FEAD abbreviations stands for Fund for European Aid to the Most Deprived. The fund was launched in March 2014 with the main aim of breaking the vicious circle of poverty and deprivation. It does so by providing non-financial assistance to some of the most vulnerable persons in the EU. Under the FEAD Regulation, assistance is given to the people who need it the most in the form of food support, material assistance (hygiene, clothes, school supplies and assistance in the form of accompanying measures (information about social services; shelter; financial literacy; dieting; language training etc.
See also: FEAD Informative brochure
See also: European Commission’s webpage on FEAD
See also: Regulation 223/2014 on the Fund for European Aid to the most deprived
Chapter 6 of the Treaty on the Functioning of the European Union is dedicated to the fight against fraud. This action encompass not only fraud but also any other illegal activity affecting the financial interests of the European Union, one of which is corruption. According to Art. 325 of TFEU the Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union's institutions, bodies, offices and agencies. Furthermore, Member States shall take the same measures to counter fraud affecting the financial interests of the Union as they take to counter fraud affecting their own financial interests. Member States shall coordinate their action aimed at protecting the financial interests of the Union against fraud. To this end they shall organize, together with the Commission, close and regular cooperation between the competent authorities. According to Title V Area of freedom, security and justice the TFEU envisages provisions on judicial cooperation in criminal matters (Chapter 4) and Police cooperation (Chapter 5) which are needed in relation to the prevention, detection and investigation of criminal offences. Fight against fraud and corruption is also subject to the mandate of the European Anti-Fraud Office (OLAF) and the European Public Prosecutor’s office (EPPO).
Source: Art. 82-89 and 325 of the Treaty on the Functioning of the European Union
Source: OLAF Regulation 883/2013 as amended by Regulation 2020/2223 and EPPO Regulation 2017/1937 |
“Financial Instrument” means a Union measure of financial support provided from the budget to address one or more specific policy objectives of the Union which may take the form of equity or quasi-equity investments, loans or guarantees, or other risk-sharing instruments, and which may, where appropriate, be combined with other forms of financial support or with funds under shared management or funds of the European Development Fund (EDF);
Source: Art. 2 (29) of the Financial Regulation 2018/1046
“Financial interests of the Union” shall include revenues, expenditures and assets covered by the budget of the European Union and those covered by the budgets of the institutions, bodies, offices and agencies and the budgets managed and monitored by them. There are two legal definitions to be found in the EU law – one within Regulation 883/2013 and another within the PIF Directive.
Source: Art. 2, par. 1 (a) of the PIF Directive
Source: Art. 2 (1) of Regulation 883/2013
A forged document is a document in respect of which the truth is altered: this means that the document does not accord with reality. The alteration may be:
Example: A forged documentation may lead to the following consequences:
Source: Guide on detection of forged documents [EN][BG][CS][DA][DE][EL][ES][ET][FI][FR][HR][HU][IT][LT][LV][NL][PL][PT][RO][SK][SL][SV] |
According to Art. 325 of TFEU the Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union's institutions, bodies, offices and agencies. Similarly, the European legislator has used the same expression in Art. 1 of OLAF Regulation 883/2013 as amended by Regulation 2020/2223 and Art. 1 of the PIF Directive 2017/1371, which is the base of the material competence of the European Public Prosecutor’s office. The idea behind this expression is to encompass all types of criminal conduct used to defraud the financial interests of the European Union, not only fraud. Such misconducts may be bribery, active corruption, passive corruption, money laundering, misappropriation etc.
Source: Art. 325 of the Treaty on the Functioning of the European Union
Source: Art. 1 of OLAF Regulation 883/2013 as amended by Regulation 2020/2223
Source: Art. 1 of PIF Directive 2017/1371 in relation with Art. 4 of EPPO Regulation 2019/1939 |
Member States shall take all necessary measures, including legislative, regulatory and administrative measures, to protect the EU's financial interests, namely by preventing, detecting and correcting irregularities and fraud. In their efforts, the CPR Regulation 1303/2013 includes specific requirements in relation to Member States' responsibility for fraud prevention and provides them with a free tool to perform a Fraud Risk Assessment under Art. 125, par. 4 CPR Regulation 1303/2013. The Fraud Risk Assessment aims to evaluate the likelihood and impact of the risks related to fraud. Likelihood means how likely is the event to happen and impact means what consequences will the event have, financially and non-financially. The risk is ranked according to the total score (between 1 and 16), as follows: 1-3 Tolerable risk (Green); Fraud Risk Assessments may be used not only as a part of the introduction of effective and proportionate anti-fraud measures under art. 125, par. 4 CPR Regulation 1303/2013, but also as the basis of an Anti-Fraud Strategy, such as a National Anti-Fraud Strategy (NAFS) or Commission Anti-Fraud Strategy (CAFS).
Further reading: Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures [EN][BG][CS][DA][DE][EL][ES][ET][FI][FR][HR][HU][IT][LT][LV][MT][NL][PL][PT][RO][SK][SL][SV]
See also: Fraud Risk Assessment accompanying the Commission Anti-Fraud Strategy (2019) |
According to the traditional criminological model of the ‘Fraud Triangle’ three elements must coincide for fraud to occur: (i) ‘pressure’ as the motivation; (ii) ‘rationalization’ as a self-justifying attitude; and (iii) perceived ‘opportunity’. There are other theories as well which further develop the Fraud Triangle, for example the “New Fraud Triangle” that adds the fraudster’s capabilities to the equation, “Fraud Diamond” and the “Fraud Pentagon”. Opportunity: Even if a person has a motive, an opportunity must be given. Slack internal control systems may give rise to an opportunity (the presumed likelihood of the fraud not being detected is a crucial consideration for the fraudster). Examples of weaknesses in the internal control systems are inadequacies related to:
Fraud may also occur, if controls are not applied or if persons in positions of authority create opportunities to override existing controls. Rationalisation: A person can develop a justification for himself/herself by rationalising their acts, e.g. "It is fair to do this – I deserve this money" or "They owe me". "I am just borrowing the money – I will pay it back". Financial pressure, incentive or motive: The "need or greed" factor. Pure greed can often be a strong motive. Other pressure can arise from personal financial problems or personal vices such as gambling, drug addiction etc. “Breaking the fraud triangle”11 is key to fraud prevention. Of the three elements, opportunity is most directly affected by strong internal control systems and therefore it is the element which can most easily be managed.
Source (All languages): Information Note on Fraud Indicators for ERDF, ESF and CF
Source: p. 8 of the Fraud Risk Assessment of the Commission Anti-Fraud Strategy |
Fraud with EU funds in the field of public procurement is a PIF offence. The following shall be regarded as fraud affecting the Union's financial interests in respect of procurement-related expenditure, at least when committed in order to make an unlawful gain for the perpetrator or another by causing a loss to the Union's financial interests, any act or omission relating to:
(i) the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds or assets from the Union budget or budgets managed by the Union, or on its behalf;
(ii) non-disclosure of information in violation of a specific obligation, with the same effect; or
(iii) the misapplication of such funds or assets for purposes other than those for which they were originally granted, which damages the Union's financial interests;
Fraud with EU funds outside the field of public procurement is a PIF offence. The following shall be regarded as fraud affecting the Union's financial interests in respect of non-procurement-related expenditure, any act or omission relating to:
(i) the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds or assets from the Union budget or budgets managed by the Union, or on its behalf;
(ii) non-disclosure of information in violation of a specific obligation, with the same effect; or
(iii) the misapplication of such funds or assets for purposes other than those for which they were originally granted;
Fraud with EU funds not related to VAT is a PIF offence. The following shall be regarded as fraud affecting the Union's financial interests in respect of revenue arising from VAT own resources, any act or omission committed in cross-border fraudulent schemes in relation to:
(i) the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the illegal diminution of the resources of the Union budget or budgets managed by the Union, or on its behalf;
(ii) non-disclosure of information in violation of a specific obligation, with the same effect; or
(iii) misapplication of a legally obtained benefit, with the same effect;
Source: Art. 3, par. 2 (c) of the PIF Directive 2017/1371
Fraud with EU funds related to VAT is a PIF offence. The following shall be regarded as fraud affecting the Union's financial interests in respect of revenue arising from VAT own resources, any act or omission committed in cross-border fraudulent schemes in relation to:
(i) the use or presentation of false, incorrect or incomplete VAT-related statements or documents, which has as an effect the diminution of the resources of the Union budget;
(ii) non-disclosure of VAT-related information in violation of a specific obligation, with the same effect; or
(iii) the presentation of correct VAT-related statements for the purposes of fraudulently disguising the non-payment or wrongful creation of rights to VAT refunds.