Fraud proofing of legislation and of the management of contracts

Table of Contents:

Fraud proofing of legislation and of the management of contracts

Outline of the Community (European Union) legislation about Fraud proofing of legislation and of the management of contracts


These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Fight against fraud > Protecting the European Union’s financial interests

Fraud proofing of legislation and of the management of contracts

Document or Iniciative

Commission Communication on fraud proofing of legislation and of the management of contracts [SEC(2001) 2029 of 07.11.2001 – Not published in the Official Journal]


The Commission Communication is the result of the work of an informal interdepartmental working party chaired by OLAF and made up inter alia of representatives of the Secretariat-General, the Legal Service, and the Directorates-General for Budget, Justice and Home Affairs, External Relations, Agriculture, Regional Policy, and Taxation and Customs Union. Its aim is to develop an overall strategic approach to fraud prevention which also takes account of the Commission’s White Paper on administrative reform and a fraud prevention culture. The new cooperation system will be targeted at new draft legislation with significant financial implications in areas of Community activity deemed most sensitive to fraud.

Provisions are also made in the 2001-03 action plan for mechanisms for cooperation from the stage of drafting legislation between the Commission departments and OLAF. As a result of its experience in conducting investigations and in drawing up legislation, OLAF will be able to help in analysing texts before they reach the stage of interdepartmental consultation by identifying loopholes which might hamper fraud prevention.

Legislative aspect

A horizontal unit has been created within OLAF (Unit OLAF/A/3) one of whose “fraud proofing” tasks will be to work with an ad hoc interdepartmental working party in defining criteria for identifying areas of competence which might be deemed highly sensitive from the point of view of their exposure to fraud risks. The outcome of this analysis will be communicated to the departments responsible and to the Directorates-General for Budget and for Administration.

This unit’s activities will be limited to the most sensitive draft legislation in areas themselves deemed high-risk. The procedure in question will apply to initiatives proposed by the Commission in its 2003 legislative work programme, adopted on 30 October 2002. Further to the decisions adopted within the interdepartmental working party, OLAF will launch a dialogue with the lead Directorates-General, who will have designated a correspondent for that purpose. OLAF and the Directorates-General will at any time be able to review the criteria validated by the interdepartmental working party.

The first meeting of this working party took place on 10 December 2002. This meeting was the first stage in the procedure leading to:

  • the determination of the criteria required to identify risk sectors;
  • the determination of risk areas of Community legislation;
  • the identification of sensitive draft legislation falling within risk areas, which will be specifically analysed by OLAF;
  • consultation of OLAF prior to interdepartmental consultation.

For the purposes of this analysis and prevention activity, departments will communicate draft legislation to OLAF as early as possible.

Contractual aspect

With regard to fraud prevention in the area of contracts, the Communication proposes two measures (which appear in the Commission’s White Paper on administrative reform), i.e.:

  • the adoption of standard contracts harmonised for the whole Commission (most frequently used clauses, types of contract, etc.);
  • the introduction of a central database of contracts and contractors.

OLAF, acting via its specific unit, will be involved at a very early stage in the process of defining and drafting clear clauses with a view to protecting not only the Community’s financial interests but also those of beneficiaries. Standard clauses concerning checks and penalties will have to be included in contracts.

Centralisation of information will enable all Commission departments to be quickly informed via the Intranet.

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