Risk categories and mitigating measures

AuthorMélissa Campagno - Goya Razavi - Brian Kessler - Léna Bonnemains - Olga Mala
Study on the implementation of Article 125(4)(c) of the CPR in the Member States
6. Risk categories and mitigating
6.1 Conflict of interest
Article 24 of the 2014 Directive on public procurement defines conflict of interest as “any situation
where staff members (…) have, directly or indirectly, a financial, economic or other personal
interest which might be perceived to compromise thei r impartiality and independence .”35 This risk
category covers potential conflicts of interest in specific institutions e.g. MAs and CAs, as well
as co nflicts of interest at specific stages of the project cycle e.g. conflicts of interest within the
evaluation board and undisclosed conflict of interests or bribes and kickbacks dur ing
implementation and verification of the project.
Level of risk
Most authorities in t he selected OPs ass ess the risk of conflict of
interest as high or medium. For 83% of the OPs, authorities assess the
risk of conflict of interest to be high or medium. Compared to other risk
categories, conflict of interest was more frequently assessed as a high risk
than other categories across OPs in the sample.
Authorities in countries where perception of corruption is
higher assessed the risks associated with conflict of interest as
lower than authorities in other countries. When relating the self-
assessed risk level for this risk category to the Transparency International
MS-level CPI score, we identified a discr epancy (Figure 8). More OPs from the sample from MS
with a low CPI (i.e. those in which corruption is perceived as a larger issue) assess ed the risk of
conflict of interest as low compared to the OPs from countries wit h a medium or high CPI (i.e.
lower perceived levels of corruption). On the other end of the scale, OPs from more low CPI MS in
the sample assess conflict of interest as a high risk than OPs from medium CPI countries.
This discrepancy indicates that authorities of the OPs from the low CPI MS may be underestimating
the risk of conflict of interest by comparison with their peers.
Figure 8: Level of risk of conflict of interest per group of MS
Source: PwC
35 Available at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32014L0024
27 % 27 %
7 %
low risk medium risk high risk low risk medium risk high risk low risk medium risk high risk
Low CPI Medium CPI High CPI
Study on the implementation of Article 125(4)(c) of the CPR in the Member States
Use of EC-recommended measures
The EC recommends a set of 19 mitigation measures to address the risk of conflict of interest. These
19 measures are split between hard, soft and verification measures (see sect ion 5 for more details).
The largest number of EC-recommended measures (9) are soft measures, focusing on:
Composition and rotation of evaluation boards;
Trainings and awareness raising on ethics and integrity for personnel;
Increased transparency (e.g. publication of calls for tenders);
Multiple-stage approval of payments.
Seven out of 19 measures suggested by the EC are hard measures, emphasising:
Availability of conflict of interest policy, including declarations and conflict registers;
Strong controls on bidding procedures for direct procurement;
Use of applicable criteria to evaluate applications;
Communication of results of evaluation to the bidders;
Implementation and publication of whistle blowing mechanism.
In addition, three verification measures are
recommended by the EC FRA template, highlighting
the need for a secondary panel to re view the
decisions of primary evaluation panels and to verify
that the procurement procedures were followed.
Most (13 out of 19) of the EC-recommended
measures for conflict of interest described above are
preventive, suggesting an important role for
prevention mechanisms in fighting this fraud risk.
The EC-recommended measures least implemented by authorities include:
MA ensuring that individuals are aware of the consequences of unethical behaviour;
Rotation of members of evaluation committees;
Publication of calls for tenders and communication of evaluation results to all the beneficiaries;
Measures related to requirements for beneficiaries to implements eleme nts of conflict of
interest policy;
Reviews of tendering processes and payment process.
The findings below reflect the most significant trends in the usage of EC-recommended and
additional measures for tackling the risk of conflict of interest.
Use of additional mitigation measures
Authorities in the sample of OPs commonly use additional hard and soft measures to
mitigate high risk and additional tailored h ard and verification measures when the
risk is low. The share of EC-recommended measures implemented is at similar level for the OPs
with different level of risks (on average, 64% of EC-recommended measures across all OPs). In
most cases, authorities have replaced some EC-r ecommended measures that were not implemented
with additional measures that vary in focus and scope (Figure 9). Moreover, the type of those
additional measures used by authorities is linked to th e level of risk. Notably, OPs with high risk of
conflict of interest imple ment slightly f ewer EC-recommended soft and hard measures compared
with OPs with medium a nd low risk for this category, but compensate for it with additional
measures of soft and hard types.
Authorities from six of the selected OPs
put in place a ll EC-recommended
measures. The majority of other
Authorities used a combination of EC-
recommended and own additio nal

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