Early detection and exclusion system (EDES)

• Author: European Anti-Fraud Office (European Commission)
• Pages: 44-45

44

30th Annual Report on the Protection of the European Union’s financial interests — Fight against fraud 

7.Early detection and exclusion

system (EDES)

The Europea n Commission manages EDES. Si nce its inception in 2016, EDES ha s reached

maturity and has proven to be a strong tool for reinforcing the protection of the EU’s

f‌inancial interests against unreliable economic operators and fraudsters (penalties in-

clude exclusion from participation in obtaining EU funds). EDES covers a broad range of

sanction able practices. It is roo ted in the Financial Regu lation applicable to t he EU budget

revised in 2018 (herea er referred to as ‘FR’) (66) (Ar ticles 135 to 145).

In particular, EDES ensures:

the early detection of economic operators representing risks to the EU’s f‌inancial

interests;

the exclusion of u nreliable economic operator s from obtaining EU funds and /or the im-

position of a f‌ina ncial penalty; and

in the most sever e cases, publishing on t he Commission’s website the infor mation relat-

ed to the exclus ion or/and to the f‌inancial pen alty (67).

EDES signif‌icantly improves the application of rules on administrative sanctions with

respect to fundamental rights of the economic operators concerned, independence and

transparency. EDES is also one of the well-established exclusion systems among those

provided by vario us international organisat ions and multilateral develo pment banks.

The peculiarity and strength of the EDES system is the power given to the European

Commission or other EU institutions and bodies (68) to act ‘in the absence of a f‌inal na-

tional judgm ent or, where applicable, a f‌inal administr ative decision’ (69). The imposition o f

sanction s can be based on establis hed ‘facts and f‌indings ’ stemming from audits, ch ecks

or controls performed under the responsibility of the competent authorising of‌f‌icer (70),

investigations carried out by OLAF or non-f‌inal administration decisions of national au-

thorities or intern ational organisations.

The decision to impose a sanction on unreliable economic operators can only be made

aer obtaining a recommendation (71) from the centralised interinstit utional Panel which

establishes a preliminary classif‌ication in law in the absence of the f‌inal judgment or f‌i-

nal administrat ive decision (72). This Panel has no investigative powers. It is composed of

a standing high-level independent Chair (73), two permanent members representing the

() Reg ulation (EU, Eurat om) /  of the Europ ean Parliament a nd of the Council of   July  on the

f‌inancial r ules applicab le to the general b udget of the Union , amending Regu lations (EU) No  /,

(EU) No  /, (EU ) No / , (EU) No  /, (EU) N o / , (EU) No / , (EU)

No / , (EU) No / , and Decision No  //E U and repealing R egulation (EU, E uratom) No

/ , OJ L  of .. , p..

() http://ec.europa.eu/budget/edes/index_en.cfm

() For th eir respectiv e budget impleme ntation.

() Wor ding used across Ar ticle  FR .

() Th e authorising ser vices can be tha t of EU institutio ns, agencies, of‌f‌i ces and bodies.

() Fo r the situations r eferred to in Art icle ()(c) to ( h) of the Financial R egulation (i.e. g rave professional

misconduc t, fraud, serio us breaches of con tractual obli gations, irregu larities, shel l companies creat ion).

() Pane l referred to in Art icle  of the Fina ncial Regulatio n.

() T he Chair has a sta nding high-leve l independent De puty.