The SafeNet Project

Strenghten Anti Fraud European

Network

Padua (IT)

February 7-9th 2017

This event is supported by the European Union Programme Hercule III (2014-2020).

This programme is implemented by the European Commission.

It was established to promote activities in the field of the protection of the financial interests of the European Union.

(for more information see http://ec.europa.eu/anti-fraud/policy/hercule_en)

MEETING DAY

“Overview of irregularities and fraud prevention,

administrative processes, cases of good practice”

National Paying Agency Lithuania

Relatore / SpeakerTautvydas Jakutis

Director of Legal Department

Padua (IT), February 7th 2017

That it reflects the author’s view and the European Commission is not responsible for the views displayed in the publications

and/or in conjunction with the activities for which the grant is used.

The information contained in this publication does not necessarily reflect the position or opinion of the European

Commission.

About us

and network opportunities

Presentation of each PAs sharing best practices and promoting

future staff exchanges

Presentation by each PA of :

•relevant elements of advanced/fraud prevention systems;•best practices, experiences, examples, study cases and innovative tools (not only about anti fraud systems);

•Proposals about staff exchanges with the aim of share know-how and experiences

AB

ST

RA

CT

BRIEFLY ABOUT THE NATIONAL PAYING AGENCY

•The National Paying Agency under the Ministry of

Agriculture (hereinafter – the Agency) was established

on 11 November 1999;

• Agency is the only accredited institution in Lithuania

managing the measures of support for agriculture,

rural development and fisheries;

• The Agency administers over 200 support measures

and activities;

• The Agency is a constantly improving organisation,

striving for innovation and challenges.

BRIEFLY ABOUT THE NATIONAL PAYING AGENCY

The main tasks of the Agency are as follows:

• To manage state and EU support for agriculture, rural development

and fisheries as well as ensure the control of their use;

• To implement agricultural, rural development and fisheries support

measures;

• To ensure the development of management system of EU support

for agriculture, rural development and fisheries;

• To participate in the implementation of an integrated management

and control system;

• To participate in the introduction and implementation of

management system of EU CAP measures;

• To prepare reports on absorbed EU funds and to submit these

reports to the EC and the Ministry of Agriculture.

BRIEFLY ABOUT THE NATIONAL PAYING AGENCY

Programmes managed by the Agency:

•Direct payments;

•Rural development measures;

•Fisheries sector measures;

•Foreign trade mechanisms;

•National support measures;

•Beekeeping sector support;

•Support schemes for fruit and vegetable growers groups;

•Programme promoting fruit consumption among children in educational institutions in the

school years 2014–2017.

THE NATIONAL PAYING AGENCY UNDER THE MINISTRY OF AGRICULTURE OF THE REPUBLIC OF LITHUANIA

SUSPICION OF IRREGULARITIES

• Information from other institutions (MOA, EC, FCIS, ECA, other law enforcement authorities);

• Evaluation of application, project administration, control of documentation;

• Ex-post control, on-the-spot check;• Information from media;• Complaints, “Trust line“;• Project risk analysis, systemic risk analysis;• Other methods.

INVESTIGATION OF IRREGULARITIES

20 working days20 working days

Analysis of Analysis of documentsdocuments

Check on the Check on the spotspot

Addressing the Addressing the beneficiary, beneficiary, providing providing

explanationsexplanations

The use of The use of information information systems, systems, registersregisters

Price evaluation Price evaluation (experts)(experts)

Conclusions of Conclusions of PA public PA public

procurement procurement unitunit

Artificial Artificial conditionsconditions

Other actionsOther actions

FRAUD PREVENTION

Internal proceduresInternal procedures

EU legislationEU legislation

LT legislationLT legislation

CoCo--operation with Law operation with Law Enforcement AuthorityEnforcement Authority

Training of employeesTraining of employees

Sharing of good experiencesSharing of good experiences

FRAUD PREVENTION

• External information systems which help to detect fraud (Creditinfo, VĮ„Registrų centras“, etc.);

• Internal systems in which employees enter information about risky projects, irregularities‘ investigations, information received from the law enforcement authority, other institutions;

• Methodology for identifying artificially created conditions;

• Risky suppliers according to procedures are entered into the internal system in order to prevent fraud/artificially inflated prices;

• Internal procedures for detecting fraud – “red flags”, systemic risk analysis, projects‘ risk analysis to prevent fraud, improving legislation, etc.

INDICATORS FOR FRAUD –“RED FLAGS “

•Identical contents/errors (errors in props, wrong brand or model names, etc.);

•The information in the external registers differs from the information given in the application/ other documents;•Falsification of the same person‘s signature (different size, form);

•Relation between beneficiary and companies which make public procurement offers;

•Beneficiary declares the investment as a new one but it turns out to be used/ second hand, etc.;•Beneficiary asks for aid for the land area which he does not maintain

/farm;

•Artificial conditions;•Other indicators (manipulated offers, pricing anomalies, etc.).

QUESTIONNAIRE OF SUSPECTED/ ESTABLISHED FRAUD

LDLD

FCIS, other FCIS, other llaw aw

enforcement enforcement aauthorituthoritiesies

Investigation, Investigation, information information trantranssfer tofer to

Indicators Yes No

Identical contents/errors

Information in the external registers differs from t he information given in the application/other documents

Loan agreement with seeming/not existing natural/le gal person

False signatures

Relation between beneficiary and bidders in public procurement

Repetitive errors in public procurement proposals

Anomalies in relation to the identity of bidder

After the beneficiary pays for the acquired investm ent, the bidders return the money back to him

Beneficiary asks for aid for the land area which doe s not belong to him and/or the beneficiary is not engaged in agr icultural activities

Beneficiary asks for aid for the land area which he does not maintain/farm

Beneficiary declares the investment as a new one bu t it turns out to be used/second hand, etc.

Beneficiary gives false information/does not mentio n important information which could have influence on decision- making

Artificial conditions

CASES. LEG-PULL

Payment Payment request for request for EUR EUR 1 7001 700

NPANPA

20142014--0707--1010June 2012, June 2012,

Google Street Google Street ViewView

20142014--0707--0101

CASES. ARTIFICIAL CONDITIONS

BeneficiaryBeneficiary::Company Company ““Biofuel1Biofuel1””

Owner: JohnOwner: John

Location: the same Location: the same buildingbuilding

Activity: Activity: biofuel pelletsbiofuel pellets

NPA aid: NPA aid: EUR 500 000EUR 500 000

The agreement was The agreement was cancelled, cancelled,

the money is the money is recoveredrecovered

BeneficiaryBeneficiary::CompanyCompany““BiofuelBiofuel 22””

Owner: JohnOwner: John

Location: the same Location: the same buildingbuilding

Activity: Activity: biofuel pelletsbiofuel pellets

NPA aid: NPA aid: EUR 500 000EUR 500 000

The agreement was The agreement was cancelled, the cancelled, the

money is recoveredmoney is recovered

CASES. OLD INVESTMENTS

• 4 companies• Payment request for EUR 1 300 000 for each

project• „Modernisation of already constructed

greenhouses“• On-the-spot check: rusty (old) parts, no

activity• No payments made, prevention

CASES. ARTIFICIALLY INFLATED PRICES

•• NonNon--profit investments in forestsprofit investments in forests•• Payment request for EUR105 000Payment request for EUR105 000•• OOnn--thethe--spotspot ccheck heck •• Expertise of prices (experts evaluated Expertise of prices (experts evaluated an an investment investment

for EUR 56 000, beneficiary for EUR 56 000, beneficiary for the same investment for the same investment declared EUR 105 000)declared EUR 105 000)

•• No paymentNo payment was made for the excess amount was made for the excess amount (EUR (EUR 49 000) 49 000)

CASES. FICTICIOUS OFFER

Signs as Signs as Consultant 1Consultant 1

Signs as Signs as Consultant 3Consultant 3

Signs as Signs as Consultant 2Consultant 2

Consultant 1Consultant 1

STATISTICS

• Suspected fraud: Lithuania until 2017-01-13 transferred to OLAF 37 cases , the total amount –EUR 9 433 789,93 (LT and EU part)

TRAININGS

• Trainings for employees about existing procedures, cases, relevant questions related to irregularities and fraud are organised at the Agency;

• Experts from other institutions (law enforcement authority, external data information centres, etc.) are invited to give presentations, answer questions;

• Participation of the Agency representatives in study visits, relevant conferences, seminars, etc.

We are willing to share our best practices withthe other PAs as well as to learn from them.

THANK YOU FOR YOUR ATTENTIONTHANK YOU FOR YOUR ATTENTION

National Paying Agency under the Ministry of Agricu ltureBlindBlind žžiiųų SStr. 17, 08111 Vilnius, Lithuania, tr. 17, 08111 Vilnius, Lithuania, teltel . (. (+ 370 + 370 5) 252 5) 252

6999, 6999, ffax. ax. (+370 5) (+370 5) 252 6945, 252 6945, www.nma.ltwww.nma.lt