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EU anti-fraud system is ineffective, auditors say

The European Union is failing to stem misuse of EU funds worth hundreds of millions of euros each year, and manages to recoup only about 15% of this sum, auditors said on Thursday according to a report by international news agency Reuters.

Fraudulent use of EU funds amounted to EUR 391 million in 2017, fairly typical of the last four years. But the judicial findings of the EU anti-fraud investigative office, OLAF, only led to actual indictments in EU member states in 45% of cases, the European Court of Auditors said in a report.

Between 2012 and 2016, only about 15% of the total volume of uncovered fraud was actually recovered. Although the uncovered scams are small compared to the annual EU budget of around EUR 140 billion, the auditors said fraud was probably substantially under-reported as the mechanism for sharing information with EU states was so clumsy.

The auditors welcomed a decision to establish a European Public Prosecutor’s Office to conduct investigations on EU spending from 2021, but said a lack of staff and funding meant it might have to rely excessively on national authorities. The new body will anyway not have jurisdiction over Hungary, Poland, Ireland, Sweden, the United Kingdom or Denmark, which have opted out.