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FRAUD

Statistics Directorate    
Definition:
“Fraud” may be understood to mean the acquisition of another person’s property by deception.

Context:
The severest form of an irregularity. The term fraud is defined in the Convention on the protection of the European Communities’ financial interest decided the 26 July 1995 (OJ No. C316, 27.11.1995).

The Convention is drawn up in accordance with the rules for the EU third pillar as the rules concerns penal issues (the regulation mentioned above concerns administrative measures and sanctions and are therefore drawn up under the rules of the first pillar).

The definition of fraud affecting the EU-budget (given in Paragraph 1 of Article 1 of the Convention) is quite lengthy. The core is that it needs intentional act or omission to have an irregularity defined as a fraud and therefore punishable by Court proceedings (all other acts can therefore only be sanctioned through administrative measures as fines and denial of further funding, etc.) states:

For the purposes of this Convention, fraud affecting the European Communities’ financial interests shall consist of:

(a) in respect of expenditure, any intentional act or omission relating to:

- the use or presentation of false, incorrect or incomplete statements or documents, which has as its effect the misappropriation or wrongful retention of funds from the general budget of the European Communities or budgets managed by, or on behalf of, the European Communities;

- non-disclosure of information in violation of a specific obligation, with the same effect;

- the misapplication of such funds for purposes other than those for which they were originally granted.

(b) in respect of revenue, any intentional act or omission relating to:

- 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 general budget of the European Communities or budgets managed by, or on behalf of, the European Communities;

- non-disclosure of information in violation of a specific obligation, with the same effect;

- misapplication of a legally obtained benefit, with the same effect.

(Effects of European Union Accession, Part 1: Budgeting and Financial Control, OECD SIGMA Paper No. 19, March 1998, Appendix 3: List of Useful Terms).

Source Publication:
United Nations, "Manual for the Development of a System of Criminal Justice Statistics (2003)", United Nations, New York, 2003.

Hyperlink:
http://ec.europa.eu/eurostat/ramon/statmanuals/files/SeriesF_89_EN.pdf

Statistical Theme: Social and welfare statistics

Created on Tuesday, August 06, 2002

Last updated on Friday, August 10, 2007