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FIGHT AGAINST FRAUD DEPARTMENT - DLAF

ANNUAL REPORT

2005

Contents

Message by the Minister Delegate Message by the Head of the Department CHAPTER I. The creation of DLAF 1 I.1. DLAF responsibilities I.2. Irregularity and fraud affecting European funds 3 I.3. The official launch of DLAF 4 I.4. Structure of DLAF 6 I.5. Consolidating DLAF's administrative capacity 7 I.6. Comparison with other Anti-Fraud Coordination Services - AFCOS 8 CHAPTER II. Overview of DLAF's activity II.1. On-the-spot checks

II.1.1. The stages of a typical investigation II.1.2. Results of the control activity II.1.3. Case study: "A.N." file

II.2. Coordination II.2.1. Coordination of the anti-fraud policy

The National Strategy for the Fight against Fraud II.2.2. Operational coordination

Cooperation protocols II.2.3. Coordination of data collection and analysis

The Irregularity Reporting Network Analyses

II.2.4. Coordination of training activities ReŃeaua coordonatorilor de training

II.2.5. Coordination of communication concerning the fight against fraud

II.3. Cooperation with OLAF II.3.1. Operational cooperation II.3.2. Participation in Commission workgroups II.3.3. Heads of AFCOS meeting, Brussels II.3.4. "PFI Convention" seminar II.3.5. AFIS - The Anti-Fraud Information System

CHAPTER III. The European Commission Comprehensive Monitoring Report ANNEXES A. Activity of control/ outcomes/ follow-up B. Training activities C. The European Commission Comprehensive Monitoring Report for 2005

9

10 11 12 14 17 18 19 20 21 22 23 24 25 26 27 29 31

MESSAGE BY THE MINISTER DELEGATE FOR THE CONTROL OF THE IMPLEMENTATION OF INTERNATIONAL GRANT PROGRAMMES AND THE MONITORING OF THE APPLICATION OF THE ACQUIS COMMUNAUTAIRE

One of the main political objectives taken on by the current Government has been the fight against corruption, as the enshrinement of legality is the only path to a

normal functioning of Romanian society. Given Romania's upcoming accession into the

European Union, we have added a more specific objective, that of reducing fraud

affecting the Communities' funds through a concerted effort on behalf of all public

institutions with responsibilities in this field.

Combatting fraud affecting EU funds, the Fight Against Fraud Department's main responsibility, serves a dual purpose. It seeks firstly to ensure the efficient and

legally correct use of internationally funded assistance for the accomplishment of

Minister Delegate Cristian David

Romania's investment priorities, so that the money used benefits Romanians to the greatest extent possible. Secondly, the

fight against fraud plays a part in convincing our European partners that the public contributions of Communities' citizens are

properly employed. This should improve Romania's image abroad to the extent that when Romania is granted structural aid

post-accession involving greater amounts than it is receiving at present, there is full trust in the capacity of the Romanian

authorities to manage these funds.

The year 2005 has seen important changes occur in this area through legislative and institutional reform at the level of central public administration involved in the fight against fraud and the protection of the Communities' financial

interests in Romania. As contact point for the European Anti-Fraud Office (OLAF), the responsibilities of the Fight Against

Fraud Department have been more clearly outlined, dealing exclusively with investigation prerogatives regarding the

obtainment, management or use of the Communities' funds. Beyond the separation of this activity from internal

administrative control functions, a number of mechanisms were developed with the aim of optimising the efficiency of the

fight against fraud affecting European financial assistance. The issue and implementation of the National Strategy for the

Fight Against Fraud, the consolidation of operational capacity through the development of intelligence collection and analysis

functions, as well as the cooperation protocols concluded with the main institutions involved in ensuring financial legality

and conformity (namely the National Anti-Corruption Department, the Financial Guard, the General Inspectorate of the

Romanian Police and the Romanian Intelligence Service) have played an important part in the results recorded by DLAF in

2005.

Apart from the increase in control efficiency, prevention has a vital role in the fight against fraud. That is why the large scale campaign launched this year targets the reduction in irregularities and fraud in the field through communication

activities aimed at central and local administration, the business community and NGOs, all of whom are beneficiaries of

European funding.

Statistically speaking, we have had three times more investigations in 2005 compared to 2004, which emphasises the extent of the change of pace in the activity of combatting fraud affecting European funds. This bodes well for the future

activity of DLAF at a crucial moment in Romania's European integration project.

The fact that considerable progress has been achieved with regard to the protection of the financial interests of the European Union in Romania has been reflected both in the Commission's Monitoring Report of October 2005 and in the

signals we have received from the headship of OLAF in Brussels.

All this renders us confident that the activity of the Fight Against Fraud Department and its cooperation with partner institutions in

Romania and the European Union will lead to an efficient protection of

the Communities' financial interests in Romania, a matter likely to

contribute to the success of the complex integration process.

Cristian David

Minister Delegate

MESSAGE BY THE HEAD OF THE DEPARTMENT

The issue of the fight against fraud affecting the financial interests of the

European Union has been one of the sensitive

issues during negotiations for Romania's

accession into the EU.

The year 2005 has been a period of profound reform in this field as part of the

overall effort to prepare Romania for the

status it will acquire as of 1 January 2005,

that of Member State of the European Union.

We have created a new structure, Head of the Fight Against Fraud Department, Tudor Chiuariu namely the Fight Against Fraud Department -

DLAF - responsible exclusively with control regarding Communities' funds.

We have adopted a new legal framework, which establishes extended competencies in two main areas: coordinating all other institutions with responsibilities in the field and carrying out on-the-spot checks on the beneficiaries of these funds.

We have adopted, for the first time in Romania, a document defining public policy in the field, namely the National Strategy for the Fight against Fraud, which also includes an action plan for until the moment of accession.

Beyond legal provisions, we have tried to establish a culture of cooperation between the authorities involved in the fight against fraud, a dimension often lacking in the Romanian institutional environment.

We have significantly increased the number of positions, attracted young professionals and attempted to offer them stimulating salary conditions.

We have sought to improve and increase the number of professional training programmes. Above all, we have intensified our investigations, the number of which has tripled compared to last year.

Tudor Chiuariu Secretary of State,

Head of the Fight Against Fraud Department

CHAPTER I. THE CREATION OF DLAF The first chapter describes the context behind the creation of the Fight Against Fraud Department - DLAF - and the progress made as a result of the administrative reorganisation. It includes presentations concerning the structure of the

Department, its main responsibilities, as well as measures taken for administrative consolidation.

Given the need to strengthen the legal framework regarding the fight against fraud for the protection of the EU's financial interests in Romania, the Government issued, on 1 June 2005, Emergency Ordinance no. 49/2005 on the

setting up of some reorganisation measures within central public administration, approved by Law 411/2005, published in

the Romanian Official Journal, part I, nr. 5 of 4 January 2006. The responsibilities of the Prime Minister's Inspection

Department - DIPM (set up by Government Decision no. 1348/2004) as sole OLAF contact point in Romania have been taken

over by a newly established structure, namely the Fight Against Fraud Department - DLAF. I.1. DLAF RESPONSIBILITIES

DLAF was created in order to optimise the efficiency of controls and to fulfil the task of coordinating the fight against fraud for the protection of the European Union's financial interests in Romania.

The Departament, as sole OLAF contact point in Romania, has the following main competencies:

• Controlling the obtainment, management and use of funds from pre-accession financial assistance; • Ensuring the cooperation between national institutions involved in the protection of the EU's financial interests, as

well as between these and OLAF and EU Member States;

• Initiating or reviewing legal acts necessary for harmonisation with EU legislation in the field; • Collecting, analysing and managing information necessary for the formulation of relevant analyses; • Preparing and coordinating professional training programmes in the field of the fight against fraud.

The main improvements derived from the reorganisation of the Department are summarised in the following table.

DLAF Annual Report 2005 1

DLAF DIPM

TYPE OF Performs controls EXCLUSIVELY on the Checks regarding the use of EU funds CONTROL obtainment, management and use of

European funds and

Controls requested by the Prime Minister

ADMINISTRATIVE CONTROL COMPETENCIES

On-the-spot checks; Requests information and documents; Unconditional access to all premises used for

economic purposes; Takes statements; Secures evidence; Assesses damages; Operational support from law enforcement and

financial/fiscal control entities.

Requested data and information; No sanction for failure to respond.

CRIMINAL INVESTIGATION COMPETENCIES

Ascertaining body for crimes against the financial interests of the European Communities;

Investigation reports can be used as evidence in criminal proceedings;

Cooperation protocol concluded with National Anticorruption Prosecutor's Office (NAPO).

Notified NAPO when elements of a criminal nature were discovered in the course of investigations.

No cooperation protocol with NAPO .

OPERATIONAL AUTONOMY

Full autonomy: the head of the Departament shall neither request nor receive instructions from any authority, institution or person regarding the initiation, carrying out and drawing up control reports.

The Head of the Department could take instructions from the Prime Minister.

2 DLAF Annual Report 2005

I.2. IRREGULARITY AND FRAUD AFFECTING EUROPEAN FUNDS

The main responsibility of the Fight Against Fraud Department consists in performing controls on the obtainment, management and use of funds from EU pre-accession financial assistance. The control activity aims to discover irregularities

and potential fraud affecting the Communities' financial interests. Irregularities are any of the following actions or ommissions:

• any breach of legality, regularity or conformity;

• any breach of financing memoranda/agreements;

• any breach of contracts concluded on the basis of memoranda/agreements.

These acts or omissions lead to incorrect payments, which affect:

• the Communities' budget;

• the budget of funds from non-reimbursable EU financial assistance;

• the budget of co-financing funds.

(Government Ordinance no. 79/2003 on the control and recovery of EU funds as well as of co-financing funds inadequately used, with subsequent amendments and completions)

Fraud is defined as any intentional act or omission consisting in:

• The use or presentation of false, incorrect or incomplete statements or documents,

• Non-disclosure of information in breach of a specific obligation;

• Misapplication of funds for purposes other than those for which they were originally granted.

These criminal acts result in the improper allocation or use of Communities' funds and of related co-financing funds. (Government Ordinance no. 79/2003 on the control and recovery of EU funds as well as of co-financing funds inadequately used, with subsequent amendments and completions)

If elements of a criminal nature are ascertained, DLAF forwards its investigation reports to the National Anticorruption Department (DNA, formerly NAPO) for immediate measures to block the funds, recover the damages and

prosecute the alleged offenders.


I.3. THE OFFICIAL LAUNCH OF DLAF

The official launch of DLAF took place on 23 November 2005 at the Diplomatic Club in Bucharest. The event was hosted by Mr. Cristian David,

Minister Delegate for the control of the implementation of internationally

financed programmes and monitoring of the application of the acquis

communautaire, and by Mr. Tudor-Alexandru Chiuariu, Head of DLAF.

It included speeches by Mr. Franz-Hermann Brüner, OLAF's Director

Ambassadors of EU Member States

General, and Mr. Jonathan Scheele, Head of t he European

Commission Delegation in Romania.

In the opening address, Mr. David emphasised the importance of the existence of a specialised body for the protection of the EU's financial

interests in Romania and expressed his contentment with the Department's

achievements to date. He pointed out that DLAF exhibited a new approach to the

fight against fraud, based on close cooperation between the institutions with responsibilities in the field, under direct coordination from the Department. The new system of Protocols

concluded between DLAF and the General Inspectorate of the Romanian Police, the Financial Guard and the National

Anticorruption Department, has the advantage of putting to maximum use various fields of expertise, without ambiguity and

competence overlaps. The Fight Against Fraud Department is evidence of the acknowledgement that combatting fraud must be,

first and foremost, a team effort within which data centralisation and activity coordination is achieved constructively and where

dialogue is open and continuous.

These opinions were shared by Mr. Brüner. He mentioned that he was particularly pleased with the openness of communication between DLAF and the European Commission. He also welcomed the realism and the determination behind

the Department's objectives and actions, evidence of which was in his opinion the National Strategy for the Fight

against Fraud, adopted in July 2005.

The OLAF Director General reminded the audience of the successive

stages of reorganisation which led to the

creation of the Fight Against Fraud

Department. He argued that the

Deparment now faces new challenges,

namely administrative consolidation and

operational development. Mr. Brüner

concluded by expressing hope that the

institutions involved in the fight against

fraud and corruption will be granted the

time necessary in order to carry out

their tasks competently and

comprehensively.

Mr. Jonathan Scheele reiterated in his speech the importance

of DLAF as the result of operational

Tudor Chiuariu, Head of DLAF and Franz-Hermann Brüner, optimisation efforts made by the OLAF Director General

Romanian Government.


He stated that the Commission appreciated

Romania's choice of the more difficult, and

inevitably more lengthy journey of thorough

institutional reform, instead of more superficial

changes.

The importance of DLAF's institutional consolidation and operational efficiency is all the

greater, given the fact that the Department is

protecting funds granted through European

Jonathan Scheele, Head of the European Commission Delegation in Romania

assistance programmes. Mr. Scheele emphasised

in this context the need to bring about an

atmosphere of respect for the Communities' budget and for the assistance derived from it.

DLAF's success, as well as that of the institutions it coordinates, can be an important step forward in this direction.

The second part of the event was dedicated to presentations concerning the activity of the newly-created Department. The Head of DLAF put forward the objectives taken on at the beginning of his mandate, which determined the administrative reorganisation, and therefore the creation of DLAF:

• separating controls requests by the Prime Minister from those concerning European funds;

• ensuring the operational independence of investigations;

• adopting the "National Strategy for the Fight against Fraud for the Protection of the Financial Interests of the European Union in Romania";

• intensifying and improving the efficiency of controls.

The new administrative structure operates in a consolidated legal framework, with extended control powers, as

well as coordinating the fight against fraud from a fully autonomous position. The Department has strengthened its

administrative capacity, through the development and implementation of a human resources policy and a stimulative

increase in wages. Furthermore, it has concluded cooperation protocols with national institutions involved in the

management of Communities' funds, which have already reaped the first concrete results. DLAF has also been involved in

coordinating training projects with partners from non-governmental sphere, namely Transparency International Romania

and the Press Monitoring Agency. Mr. Chiuariu concluded with an assessement of the cooperation between DLAF and OLAF,

consisting in common activities and information exchange.

The addresses of the Directors of DLAF's compartments sought to complement

these assessements through more detailed

presentations of the Department's achievements and

future projected developments. They included mentions

concerning the status of implementation of the National

Strategy for the Fight against Fraud, the findings of

investigations, as well as the development of the data

collection and analysis

capacity. The Directors of DLAF 's compartments: Lorena Tarlion, Andrei Chendi, Dan Diaconescu


I.4. STRUCTURE OF DLAF

DIRECTORATE A: LEGISLATION, POLICIES,TRAINING

• Initiates and reviews draft legal texts regarding the

protection of the EU's financial interests in Roma- nia;

• Drafts strategies and action plans in the field of the

fight against fraud;

Secretary of State Head of the Department

General Directorate for

• Drafts points of view regarding the application and Operations interpretation of relevant national and EU legislation;

• Draws up position documents for international re-

unions in which DLAF is representing the Romanian Government;

• Prepares and coordinates professional training pro-

grammes and internships in the field of the fight against fraud and implements the Multi-Country Phare Programme "The Fight against Fraud affecting EU Financial Interests".

Directorate A

Legislation, policies, training

Directorate B

Investigations

Directorate C

Data collection

and analysis

DIRECTORATE B: INVESTIGATIONS

• Acts on the basis of notifications from OLAF or other sources, or ex officio;

• Carries out on-the-spot checks, whereby it has unconditional access to all premises used for economic purposes;

• Requests from all public institutions and authorities involved, as well as from all economic agents, wether state or private

owned, documents and information necessary for drawing up control reports;

• Financial/fiscal control entities, as well as the police and gendarmerie, have the legal obligation to provide DLAF with

operational support when performing its tasks;

• If elements of a criminal nature are discovered in connection with the management of European funds, following the

performance of all procedural steps, control reports are forwarded to the National Anticorruption Department.

DIRECTORATE C: DATA COLLECTION AND ANALYSIS

• Collects and provides data necessary for opening and carrying out investigations;

• Performs risk analyses in order to draw up proposals for investigations and prevention policies;

• Communicates irregularity reports to OLAF;

• Performs administrative and judicial follow-up regarding irregularities and potential fraud discovered by DLAF

investigators;

• Ensures information exchange with national and international partners.


I.5. CONSOLIDATING DLAF'S ADMINISTRATIVE CAPACITY DLAF counselors

The first step towards institutional consolidation was finalising the organisational structure of the Department. With the assistance of Mr. Carlo de Hennin, pre-accession advisor from OLAF, DLAF regulated and clarified its administrative

setup, by drawing up the organisational chart and job descriptions. The next step was the drafting of the Internal

Procedures Manual, in accordance with OLAF requirements. The Manual was adopted through an order of the State

Secretary, Head of DLAF, and entered into force on 1 January 2006. The Manual contains regulations regarding the opening, carrying out and closing of investigations, the flow of

information within the Department as well as rules for the use and protection of the Case Management System software

(CMS) and of the Anti-Fraud Information System (AFIS) modules. A new element is the creation of an Investigations

Board made up of the Secretary of State, the Director General, the Controller and Directors B and C. The Board has an

advisory role regarding the opening and closing of investigations and guarantees the operational independence of the

Department. The second dimension of DLAF's administrative capacity concerns human resources management. Once the

Department's responsibilities and competencies were extended, it became necessary to increase the number of staff, in

order to intensify controls and to develop data collection and analysis capabilities. By Emergency Ordinance no. 156/2005,

the Government raised the number of budgeted positions from 26 to 45. Graduation from courses or participation in seminaries and internships abroad has been an important criterion in the

recruitment of personnel. 85% of DLAF staff have graduated courses in EU Member States or have participated in

professional training programmes in fields related to the fight against fraud. Starting with 1 October 2005, DLAF personnel has been the beneficiary of stimulating wage conditions, namely a

75% increase of the base salary, in accordance with Government Decision no. 170/2005 for the application of Law no.

490/2004 on the financial stimulation of staff handling European funds.


I.6. A COMPARISON WITH OTHER ANTI-FRAUD COORDINATION

SERVICES - AFCOS

A comparative analysis between DLAF and other AFCOS from Member States or candidate countries emphasises the Department's increased capacity to combat fraud.

• DLAF is the largest AFCOS in terms of number of employees.

• DLAF performs controls on the obtainment, management and use of Communities' funds.

• DLAF facilitates, coordinates and monitors the exchange of information at all levels of national administration, as well as with the European Commission, concerning cases of irregularity and potential fraud affecting Communities' funds.

• DLAF is responsible for drafting the national antifraud strategy and monitoring its implementation and runs programmes and training modules in the field of the protection of the financial interests of the European Union in Romania .

AFCOS Comparison

Organisation Legal embedding

Number of staff Centre for reporting irregularities to OLAF Detection of irregularities Conducting administrative control

Conducting criminal investigation Cooperating with OLAF investigations Role in recovery of funds

Inventory and coordination of training needs

Developing national antifraud strategy Publication of

CZ

Prosecutor's

Office

Governmental Decree

3

HU

Customs and Financial

Guard Law

6

RO

Prime Minister's

Chancellery

Law

45

BG

Intergovernmental

Committee

Council of Ministers Decree

n/a

SK

Office of the Department

Governmental Decree

7

CY

Coordinated by

the Treasury

Governmental Decree

n/a

EE

Ministry of

Finance

Governmental Decision

2

LT

Ministry of the

Interior

Governmental Decree

5

partly

LV

Ministry of

Finance

Ministry of

Finance Decree

1

annual bulletin on the fraud situation in the country

Coordination point for annual reporting Post-accession on article 280

Initiating needed legislative changes in the field of the fight against fraud

partly


CHAPTER II. OVERVIEW OF DLAF'S ACTIVITY The second chapter presents the Department's control activity, the achievements to date, the characteristics and stages of a typical investigation. Various aspects of coordinating the fight against fraud are dealt with in the second

section. The chapter concludes with an assessement of the DLAF's cooperation with OLAF over the past year.

II.1. ON-THE-SPOT CHECKS

The control activity per se is performed on the basis of a specific methodology. Controls is carried out by teams

usually made up of two DLAF counselors, one dealing with judicial matters, the other with the economic and financial

aspects. The investigators can request necessary documents and information from the entity they are investigating.

Furthermore, they can take statements from the beneficiary or on his behalf, as well as from witnesses that can supply

information regarding irregularities or potential fraud. The full documentation (information, documents, statements) is then analysed at DLAF headquarters where the control report is drawn up, ascertaining:

• the existence of an irregularity;

• potential fraud;

• notification not confirmed. According to the type of ascertainment the control report is sent to the National Anticorruption Department and/or

the relevant implementation agencies, for the necessary measures to be undertaken. The report is also sent to OLAF.

The creation of DLAF has inevitably led to some changes in the practicalities of the control activity. The investigations carried out by DIPM were in effect analyses performed strictly on documentation received. Furthemore, DIPM's control

reports were, legally speaking, mere notifications. The adoption of Government Emergency Ordinance 49/2005 approved by Law 411/2005 has conferred new

prerogatives to DLAF. The Department can now perform on-the-spot checks on the premises used for economic purposes,

and can request support from law enforcement, as well as other financial and fiscal control entities. The new legal

framework also designates DLAF as ascertaining body, in accordance with art. 214 of the Criminal Procedure Code. Two immediate consequences are:

• DLAF investigators now have the means necessary to perform efficient and timely controls, as they have unconditional access to all premises belonging to any institution, public authority or economic agent, whether public or private;

• The investigators no longer have to rely exclusively on the documents supplied by the investigated entity in order to formulate their conclusions. The investigations are now more complex as they consist both in analysing documentation, and in cross-checking it against observations on the spot and statements taken from all parties

involved.

As an ascertaining body, DLAF supplies the National Anticorruption Department with more than just notifications. DLAF now drafts a procès-verbal on the particularities of the potential fraud, and can seize evidence and evaluate damages.

The procès-verbal can be used as evidence in criminal proceedings.


II.1.1. THE STAGES OF A TYPICAL INVESTIGATION

Clarifying the ambiguities regarding the operational competencies of DLAF investigators leads to less bureaucracy in the control activity. It has become easier to estimate the time necessary for the Department to gather all necessary information

and formulate its conclusions. According to the new legislation, the investigated entities have an obligation to supply the

requested documents within 15 days of the request being received, while access to premises is unconditional and

immediate. The consequence is that the average duration of an investigation, from the reception of a notification to the

transmission of the findings to the competent authorities, has been considerably reduced.

The typical stages in an investigation are shown below:


II.1.2. RESULTS OF THE CONTROL ACTIVITY

The increase in competencies has led to greater efficiency and to more investigations being carried out.

During the first 3 months of 2005, DIPM finalised 6 of the

10 cases opened in the field of Communities' funds. By

contrast, the last 3 months of 2005 have seen 15 cases

finalised out of a total of 23 investigations opened by DLAF.

There are several explanations for this, beyond the greater

Cases opened 2005

ISPA

3

Sapard 10

clarity bestowed upon the competencies of the Other

LdV: 4 Youth: 2 LIFE:1

investigators. DLAF's scope of investigation is now Phare 8 Other: 1

restricted to European funds, while DIPM also performed internal administrative investigations requested by the

Prime Minister. Furthermore, the new Department benefits

from an improved legal framework, which enables it to

specialise to a greater extent.

Consequently, DLAF finalised 43 files of the 51 opened throughout 2005. Potential fraud was ascertained

in 26 cases and there were irregularities in 6 others. 11

30

notifications were not confirmed following investigations. The total amount involved in the contracts investigated by DLAF in

the 51 files was of approximately 100 million euro, the individual projects varying in cost between 15,000 and 28 million euro.

Given their number and variety, more than half of the investigations performed involved PHARE funds, where

most potential frauds were found. The damages evaluated

Ascertainments

18

5

16 4

for each individual case range between 10,000 and over 6 14 3

million euro. 12

2 1

10 ISPA projects are of a somewhat different nature to 0

other programmes, given the great expenses involved. The

3 ISPA files under investigation concerned contracts worth

over 46 million euro between them. Potential fraud was

found in one case, where damages exceeded 2 million euro.

8 6

4 2 0

L dV

Youth

L fe i

PHARE ISPA SAPARD

SAPARD projects have a very important part to play Potential fraud Irregularities Un c o n f i r m e d in Romania's accession efforts, given the need for

development in agriculture and rural infrastructure.

Irregularities found in these rural projects are often caused by a lack of awareness on behalf of the beneficiaries, who often

fail to understand and comply with all the clauses of the financing contracts. Of the 10 files opened, 3 were sent to the

National Anticorruption Department for criminal investigations concerning potential fraud.


II.1.3. CASE STUDY: „A.N." FILE „A.N." is a typical case of fraud affecting European funds. From the start of the investigation up until the transmission of findings to NAPO (currently the National Anticorruption Department), each stage in the process brought out new, and often,

unexpected aspects. 1. Notification The Department acted ex officio in reaction to allegations made by „R.L." newspaper, in its issue of 11 March 2003. „R.L." would publish 2 more articles on the matter, on 14 May and 4 July 2005 respectively. In these, the newspaper referred to

the various projects involved as a virtual "Bermuda triangle" for PHARE funds. 2. Project The project which attracted the attention of both press and DLAF investigators was, prima facie, not only harmless, but actually really useful. It set out to create a careers' advice and advertisement centre called BEST JOBS. The centre would then

create an electronic labour advertisement database and run professional training programmes, long distance learning over

short periods of time, symposia and job fairs. The project requested financing from the PHARE 2000 programme with SC B.

SRL Bucharest as the beneficiary. 3. Documentation analysis Investigations began at the Regional Development Agency, Bucharest, Ilfov county (ADR-Bucharest). Initially, DLAF investigators requested that the Agency provide the documents which had formed the basis for the approval of the PHARE

financing, namely the financing application, the financing contract and the monitoring report. The analysis performed on

these documents identified several potential breaches of legality, both in contracting the financing and in managing the project:

• The beneficiary was going to organise a tender in order to acquire the goods necessary for starting the project. The tender evaluation board members signed impartiality and confidentiality statements, in accordance with the requirements of the financing terms. They acknowledged the obligation to step down from the board in case of conflict of interests occurring with relation to the bidders. A.N. was president of the tender evaluation board.

• The bidding companies were investigated with regard to their structure and major stockholders. Since 2 of the 3 bidders were based in Germany, the Department requested support from OLAF. The information received, both from OLAF and from the Romanian National Registry of Commerce, revealed the fact that A.N. was in fact

involved in all 3 bidding companies.

4. Spot checks The spot checks would prove decisive in confirming the initial suspicions. A.N.'s behaviour was aggressive, as he tried to intimidate the investigating team. He was, however, unable to provide the investigators with evidence of the

accomplishment of the project's objectives. It is true that the electronic labour advertisement database had succeeded in

mediating the conclusion of 7 labour contracts, but 4 of the individuals had been employed by companies where A.N. was a

major stockholder. 12 DLAF Annual Report 2005

Data regarding expenditure eligibility soon followed. The project stated salary expenses for the implementing staff in the amount of 23,000 euros, which would be covered by the beneficiary. SC B. SRL supplied 7 individual contracts and 12

monthly payment schedules, all registered at the Bucharest Labour Inspectorate and bearing an expert's seal. However, the 7

contracts did not appear in the Inspectorate's evidence, and the registration numbers were also lacking. The expert's seal and

signature were not genuine. Moreover, in the accounting statement of 30 June 2004, the company claimed that it had had no employees throughout 2003 and that it had only concluded one labour contract in 2004, with A.N.! The investigators also observed that the SC B. SRL's project had received funding in spite of failing to comply with the proportion between EU assistance and the beneficiary's contribution, as required by law. The expenses declared ineligible in this case were in the amount of 21,000 euro.

5. Additional checks A.N. was involved in several companies, as the evidence above shows. DLAF investigators next sought to determine whether other projects had been approved involving, as beneficiaries, other such companies. Two companies were identified, which had obtained PHARE financing: One of these was SC S.T. SRL, which received funding for a project involving the supply of internet services for schools,

universities, libraries and civic facilities.

• The same modus operandi was detected as in the previous case; a tender for the acquisition of goods was identically manipulated, resulting in improper spending in the amount of 64,950 euro.

• The 3 labour contracts and 6 payments' schedules had also been forged.

• Neither the beneficiary, nor the service supplier notified the National Communications Regulating Authority, stating their intention to supply networks or internet services.

• The beneficiary claimed to have connected 10 highschools from Bucharest for free in a trial scheme. Of these, 7 provided statements declaring the contrary. The teachers supposed to have signed statements confirming the trial connection proved not to be employed by the respective schools.

The third project claimed to have as an objective the development of software applications for small and medium enterprises. The methods used by A.N. bore an uncanny resemblance with those used for the project run by SC S.T. SRL. 6. Investigation outcome The control reports drafted following investigations in the 3 cases were forwarded to the National Anticorruption Department for criminal investigations regarding offences against the financial interests of the European Communities in Romania. The 3 files were merged into one criminal case against A.N. The National Anticorruption Department notified DLAF concerning the decision to prosecute A.N. for offences stipulated in art. 181 and art. 182 of Law 78/2000, as subsequently

amended. Meanwhile, the 3 companies requested the termination of the financing contracts. The total damages of 169,323

euro were recovered as a result of a restitution convention concluded between the beneficiaries and the Ministry of

European Integration, as paying agency. The Fight Against Fraud Department will be notified as to the outcome of the

criminal trial.


II.2. COORDINATION

II.2.1. COORDINATION OF THE ANTI-FRAUD POLICY - The National Strat- egy for the Fight against Fraud for the Protection of the Financial Inter- ests of the European Union in Romania

The National Strategy for the Fight against Fraud was drafted in order to harmonise regulations of national legislation with European regulations in the field, and to prepare the legal, institutional and operational framework for

Romania's accession into the EU. The need for such a unitary text was outlined in the Cooperation Agreement concluded

with OLAF, which entered into force in October 2004. As overall coordinator of the fight against fraud affecting the financial

interests of the EU, DLAF reached an agreement with the various national institutions bearing responsibilities in the field

over 53 concrete measures to be implemented in accordance with deadlines stipulated in the Action Plan attached to the

Strategy. DLAF was supported in identifying these measures by representatives of the SIGMA Programme (Support for

Improvement in Governance and Management) of the European Commission and of OECD (Organisation for Economic Cooperation and Development), as well as those of the Public Policy Unit within the Government's General Secretariat.

The Strategy was approved through Government Decision no. 793 of 14 July 2005, published in the Romanian

Official Journal no. 743 of 16 August 2005. The main domains covered by the Strategy are: A. Communication and Public Relations The main objective is to increase the efficiency of cooperation in the field of communication between national

institutions with responsibilities regarding the protection of the Communities' financial interests, as well as between these and:

• Beneficiaries of EU funds ;

• EU institutions;

• Member States' embassies;

• Civil society.

The Strategy also aims to increase the level of public awareness, particularly that of economic agents, in order to contribute to the prevention of fraud. Related to this aspect is the increase in transparency when allocating non-

reimbursable European funds. The Action Plan stipulates 6 measures to be implemented in this field, of which 5 had deadlines in 2005. 4

measures were finalised, the most important being the conclusion of cooperation protocols on communication with

institutions involved in the protection of the Communities' financial interests in Romania. Furthermore, a work group was

formed with the aim of guaranteeing and facilitating communication related to the fight against fraud. Further details

regarding the breakthroughs achieved in this segment are presented in section II.2.5. B. Public financial control This chapter aims primarily to increase the managerial responsibility of heads of implementing agencies for

programmes with international financing. This involves amending the legal framework in relation to financing contracts, so

that these contain clear performance indicators to facilitate evaluations. It is furthermore necessary to adopt standards of

control and financial management which are compatible with those enforced by the European Union, and to emphasise the

distinction between managerial control and internal audit. The Action Plan also contains measures for the establishment of

standard procedures for managerial control and internal audit, as well as plans for professional training schemes for staff

employed by the Ministry of Public Finances, Implementing Agencies, as well as the Audit Authority attached to the

Romanian Court of Accounts.


The chapter contains 11 measures, of which 7 were due to be completed before December 2005. 5 measures have been finalised, perhaps the most important of which was the approval, by the Ministry of Public Finances, of the "Internal

Control Code, containing standards of management and internal control within public entities". Also drafted was "The

General Manual for Performance Audit", which formed the basis for the performance audit guide concerning European

programmes. This is all the more significant considering the need, identified and confirmed by the European Commission, to

draw a clear distinction at national level between control and audit activities.

C. Fiscal control The measures to be implemented in this field focus on developing the capacity to calculate, collect and control own

resources which will be used for Romania's contribution to the European Union budget, as well as the reporting

methodologies. The main responsibility belongs to the National Agency for Fiscal Administration (ANAF). According to the

Governing programme approved by Parliament, ANAF will take over all forms of fiscal control, in order to establish a direct

link between fiscal control and the collection of budgetary obligations. 2 of the 7 measures in this chapter had early deadlines in August and October 2005, and both have been

completed. Two items of legislation have been adopted: through Government G.E.O. no. 103/2005, which designated the

Payment and Intervention Agency as the structure responsible with managing (calculating, collecting and controlling) sugar

and isoglucose tax, and G.O. no. 41/2005 on establishing the legal framework for sugar and isoglucose tax. Furthermore,

specific procedures regarding sugar levies have been developed through the twinning project "Set up and implementation of a

full simulation model regarding Romania's contribution to the EU budget". D. Criminal investigation and proceedings The main objectives of this chapter concern harmonisation in the field of criminal law, most specifically the

introduction into Romanian law of substantive and procedural regulations on the criminal liability of legal persons. The efficiency of the fight against fraud is heavily influenced by the effective implementing capacity of legal norms in

the field, together with the administrative consolidation of institutions with competencies in the protection of the EU's

financial interests (such as the National Office for Prevention and Combat of Money Laundering), as well as by the specific

professional training of staff involved in the criminal investigation and proceedings involving offences against the European

Communities' financial interests in Romania. 2 measures out of the 3 to be fulfilled at this chapter have been accomplished, the most relevant being the

adoption by the Government of draft legislation amending the Criminal Code and the Criminal Procedure Code that is

currently under Parliamentary scrutiny. E. Financial recovery This chapter aims to improve the legislative framework related to the recovery of Communities' funds, to develop

the professional skills of staff employed by institutions responsible with recovery and to prepare the legislative and

operational framework for the recovery of taxes that are to be own resources of the EU budget upon accession. The measures in this chapter address problems generated by the conflict between legislation in the field of financial

recovery and contractual clauses, which have primacy in law according to the provisions of the financing contracts. Control

reports made by the implementing agencies cannot be used as executory titles (as the legislation provides) as long as there is

no mention of them in the financing contracts. Initiation of financial recovery measures is impossible in the absence of a

legal act stipulating the ineligibility of expenditure. The Strategy requires that provisions of financing contracts be altered in

line with applicable legal provisions. For the same reason, another measure within this chapter requires the explicit and

exclusive designation of ANAF as the entity responsible with the enforcement of executory titles and financial recovery

concerning EU funds.


The Action Plan comprises 10 measures concering financial recovery, out of which 4 had to be implemented by the end of November 2005. Thus, G.O. no. 53/2005 on the regulation of certain financial measures in the budgetary domain and

public accounting modifies the provisions of G.O. No. 79/2003 on the control and recovery of Communities' funds, as well as

related co-financing funds inadequately used, by giving ANAF exclusive competence to enforce executory titles concerning

European funds. Furthermore, the draft Government decision for the amendment and completion of the Methodological Norms for

the application of G.O. No. 79/2003 was sent, for review and comments, to competent institutions, the overall aim being the

externalisation of damages evaluation to implementing agencies in cases involving conflicts of interests. F. Coordination of the fight against fraud Given that the Department has exclusive competence in this field, Chapter VII measures designate 3 directions of

action for further development of DLAF:

• Institutional consolidation, mainly by evaluating training needs and meeting them;

• Developing the activity of strategic and operational analysis, by developing human and technological resources necessary for data analysis ;

• Communication of irregularities, via the electronic modules accessible to Romania as a candidate country and with the support of the Irregularities Reporting Network.

There are 16 measures provided for by this chapter, 7 out of which had as deadline August to November 2005. 5

measures were fully implemented, amongst which the elaboration of the AFIS connection and user policy and of the

selection procedures for trainers. Further details on these topics are presented in the following section.


II.2.2. OPERATIONAL COORDINATION Cooperation protocols

Operational cooperation by DLAF concerns both cooperation during and after investigations, and the exchange of information between institutions with responsibilities in combatting fraud affecting Communities' funds. The improvement in

communication between these institutions has been an explicitly stated priority for the Department. To this end, DLAF has

concluded a number of Cooperation Protocols.

The protocol with NAPO, which remained valid after the latter's transformation into the National Anticorruption Department (DNA), stipulates the manner in which control reports are transmitted by DLAF, as well DNA's obligation to

inform DLAF periodically about the outcomes of criminal proceedings regarding offences against the financial interests of the

European Communities in Romania. Eversince the conclusion of the protocol, communication between DLAF and DNA has

improved considerably.

The National Anticorruption Department is the outcome of judicial reorganisation, as it has taken over the responsibilities previously held by NAPO. One of these responsibilities is criminal prosecution in cases involving potential

offences against the financial interests of the European Union. During the first half of 2005, DIPM forwarded NAPO 7

notifications. Following the reorganisation, DLAF sent 14 more files in the form of control reports, ascertaining potential

frauds related to European financial assistance. The increase in communication from 2004, when NAPO only received 8 DIPM

notifications, is hardly surprising, given both the increased efficiency of administrative investigations and the improvement in

the relationship between the two institutions. During 2005, apart from the decision to prosecute A.N., DNA has finalised 4

more files, declining competence in favour of ordinary prosecutor's offices in 2 instances, and deciding to abandon

proceedings in one case. 2 other criminal cases have been opened and are in the preliminary stages.

Another cooperation protocol was concluded with the Financial Guard. The protocol aimed to enable joint controls, with investigators from both institutions cooperating and contributing. It also regulated the exchange of information derived

from specific controls performed by each institution and which may prove of relevance for the other. Based on this protocol, 3

joint controls have already begun, 2 of which were finalised while one is ongoing. The Financial Guard has also sent DLAF one

notification regarding potential fraud related to a PHARE project worth approximately 10 million euros.

The two protocols mentioned above also regulated the flow of information regarding irregularities and potential fraud in the management of European funds. A third protocol, concluded with the General Inspectorate of the Romanian

Police (IGPR), also focuses on this aspect. It stipulates the need for mutual support, as well as the mediation by DLAF of

IGPR requests for OLAF support. To date, the Department has performed an expert investigation in a case instrumented by

IGPR which involved the management of European funds. IGPR has furthermore received support from OLAF, mediated by

DLAF, in 2 cases. In terms of information exchange, IGPR has sent DLAF 3 notifications regarding potential irregularities and

fraud. Protocols similar to this last one will, in the near future, be concluded with other authorities bearing information

regarding potential irregularities and fraud affecting European funds.


II.2.3. COORDINATION OF DATA COLLECTION AND ANALYSIS

The reorganisation of the Department brought about the creation, within the General Directorate for Operations, of Directorate C Data collection and analysis, responsible with collecting and processing relevant information, and subsequently drafting analyses regarding the protection of the Communities' financial interests in Romania.

The Directorate's main tasks are: to collect data and information regarding irregularities or potential fraud, to perform

risk assessments in order to formulate and adapt the Department's prevention and control policies, and to establish and

maintain links with national and international partners involved in the prevention of and fight against fraud affecting pre-

accession financial assistance programmes. The development of this dimension in the Department's activity was explicitly mentioned in the Monitoring Report

published by the European Commission in October. Directorate C has continued its development by increasing its staff and

through the initiation and coordination of the Irregularity Reporting Network. The Irregularity Reporting Network According to financing agreements and memoranda concluded with the European Union, Romania has an obligation

to transmit quarterly reports to the European Commission regarding irregularities discovered which concern Communities'

funds. As contact point for OLAF, DLAF is responsible with ensuring, coordinating and monitoring the reporting of

irregularities concerning pre-accession funds, both between entities within national administration and between these and

the European Commission and OLAF.

That is why the creation by Directorate C of an Irregularity Reporting Network is such an important development. The network is made up of all institutions with reporting duties in the field of Communities' funds management. Its aim is for all

institutions to fulfil their standard and additional reporting tasks on time and correctly. The existence of the Network makes it

possible to achieve a tighter cooperation between DLAF and these institutions and facilitates communication through

channels other than those vulnerable to bureaucratic delay. Furthermore, it enables DLAF to make certain that all

institutions are performing their standard quarterly reporting duty.

Two Network meetings have taken place to date. During the first meeting, on 21 September, the Manual for reporting irregularities regarding pre-accession funds was adopted. Furthermore, contact points were established in each institution, with the following agreed responsibilities:

• to ensure that irregularity reporting documents are complete, accurate and sent on time; • to ensure that the financial control and internal audit departments receive a copy of the quarterly irregularity

report;

• to transmit to DLAF other information, obtained during the specific activities of their respective institutions, which concerns cases affecting the financial interests of the European Union in Romania.


The second meeting took place on 8 December and was aimed at clarifying some

practical aspects of the irregularity reporting

system. The discussions revealed the need to

strengthen cooperation between irregularity

reporting officers and internal audit structures

within each partner institution. Furthermore it

A doua reuniune a ReŃelei de Raportare a Neregulilor

was decided to conclude a cooperation

protocol between DLAF and the Central Unit for the

Harmonisation of Internal Public Audit within the

Ministry of Public Finances. The protocol will be

concluded early in 2006. Analyses

Directorate C has already drafted its first proper analyses:

• Risk assessment concerning Sapard Agency

This first exercise in risk assessment was performed with the support of Mr. Carlo de Hennin, pre-accession expert on

matters of institutional consolidation. Sapard Agency was chosen as first assessment subject because of the important sums it

handles and because of its unitary, homogenous nature. Following the analysis of documents and information, the main risks were identified and communicated to the

Agency, for the necessary corrective measures to be undertaken.

• Analysis of the factors determining the degree of absorbtion for pre-accession funds

In order to identify the problems related to the level of absorbtion of pre-accession funds, Directorate C analysed

available data and drafted a report note covering the factors which influence it. The analysis revealed links between the

disfunctionalities identified in the various programme management stages (publicity, project selection, evaluation, payments

etc.) and the limited degree of absorbtion of Communities' funds. The assessment was concluded with suggestions

concerning the necessary corrective measures.

For 2006, Directorate C aims to develop its human resources further, with the employment of more analysts and IT specialists. The long-term aim of this is the successful monitoring of structural and cohesion funds during the post-accession

period. Furthermore, given the advanced stage of implementation of several ISPA projects, Directorate C will seek to

establish the risks and vulnerabilities associated with this pre-accession programme. To this extent, it will cooperate with

other authorities and institutions to obtain the necessary information for performing a risk assessment on the programme.


II.2.4. COORDINATING TRAINING ACTIVITIES

Coordinating training activities in the field of protecting the Communities' financial interests is the

responsibility of Directorate A Legislation, Policies,

Training. The coordination has two aspects:

Training activities 2005

13 p e r s.

86 p e r s. 3

Organised by DLAF

• •

selection of participants in order to ensure adequate participation in seminars / conferences / workgroups. administrative and financial procedures necessary in order to ensure the participation of Ro- manian delegations abroad and the organisa-

tion of seminars in Romania. During 2005, DLAF organised or coordinated

7

100 p e r s.

10

Participations by Romanian Delegations DLAF participations in workgrous

the participation of Romanian delegations

representing 25 institutions in 18 training activities. The activities varied in subject, duration and participation. Romania was

granted a total of 200 invites for both representatives of central institutions and for some units from outside the capital,

which constitutes significant progress since 2004.

I. Through financing contracts concluded with the European Commission on the basis of Multi-Country

Phare Programme:

1. DLAF organised 3 seminars in Bucharest, together with OLAF and EUROCUSTOMS. They were attended by

representatives of national institutions with responsibilities in the field of protecting the Communities' financial

interests, as well as their counterparts from EU Member States.

2. DLAF ensured the participation of Romanian delegations in 10 seminars organised in Member States.

The Romanian delegation at "PFI Convention" seminar, Brussels, 10 noiembrie 2005

II. DLAF representatives participated in 7 meetings,

seminars and workgroups at the invitation of institutions, workgroups and consultative committees of the European Commission, EU Member States or national institutions with re-

sponsibilities in the field of protecting the Communities' financial interests in Romania.

Details concerning these activities are given in Annex B.


The Training Coordinators' Network

Following acknowledgement of the continuous need for professional training in the field of protecting the Communities' financial interests, a Training Coordinators Network was created. The Network is made up of individuals

delegated by each main institution with responsibilities in the field. They have the following main responsibilities within their respective institutions: • to reply to European Commission, OLAF and DLAF requests concerning training; • to identify training needs, the financial resources required for organisation, the people who will benefit from the ac-

tivities and the specialists/experts who could become trainers in the field;

• to draft, organise and monitor training programmes for potential beneficiaries and trainers alike;

• to ensure the increase in awareness of the staff employed by their respective institutions, through the dissemination of training activity reports, promotional material issued by DLAF and any other relevant documents. One main objective of the Network is for DLAF to coordinate

all training activities. That is why each training coordinator receives

DLAF support whenever necessary.

The first meeting between OLAF External Training Manager, Mr. Wesley-Gerald Barnett, and the training coordinators took place

on 25 February, when it was decided to extend the network, and

some future training needs were identified. The final training needs

report was subsequently transmitted to OLAF. Two further meetings

took place after the data was processed by OLAF, on 9 May and 8

November. Thanks to the existence of the Network, it was possible

W.G. Barnett and the Network

to ensure that training needs were more adequately met by the activities organised. The meetings included ample discus-

sions regarding the draft training activity list along with their timetable.

On the basis of Phare Multi-Country Networking Programme, financing contract no. 2005/109-099 was concluded with the European Commission on 28 November, providing funding for training activities in the field of "Fight against fraud

affecting the financial interest of the EU". The implementing period is 18 months, while the funding made available is

300,000 euro. 19 activities (seminars and internships) will be organised. 5 of these will be organised twice, once in Bucha-

rest and once outside the capital, in order to ensure the professional training of staff at local, as well as at central level. The activities to be organised twice are as follows:

• "Financial crime", to be organised a second time in Braşov, between 20 - 24 February 2006; • "Exploitation of the VAT system", to be organised a second time in Oradea, between 26 - 28 April 2006; • "Risk Analysis", to be organised a second time in ConstanŃa, between 1 - 2 June 2006; • "Excise fraud in Alchool, Tobaco and mineral oils" to be organised a second time in Timişoara, between 18 - 20 September 2006; • "Recovery" to be organised a second time in Cluj Napoca, between 26 - 27 October 2006.


II.2.5. COORDINATION OF COMMUNICATION CONCERNING THE

FIGHT AGAINST FRAUD The communication campaign

The public communication campaign "Preventing fraud affecting Communities' funds" is part of the Government's Strategy for Internal and External Communication regarding Romania's accession into the European Union,

adopted on 9 June 2005. The campaign was drawn up with the assistance of Mr. Richard Linning, pre-accession expert in the

field of communication. The campaign seeks to increase the efficiency of communication between the institutions involved in the fight against

fraud affecting European financial interests, with DLAF taking a pro-active, coordinating role. According to Mr. Linning, the

main objective was, however, acknowledgement on behalf of all institutions involved in the fight against fraud of the

important part they have to play in the overall process. The campaign emphasises the unitary nature of the fight against

fraud, and encourages the institutions involved in it to do the same. Simultaneously, the campaign seeks to establish communicating procedures between institutions, with DLAF as

central point of reference:

• The Department will collect and centralise all data regarding irregularities and fraud against the Communities' financial interests.

• Directorate C will ensure that the data is stored, analysed and made readily available.

• The Department must maintain its status as contact point with the European Commission with regard to communication of information on illicit activities affecting EU interests.

The second important dimension of the campaign is the Department's commitment to ensuring greater public awareness of the phenomenon of fraud affecting European funds. To this end, the campaign aims to transmit a clear, twofold message to all economic agents:

• fraud is damaging to the economic environment, by dissuading investors and by promoting mistrust both in relations with political entities, and in dealings between economic partners;

• aware of this impact, the Romanian Government will not tolerate fraud in any form and regardless of the sums involved; the fraud combatting mechanism is well defined and prepared to intervene.

All 5 measures stipulated in the Action Plan attached to the National Strategy for the Fight against Fraud and concerning the communication campaign have been accomplished. Communication between national institutions with

responsibilities in the field of European funds was facilitated through the creation, on 15 September, of a Communicators'

Workgroup. This Workgroup agreed on a standard format for a Cooperation Protocol in the field of communication to be

signed by all institutions. Protocols have been concluded with 11 institutions to date. In order to increase public awareness,

the Department has published a DLAF brochure, both in Romanian and in English. The brochure was distributed to guests at

the Department's official launch, an event which was also part of the campaign.


II.3. COOPERATION WITH OLAF II.3.1. OPERATIONAL COOPERATION

A strong relationship has developed between DLAF and OLAF at an operational level. This includes the exchange of information, joint investigations, mutual tehnical assistance and mediation of contact with other authorities:

• The Department received 7 notifications from OLAF leading to investigations. 5 of the controls revealed cases of potential fraud.

• The Department forwarded control reports to OLAF, as well as 3 requests for technical assistance for 5 cases concerning European funds: 3 joined-up PHARE investigations, one for SAPARD funds, as well as one request made on behalf of the General Inspectorate of the Romanian Police.

• 3 meetings took place in Bucharest between DLAF investigators and their OLAF counterparts, aimed at discussing practical problems in the field of management of European funds.

• 2 further meetings dealt with the specific issue of cigarette traffic. The Romanian delegation, led by DLAF representatives, included representatives of the national institutions with responsibilities in the fight against illegal smuggling, namely the Financial Guard, the National Customs Authority, the General Inspectorate of Border Police and the General Inspectorate of the Romanian Police. Discussions took place with members of Unit B7 Task Group

Cigarettes within OLAF, Italian magistrates and representatives of the Italian Financial Guard. It was agreed that joint action should be undertaken to combat cigarette smuggling. The first steps will be taken at the start of 2006, and DLAF will mediate communication between the various partners involved.

II.3.2. PARTICIPATION IN COMMISSION WORKGROUPS • COCOLAF meetings - The reunions of the Committee for the Coordination of the Fight against Fraud (COCOLAF) took place in Brussels on 31 May-1 June and 25-26 October respectively. The meetings were presided over by OLAF Director General Mr. Franz-Hermann Brüner, together with representatives of European Commission General Directorates. The Ro-

manian delegation was invited as an observer, in order to become more familiar with the committee's working procedure

and with European Union regulations in the field of fraud combat. Among the elements on the agenda was an analysis of a

draft amendment for EC Regulation 1681/94 regarding irregularities and the recovery of incorrect expenditure from

structural funds, which is of significant importance for Romania.

• The meeting of the workgroup "Irregularity and mutual assistance - agricultural products" - The meeting

took place on 15 November 2005 in Brussels, and the Romanian delegation took part as an observer. Among the items discussed were the Customs Information System, as well as the potential for information exchange between agricultural

authorities in Member States, to which end a workgroup was charged with developing a database. EC Regulation 1290/2005 on

financing the Common Agricultural Policy was then presented. The Regulation puts forward some changes which reflect

recent trends, namely the consolidation of the role played by paying bodies, single audit for the European Court of Accounts, as

well as a statement of guarantee on behalf of the head of the paying body regarding the control and proper use of the

Communities' funds.

• Other participations in international activities: A Department delegation took part in the seminar „Crime in agriculture: analysis of methodologies of

investigation in the fight against fraud", organised in Rome between 11-12 May 2005. The seminar was organised by the

Carabinieri for Agricultural Policy Command and included presentations by the Italian, French and Spanish

representatives, as these are the states who have Departments specialising in combatting fraud affecting agricultural funds.

Under OLAF's coordination, contact points were established in the Member States to facilitate communication. Between 19-21 October, in Atena, a DLAF representative took part in the international seminar „Inspectors -

Controllers Continuous Training Workshop", . The Seminar was organised by the Greek National Centre for Public

Administration and Local Government, with the support of OLAF, and aimed to promote a unitary system of financial control

upon beneficiaries of European financial assistance across the Balkans.


II.3.3. HEADS OF AFCOS MEETING, BRUSSELS

Between 21 - 22 June 2005, DLAF representatives took part in the "Heads of AFCOS work visit", which

took place at OLAF headquarters in Brussels. The

Romanian delegation met with Director General Mr. Franz-

Hermann Brüner, as well as with OLAF compartment Directors.

The visit afforded DLAF representatives a useful opportunity to

present the recent reorganisation to OLAF. In recognition of the Department's achievements,

State Secretary Tudor-Alexandru Chiuariu, Head of

DLAF was invited to present the activity of the Romanian

Cristian David, Minister Delegate, Tudor Chiuariu, Head of DLAF and Lorena Tarlion, Directorate A Director, in talks with Franz-Hermann Brüner, OLAF Director General , Jona- than Scheele, Head of the European Commission Delegation

AFCOS during the annual "Round table of AFCOS in Bucharest, and Esteban Castro-Fernandez, pre-accession representatives", Brussels 23-24 June 2005. During the expert. same meeting, Mr. Thierry Cretin, Head of Directorate "Direct expenditure and foreign aid" and Mr. Marco

Pecoraro, Head of Directorate "Operations", presented a concrete case of operational cooperation between OLAF and DLAF. The

work visit also offered a welcome opportunity for the Directors of the three DLAF compartments to debate specific problems

regarding legislative harmonisation, investigations and data analysis respectively with counterparts from Member States.

II.3.4. "PFI CONVENTION" SEMINAR

On 10 November 2005, OLAF organised a seminar on the implementation of the Convention for the protection of the Communities' financial interests (PFI Convention). The Romanian delegation, led by State Secretary Mr. Tudor-

Alexandru Chiuariu, was made up of representatives of DLAF, the Ministry of Justice, the National Anticorruption Department

and the General Prosecutor's Office attached to the High Court of Justice and Cassation. The first part of the seminar saw the representatives of the participating countries describe the status of imple-

mentation of obligations stipulated by PFI instruments into national legislation. The Romanian presentation made by

Mr. Chiuariu included mentions of the main provisions of the legal framework in the field (Criminal Code, Criminal Procedure

Code, Law 78/2000 on the prevention, identification and sanctioning of corruption, Law 656/2000 on the prevention and

sanctioning of money laundering, Law 302/2004 on international judicial cooperation in criminal matters).The presentation

also dealt with the practicalities of applying the legislative framework, including 13 criminal investigations opened for

cases of potential fraud, one of which was finalised with a 3-year prison sentence. It is important to note that 7 cases

involved the criminal investigation of heads of businesses, as defined by the Convention. The conclusions drawn were as follows: Romanian legislation incriminates illicit conduct in managing European

funds as required by PFI legislation; provides for proportional, dissuasive penalties; allows for criminal prosecution of heads of

businesses; recognizes the principle of non bis in idem, and jurisdiction based on the principles of territoriality and active and

passive personality. Regarding the criminal liability of legal persons, the Romanian Government has approved, on 6 and 29

September respectively, draft laws amending the Criminal Code and the Criminal Procedure Code, both of which are

presently undergoing Parliamentary debate. During the second part of the seminar, the representatives of participating countries were divided into several

workgroups. Within these, debates focused on single specific problems regarding the transposition of PFI legislation into

national law. The group comprising the Romanian delegation also included representatives of Bulgaria and Latvia, and dis-

cussed the issues surrounding the manner in which each country has sought to incriminate corruption offences.


II.3.5. AFIS - THE ANTI-FRAUD INFORMATION SYSTEM

AFIS screenshots

The E ur o p e an C o mmis s i o n's A nt i-F r aud

Information System - AFIS is the main electronic means

used for the exchange of information between OLAF and its

partners involved in the fight against fraud and the protection

of the financial interests of the European Union.

AFIS software is made up of several operational modules structured within a framework called

"Operations Manager" - OM. The modules are

specialised on certain sectors of activity where fraud is

frequent, such as cigarette smuggling, export

subsidies and VAT deductions. Some of these

databases are only accessible to Member States. Others are also available to candidate countries.

The Fight against Fraud Department acts as contact point for connections to AFIS. In this capacity, it is responsible with coordinating activities related to the administrative management of AFIS/CIS applications in Romania. DLAF is the only

authority who has the competence to grant permission for institutions to connect to AFIS modules.

Directorate C Data collection and analysis has drafted an AFIS connection policy, which states the modules accessible to Romanian institutions and establishes the standard means for connecting.

As Romania is granted access rights to more AFIS modules, the institutions with responsibilities in the field

can apply for connection according to the

standard established procedure. The National

Customs Authority has an important role in AFIS use, as the

majority of databases concern border control activities.

Connecting to various AFIS modules is a very welcome development for any institution. The system offers

instant, up-to-date, secure information at a minimum

maintenance cost.


CHAPTER III. THE EUROPEAN COMMISSION

COMPREHENSIVE MONITORING REPORT

A comparative analysis between the 2004 Country Report and the 2005 Comprehensive Monitoring Report, issued by the European Commission, highlights the progress made by Romania in the field of protection of the European Union's financial interests. The Monitoring Report acknowledges the consolidation of both the legal and operational framework of the

Romanian Anti-Fraud Coordination Service.

In its 2004 Country Report, the European Commission drew attention to deficiencies related to anti-fraud legislation and investigations. With regard to the protection of the European Union's financial interests, the Commission recommended that Romania continue its efforts in order to: • develop effective mechanisms for the conduct of anti-fraud investigations and judicial follow-up; • develop both framework and implementing legislation in the field;

• further develop the National Anti-Fraud Strategy for the Protection of the European Union's Financial Interests ;

• conclude a new Administrative Cooperation Agreement with OLAF.

The 2005 Comprehensive Monitoring Report underlined the improvements of the legal framework in the field, namely: • the regulation of the control and recovery of improperly used EU and national co-financing funds; • the increase of powers regarding investigations;

• the development of intelligence activities;

• the conclusion of cooperation protocols with the National Anticorruption Prosecutor's Office and the Financial Guard;

• the adoption of the National Anti-Fraud Strategy for the Protection of the European Union's Financial Interests in Romania

The European Commission concluded that "cooperation with OLAF has become very satisfactory". 26 DLAF Annual Report 2005

ANNEX A. ACTIVITY OF CONTROL/ RESULTS /FOLLOW-UP

• 2005: 51 investigation files were opened, 43 finalised. • The total amount involved in the contracts investigated was approximatively 100 million euro.

STAGE I - RECEIVING INFORMATION.

Notifications

Ex officio 27

National

STAGE II - OPENING AN INVESTIGATION.

CASES OPENED

OLAF 7

Economic agents 2

Natural persons 2

institutions 13

2005 2004

0

30

7 34

20

3 10

40

8 60

PHARE ISPA SAPARD OTHER

STAGE III - INVESTIGATIONS

Irregularities Potential fraud Ineligible Total expenses files opened identified

PHARE 3 18 10 313 843 30 euro

ISPA 0 1 1 995 994 3 euro

SAPARD 2 3 1 016 341 euro 10 12,22 mld ROL

Leonardo da Vinci 0 4 65 964 4 euro

YOUTH 2 0 69 000 2 euro

LIFE 0 0 168 647 1 euro

OPERATIONAL SUPPORT: • Financial Guard: 3 joint controls, 2 finalised; • OLAF: provided technical assistance to DLAF in 4 cases;

• Police: DLAF facilitated the granting of technical assistance by OLAF in 2 cases at the request of IGPR.


STAGES IV AND V: INVESTIGATIONS' OUTCOME AND FOLLOW-UP DNA: •

•

•

21 control reports were sent by DLAF. 11 of these notifications led to the opening of 7 criminal files, the outcomes of which are as follows: • 1 case sent to court; • 2 files — criminal investigations dismissed; • 3 files — sent to ordinary prosecution offices; • 1 case is ongoing. 10 files are pending the start of criminal investigations.

45 40 35 30 25 20 15

43

Cases finalised Control reports utilised by judicial bodies

IMPLEMENTING AGENCIES: 10

14

Control reports utilised by administrative

• 25 files were sent by DLAF to 12 implementing agencies. • Of these, 9 have already produced results:

The Ministry for European Integration • 4 contracts have been terminated; • In 2 cases damages have been recovered;

5 0

7

2 00 4

1

11 9

2 00 5

bodies

• In 2 further cases recovery procedures were

initiated.

Sapard Agency initiated recovery procedures for 1 case.

OLAF •

21 files sent by DLAF for information.


ANNEX B. TRAINING ACTIVITIES

1. DLAF organised 3 seminars in Bucharest:

1. Between 7 February - 4 March, together with the European Anti-Fraud Office and Eurocustoms, on the topic of "Detection of fraud in specific customs regimes". The activity consisted of 7 modules, with participants

from Romania, Cyprus, Slovenia and Hungary, as well as representatives from OLAF and Eurocustoms.

2. Between 10 - 13 May, together with OLAF and Eurocustoms, on the topic of „Common Agricultural Policy Fraud Analysis", with delegates participating from the National Customs Authority, SAPARD Agency and the

Payment and Intervention Agency for Agriculture, Food Industry and Rural Development ;

3. Between 23 - 24 May, together with OLAF, on the topic of „Irregularity Reporting". The seminar was attended by 30 representatives of Romanian institutions with competencies in the field (National Customs Au-

thority, Payment and Intervention Agency for agriculture, food industry and rural development, SAPARD Agency, National

Agency for Fiscal Administration; Management Authority for Community Support Framework; Romanian National Company of

Motorways and National Roads Paying Agency - ISPA; Romanian Court of Accounts; National Railways Company CFR SA

Paying Agency - ISPA; Management Authority for Cohesion Fund; the National Fund; the General Inspectorate of the Roma-

nian Police; Ministry of European Integration; Central Financing and Contracting Unit for PHARE; National Anti-Corruption

Prosecutor's Office; National Agency for Community Programmes in the Field of Education and Vocational Training and DLAF)

as well as representatives of counterpart institutions from Slovakia and Estonia. There were approximately 100 participants

in total.

2. Romanian delegations attended 10 seminars in EU Member States:

1. 10 - 14 January, a seminar on the topic „Investigation Techniques and Procedures", organised in Budapest; the Romanian delegation included representatives of DLAF, Sapard Agency; National Anticorruption Prosecutor's Office; Financial Guard; General Inspectorate of the Romanian Police; National Customs Authority.

2. 11 - 15 April, in Tallinn, a seminar on „Anti-Fraud in Cohesion and Structural Funds". The Ro-

manian delegation was made up of representatives from DLAF; the National Anticorruption Prosecutor's Office, Ministry of

Economy and Commerce; Ministry of Environment and Water Management; Ministry of Labour, Social Solidarity and Family;

Ministry of Transport, Construction and Tourism; Ministry of Agriculture, Forests and Rural Development and from the Min-

istry of Public Finances.

3. 25 - 29 April, in Bratislava, a seminar on „Anti-Fraud in Agricultural Funds" . The Romanian

delegation included representatives from the Anticorruption Prosecutor's Office, Ministry of European Integration,Ministry of Public Finances, Ministry of Agriculture, Forests and Rural Development and from DLAF.

4. 23 - 26 May, in Brussels, a seminar on "Relations with the Media" . The seminar was at-

tended by two representatives of DLAF.

5. 30 May - 2 June, in Riga, „Investigators workshops", activity attended by representatives from

the National Anticorruption Prosecutor's Office; Financial Guard; General Inspectorate of the Romanian Police, National Rail-

ways Company CFR SA, Sapard Agency and from DLAF .

6. 21 - 22 June, in Brussels, „AFCOS ad-hoc coordination meeting ", attended by a Romanian dele-

gation led by the Head of DLAF.


7. 23 - 24 June, in Brussels, „AFCOS roundtable", attended by a DLAF delegation.

8. 20 - 22 septembrie, in Ljubliana, seminar on „Economic crimes and money laundering", where

Romania was represented by members of the National Anticorruption Prosecutor's Office, National Office for Prevention and Combat of Money Laundering and of DLAF.

9. 10 - 21 October, „Training Internship in OLAF" organized in Brusells, attended by the DLAF

training coordinator.

10. 10 November, in Brussels, seminar on the implementation of the „PFI Convetion". The Romanian

delegation was made up of representatives from the National Anticorruption Department, Ministry of Justice, Prosecutor's

Office attached to the High Court of Cassation and Justice and of DLAF.

3. DLAF delegations attended 7 meetings/seminars at the invitation of institutions, workgroups, consultative committees of the European Commission, Member States or national institutions involved in the protection of the

Communities' financial interests or Member States' institutions:

1. 11 - 12 May, in Rome, seminar on "Crime in agriculture: analysis of methodologies of investigation in the fight against fraud", organised on the basis of Programme AGIS 2003 - 2007 „EU - Judicial and investigative cooperation in the field of criminal law". The seminar was attended by a DLAF delegation in response to an

invitation issued by the Carabinieri for Agricultural Policy Command in Italy.

2. 31 May - 1 June and 25 - 26 October , in Brussels, meetings of the Anti-Fraud Coordination Com- mittee (COCOLAF).

3. 1 June - 2 June and 15 November, in Brussels, meeting of the workgroup on „Irregularities and mutual assistance — agricultural products".

4. 19 - 21 October, in Athens, international seminar on „Inspectors-Controllers Continuous Training Workshop".

5. 29 - 30 September, first inter-institutional meeting of the Legislation and Anti-Corruption Work

30 DLAF Raport anual 2005

ANNEX C. THE EUROPEAN COMMISSION'S COMPREHENSIVE

MONITORING REPORT FOR 2005

As far as the protection of EU financial interests is concerned, the national anti-fraud strategy and action plan, which include the protection of EU financial interests will need to be fully implemented. In terms of administrative capacity,

three texts were recently adopted on the organisation and functioning of a dedicated department attached to the Prime Min-

ister as contact institution with the EU anti-fraud agency OLAF; the regulation of the control and recovery of improperly used

EU and national co-financing funds; and implementing regulations. The powers of the anti-fraud co-ordination service

regarding investigations have been increased and now it is allowed to develop intelligence activities. An administrative coop-

eration agreement was signed with OLAF and became operational in October 2004; within Romania, the anti-fraud co-

ordination service has concluded Protocols with the National Anti-Corruption Prosecutor's Office and with the Financial

Guard. The Fight Against Fraud Department is now focussing on investigations of fraud cases regarding EU funds. Co-

operation with OLAF has become very satisfactory.

Conclusion Romania must increase its efforts in the field of financial control. The overall operational capacity should be consid-

erably enhanced to ensure sound and efficient management of Community funds. The development and harmonisation of

these public systems and of the external audit system must be completed. Romania needs to speed up accreditation for the

Phare- and ISPA-related Extended Decentralised Implementation System as a matter of urgency by significantly increasing

management and control capacity. Substantial efforts are needed to guarantee the protection of EU financial interests and to

significantly increase management and control capacity. Whilst progress has been made, co-ordination and legislation

should be improved, with priority given to effective administrative anti-fraud investigations and judicial follow-up of anti-

fraud investigations. The role and competencies of the anti-fraud co-ordination service within the national institutional

framework could be further developed and its independence should be guaranteed.

(THE EUROPEAN COMMISSION'S COMPREHENSIVE MONITORING REPORT FOR 2005, pp. 76-77)

DLAF Raport anual 2005 31

ANNEX D. THE ACTION PLAN ATTACHED TO THE NATIONAL

STRATEGY FOR THE FIGHT AGAINST FRAUD Preventing fraud against Community funding through communication and public rela-

tions Objectives Enhancing the efficiency of the

cooperation related to the communication between the institu-

tions with attributions in the area of Community

funding and in the same time in between these

institutions and the beneficiaries

of European Un- ion funding, Euro- pean Union's institutions, embassies of the member states and the civil society

Increasing the degree of information of the public opinion in

order to prevent fraud

Measures

Naming the persons responsible for communication in order for DLAF to form a working group to realize its attributions of coordinating the com-

munication in the fight against fraud

and also to adopt a mutual method-

ology regarding the monitoring, the evaluation and the presentation of the public reactions to the measures taken to prevent the fraud Concluding the cooperation agreements with regards to communication, with the institutions involved in protecting the financial interests of the European Union in Romania The coordination of communication in between the national institutions with attributions in the area of Commu- nity funding and with the international specific institutions Elaborating every three months a summary of the actions and measures taken at the national level, after

monitoring the activity of the institutions with attributions in protecting

the financial interests of the Euro- pean Communities in Romania

Deadline

August 2005 August 2005 permanent

September 2005 and every three months after this date

Responsible in-

stitutions

DLAF The institutions with attributions in

managing the non- reimbursable financial assistance of Community funding and in the

control of its usage DLAF Institutions involved in protecting the financial

interests of the European Union in Romania DLAF

DLAF

Evaluating the degree of accomplishment of the measure Constituting the working group Concluded cooperation agreements

Coordination as- sured Summary of actions and measures realized

Organizing every four months a December 2006 DLAF Seminars, sessions seminar, a session of communication of communication and information, a reunion, as well as and information,

consultations with the mass media reunions

organized representatives regarding the granting procedures of community funding,

possible risks and irregularities, various organisms' attributions in the area

Increasing the Elaborating promotional materials October 2005 DLAF Promotional mate- degree of trans- which will contain information about rials distributed parency in the the financial support granted to Ro- allocation of non- mania by the European Union reimbursable European funding

Public financial control Improvement of Drawing up a Code of internal control November 2005 MFP Code of internal the internal public control approved financial control in the view of mak- ing efficient the fraud and irregularities

identification activities

Drawing up of general control and July 2005 MFP The general con- financial management standards by trol and financial the Ministry of Public Finances management

standards approved through order of the minister of public finances

Drawing up of general control and July 2005 MFP The general con- financial management standards by trol and financial the Ministry of Public Finances management

standards approved through order of the minister of public

Setting up the necessary framework November 2005 Implementing the necessary on the organization of control activi- entities of the framework on the ties regarding the use and manage- projects financed organization of ment of Pre-accession Community by the communi- control activities funds ties funds regarding the use

and management of Pre-accession Community funds approved by the

manager of each implementing

Establishing the bodies responsible September 2005 MFP Legal act project with sample verification of the Cohe- open to public sion Fund debate

Legal act project approved by the

Romanian Gov-

Drawing up a General Manual of Audit November 2005 MFP The General Man- of Performance ual of Audit of

Performance ap-

Drawing up a Guide of Audit of Per- November 2005 MFP The Guide of Audit formance on European Programmes of Performance on

European Pro- grammes ap-

Strengthening the Creating of the necessary legal January 2006 MFP Legal act project managerial re- framework on drawing up accurate open to public sponsibility of the contracts containing performance debate EU financing pro- indicators for management liability of grams imple- heads of implementation agencies of Legal act project

menting agencies European financing programmes approved by the heads Romanian Gov-

Development of Training of the staff responsible with December 2006 Implementing Drafted special- the professional control activities on the use and man- entities of the ized training plans competences of agement of Pre-accession Community projects financed the staff involved funds by the communi- Organized training in activities re-

Training of the implementation agen- January 2006 MFP Drafted special- lated to the finan-

cies staff in order to settle the role ized training plans cial control

and duties of management control within internal control in comparison Organized training with the role and duties of internal sessions audit Training of the staff of the associated December 2006 CCR Drafted special- body established near the Court of ized training plans Accounts

Organized training sessions

Development and Setting up working procedures on October 2005 CCR working proce- implementation of external audit performing related to dures on external the external audit ISPA funds, and shall improve the audit performing

standards accord- actual working procedures on the related to ISPA

ing to the interna- audit related to SAPARD funds funds, and shall

tional standards improve the ac- in this field tual working pro-

cedures on the

audit related to SAPARD funds approved

Fiscal control

Development of Elaborating of the legal framework December 2005 A.N.A.F. Legal act project an adequate ca- for the activity of fiscal control and open to public pacity for the fight against tax evasion debate coordination and ensuring the cal- Legal act project

culation, gather- approved by the ing, payment and Romanian Gov- control of the own ernment resources as well as for reporting to the European

Establishing of the structures re- August M.A.P.D.R., M.F.P. Legal act project Creation of a legal sponsible for the calculation, collec- 2005 open to public framework for tion and control of production duties debate gathering and on sugar and isoglucose quotas control of the Legal act project

production duties approved by the which shall be Romanian Gov- perceived on the

Setting up of the special procedures October M.A.P.D.R., M.F.P. special proce- sugar and isoglu-

for the collection of production du- 2005 dures approved cose quotas

ties on sugar and isoglucose quotas for the collection of production du-

ties on sugar and

isoglucose quotas Elaboration of the Establishing of the standard format December 2005 A.N.A.F. Legal act project normative acts of the VAT recapitulative declaration open to public necessary to en- debate sure the conformity with the Legal act project

community regu- approved by the lations in the field Romanian Gov- of own resources

Setting up of the procedures and December 2005 A.N.A.F. Legal act project gathering and

rules for registration of Romanian open to public control

intra-Community operators that are debate VAT payers and of intra-Community transactions Legal act project

approved by the Romanian Gov-

Adopting of the Community regula- December 2005 A.N.A.F. Legal act project tions on setting up a VAT register of open to public Intra-Community operators debate


Romanian Gov-

Adopting of the Community regula- December A.N.A.F. Legal act project tions on establishing the VAT num- 2005 open to public b er debate


Romanian Gov-

Criminal investigation and prosecution Harmonization of Drafting the provisions of criminal sub- August 2005 MJ Legal project for the criminal pro- stantial and procedural law as regards amending the ceedings disposi- the criminal liability of the legal persons Criminal Code tions with the criminal legal Legal project for framework in the amending the field Criminal Proce-

dure Code Strengthening of Updating the cooperation agreements October 2005 OPCSB Number of the the administra- system concluded by the National Of- agreements tive capacity of fice for Preventing and Fighting against and the institutions Money Laundering (OPCSB) as regards

with preroga- the cooperation with the reporting enti- Reporting entities tives in the field ties of European Un- Nominating the ion financial in- reporting entities terests protection Permanent Participation of prosecutors and judges December 2006 CSM, INM, Number of train- grounding and dealing with crimes affecting European DLAF ing modules / training of the Communities' financial interests to topics / partici-

personnel in- training modules (courses, seminars, pants / per year volved in the symposia), for strengthening the imple- criminal prosecu- mentation capacity of the anti-fraud tion activity as legislation well as in the judgment activity of the in- fringements of the law

against the European Union 's financial interests

Financial recovery Improvement of Elaboration the proposals in order to October 2005 MFP Legal act project the legal frame- change the provisions of the GO no. open to public de- work in the re- 79/2003 and GD no. 1510/2003, so bate covery of com- that the evaluation of the prejudice be munity funds externalized to the implementing agen- Legal act project

cies in case o conflict of interests at approved by the this level Government

Elaboration the proposals in order to October 2005 MFP Legal act project change the provisions of the GO no. open to public 79/2003 and GD no. 1510/2003 with debate the purpose to concede to ANAF the exclusive competences concerning Legal act project

the enforcement proceedings for approved by the regulating the contestations and in- Government stitutions which shall calculate the interests and penalties applied after sending the payment notice or the execution title Elaboration the proposals in order to October 2005 MFP, ANAF Legal act project change the provisions of the GO no. open to public 79/2003, so that be covered the debate number of the personnel of ANAF needful in order to accomplish in the Legal act project

best way possible the attributions approved by the regarding the enforcement in com- Government munity funds cases Undertaken the necessary measures December MFP, Modification of in order to modify the financing con- 2005 the paying agen- financing contracts, so that their provision don't cies within PHARE, tracts contradict GO no. 79/2003 and GD ISPA and SAPARD no. 1510/2003 provisions programmes

Development of Providing the training of the person- December 2006 MFP, Elaboration the the compe- nel with attributions in the evaluation the paying agen- training plans tences for the of the prejudices cies within PHARE, personnel in- ISPA, SAPARD Number of train- volved in the and community ing modules/ evaluation of programmes subjects/ the prejudices participants/per caused by fraud year

Concluding a cooperation agreement September 2005 DLAF Cooperation with the Superior Council of Magis- agreement con- trates (CSM) for ensuring the train- cluded ing of magistrates in the field of community funds Elaboration the

training plans No. of training modules/

subjects/ participants/per

Providing the training of the judicial December 2006 AMCSC, MJ Elaboration the technical experts training plans

No. of training modules/

subjects/ participants/per year

Identifying the number of experts August MJ Identification the which shall benefit of training 2005 number of ex-

perts which shall

benefit of training Providing the training of the person- December 2006 MFP, Elaboration the nel with attributions in recovery in ANAF, training plans the field of own resources GF ,

ANV No. of training modules/ subjects/ participants/per year

Preparation of Carrying out an analyse in order to December MFP, Identification the the legal and identify the necessary legislative, 2005 ANAF, necessary meas- operational operational and training measures in GF , ures framework con- this field ANV cerning the recovery process in the field of own resources, after the

accession of Romania to

the European Union

Coordination of the anti-fraud fight and protection of the European Union's financial interest in Romania Improvement of Adopting internal procedures for December 2005 DLAF Internal proce- the anti-fraud assuring the best fulfilment of PNA dures specific to fight coordina- training coordinators' duties ANV the training coor- tion regarding IGPR dinators approved

the protection GF by the heads of of

European ONPCSB the responsible Union's financial CCR institutions interests in Ro- MFP mania MIE

SAPARD Agency CNADNR CNCFR

Development of Drafting the supplementary training April 2006 follow- DLAF, with the Approved supple- the professional program ing to be support of the mentary training competencies of amended consid- training coordina- program the Fight ering the progress tors from: Against Fraud of the MCP 2002 PNA Training com- Department's Program ANV pleted sessions personnel and IGPR the other insti- GF tutions person- ONPCSB nel involved in CCR the protection of MFP the European MIE Union financial SAPARD Agency interests in Ro- CNADNR mania CNCFR

ANAF Adopt the trainers' selection proce- September 2005 DLAF Selection procedures PNA dures for the

ANV trainers approved

IGPR by the heads of GF the responsible ONPCSB institutions CCR MFP

MIE SAPARD Agency CNADNR CNCFR ANAF

Identifying the necessary resources March 2006 DLAF Approved budget for the participation of the selected PNA for carrying on trainers to train the trainer courses ANV train the trainer

IGPR courses GF ONPCSB CCR

MFP

MIE SAPARD Agency CNADNR CNCFR ANAF

Development of Recruiting staff for carrying on in- August 2005 DLAF Selection of nec- the activity con- telligence activities essary staff

cerning gathering

the

an

d

Establishing an informatics system for data gathering regarding frauds

September 2005

DLAF

Operational informatics system

analysis of the relevant data for

and irregularities concerning the use of community funds

the European Developing an internal procedure as October 2005 DLAF Internal working

Union's financial regards receiving and sending infor- procedures ap-

interests protec- mation obtained on irregularities proved by the

tion, within the reporting basis, which will be col- head of DLAF

Fight Against lected to informatics data bases, as

Fraud Depart- regards this bases access and use

ment Drawing up risk analysis based on December 2005 DLAF Forwarding the the information regarding previous risk analyses and

detected irregularities and drawing the reports re- up

quarterly reports as regards the garding the re- situations when the measures for maining measures

eliminating irregularities or recover- to the head of ing the prejudice haven't been ful- DLAF filled by the implementation agencies

Improvement of Developing a help-desk function on March 2006 DLAF Designation, by the irregularities issues concerning irregularities re- the head of DLAF,

communication porting within DLAF of the personnel system having this com-

petency Clarifying the problems met by

the national insti-

tutions when ap-

plying the irregu-

larities communi-

cation procedures Concluding cooperation agreements December 2005 DLAF, Cooperation with the potential institutions, own- Romanian Infor- agreement pro- ers of information concerning Euro- mation Service, jects open to the pean Union's financial interests in IGPR, ANAF debate between Romania parties

Cooperation agreements signed by each parties

Amending the internal working pro- November 2005 Agencies for im- Approved internal cedures for assuring the informa- plementing the working proce- tion communication from the de- projects financed dures tecting services to that responsible under pre- for reporting irregularities and for accession funds assuring the monitoring the fulfilment of the necessary measures for each irregularity DGFNP connection to the Anti-Fraud December 2005 DGFNP Operational AFIS Information System (AFIS) of the terminal European Commission Connection of each implementing July 2006 Agencies for im- Operational AFIS agency to the Anti-Fraud Informa- plementing the terminals tion System (AFIS) of the European projects financed Commission under pre-

accession funds

development of Training the personnel involved in December 2006 Agencies for im- Drafted training the professional reporting irregularities activities plementing the plans competences of projects financed the personnel under pre- Organised train- involved in the accession funds, ing sessions reporting irregu- DGNFP and DLAF larities Setting up an Taking the necessary measures for October 2005 ANV Obtained access informational obtaining the access to AFIS mod- for the available system concern- ules available to a candidate coun- AFIS modules ing fraud cases try

Drawing up an AFIS connection October 2005 DLAF Approved AFIS and use policy connection and

use policy

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