Control, audit and investigation of fraud with European Structural and Investment Funds – Dichotomy between fraud prevention and swift execution of European funds

Nuno Almeida (Master’s in EU Law at the University of Minho)

The European Structural and Investment Funds (ESIF) made available by the European Union will be the highest ever, a fact that will raise new challenges regarding their control and effectiveness. [i] The European Court of Auditors has already expressed its concern about the inefficiency shown by the management authorities of operational programs in the control of the application of European funds, a fact duly expressed in its Report No. 6/2019, prepared on the basis of the audit of the activity of the managing authorities of Member States at the different procedural stages. Thus, in terms of fraud prevention, detection and combat, there was a small number of identified cases in the 2007-2013 programming period, with fraud detection rates between 0% and 2.1%[ii]. According to the European Court of Auditors, this figure is not representative of the level of fraud identified, as several cases of fraud were detected but not communicated to the competent authorities. As a result, it will be necessary to assess the current capacity of national institutions with control and auditing functions, especially regarding their real effectiveness in detecting irregular or illicit situations, since, as it should be recalled, approximately 80% of European funds are executed by Member States. Furthermore, given the exceptional need for swift execution of European funds, it is important to consider whether the pressure that will be placed on the authorities involved in this plan will inevitably lead to a concentration of all means in the execution area. In fact, it is expected that there will be predetermined levels or objectives for the execution of operational programs, a fundamental factor for the evaluation of the activity of these entities, which may weaken the identification of irregular or illicit situations, that is, a prevalence of execution in relation to prevention, a dichotomy that will require measures from the responsible entities if proven true.

On the national level, on May 21, 2021, Law No. 30/2021 approved special public procurement measures for projects financed or co-financed by European funds, a legislative change arisen from a need for speed in execution and application of European funds made available by the European Union, by simplifying public procurement procedures, as well as from the need to reinforce the fundamental principle of transparency, achieved through the implementation of mandatory electronic disclosure procedures and the reinforcement of the Court of Auditors’ intervention in the oversight of procedures.

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Editorial of October 2021

By Alessandra Silveira (Editor) and Tiago Sérgio Cabral (Managing Editor)

Strange times and the need to remember the obvious…on the recent decision of the Polish Constitutional Court

The recent judgment of the Polish Constitutional Court calls into question one of the base pillars of the European legal order – namely the primacy of EU law over national law. As a result, it is likely that the European Commission will bring infringement proceedings against Poland. If the CJEU finds that Poland has not complied with its judgment, it may impose a financial penalty.

However, there is a possibility for de-escalation which would allow for this imbroglio to be first be resolved politically. This was the case regarding the German Constitutional Court’s astonishing decision of 5 May 2020, concerning the ECB’s bond buying programme for purchasing Member States’ public debt on the secondary market. The crux of the matter was that the German Constitutional Court’s judgment followed a judgment by CJEU which settled the issue of the validity of the ECB’s bond buying programme. The German Constitutional Court in its decision disregarded the decision of the competent court under Article 19(1) TEU, according to which the CJEU ensures that the law is observed in the interpretation and application of EU treaties. It did not take long for the so-called “illiberal democracies” in Europe to welcome the ruling of the German Constitutional Court, using it to subvert judicial independence and freedom of expression as recognised by the EU. Fortunately, the good sense of the German governmental and parliamentary authorities under Angela Merkel’s leadership prevailed – and the European institutions did not have to act accordingly (at least immediately). It is important to note that in a second decision regarding the ECB’s bond buying programme also appeared to walk back from the edge of the cliff.

In any case, such episodes recommend revisiting the elementary notions of European integration law, because there are occasions when certain civilisational achievements still need to be defended, and the reason behind some choices needs to be recalled. What functional reason justifies the primacy of Union law over national law? Does Union law take precedence over national constitutional norms (or, on the contrary, can it be declared unconstitutional or set aside on the grounds of alleged unconstitutionality)?

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Summaries of judgments: Commission v Poland (Régime disciplinaire des juges) | Wabe

Summaries of judgments made in collaboration with the Portuguese judge and référendaire of the CJEU (Nuno Piçarra and Sophie Perez)

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Judgment of the Court (Grand Chamber) of 15 July 2021, European Commission v Republic of Poland, Case C-791/19, EU:C:2021:596

Failure of a Member State to fulfil obligations – Disciplinary regime applicable to judges – Rule of law – Independence of judges – Effective legal protection in the fields covered by Union law – Second subparagraph of Article 19(1) TEU – Article 47 of the Charter of Fundamental Rights of the European Union – Disciplinary offences resulting from the content of judicial decisions – Independent disciplinary courts or tribunals established by law – Respect for reasonable time and the rights of the defence in disciplinary proceedings – Article 267 TFEU – Restriction of the right of national courts to submit requests for a preliminary ruling to the Court of Justice and of their obligation to do so

Facts

In 2017, Poland adopted a new disciplinary regime concerning judges of the Sąd Najwyższy (Supreme Court) and judges of the ordinary courts. In the context of that legislative reform, a new chamber, the Izba Dyscyplinarna (‘the Disciplinary Chamber’), was established within the Supreme Court and was made responsible, inter alia, for hearing disciplinary cases relating to judges of the Supreme Court and, on appeal, those relating to judges of the ordinary courts.

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