EU BUDGET: COMMISSION CONSIDERS STEPPING UP FRAUD PENALTIES.

This comparative analysis of Member States' reports about steps taken nationally for preventing waste and the misuse of Community resources underscores the tenuous nature of the reports the Member States provided (about their verification procedures) in the wake of the European Commission's first request in 1995 and a questionnaire sent out in 1996. "In which sector of a national Budget involving a similar level of resources would there have been such a poor level of response as was the case with the Commission's supplementary questionnaire on the Structural Funds?", queries the report.EU own resources.The level of misappropriations in this area rose from Euro 577 million in 1994 to one billion in 1997. These fraudulent activities represent 3.6% of the Community resources going astray under this heading in 1995, 5.8% in 1996 and 6.5% in 1997. The figure was 3.8% in 1998. The Commission regards this upsurge in discoveries as the fruit of better co-operation between anti-fraud departments promoted over several years, rather than a rise in the level of malpractices. Fraud detection performances vary according to the method used, the country in question, whether the checks are made to coincide with imports or retrospectively. This inconsistency casts serious doubts on the reliably of the answers provided, says the Commission paper. The institution nonetheless regards better targeted and more extensive back-checking as relatively effective and reliable with one fraud being detected for every nine verifications.The report also points to the type of administrative penalties applied by the various countries: practices vary widely in an area where there are no mutually agreed rules. This situation is hardly conducive to effective protection for Community money, so the European Commission would like to see activities in this area approximated more. The use of administrative penalties varies from country to country: in...