Letter B

Beneficiary

“Beneficiary” in the general context of the Financial Regulation 2018/1046 means a natural person or an entity with or without legal personality with whom a grant agreement for EU funds has been signed.

“Beneficiary' in the context of ESIF funds and regulation 1303/2013 means a public or private body and, for the purposes of the EAFRD Regulation and of the EMFF Regulation only, a natural person, responsible for initiating or both initiating and implementing operations; and in the context of State aid schemes, the body which receives the aid; and in the context of financial instruments under Title IV of Part Two of Regulation 1303/2013 it means the body that implements the financial instrument or the fund of funds as appropriate.

Source: Art. 2 (5) of the Financial regulation 2018/1046

Source: Art. 2 (10) of CPR Regulation 1303/2013

Bid rigging/collusive bidding

Bid rigging or collusive bidding is a fraud scheme used by fraudsters during public procurement with EU funds. This is an illegal practice in which competing parties collude to determine the winner of a bidding process. The aim of this practice is to eliminate the competition in order to secure the contract.

The other parties are often compensated, for example with cash payments or using the same scheme to allow them to win another contract.

Fraud indicators in cases of bid rigging (collusive bidding) are:

winning bid is too high compared to cost estimates, published price lists, similar works or services or industry averages and fair market prices
persistent high prices by all bidders;
bid prices drop when new bidder enters the competition
rotation of winning bidders by region, job, type of work; -losing bidders hired as subcontractors
apparent connections between bidders, e.g. common addresses, personnel, phone numbers etc;
contractor includes subcontractors in its bid which are competing for the main contract; -qualified contractors fail to bid and become subcontractors or low bidder withdraws and becomes a subcontractor
losing bidders cannot be located in the Internet, business directories, have no address etc (in other words they are fictive);
collusive bidding has been found in the following sectors and is also relevant for structural funds: asphalt paving, building construction, dredging, electrical equipment, roofing, waste disposal

Source (All languages): Information Note on Fraud Indicators for ERDF, ESF and CF

Breach of EU law (Directive 2019/1937)

In the general context, breach of EU Law means breach of any provision related to the application of EU legal acts of national acts related to them. In the context of the new EU Whistleblower’s directive “breaches” means acts or omissions that:

(i) are unlawful and relate to the Union acts and areas falling within the material scope referred to in Article 2 of the Directive; or

(ii) defeat the object or the purpose of the rules in the Union acts and areas falling within the material scope referred to in Article 2 of the Directive;

Source: Art. 5 (1) of the Whistleblower Directive 2019/1937

Bribery

Bribery is a criminal offence and is included in the definition of corruption, irrespective of the law or regulations applicable in the particular official's country or to the international organisation concerned. It is widely used as a modus operandi as regards to obtaining EU funds.

Directive 2017/1371 mentions the division of active and passive corruption. Similarly, there are two types of bribery: active and passive bribery.

Active bribery is a situation where a person offers, promises or gives a gift or any benefit to an official in order for him/her to perform or not to perform an act of office or for which he has performed or has not performed such an action in the past.

Passive bribery is a situation where an official requests or accepts a gift or any benefit or accepts an offer or promise of a gift or benefit in order to perform or not to perform an official act or for which he has performed or has not performed such action in the past.

Source: Recital 8 Directive (EU) 2017/1371

Article 4 (2) Directive (EU) 2017/1371