'm happy to present to you this morning the results of our performance audit of the EU bodies fighting fraud.
I cannot stress enough how important the topic of our report is. One reason is that fraud with EU money directly harms the EU budget, and another is that the perception of fraud can make citizens lose trust in the EU. Therefore, it's essential to tackle fraud effectively. The context and timing of our report are also important. Our report comes some four years after a major change was introduced in the EU's anti-fraud architecture: the start of the European Public Prosecutor's Office, or EPPO.
As auditors need some time to pass, this is indeed our first performance audit related to EPO's contribution to the overall anti-fraud architecture. We published the report against the backdrop of the European Commission's review of the EU's antifraud architecture. This means our findings would contribute in a timely manner to the ongoing review. In this audit, we examined the system for combating fraud, focusing on the EU's anti-fraud office, OLAF, the European Public Prosecutor's Office, EPPO, the EU Agency for Criminal Justice Cooperation, Eurojust, and the EU Agency for Law Enforcement Cooperation, Europol. Our audit assessed whether the mandates of these four bodies were clear regarding their responsibilities for fighting fraud and the support provided to each other, in particular between Apple and OLAF.
We also checked the commission's oversight and its overarching role in protecting the EU's funds. Of course, the member states also have an important role to play, but this was outside the scope of our audit. As you may see, fraud reporting obligations vary, and they may lead to duplicate reporting to OLAF and the EPO. This increases the administrative burden for both those who report allegations of fraud and those who process them. At the same time, the coexistence of administrative and criminal reporting channels causes problems.
Currently, the system fails to ensure that all allegations reach APO, which means they are not assessed for potential criminal conduct. Procedures for transferring them from OAF to APO are difficult. On top of that, APO's exchange of information with OAF also has limits. This may reduce the scope for further protective measures by the Commission, such as exclusion from EU financing. Just the example in terms of figures.
Between 2022 and 2024, OAF and EPO received a total of 27,000 fraud allegations. On average, OAF and EPO judged that one-third of these allegations merited an investigation. Overall, we concluded that the mandates of OAF, EPO, Eurojust, and Europol are clearly defined in the legislation. In fact, their independent roles are complementary and can serve as an effective safeguard against fraud. It's clear that effective cooperation between all fraud fighters, from EU investigators to national police, is necessary.
Andreas Schwab
May I interrupt you for a second? I'm indicated that you are speaking a bit too fast, so if colleagues listen in their mother tongue, they may not follow you. Please, over to you again.
Speaker 5
Okay. Overall, I will repeat just this slide because it's really about the overall conclusions. Overall, we concluded that the mandates of OLAF, EPO, Eurojust, and Europol are clearly defined in the legislation. In fact, their independent roles are complementary and can serve as an effective safeguard against fraud. It's clear that effective cooperation between all fraud fighters, from EU investigators to national police and judicial authorities, is absolutely essential.
However, our audit revealed that the EU's fight against fraud suffers from weaknesses in the exchange of information between its key investigative bodies, APOL and OLAF. In addition, the European Commission's oversight of repayments to the EU budget is insufficient. While shortcomings regarding information exchange may sound like a trivial procedural matter, they actually have serious consequences. First, this affects the number and timeliness of fraud investigations. We think there is scope for more investigations with fewer delays.
Secondly, it also affects the commission's oversight of both the repayments being made to the EU budget and the repayments that should have been made. Figures also show that EU bodies report three times more fraud allegations to OLAF than to the Apple. What caught our attention is a substantial gap between member states' share of the EU budget and the number of fraud cases they report. None of these gaps and variations have been analyzed by the commission. Following its investigations between 2022 and 2024, OLAF recommended repayments of over €600,000,000 to the EU budget.
By 2024, over €20,000,000 had already been repaid. In the same period, Apple froze €3,000,000,000 worth of assets. Following its investigations in 2024, the Kurds in member states ordered the national authorities to recover over 230,000,000 from criminal damages. But the commission does not have a mechanism to monitor whether the recoveries imposed by courts have taken place and whether the full amount due to the EU budget has been recovered. So, the Commission doesn't know whether all the money due to the EU budget is being repaid.
So, what do we recommend? There is a need for a new system to simplify the handling of fraud allegations and investigations, as the current one suffers from significant weaknesses in terms of information exchange. For example, the new system should ensure that all allegations received are channeled to a central repository. The commission must improve its oversight, so it should analyze reasons for the variations in reporting and investigate the causes of any insignificant underreporting. And finally, it should ensure that all the money due to the EU budget is repaid.
All three recommendations have been accepted by the commission and welcomed by Apple. We are sure that the ongoing review of the EU anti-fraud architecture is an opportunity to address the system's faults. Thank you.
Andreas Schwab
Thank you very much for your presentation. Miss Cassano Savoy, we now give the floor to Commissioner Seraphine for eight minutes. Commissioner, over to you.
Piotr Serafin
Thank you, Mr. Chair. Let me start by congratulating you. I would also like to thank Niklas Herbst for our excellent cooperation. I hope we'll keep it like that in the future and that this dialogue during the committee will be as fruitful as it has been so far.
Now, first of all, I would like, of course, to thank you for this opportunity to attend the presentation of the special report. As was already said, and I will repeat it, the Commission has accepted all the recommendations made by the European Court of Auditors in this report. The commission is committed to improving the ways all anti-fraud actors work together, and this report comes at the perfect time to feed into our reflections on the ongoing preview of the anti-fraud architecture. But as you will see, we are not planning to only wait for the anti-fraud architecture. We are already taking actions.
As regards the first recommendation, we compared with the ECA that the establishment of an interoperable system for the exchange of information is essential for effective cooperation and efficient investigations. We are currently exploring how this common repository can work in the context of different mandates of the anti-fraud actors and the existing crews on data protection and confidentiality. But the direction of travel is clear. We need to improve the exchange of information, and the concept of the common repository is also the one we were considering.
About.
Piotr Serafin
The second recommendation to address the issue of underreporting is that we will work closely with the member states to identify ways to increase and streamline reporting to OLAF and EPO. I would like to stress that the Commission has proactively addressed this issue in the proposal for the next MFF by making reporting to the Irregularities Management System (IMS) an obligation for member states under the NRPP regulation. Finally, as regards the third recommendation on recoveries, to enhance the oversight as suggested by the report, we are not waiting for the anti-fraud review to be concluded at the end of the year. We are already taking action. Olaf will now be the lead commission service to step up the follow-up of financial recommendations and notifications from the EPO.
Let me now turn to the state of play with the review of the anti-fraud architecture. As you know, in July 2025, the Commission adopted the white paper on the anti-fraud architecture review. Since then, we have launched a review process engaging all relevant stakeholders. The review is led by the Commission services, but let me assure you that Olaf, EPO, Europol, Eurojust, and the Anti-Money Laundering Authority are closely involved in a fully inclusive process of consultations. The objectives of the anti-fraud architecture review are threefold.
First, to improve efficiency and coordination across the entire anti-fraud cycle. Second, to make better use of technology, information, and data to anticipate and disrupt fraudulent behavior; and third, to strengthen coordination of the anti-fraud actors involved to ensure that our resources are deployed where they deliver the greatest impact. Central to this effort will be stronger deterrence, clearer rules for cooperation, and better integration of administrative and criminal investigations. The commission has launched six strengths of work: information sharing, investigations and prosecutions, analytical support and forensics, recoveries, reporting, and coordination and steering. Let me stress some of the most important issues that we are working on.
Effective sharing of information between anti-fraud actors, as well as with national forages, is a key cross-cutting area of focus. Of course, this exchange needs to be done in full respect of the different mandates of the anti-fraud actors involved. As suggested by the ECA, we also need to reinforce coordination between OLAF and the EPO. Both institutions have distinct and important roles, but without clear demarcation and with close cooperation, there is a risk of uncoordinated actions. The protection of the budget relies on both criminal and administrative investigations.
Secondly, protecting the EU's financial interests does not stop with prosecution. We must also ensure that misappropriated funds are recovered wherever possible. The recovery is complex. It requires close cooperation within the commission with OLAF, the EPO, and National Forages. The review of the anti-fraud architecture will, therefore, explore ways to simplify and accelerate the recovery process.
The ongoing work on the review is also examining how the results of the efforts of all anti-fraud actors can be better reported in a clear and comprehensive manner. To ensure that the committee, your committee, but also the taxpayers, have a clear understanding of the work of all actors to protect the financial interests of the EU. The outcome of the review will be presented in the commission's communication this year. The commission will take into account the outcome of the working group on the antifraud architecture and the results of the ongoing evaluations and impact assessments of the regulations of Eurojust, Europol, EPO, OLAF, and the directive on the fight against fraud against the Union's financial interests. Honorable members, once again, I would like to thank ECA for the special report. I believe that by working together, we can ensure better protection of the EU budget, and the report will definitely contribute to that effort.
Thank you.
Andreas Schwab
Thank you very much, Commissioner Seraphin. That has been very helpful. And we now come immediately to Miss Quevezi as European Chief Prosecutor. You have 6 minutes. Please, over to you.
Speaker 8
Thank you very much. Congratulations on your appointment, and I wish you a successful mandate. Honorable members of parliament, dear commissioner, dear members of the Court of Auditors, dear Director General, ladies and gentlemen, thank you for this opportunity to speak to you today. And thank you, Miss Casazova, for your special report on EU bodies fighting fraud. It is an important contribution to the ongoing discussion on the reform of the European anti-fraud architecture because everybody agrees on it.
We need to do better. We need to become much more efficient in the fight against EU fraud, especially against organized crime groups who are literally plundering our budget. Your time is precious, and you have heard it many times before. Yes. We can always improve cooperation and coordinate better.
Yes. We can change more of the information. Yes. But concretely, what do we do to dismantle the criminal industry that has been allowed to steal revenue from VAT and customs fees? The EU anti-fraud architecture needs to give a convincing answer to this question.
It is not the job of the prosecutor to estimate the fraudulent VAT or customs gaps. It is not for us to tell you what percentage of the EU funds is targeted by fraudsters. Our job is to investigate and prosecute in order to take these criminals out of the picture so that justice is served in the interest of European citizens. At the end of my mandate, I can tell you this. I did not expect to see what I saw at the EPPO.
And the EPPO provides an unprecedented understanding of the criminal ecosystem in the EU. This is why I regret the past years of missed opportunities between EPPO and Olaf, but I am confident that with Mr. Peter Clement as the new Director General of Olaf, things will change. They are already changing. At last, we are moving away from a rather sterile insistence on systematic complementary administrative investigations to EPPO's criminal investigations. I will leave it to Peter to give you more details about all the areas in which Olaf and EPPO cooperation can improve rather quickly.
At EPPO, we are relieved to finally have a counterpart willing to engage in serious discussions about how to fight customs fraud together. As to improving recoveries for the EU budget, we fully understand the role of the Commission to protect the EU budget by means of conservatory, precautionary, or corrective measures. We also understand that the information we have in our cases is essential in this respect. However, we all have to respect the principle of confidentiality in criminal investigations. The key issue is for the responsible commission services to get relevant information in a timely fashion.
We have already established a good system of notification in this respect, but, of course, we can improve it further. Ladies and gentlemen, together with Peter, we have started to discuss concrete modalities for the exchange of staff, a possibility foreseen in our working arrangements. I would expand this idea beyond OLAF and propose it to the Commission officials in charge of recoveries. These OLAF and Commission officials could be allocated to support the work of the PPPO's permanent chambers. These experts would systematically retrieve all the relevant information for administrative follow-up purposes and flag it to the responsible European delegated prosecutors for a decision to notify.
They could even train our support staff to draft administrative follow-up recommendations for the commission services. This would be a simplification. This would create synergies. It would definitely optimize the existing notification system and reassure everyone that no information that can be communicated to the commission has been missed. It would also develop the commission's knowledge about prosecutorial constraints and different applicable legal frameworks in the EPPO zone, to the benefit of increasing and speeding up recovery.
Thank you for your attention.
Andreas Schwab
Thank you very much, Miss Kovese, for this presentation. I am very glad that you have also mentioned the fraud issue in customs because customs legislation is about to be enacted soon, and therefore, it is very important to address this issue in other committees of this Parliament as well. But I shouldn't spend your time on these comments. I should give the floor to Mr. Thank you, Petr Clements, immediately for his intervention as Director General of Olaf.
And a warm welcome to you as well, because it's not only me who is new here, but also you. A very warm welcome, and over to you.
Speaker 9
Good morning. Thank you, Mr. Chair for the floor. Honorable members of the parliament, honorable chair, thank you for inviting me to today's meeting for the first time in my capacity as the director general of Olaf. Allow me to add my congratulations to Mr. Schwab for his election as the new chair, and to also thank Mr. Herbst for his service and for what I was told was an excellent cooperation with Olaf.
I welcome the opportunity to address the findings of the European Court of Auditors' report. I would like to thank Missus Casasova and her team on behalf of Olaf for their constructive engagement in this audit. The commission has accepted all three ECA recommendations to improve the communication and exchange of information between the key actors, overall fraud reporting, and oversight of amounts relating to the outcomes of Olaf and EPO investigations. As DG Olaf, I'm strongly committed and look forward to working with the Commission in the implementation of these recommendations. We are reassured by ECA's finding that Olaf, EPO, Europol, and Eurojust have specific, clear, and complementary roles and responsibilities.
The court pointed to the important distinction in the roles of Olaf and the EPO, with responsibility for their administrative and criminal investigations, respectively. This already gives us a strong foundation for moving forward. Olaf has taken this audit as an opportunity to highlight the extent of the existing cooperation with the BPO in the context of our complementary activities. The recoveries recommended so far amount to nearly 900,000,000 euros, which is a result we can be proud of. Equally, the Audi has also allowed us to reflect on broader areas of our cooperation with EPPO, Europol, and Eurojust that can be improved, especially in lifting barriers to information and data exchange.
I'm sure we can cooperate better, and we shall, because of the volume of EU investments planned and because the landscape of fraud is evolving fast due to technologies. I want to reassure the court and this committee, as all partners in the protection of the EU financial interests, that your views have been heard and work has already started, as already mentioned by Miss. For the recommendations themselves, as for the first one, OLAF, through its extensive administrative toolsets, is also able to detect early suspicions of criminal behavior, which were swiftly reported to EPPO. We recognize that the coexistence of administrative and civil reporting needs to be optimized, and the exchange of information between EPPO and OLAF could be simplified. OLAF strongly supports the introduction of an IT infrastructure to facilitate more streamlined cooperation, and we look forward to working with the Commission towards its implementation.
As for the second recommendation, the commission is currently gathering evidence from all AFA actors on ways to improve the existing mechanisms. Olaf can contribute significantly to the implementation of this recommendation. As the implementation framework is short, Olaf has already started analyzing the inherent reasons, as well as any external factors, that might explain the different levels of fraud reporting by member states and union bodies, as recommended by the court. Third recommendation: we have been fully focused on improving actual financial recoveries to the EU budget, and we will continue this work. We have developed a methodology to measure the impact of investigations, and we have an important ally here.
Commissioner Seraphin has underlined the need to ensure effective and efficient cooperation with EPPO to protect the EU budget and to ensure that the Commission can swiftly recover EU funds based on the outcome of EPPO investigations and prosecutions. The commission continues to pursue, by means of annual monitoring exercises conducted by Olaf, a reinforced follow-up of the implementation of Olaf's financial recommendations until the final outcome, strategically coordinated by the corporate management board. Olaf will work closely with the Commission services concerned to better leverage financial recoveries from EPPO cases. The European Parliament will receive more granular data in the OLAF report 2025 on the protection of the EU budget, such as a yearly breakdown of recoveries. Olaf shall report on the outcome of all the investigations, and a critical aspect of this is informing this committee on an annual basis.
We value all of our relationships with the European Parliament and ECA, and reinforcing our cooperation is of utmost importance. I very much look forward to our sustained collaboration. Thank you.
Andreas Schwab
Thank you very much, Mr. Clement. Sustained cooperation on budgetary control can be assured from this committee. And for that reason, we now give the floor to our respective rapporteurs. As Mr. Sanchez is not here, I will give the floor immediately to colleague Ericsson for 3 minutes. Over to you.
Dick Erixon
Thank you. Yes. As a standing rapporteur of Ublaaf, I have four points I would like to share with you. Also, in light of the findings and conclusions of the court's presented report, I deem it essential to reiterate that the commission should develop a benchmarking system to measure recovery effectiveness, including indicators such as the ratio between amounts recovered, amounts recommended for recovery, and those established for recovery. The delay between the end of investigations and recovery decisions, and the length of the recovery procedures, are linked to the results.
I also want to ask the commissioner if the commission is considering the publication of an annual breakdown of the legal and administrative bottlenecks preventing recovery, with a competitive analysis of recovery rates across member states. These could be the preconditions for following the results with recommendations on elaborating the best practices. It is important not to ignore that every euro recovered through effective anti-fraud measures is a euro that does not need to be raised through additional taxation of Union citizens. So ultimately, it's about making the right use of the resources invested in the IFA, but also preventing additional costs and financial burdens. Finally, reminding you that you have presented an IFA as complementary to the new MFF, I cannot help but underline that the appropriate procedure of the financial interest is transparent and proportional.
It's crucial for the adoption of performance-based instruments. They must demonstrate clear added value for union citizens and comply with the principles of economy, effectiveness, and efficiency. And this can be achieved only if they are protected from mismanagement, crime, fraud, corruption, conflicts of interest, and organized crime. Thank you.
Andreas Schwab
Thank you very much, Mr. Ericsson, and the floor is now given to Gilles Boire for three minutes, as he is the standing rapporteur on EPPO.
Thank you.
Gilles Boyer
Thank you very much, Chair. Congratulations on your election, and welcome to our budget control committee, Commissioner, ladies and gentlemen. The Court of Auditors has been extremely clear. It seems that competencies have been well defined, but the systems do not seem to be working optimally. Antifraud architecture is fuller and more complete than it has been, but it still faces a number of major challenges.
And the first challenge is fragmentation. The flows of information are not being harmonized. They're not being coordinated, which means there is redundancy and delays. And there's a problem moving from cooperation between the EPO and OLAF to looking at the global architecture of receiving information. The second challenge is the structural tension between the criminal logic on one side and the administrative logic on the other.
On one side, we have to maintain confidentiality in criminal investigations, whereas the other logic urges us to work quickly and push for recovery. The third challenge, which is problematic, is a lack of an overview of the actual money recovered. Today, we do not have a harmonized methodology to achieve this that will allow us to provide clear metrics on what has been achieved in terms of recoveries and what has actually been recovered. Obviously, this is important for our committee. In fact, I would say it's decisive.
We can't work with these fragmented systems any longer. We have to have an integrated, holistic approach. We have to have comparable data. We have to have transparent data on the results. So, coordination has to make headway, obviously, while respecting the independence of the European Public Prosecutor.
Chair, if I may, there are a few questions I'd like to put to our guests, maybe to the Court of Auditors: how can we have a real evaluation of the performance of our architecture without having a common methodology in place for metrics? That seems to constitute a severe hampering of our system. I'd also turn to the Commission on the state of progress on the evaluation of the OLAF regulation and the timetable. And maybe for us, what's interesting to know is whether the results of this investigation will be forthcoming here in this Parliament, in this committee, in the months to come. Thank you.
Merci.
Thank you.
Andreas Schwab
And like that, we come to a general exchange. And I would like to give the floor for three minutes to the rapporteur, the coordinator of the EPP group, Tomas Tickowski.
Tomáš Zdechovský
I prepare my great speech, which I will start by criticizing everyone who is doing nothing for better cooperation, but it's not true. Also, I heard very good speeches from the commissioner, the European Court of Auditors, from Madam Kovese, and also from the new director of Olaf that we have to change our structure, how to fight against corruption in the European Union, and it's a great signal. If you want to make Europe great again, you have to change Europe. And this is what we are facing now. And this is why it's very important to really take the mandate.
Commissioner Seraphine, who will change the anti-fraud infrastructure? Only you. No one else. It's cooperation with me, with Mr. Freund, with my other colleagues, but it's only us who will do these jobs. And, really, it's very interesting, and it's very important what you said to my colleagues: that we need some actions.
It was enough. He knows what we have to do. 10,000,000 of 10,000,000,000 euros are being investigated now by Olaf in many cases. It's a great signal to show us that something is wrong in the European Union. And when we invest €1 in Apple, we get back €9.
You can imagine such a successful institution, and it shows that it must be much more supported, especially by this committee, which many times criticizes things. But today, it is full harmony. We are really prepared to cooperate. Commissioner Seraphine, I had a question, but you responded with your response about cooperation, a new mandate for Olaf EPO, and I know that you are prepared to do it. I also had the question for General Director General Clement about how to really implement a very low level of recommendation because it's around 20%, but you already responded to my questions.
And I also had the question for Chief Prosecutor Kovacic about what we can do much better and how to cooperate much better with Olaf. And you started by saying that there is an opportunity to work together, and you are prepared, and you are working on that. Also, it's a really very good signal. And after my visit to the US, I was a little bit frustrated by many things, but thanks to Brussels, I will be much more positive this week than before. Also, it shows that Europe really has its future.
Thank you very much.
Andreas Schwab
Thank you very much, Thomas Tiekowski. And now for the S and D, Jens Kaia.
Jens Geier
Thank you, Chair. Obviously, I'd like to wish you all the best in your new office. And I'd like to express a vote of thanks to the European Court of Auditors for a very important report, which has made it clear that in fighting fraud, we're not quite where we want to be or where we need to be. I think all institutions have admitted that, and that's good. But it's not a question of lacking recognition of your shortcomings.
It's a lack of action. So I've taken the turn to talk to Mister Seraphin and the others. How quickly do you believe you can address these shortcomings that you've recognized? Thomas Stikovsky used a figure of 10,000,000,000, if I understood what he was saying, where we're talking about recoverables which have not been received yet. Given the tight budgets we're talking about, this is a considerable amount of money.
In 2026, this year, we have an EU budget of €200 billion. So that's 5% of the way, I see it. And so, recovering that money would not just be in the interest of taxpayers. Obviously, it would constitute a guarantee of budget security within the framework of the MFF. We are fighting to make sure that the EU budget is made more robust. That means, of course, on the one hand, that we have to keep the money together and spend it efficiently, but also that we have to combat fraud.
And where we find fraud, we have to make sure that the money is recovered. Hence, I would be interested in knowing whether you have any knowledge of how many budgetary years the fraudulent sums have covered. It's not just something that cropped up last year. This is something that has been compiled over a number of years. Would you, first of all, confirm the 10,000,000,000 that Mr. Stokovsky mentioned, and over how many years this has built up?
And the mechanisms for recovery, how rapidly do they work according to your experience? How quickly can we act if we've noted a fraudulent action obviously working in cooperation with the national authorities? They have their role to play. But how quickly can we get that money back into the EU budget? What is your experience there?
Andreas Schwab
Thank you. Thank you very much, Mr. Gayer. Would.
Do you like to answer directly? I don't really know who can most successfully give an answer to this question. Probably all of you, but maybe only for a short time. Commissioner.
Piotr Serafin
You mean on all the questions, because it is not the only one that we have received. The first one was in relation to the evaluation report on the OLAF regulation. So, what I can tell you is that it is almost finalized. I wouldn't like to commit to a specific date, but it should be relatively soon that this evaluation report will be adopted by the college and, of course, presented to this committee. We are still working on a joint impact assessment of the OLAF regulation and the EPO regulation and directive.
And as I have already mentioned at the beginning, all of that will feed into a possible revision of the OLAF regulations still this year. I stress the possible revision. It is in the cards, but I wouldn't like to commit that the revision at this point is going to take place. And the overall timeline: the Alfa communication will still be this autumn, by the end of the year. That's the timeline for the end of the year.
And it will be at this moment that it will be clear whether it will be accompanied by legislative changes or not. Again, I cannot commit on behalf of the college in this respect, but let me also refer to the ECA report. We talk about the question of the collection of data. For me, it's clear that he would need to look into the legal basis to make sure that we have an efficient system of exchange of information in place, and it is our commitment to ensure such an efficient system of exchange of information. I also have to tell you, from my personal experience, that this was an issue of concern. To be frank, one of the first issues of my concern when I took over this role was to make sure that we have a team Europe, or I should even say team anti-fraud in Europe spirit, when we organize cooperation between anti-fraud actors.
And I do believe that the concept of repository, depository—yes, it's repository. The repository can be the one that contributes to that. On the second question, what I would like to say is this. I also stressed at the beginning that some issues to be implemented might indeed require the conclusion of this anti-fraud review process, potentially changes to the legal base, but there are some that, in my view, cannot wait. And this was the question of the recoveries.
So it was not even waiting for the report of the ECA. Last year, Olaf and I also asked Seggen in the European Commission to empower Olaf within the commission vis-à-vis DGs to play a more active, more forceful role in the process of follow-up not only to Olaf's recommendations on recoveries but also to put in place the process of follow-up on the EPO notifications. And that was indeed, in my view, one of the weaknesses. It can be justified. EPO is a new player.
Also, the new language needs to be defined between EPO and Commission services. The Commission services that used to work on the basis of Olaf recommendations were confronted with a new way of reporting from the EPO. I know there was an effort between Olaf and EPO to make sure that they speak the common language and that the messages from Epura are understood in the commission, which still requires, I believe, some streamlining. But ultimately, what I want to tell you is that we have already put such a system in place based on the current common legal basis. It's also good because, if need be, we will still have an opportunity to look into the context of the offer review to determine whether some changes are needed or not.
On the question of recoveries, yes, there was also this point on recoveries: how quickly, how can we report? Here, I would like to assure you that DG Olaf also mentioned that we have planned together to increase the granularity of PIEF reporting on recoveries. And I know that you were not fully satisfied last year with the report for 2024, which we will change. So, we will ensure full transparency for this committee and for the European Parliament when it comes to the recoveries. On the amount of €9,000,000,000, which I understand comes from the EPO, I wouldn't like to comment.
I believe it's not, but I'm not sure. I think it's not necessarily about the EU budget or all of that amount. So, that's where we are. But I want to assure you that I also share your feeling that more transparency when it comes to the recoveries and how the process goes is needed. It's true; not everything is in the hands of the commission. Not everything is in the hands of the Commission services.
There is also a need to ensure recoveries. There is also a need to have a robust dialogue and cooperation with the member states. So I can assure you that we will improve what we can within the commission, and we will work to also try to use the AFA review to streamline the cooperation with our member states. Thank you.
Andreas Schwab
Thank you very much, Commissioner Seraphine. I will remind you of this sentence. Not everything is in the hands of the commission. I've never heard it like that, but it's also interesting to learn something new here. And I would like to give the floor, but with a limited amount of time, to Katharina Casazova and then to the others, and then we will come back to the speakers of the committee.
Please.
Speaker 5
Yeah. Thank you. As one of the questions was also addressed to us, let me just contribute what Mister Segafin has explained. It's definitely not an easy exercise to have some kind of financial evaluation of the architecture as a system, as the whole system, and to have a unique methodology because of several aspects. First, the roles and competencies of OAF and EPO are different.
OAF, it's just the EU budget. EPO relates to total criminal damage. Also, there are more players in place, not only the commission and these four bodies we have been discussing today, but also 27 member states with their police and judicial systems, which differ among the member states. What Mister Seraphin said could also be taught using other words: Olaf and Eppo do not recover money themselves. Yeah?
They are dependent on the local courts and police. What should also be taken into consideration when assessing the effectiveness of anti-fraud architecture is prevention. We all know that prevention is perhaps less visible. It's not about the titles in newspapers, but prevention is always more important than detection later on, and all these steps, including the judicial process and recovery, are necessary because the fraudsters are always one step ahead of us. So, from my point of view, it's not a mission impossible to think about and combat something like this, but there are many aspects to be considered.
And definitely, the proposed and admitted simplification of the system in terms of reporting exchange of information would help to come to one amount and one estimation of the effectiveness of the system. Thank you.
Andreas Schwab
Thank you very much. And maybe quickly also, Eppo and Olaf, and then we will come back to our speakers.
Speaker 8
Thank you. To a potential question that was not raised, I will reply with the real answer. I think we can cooperate better with Olaf than yesterday. We had a very constructive meeting, and we discussed how to improve our cooperation in three fields: notifications, recovery, and custom. And I insist on customs because here, unfortunately, we have several criminal networks active in almost all member states of the EU, and they cause damages of billions of euros to the EU budget and the national budgets.
So, we are talking about systemic customs goods, misdeclaration, and smuggling. And here, I will give you the example of Calypso, where we had good reports from Olaf, but also how we develop our cooperation in order to improve the recovery. In this case, where the damages were around €800,000,000, we seized €5,200,000 in cash from the beginning. And we seized 2,400 containers of important products with a conservative estimated value of €250,000,000. Everything that is custom comes directly from the EU budget.
This is why we think that in this field of custom, we can work very well with Olaf, and we have a few ideas on this. But coming back to the question, what can be improved? We have, especially when it's about the recovery, a few criteria that are important: how early the crime is reported. You are bound by the national legislation. You are bound by the capacity of the responsible institution, not only at your level but also by the member states.
And I think, in this case, the legislation is very important. Legislation. We have a few regulations that will be revised for all of EPO, Euro Poland, and Eurojust. We have a revision of the PIF directive. We have the Asset Recovery and Confiscation Directive.
So one idea can be: why not link the implementation of this legislation with the spending of the EU funds in the next MFF? And related to the estimated damages for expenditure fraud, I heard €10,000,000,000. I don't know where that information came from. We will publish on Monday the annual report of the APPO, and I can already tell you that the damages from the expenditure fraud are higher than 10 billion. You will have the exact figures in the annual report on Monday.
Speaker 9
Thank you for the chair again, Mister Chair. I think that those with a goodwill to change cooperation between the anti-fraud architecture members, all of EPPO, Europol, Eurojust, and to change recoveries and their follow-up for the better are already sitting in this room, expressing their goodwill and also the fact that we have already started. As for the questions in general, I would say it would be better to speak over more granular and accurate numbers, which we are currently collecting. OLAF is already committed to giving granularity in its 2025 OLAF report and in the PIF report over the last ten years' snapshot. We will work with our partners going forward to see what additional data might be helpful.
There are problematic and unproblematic areas in the spending and in the recoveries. For example, recoveries in customs on the customs site have amounted to almost 100% over the last 10 years. Recoveries, in general, average 80% over the same period, but there are problematic areas which we have to look into. I shall also say that over the ten years, Olaf has recommended about €8,000,000,000 for recovery. And as of now, and I underline now because this is a process, this is also a snapshot in time which may change.
The numbers will change. So, as of now, over 6,500,000,000 has been recovered, and the process will continue. As I said, the goodwill is there. The actions are already there too, and they will be coming. Thank you.
Andreas Schwab
Thank you so much. The process will go on, and therefore, we have to speed up a bit because at 10, there is the next meeting. Based on my list, the next one is Daniel Freund. Over to you.
Daniel Freund
Thank you, Chair. Congratulations from me as well. Wish you every success in your new role.
Member from the Court of Auditors for this good special report. I think I found figure number four particularly interesting, where we see, depending on which member state, we have very different reporting ratios. What is a bit confusing to me is that I cannot see which member state. It actually is. We have a big table.
We see some member states are self-declared free of any misuse or corruption. Others have a very high ratio, but I cannot see which member state corresponds to which. And that would obviously be very interesting, and maybe you can provide us the scale of the graph. And then to Mister Zerafin, well, actually, if we have these differences between member states, one thing might be that member states don't report because there is no problem, or they might be underreporting, of course. But right now, we don't know for each member state which is which, but we should be able to know.
Right? So I think that is some homework to do. And what this graph, I think, also shows is that at least for some member states, there seems to be a real issue. And I'm wondering how much work there actually is to be done to make sure that the national systems work, that they improve, and that they all become better in this, particularly since, according to your proposal for the next MFF, we're relying even more on the national control systems to protect your taxpayer money. And, you know, when the whole discussion we have had now already on recoveries, I mean, when we negotiated the financial regulation, we saw that the member states actually heavily resisted doing recoveries.
They don't want to do this. It seems to me that there is a bit of a disincentive when they take money from their own taxpayers, and then it goes back into the EU budget, and they see little reward, in a way, for the recovery that they do. Do we have to change the system? Can we actually rely on member states to carry out the recoveries properly? I mean, it's good now that you say at least we're going to get a picture of how many recoveries are being done.
But I fear that when we have that picture, you know, there are a number of member states that actually don't do that job properly, and maybe we need a different system for that. Thank you.
Jonas Sjöstedt
You, Chair, congratulations on your appointment. I would also like to thank Nicolas Herbs, your predecessor. I really liked the way you worked as the Chair of this committee. You were inclusive, and you put the content first. In spite of our political differences, I have always felt that you did a very good and honest job.
You also showed a lot of patience and a sense of humor, which is not always the case in this parliament. I'm sure you will need it in your new position as well, and I wish you all the best of luck there. So, the most important things have been covered, I think, by other members, but we are coming back to some problem children that we know quite well: recovery and also the relationship between Olaf and EPO. And I really appreciate all the efforts now being made to improve that: the clearing of information, etc. That's really needed and helpful, I think.
But I would like to ask Ms. Casasova, as an experienced member of ECA, have you seen any improvement in this relationship? I mean, when you have a sense of déjà vu, you have been there before, talking about this. But have you seen it improve during the last year as you studied this in your report? Thank you.
Andreas Schwab
Thank you very much, colleague. And the next one is colleague Riesen.
Bert-Jan Ruissen
Thank you very much, Chair. This debate mainly focuses on the role of EU institutions, Olaf, EPO, and so on. But I would like to stress how important the role of national institutions is. I think we have to realize that. They are really the eyes and ears in the system.
We cannot ignore that. If the systems in the member states don't approve, then really, I believe that we are going to lose the fight against fraud. And in this respect, I have the same concerns as already expressed by my colleague Freund about the very low reporting ratio by different member states. So, when you see that figure—I'm talking about figure four in the report—there are two possibilities. Either these member states are a paradise where no fraud is committed, or they are turning a blind eye and have not yet confronted the real problem.
And I have the same question as Skolleg Freund. Why didn't the court publish the names of the member states concerned? Because the fight against trans fraud, I think, starts with transparency. So, at least what I expect from the court in this respect is transparency. So, why didn't you publish the names of the member states with a very low reporting ratio?
And in this respect, also a question to the commission. Is the Commission willing to analyze the differences between member states? And what measures will the Commission take to ensure that member states fulfill at least their reporting obligations? Thank you very much.
Andreas Schwab
Thank you very much, colleague Riesen. Next one is Monica Hullmeier.
Monika Hohlmeier
Thank you very much, Chad. I'd also like to wish you all the best. I know you have a lot of work ahead of you. It's not always so easy. I have a very specific question.
Obviously, you won't be able to answer all of this today, but in the new mandate for Olaf, EPO, Europol, and Eurojust, I need to say something very clearly on that. Well, we need to ensure there's no competition between agencies, and then we can look at the mandates. Obviously, there are problems related to the content. An important point for me is that the different mandates chime with each other. We need to make sure we're not overlapping.
Obviously, there's AMLA as well. We need to make sure that they can work with the banking sector as well. And, obviously, I mentioned Europol and the investigative capacities, above all for IT and financial crimes. That needs to be expanded so that it can be a full service, and that can be worked with police at the member state level as well. And then all these need to work together, need to be in line with the different mandates, and we need to guarantee that this is something that can be achieved. This is not just Olaf, but I'm very pleased that cooperation will be improved.
Now, is the Commission beginning to look at infringement proceedings against those member states that aren't complying with the reporting obligations? It's fantastic that they have this investigative capacity so we can see that there is no fraud in certain countries, but obviously, we need to look at the different possibilities. And, obviously, there are crimes, and then there are more serious crimes. And, obviously, customs have already been mentioned as well. And that's we're talking about billions when it comes to this, and these huge amounts which are now missing from budgets, which could be VAT fraud as well.
And something we've discussed with Olof, and it's not a criticism here. But, obviously, there can be investigations that go on for two years and then just come up with administrative recommendations. But we've got billions disappearing from customs, so we need to have priorities and make sure that we are focusing on these priorities. It's not just so there are, obviously, mystery questions for the commission, but our investigative capacity needs to be focused on the most serious cases. Then there are also structures which need to be looked at. And then, obviously, you need to have traceability in relation to the funds as well.
Obviously, this is something that we've been working on for years in this committee. Thank you very much, Monica.
Andreas Schwab
Colleague Kenichi, before we quickly give the floor to our guests, we have to come to an end at 10:00. Over to you.
Thank you.
Caterina Chinnici
You. Thank you, Chair. I'd like to thank Commissioner Serafin and all of our guests for their very interesting presentations. I'm sure we can welcome all the advances that have been made in cooperation in the anti-fraud architecture as it is being developed, but it is a work in progress. Are we still going to have to work on beefing up these points, deal with the existing complications, and make sure that all areas of the anti-fraud architecture are bolstered?
Work on synergies, cooperation, exchange of information, and make sure that we have ongoing cooperation because fraud has already been mentioned. And as Miss Corvese said, this is part of a criminal system. It's part of organized crime that works on an international scene, responsible, among others, for serious crimes such as human trafficking, narco trafficking, arms trafficking, and many other crimes besides. So, we need to look at fraud in this light, and I'd like to pick up on what was said by Prosecutor Corvese on customs fraud. I'd like to ask, how are we meant to see cooperation develop between the future European authority and others on customs?
What about having access to information? How can we ensure flows of information to allow the EPO to work efficiently in combating this form of customs fraud?
Andreas Schwab
And to the commissioner first for two minutes, and then for one minute each to the other institutions. Over to you, Piotr.
Piotr Serafin
Thank you, Mr. Chair. There was a question about whether we need to rely on member states. Yes, we need it. As long as we have a shared management mode in the budget, that is not going to change in the future.
So, here we need to have good cooperation with the member states. But indeed, there is a question of a) the reporting obligations that exist or do not exist, and b) also, as was said by Honorable Member Freund, rewarding, I would say, incentives to cooperation. On reporting itself, just to give you a full picture, our reporting is based on information from OLAF investigations, from EPO investigations, and from direct reporting by member states. These are the three sources that we have. For member states, it is not obligatory, for example, to report in the context of the RF.
And that's what I said at the beginning: for the future NRPP, we put the obligation to report to the IMS in the NRPP regulation. There is no reporting obligation for Member States in the AQI regarding VAT. And that is also something that we address. We have, as I said, looked into it in the context of an RPP, but we are also assessing if we need to address the recovery problem through legislative changes, also in the context of the anti-fraud architecture review. And I'm sorry, but I will still say a few words in the context of incentives.
When we think about the NRPP of tomorrow, one of the preconditions is national anti-fraud strategies, so no flow of EU money can happen without the anti-fraud strategies in place. So, we can indeed make the question of following up on Olaf EPO recovery actions taken following Olaf EPO notifications or recommendations part of the anti-fraud strategy. That's what I want to do: leave it like that. But I think, you know, at the end of the day, we will also need the support of the European Parliament because it's not, I would say, basic instinct, and de facto, it means broader competencies for the commission here. And I can already feel where I can expect pushback.
Thank you.
Andreas Schwab
Thank you very much, Commissioner. Over to Miss Casasova for the last time, but please respect the timing.
Speaker 5
Yeah. Thank you very much. Regarding figure four, the question is whether we could name the member states with underreporting. I mentioned at the beginning that the member states were not subject to our audit. Basically, we compiled this figure based on data from Apple and Olaf.
And, to express any opinions on this, we would have had to widen our audit, and it would take time. Basically, it's homework for the commission, and it's part of our recommendation. So, sorry. We are not going to disclose these member states without having our own evidence and analysis of why this is the case. By the way, this afternoon, I will be presenting another report.
It's about fraud in the RAF, where four member states were included in the sample, and then you can see how it works when we focus on the member state level. Regarding the question on improvements in the relationships, we have already noted some improvements during the audit between APHO, OAF, and the commissions. But, frankly, as a conclusion, for me, it's not about the relationships. There should be clear, good rules and procedures in place, clear competencies, and respectful cooperation regardless of the personalities or tone at the top. For me, it is one system that should work, and we can just improve it if we really would like to.
Andreas Schwab
Thank you very much. And a quick comment from Miss Cohesi and Mr. Clement.
Speaker 8
I will make only two comments. First, regarding the differences between the member states and the statistics, you will see in our report on Monday that there are very big differences between the member states. The explanations can be different. The level of detection and reporting that we receive also comes from national authorities, as well as from EU institutions and bodies, and the support that the member states give to the APP in our investigations, whether we have dedicated police officers to work on our cases or not, the way they implement different legislation, and also the specificities of the member states. Whether you have a big harbor or not, this can also be a criterion.
But what do we do when, due to the investigations that we are performing, the member states take measures to decrease the level of reporting and the efficiency of the investigations? We also have situations when some members say they changed the legislation. They dismantle the specialized national authorities in order to fight against fraud. And in all these situations, we reported this to the commission, and we will continue to monitor and report to the commission if these situations appear. And the second comment is regarding the future of the fight against customs, and we welcome the customs reform. And in this context, I think it's important to underline that EPPO needs direct access to the custom data hub in order to quickly identify where and forsters change import patterns.
And second, the EU customs authority can help us strengthen the risk analysis across the EU on increased detection and reporting. Thank you.
Andreas Schwab
Thank you very much, Miss Kuevesi. And a quick final comment from Mr. Clement before the meeting is adjourned.
Speaker 9
Thank you for the floor. Lifting barriers to cooperation, better access to information, and digitalizing these exchanges are definitely key to better cooperation and also for you to get the right data. We are already committed to giving more granularity on the data in the OLAF report and also in the PAIF report, as I said before. But as for granularity pertaining to member states, I think this exercise is also in line with the second recommendation of the ECA report. The analysis will be done within the deadline, by the end of this year.
As for the customs, we also said we started, and I can see a big potential in this kind of cooperation. And I shall also repeat that the rate of recoveries on the customs side is almost 100% after all the recommendations. Finally, I'm very confident and positive about the future relationships in the Alfa framework. And I thank you also for hearing us today. Thank you.
Andreas Schwab
Thank you, Mr. Clément. I look to our standing rapporteurs. I hope that we can agree to go to the plenary now immediately for this special meeting. And so, the meeting is adjourned.
Thank you very much, colleagues.
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