The European Parliament wants to tackle fraud more rigorously, also in NGOs

“Almost EUR 2 billion in European Community funds are spent incorrectly and even fraudulently,” states MEP Johan Van Overtveldt. “We must reinforce monitoring of this to the greatest extent possible.” At the same time, the European Parliament is calling for more oversight and transparency regarding the funds flowing to NGOs.

The number of cases of fraud and irregularities involving European funds rose to 12,455 in 2022, an increase of 7% compared to the previous year. Together, they represent an amount of no less than EUR 1.77 billion, according to the annual report of the European Commission. This concerns various infringements, such as VAT and excise duty fraud or customs duty evasion. But also in European support to agriculture, for example, we see an increase in the number of fraud cases, from around 100 in 2021 to almost 300 in 2022.

EUR 2 billion of Community funds

Johan Van Overtveldt, MEP and Chairman of the Budget Committee: “That concerns almost EUR 2 billion of European Community funds, taxpayers’ money that is not spent correctly. It is important that we reinforce monitoring of this to the greatest extent possible.” The European Court of Auditors previously also expressed concerns about the quality of European expenditure. Out of a total of EUR 196 billion, it contained 4.2% errors last year, a percentage that is increasing every year and is now at the highest level since 2014.

The problem threatens to get worse

“I have been raising this issue for some time, but I notice that there is insufficient will in many Member States to take stricter action. Moreover, I fear that the problem will only get worse, because there are new financial structures - such as the coronavirus recovery fund - that are outside the regular budget, and over which even less control is thus possible. By the way, the same applies to the funds that - rightly - go to Ukraine. There is insufficient scrutiny over where exactly that money ends up.”

The European Parliament is now calling for better cooperation between the European institutions and the Member States to tackle fraud proactively. According to Van Overtveldt, that is the right signal, although success will depend on the concrete actions that are taken.

Obscure associations

At the same time, the European Parliament is also requesting stricter oversight and more transparency of the European funds flowing to NGOs. Van Overtveldt: “European subsidies to NGOs are estimated at almost EUR 4 billion on an annual basis. However, we note that there are still many gaps in monitoring and checking them. Here, too, it is necessary to identify where the money ultimately ends up to avoid being confronted with obscure associations once again, such as with Qatargate. Just as it cannot be the intention that the European Union should subsidise NGOs that undermine its own economic and industrial policies, or that can be linked to criminal or violent activities.”