Introduction

• Author: Mélissa Campagno - Goya Razavi - Brian Kessler - Léna Bonnemains - Olga Mala
• Pages: 6-13

DG REGIO

Study on the implementation of Article 125(4)(c) of the CPR in the Member States

6

1. Introduction

1.1 Context

With approximately EUR 460 billion alloc ated for the 2014-2020 programming period, the

European Structural and Investment (ESI) Funds (consisting of the Cohesio n Fund (CF), the

European Regional Develo pment Fund (ERDF), the European Social Fund (ESF), the European

Agricultural Fund for Rural Development (EAFRD), and the European Maritime and Fisheries

Fund (EMFF)) represent almost a third of the EU budget.1

ESI Funds finance operational programmes (OPs) in Member States (MS), each aimed at achieving

specific objectives within the areas defined as EU priorities. 3 80 OPs 2 are funded through ESI

Funds for the 2014-2020 programming period a nd managed by competent au thorities within each

EU Member States.

The Euro pean Commission (EC) and MS share responsibilities for the implementation and

management of ESI Funds, and both must ensure funds are spent properly and achieve the greatest

possible impact. Moreover, they must put in place the proper safeguards to limit the risks of fraud

and corruption. Fraud affecting the Union's financial interests is defined in detail in Article 3 of

Directive (EU) 2017/1371 on the fight against fraud to the Union's financial interests by means of

criminal law; in a generalised and simplified manner, fraud may be characterised as the deli berate

act of deception intended for personal gain or to cause a loss to anoth er party. A definition of

corruption used by the EC is the abuse of (public) position for private gain.3 Example of fraudulent

and corrupt practices can include but are not limited to conflict of interest, double funding, bribery

or falsification of documents.4

MS authorities have the legal obligation to safeguard EU funds as per Article 325 of the Treaty on

the Functioning of the E uropean Union and Article 59(2) of the Financial Regulation. This

obligation was specif ied and reinforced in 2013 via Article 125(4)(c) of the Common Provisions

Regulation (CP R). Article 125(4)(c) requires the implementation of risk-based, effective and

proportionate measures to prevent fraud when managing and controllin g the OPs.

The present study focuses on the implementation of this article in MS.

1.2 Background information

Three key authoriti es within MS are responsible f or managing and contr olling o perational

programmes (OP s). These authorities inc lude the managing authoriti es (MAs), certifying

authorities (CAs), and audit authorities (AAs). In addition, each MS possesses an anti-fra ud co-

ordination service (AFCOSs). Throughou t the present report, we refer to these bodies as

“authorities .”

 MAs are responsible for managing one or se veral OPs in accord ance wit h the principle of

sound f inancial management . The MA is also u ltimately respons ible for puttin g effective an d

proportionat e anti-fraud measur es in place taking in to account the risk id entified.

 CAs are responsible for, a mongst others, d rawing up and submitting payment applications to

the EC, and certif ying that they result from reliable accounting systems, are based on

verifiable suppo rting documents, and have been su bject to verifications by the MA .

1 See https://cohesiondata.ec.europa.eu/overview

2 See the full list of OPs at http://s3platform.jrc.ec.europa.eu/esif-viewer

3 See p7 https://ec.europa.eu/sfc/sites/sfc2014/files/sfc-files/guidance_fraud_risk_assessment.pdf

4 European Commission. European Structural and Investment Funds, Guidance for Member States and Programme Authorities, Fraud

Risk Assessment and Effective and Proportionate Anti-Fraud Measures, June 2014