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On-the-spot checks and inspections on the premises of economic operators

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On-the-spot checks and inspections on the premises of economic operators

Outline of the Community (European Union) legislation about On-the-spot checks and inspections on the premises of economic operators

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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

On-the-spot checks and inspections on the premises of economic operators

Document or Iniciative

Council Regulation (Euratom, EC) No 2185/96 of 11 November 1996 concerning on-the-spot checks and inspections carried out by the Commission in order to detect fraud and irregularities affecting the European Communities’ financial interests.

Summary

1.The Regulation applies to the on-the-spot checks and inspections carried out by the Commission in order to counter fraud, in particular where there are grounds for suspecting that irregularities * have been committed against the Community budget by economic operators *. The regulation, which establishes additional general provisions to Regulation (EC, Euratom) No 2988/95, applies to all areas of the Community’s activities. It does not affect the Member States’ powers to prosecute criminal infringements under national law.

Carrying out on-the-spot checks and inspections

The European Commission is to carry out on-the-spot checks and inspections on the premises of economic operators:

  • to investigate possible serious or cross-border irregularities or irregularities involving economic operators acting in several Member States;
  • to reinforce on-the-spot checks and inspections in a Member State in order to protect the Community’s financial interests more effectively and ensure an equivalent level of protection within the European Union;
  • at the request of a Member State.

Prior to the on-the-spot checks and inspections the Commission is required to inform the Member State(s) concerned in good time in order to obtain all the assistance required. The on-the-spot checks and inspections are to be prepared and carried out by the Commission in close cooperation with the competent authorities of the Member State concerned. They will be carried out under the authority and responsibility of “Commission inspectors”, i.e. duly authorised officials or other staff, who will comply with the rules of procedure in the Member State concerned.

The economic operators must allow the inspectors access to their premises, land and other places used for business purposes, and means of transport. If an economic operator resists an on-the-spot check or inspection, the Member State concerned will give the Commission’s inspectors such assistance as they need to allow them to discharge their duty. This assistance will be given by the competent authorities of the Member State in compliance with national law.

In the interests of efficiency, the Commission will ensure that similar checks and inspections are not carried out at the same time in relation to the same matters on the premises of the economic operators concerned under sectoral rules. It will take into account inspections that are being or have been carried out by the Member State under national law.

Ensuring access to the necessary information and documentation under national law

Commission inspectors are to have access, in compliance with national criminal procedure law, to all the information on the operations concerned which are required for the proper conduct of the checks and inspections. They may avail themselves of the same inspection facilities as national administrative inspectors and in particular copy relevant documents.

On-the-spot checks and inspections may concern, in particular:

  • business books and documents such as invoices, lists of terms and conditions, pay slips, statements of materials used and work done, and bank statements,
  • computer data;
  • production, packaging and dispatching systems and methods;
  • physical checks as to the nature and quantity of goods or completed operations;
  • the taking and checking of samples;
  • the progress of works and investments for which financing has been provided, and the use made of completed investments;
  • budgetary and accounting documents;
  • the financial and technical implementation of subsidised projects.

Where necessary, it will be for the Member States, at the Commission’s request, to take the appropriate precautionary measures under national law, in particular in order to safeguard evidence.

Information acquired in relation to the on-the-spot checks and inspections is covered by professional secrecy and by the Community provisions on data-protection.

The Commission inspectors’ reports constitute admissible evidence in administrative or judicial proceedings of the Member State in which their use proves necessary.

Key terms used in the act
  • economic operator means: natural or legal person or any other entity on which national law confers legal capacity (Article 7 of Regulation No 2988/95);
  • “irregularity”: any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure (Article 1(2) of Regulation No 2988/95).

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2185/96. 18.11.1996 – OJ L 292 of 15.11.1996