International

Correspondence Dan Alexe // OLAF: fraudulent use of EU funds in Danube Delta development projects

The European Anti-Fraud Office (OLAF) showed it could play a key role in European mechanisms by uncovering a major fraud case in Romania, revealing that EU funds intended for development projects in the Danube Delta were misused through fraudulent schemes. The OLAF investigation carried out in close cooperation with the European Public Prosecutor’s Office, led by Romanian Codruța Kovesi, revealed a significant misuse of funds in over 30 EU-funded projects.

The Danube Delta, a UNESCO World Heritage Site, is one of the most important ecological regions in Europe. The funds allocated to this region through the European Regional Development Fund (ERDF) are vital for its preservation.

At the request of the European Public Prosecutor’s Office, OLAF carried out an investigative analysis of allegations of mismanagement of EU funds.

One of the projects under OLAF’s investigation in the Danube Delta was co-financed under the 2014-2020 Regional Operational Programme. The project aimed to expand the activities of a transport company to include construction services, based on EU and national contributions that were to cover 70.95% of the eligible costs.

OLAF revealed that the company’s legal representative submitted falsified documents, including falsified bank statements, to misrepresent the project’s financial capacity, which led to the illegal winning of the EU-funded tender.

Such fraudulent actions led to the misappropriation of approximately EUR 593,000 of EU funds and EUR 104,000 of Romania’s national budget.

In total, the EU funds dedicated to the Delta reached one billion euros – received from Brussels through the Danube Delta Integrated Territorial Investment (ITI DD) mechanism, with the largest budget of all ITIs in Europe.

In July 2024, OLAF concluded its investigation and issued a recommendation to the European Commission to recover EUR 593,000 as a result of the misappropriation of EU funds. The European Public Prosecutor’s Office has indicted an individual and a company involved in the investigation. If found guilty, the individual faces a prison sentence of three to ten and a half years. The company, in turn, could face fines of up to EUR 420,000 and risk seizure.

OLAF's mission is to detect, investigate and stop fraud involving EU funds.

OLAF fulfils its mission by:

• conducting independent investigations into fraud and corruption involving EU funds, to ensure that all EU taxpayers' money goes to projects that can create jobs and growth in Europe;

• contributing to strengthening citizens' trust in the EU institutions by investigating serious misconduct by EU staff and members of the EU institutions;

• developing a robust EU anti-fraud policy;

In its independent investigative function, OLAF can investigate matters relating to fraud, corruption and other crimes affecting the EU's financial interests in relation to;

• all EU spending: the main spending categories are structural funds, agricultural policy and rural development funds, direct expenditure and external aid;

• some areas of EU revenue, mainly customs duties;

• suspicions of serious misconduct by EU staff and members of EU institutions.

Once OLAF has completed its investigation, it is up to the competent national and EU authorities to examine and decide on the follow-up to OLAF's recommendations, which is why many frauds, especially in countries such as eastern ones such as Hungary, Bulgaria or Romania, often go unpunished.

Bogdan Nigai

Bogdan Nigai

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