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 an d has proven to be a strong tool for rei nforcing the protection of t he EU’s

f‌inancial int erests against unreliable e conomic operators and frauds ters (penalties in-

clude exclusio n from partic ipation in obt aining EU funds). ED ES covers a broa d 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 dete ction of econ omic operator s represent ing risks to t he EU’s f‌inancia l

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 signif‌ic antly improve s the applic ation of rules o n administrat ive sancti ons with

respect to f undament al rights of t he economic op erators concer ned, indep endence and

transpare ncy. EDES is als o one of the well-e stablishe d exclusion syst ems among th ose

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

The peculiar ity and str ength of th e EDES syste m is the power given t o the Europea n

Commission or other E U institut ions and bodies ( 68) to act ‘in the absence of a f‌in al 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 per formed und er the respon sibility of the co mpetent aut horising of‌f‌icer ( 70),

investigatio ns carried ou t by OLAF or no n-f‌inal admin istration de cisions of national a u-

thorities or intern ational organisations.

The decision to im pose a sanc tion on unrelia ble economic op erators can o nly be made

aer obtainin g a recommend ation (71) from th e centralise d interinstit utional Panel which

establishe s a preliminar y classif‌icat ion in law in the a bsence of the f‌i nal judgment or f‌i -

nal administrat ive decision (72). This Panel has no inve stigative pow ers. It is compos ed of

a standing hig h-level indep endent 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.