On the protection of the European Union’s financial interests – combating fraud – annual report 2024

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the protection of the European Union’s financial interests – combating fraud – annual report 2024

(2025/2238(INI))

The European Parliament,

– having regard to Articles 310(6) and 325(5) of the Treaty on the Functioning of the European Union (TFEU),

– having regard to the Commission report of 25 July 2025 entitled ‘36th Annual Report on the protection of the European Union’s financial interests and the fight against fraud – 2024’ (COM(2025)0426) (2024 PIF Report),

– having regard to the 2024 annual report of the European Anti-Fraud Office (OLAF)1 and to the 2024 activity report of the Supervisory Committee of OLAF2,

– having regard to the 2024 annual report of the European Public Prosecutor’s Office (EPPO), published on 3 March 2025,

– having regard to Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council of 16 December 2020 on a general regime of conditionality for the protection of the Union budget3 (the Conditionality Regulation),

– having regard to Regulation (EU, Euratom) 2024/2509 of the European Parliament and of the Council of 23 September 2024 on the financial rules applicable to the general budget of the Union4 (the Financial Regulation),

– having regard to Regulation (EU) 2024/16245, Regulation (EU) 2024/16206 and Directive (EU) 2024/16407, all of the European Parliament and of the Council, all adopted on 31 May 2024 and all concerning the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, including through the establishment of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism,

– having regard to Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law8 (the Whistleblower Directive) and to the Commission report of 3 July 2024 on its implementation and application (COM(2024)0269),

– having regard to Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law9 (the PIF Directive),

– having regard to the Commission report of 16 September 2022 entitled ‘Second report on the implementation of Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union’s financial interests by means of criminal law’ (COM(2022)0466),

– having regard to the joint Europol-OLAF report of 6 June 2023 entitled ‘Assessing the Threats to the NextGenerationEU (NGEU) Fund’,

– having regard to the annual reports of the European Court of Auditors (ECA) on the implementation of the Union budget and the activities financed by the 9th, 10th and 11th European Development Funds (EDFs) for the financial year 202410,

– having regard to ECA special report 06/2023 of 13 March 2023 entitled ‘Conflict of interest in EU cohesion and agricultural spending – Framework in place but gaps in transparency and detection measures’11,

– having regard to ECA special report 03/2024 of 22 February 2024 entitled ‘The rule of law in the EU – An improved framework to protect the EU’s financial interests, but risks remain’12,

– having regard to ECA Review 02/2025 of 6 May2025 entitled ‘Performance-orientation, accountability and transparency – lessons to be learned from the weaknesses of the RRF’13,

– having regard to ECA special report 08/2025 of 24 March 2025 entitled ‘Value Added Tax fraud on imports – The EU’s financial interests are insufficiently protected under simplified import customs procedures’14 and to the Commission report entitled ‘VAT gap in the EU – 2024 report’15,

– having regard to ECA special report 09/2025 of 10 March 2025 entitled ‘Systems for ensuring compliance of RRF spending with public procurement and state aid rules – Improving but still insufficient’ 16,

– having regard to ECA special report 13/2025 of 18 June 2025 entitled ‘EU humanitarian aid under remote management – Can save lives, but there are weaknesses in the approach’17,

– having regard to ECA special report 26/2025 of 15 December 2025 entitled ‘EU bodies fighting fraud – Clear mandates but exchange of information and Commission oversight remain insufficient’18,

– having regard to Special Eurobarometer 548 entitled ‘Citizens’ attitudes towards corruption in the EU in 2024’19,

– having regard to its resolution of 6 May 2025 on the protection of the European Union’s financial interests – combating fraud – annual report 202320,

– having regard to Rule 55 of its Rules of Procedure,

– having regard to the report of the Committee on Budgetary Control (A10-0000/2025),

A. whereas every year, the Commission submits a report, known as the PIF Report, to Parliament and the Council, drafted in cooperation with the Member States on the measures taken for the implementation of Article 325(5) TFEU;

B. whereas the sound management of the EU’s resources, both for expenditure and for revenue, and the protection of the EU’s financial interests, should form key components of any EU policy, so as to foster their efficient implementation, ensure that taxpayers’ money is used properly and effectively and increase citizens’ confidence in the European institutions;

C. whereas the annual PIF Report is mainly based on information provided by the Member States, via the Irregularity Management System (IMS), and by the Commission, via its accounting system (ABAC), which includes data on irregularities and on fraud detection, which is analysed to identify areas deemed most exposed;

D. whereas the description and analysis in the PIF Report of the measures adopted to combat fraud and irregularities should make it possible to identify and implement more targeted actions at both EU and national level;

E. whereas the protection of the EU’s financial interests must be supported by an analysis based on reliable data;

F. whereas, considering the disparities between the Member States, in particular as regards the detection and reporting of irregularities, the diversity of administrative systems in the Member States hinders the implementation of the objective of a common level of national management, control and reporting systems in the Union; whereas, if the diversity of administrative systems in the Member States is not addressed in a consistent manner by enhancing interoperability and digitalisation, it risks undermining the reliability, comparability and usefulness of data and reports; whereas, to this end, it seems necessary that genuine common guidelines worthy of the name and robust standard procedures be implemented effectively and more efficiently in order to achieve a more standardised and uniform management and treatment of European funds and the protection of the Union’s financial interests in the same way in all Member States;

G. whereas the EU and its Member States share responsibility for the protection of the Union’s financial interests, which covers the deployment of funds under the Recovery and Resilience Facility (RRF)21 and the implementation of the national recovery and resilience plans; whereas the role of national authorities in ensuring an adequate level of protection of the Union’s financial interests has significantly increased under NextGenerationEU (NGEU) and the proposal for the future multiannual financial framework (MFF);

H. whereas criminal organisations, attracted by the unprecedented volume of resources deployed under the MFF and NGEU programmes, are particularly active in intercepting EU funds and are able to exploit the heterogeneity of Member States’ administrative, control and sanctioning systems to penetrate their economic, financial, commercial, social and political fabric, thereby undermining the financial interests of the Union;

I. whereas the protection of the EU budget is based on an anti-fraud architecture22, involving multiple actors at EU and Member State level, and allowing for cooperation between authorities responsible for administrative and criminal investigations; whereas the actions of the EPPO, OLAF, Europol and Eurojust have contributed to the fight against crimes affecting the financial interests of the Union, but their effectiveness depends on enhanced coordination between them and with the competent national authorities and international partners;

J. whereas value added tax (VAT) is an important source of revenue for national budgets and VAT-based own resources, which accounted for around 14 % of the EU’s total own resources in 2024 and around 10 % in 2023; whereas the emergence of cases of VAT carousel fraud has intensified in recent years and has seen the increasing involvement of organised criminal networks;

K. whereas corruption is one of the most serious crimes with a cross-border dimension and affects all Member States to varying degrees; whereas it erodes citizens’ trust in the Union and undermines the Union’s financial interests and economy as a whole, as well as democracy and the rule of law in the Union;

L. whereas conflicts of interest are not duly and fully reported in the current monitoring databases; whereas they deserve the highest consideration, as they represent a serious threat to the credibility of institutions and supporting authorities and a breach of taxpayers’ trust;

M. whereas the protection of the Union’s financial interests must be fully integrated into all EU external action instruments, given that financial support to non-EU countries inherently entails an increased risk of fraud, misappropriation and misuse of funds compared to direct implementation, and must therefore be accompanied by robust safeguard measures ensuring the consistent use of Union funds, as well as mechanisms allowing for protective interventions at all times in order to prevent, detect and correct possible breaches;

General remarks on PIF reports and major issues

1. Takes note of the 2024 PIF report, endorses its four recommendations but considers them insufficiently ambitious, particularly regarding transparency and the means by which citizens and their elected representatives can monitor the use of funds, as annual reports alone offer only a partial and filtered view of the real problems;

2. Reiterates that the protection of the Union’s financial interests faces significant challenges in an increasingly complex and rapidly evolving context and that its effectiveness can only be achieved through joint and coordinated actions by judicial and administrative authorities, the European institutions and entities and the Member States;

3. Stresses that only enhanced digitalisation, including through national anti-fraud strategies, process digitalisation and the use of common digital tools, will enable knowledge sharing, accessibility and data processing, as well as the comprehensive reporting necessary for results-based governance in the protection of the Union’s financial interests; notes that only enhanced digitalisation can provide the foundation for genuine transparency to citizens and their elected representatives, which is essential when public money is at stake;

4. Notes that the number of irregularities reported by EU competent authorities and national authorities in 2024 was slightly lower than in 2023 (totalling 13 589 in 2024, 13 947 in 2023 and 12 455 in 2022), while the corresponding irregular amounts were reported to be relatively stable (EUR 1.84 billion in 2024 compared to EUR 1.90 billion in 2023, reaching EUR 1.77 billion in 2022); observes that fraud cases account for around 10 % of the total irregularities reported, the number having increased sharply to 1 364 (26 % more than in 2023); notes that the financial amounts related to these fraud cases also increased to EUR 548.8 million in 2024 (+ 138.7 % compared to 2023); points out that since checks are not systematic but are often carried out by sampling, these figures should be interpreted with caution;

5. Expresses its concern that the number of irregularities reported in 2024 was 3.6 % higher than the five-year average, while the financial amounts involved were 12 % higher, and that the number of frauds reported in 2024 was 19 % higher and the amounts involved were 56 % higher than the average over the five-year period;

6. Notes that the results of OLAF investigations are stable, indicating that it closed 246 investigations (265 in 2023 and 256 in 2022) and issued 301 recommendations (309 in 2023 and 275 in 2022), with a total recommended recovery amount of EUR 871.5 million (EUR 1 043.8 million in 2023 compared to EUR 426.8 million in 2022);

7. Notes that the EPPO’s activities have steadily increased since June 2021, in terms of the number of investigations opened (in 2024, 1 504 investigations, compared to 1 371 in 2023 and 865 in 2022), the number of investigations currently ongoing (2 666 in 2024 compared to 1 927 in 2023 and 1 117 in 2022), the number of indictments (205 in 2024 compared to 139 in 2023 and 87 in 2022), the number of judicial convictions (102 criminal cases were closed in 2024 with one conviction compared to 48 cases in 2023 and 20 cases in 2022) and the number of freezing orders obtained (in 2024 for EUR 2.42 billion compared to EUR 1.5 billion in 2023, EUR 359.1 million in 2022);

8. Notes that in 2024, the EPPO reported that Europol had provided support (information exchange, analytical support and expertise) in response to 83 requests and that by the end of 2024, 25 cases were ongoing with the support of Eurojust’s national offices; notes that in 2024, OLAF sent 74 cases to the EPPO for the opening of a criminal investigation, and that the EPPO opened 69 cases on the basis of OLAF’s contributions, and that in the same year OLAF closed 26 additional investigations and opened 17; expects that the revision of the anti-fraud architecture will provide opportunities to strengthen this cooperation and set ambitious targets aligned with EU priorities;

9. Stresses that the fight against fraud requires a comprehensive approach, involving a wide range of actors and interconnected processes that influence each other and cover the four main stages of the anti-fraud cycle, namely prevention, detection, investigation and prosecution, as well as recovery and sanctions;

Prevention and detection

10. Recalls that the fight against fraud must not be carried out only a posteriori, but must concern all the European institutions as soon as funding schemes, instruments and programmes are drawn up; stresses, therefore, that better involvement of stakeholders in the anti-fraud architecture and of Parliament at the stage of developing the arrangements, instruments and programmes would certainly lead to better protection of the Union’s financial interests; calls on the Commission to take note of this and to better involve all actors upstream;

11. Stresses that, in addition to the necessary efforts to limit fraud through the design of public policies, a more determined proactive effort is also needed to detect and combat fraud; highlights that artificial intelligence is one of the tools to be used to optimise this fight;

12. Notes that infringement reports submitted to the EPPO, information on potential investigative interests transmitted to OLAF and the reporting of irregularities, as well as the periodic updates to them submitted to the Commission through the IMS, are the main source of data for assessing detection levels; notes that detection levels vary from one Member State to another and among the sources of information, and maintains that the level of detection in a geographical area or a budgetary or political sector does not necessarily correspond to the actual incidence of fraud or other misconduct in that area or sector; stresses, furthermore, that the results of detection efforts vary considerably across sectors and countries;

13. Notes that, in the common agricultural policy (CAP), cohesion policy and fisheries sectors, during the period 2020-2024, risk analysis still only marginally contributed to the detection of fraud, with no improvement compared to the previous period (2015-2019); notes that the detection of fraud based on alerts by whistleblowers remains low, as fraud has only been detected once as a result of information published in the media in the context of direct payments, while in the cohesion and fisheries sectors the role of information from civil society has increased, with around 18 % of irregularities detected on this basis; stresses that for irregularities affecting the CAP, the analysis of the detection concentration presented in the 2024 PIF Report shows a higher concentration for fraudulent irregularities than for non-fraudulent irregularities, suggesting that differentiated approaches to investigations and criminal prosecutions may have been a determining factor in these detection levels; notes, furthermore, that for the detection of non-fraudulent irregularities, neither risk analysis nor civil society information play a significant role and recalls that in 2023, a significant level of error persisted under the heading ‘Cohesion, resilience and values’, reaching 9.3 %; reiterates its concerns about the excessive length of procedures needed to finalise cases where irregularities are detected, noting that in the period 2020-2024, it took on average more than four years in the CAP sector between the start of the irregularity and the suspicion of a fraudulent irregularity, and then about three more years to close the case after informing the Commission, while in the cohesion sector almost two years were needed to detect a suspicion of fraud and almost two and a half more years to finalise the case; understands that in both sectors the average duration is shorter for non-fraudulent irregularities, possibly due to higher obstacles to verification in cases of fraud and the need to mobilise specialised resources that are generally limited; stresses that the length of these procedures hampers the adoption of effective recovery or mitigation measures and deprives the actions taken of their deterrent effect; considers, lastly, that the modalities and timing of the initial handling of cases have a decisive influence on the subsequent conduct of proceedings and calls on the Commission to consider adopting appropriate measures to speed up these processes, in particular by intensifying its dialogue with the authorities of the Member States, which is in the interest of protecting the financial interests of the Union;

14. Notes that, in the area of direct management, during the period 2020-2024, OLAF was presumably the main source of detection of recovery elements related to fraudulent irregularities, accounting for 89.8 % of cases and 96.9 % of the total amounts recovered, while the Commission’s ex post controls detected an additional 6.0 % of these elements, corresponding to 1.9 % of the amounts recovered; notes furthermore that around 95.7 % of the recovery items classified as non-fraudulent irregularities were detected through Commission controls, both ex ante and ex post; notes, in this regard, the analysis of the 2024 PIF Report on the relationship between the source of detection and the amounts to be recovered, which shows that the Commission’s ex post controls and OLAF investigations led to the highest amounts recovered for non-fraudulent and fraudulent irregularities, respectively;

15. Notes that in recent years, the increase in detection by Union bodies has been proportionately lower than that by private whistleblowers or national authorities (in 2024, reports of offences to the EPPO by private whistleblowers increased by 85 %, those by national authorities by 13 % and those by the EU’s institutions, bodies, office and agencies by 5 %, and in 2023, reports of offences from private whistleblowers, national authorities and IBOA increased by 30 %, 24 % and 5 % respectively compared to 2022); reiterates its call on the Commission and other EU authorities to promote detection by facilitating reporting processes and strengthening staff and management awareness initiatives and internal communication;

16. Reminds the Commission that for fraud to be detected, checks are needed and that although this may cost money, it also makes it possible to bring in – sometimes significant – additional revenue and/or to avoid irregular expenditure; notes therefore that it is essential to provide resources to those involved in the anti-fraud architecture to enable them to carry out more frequent checks;

Investigations and prosecutions

17. Considers that the excessive length of investigations and administrative procedures undermines the effectiveness of the protection of the Union’s financial interests, in particular as regards monitoring, recovery and prosecution;

18. Underlines the strategic role of the Anti-Fraud Coordination Services (AFCOS) at all stages of the anti-fraud cycle and calls on the Commission to strengthen their activities;

19. Stresses that information on the EPPO’s ongoing investigations should be forwarded to the Commission where the conditions laid down in Article 103 of the EPPO Regulation23 so permit; notes, however, that according to the 2024 PIF Report, from the start of the implementation of the RRF until 27 May 2025, the Commission received only 75 notifications from the EPPO, of which 64 concerned ongoing cases, while 279 investigations related to the RRF existed at the end of 2024, with an estimated total financial damage of EUR 2.7 billion; observes that this prevents a full understanding of the state of play of the implementation of the RRF;

Recoveries and reporting

20. Acknowledges that recovery is a complex process that requires cooperation within the Commission and with other actors and national authorities; reiterates its calls on the Commission to ensure effective follow-up of OLAF recommendations and of EPPO proceedings in order to reliably measure the actual impact of their actions and to provide further evidence in support of results-oriented policymaking;

21. Expresses its disagreement with the Commission’s reply to its resolution of 6 May 2025, in which it stated that the information on recovery would be accurate and available; stresses that detailed data on effective recoveries following OLAF’s financial recommendations are published neither in the OLAF Annual Report nor in any other Commission official report; regrets that only aggregated data is made available; highlights the persistence of the significant gap between the amounts recommended for recovery by OLAF, the amount established as recoverable by the Commission’s services and the amount eventually effectively recovered from the economic operators; reiterates its call on the Commission to provide data with an adequate level of granularity on recovery and to assess and publish the reasons explaining any such gap;

Main threats – organised crime

22. Notes that the EPPO reported 385 offences under investigation concerning PIF-focused criminal organisations in its active investigations up until the end of 2024 (the EPPO’s 2023 annual report referred to 209 investigations concerned PIF-focused criminal organisations); is aware that the true overall involvement of organised crime and its impact on the deployment of EU resources is not precisely quantifiable; notes that, according to data and analysis provided by the EPPO, in the majority of cases, the European Delegated Prosecutors (EDPs) focus their investigations on the underlying PIF offences (misappropriation, fraud, corruption) and not on the criminal organisation per se, as the EPPO Regulation limits the competence of the EPPO to organised criminal groups whose activity focuses on the commission of PIF offences (Article 22(2) EPPO Regulation); recalls that Eurojust can provide assistance in coordinating investigations into crimes against the Union’s financial interests linked to organised crime; stresses that the reality of organised criminal activity on the ground is apparent from an assessment of the extent of the financial damages attributed to VAT fraud, excise duty fraud and customs fraud, where a strong component of organised crime is often present, and which always occurs when large financial volumes are involved;

Main threats – VAT fraud

23. Notes that there is an increasing number of reported cases of VAT fraud, that in 2023 it was present in around 20 % of the EPPO’s ongoing cases, with 873 cases, and that in 2024, there were a total of 1 287 VAT infringement cases, accounting for 20.29 % of all infringements, causing an estimated loss of EUR 13.5 billion, representing 53 % of the total estimated loss;

24. Stresses the importance of moving towards digital reporting in order to reduce VAT fraud by up to EUR 11 billion per year and to reduce administrative and compliance costs for EU traders by more than EUR 4. billion per year over the next 10 years, to also ensure that, in the long term, existing national systems converge across the EU and to pave the way for Member States wishing to introduce national digital reporting systems for domestic trade;

25. Stresses that OLAF’s limited and indirect access to certain customs and tax data is a major obstacle to the effectiveness of the fight against fraud affecting the financial interests of the Union; recalls that, in order to obtain certain essential information, especially in the field of VAT, OLAF must go through the competent national administrations, resulting in delays that are incompatible with the speed of fraud mechanisms; calls, therefore, for OLAF’s access to relevant data to be improved without delay, in line with the applicable legal framework;

Main threats – corruption

26. Is aware that corruption is a crime closely linked to many serious forms of misconduct; notes that corruption is intrinsically linked to money laundering and that money laundering is one of the main drivers of illegal activities of organised crime, as it allows criminals to transfer the proceeds of their crime into the legal economy; observes that corruption is also detected on a recurrent basis in cases of fraud affecting the financial interests of the Union and notes in this regard the analysis that explores the relationship between corruption and fraud presented in the 2024 PIF Report, targeting corruption cases reported since 2007 for the 2007-2013 and 2014-2020 programming periods in the area of cohesion; underlines that the proposed anti-corruption directive (COM(2023)0234), currently under consideration by the co-legislators, recognises the link between corruption and money laundering and provides for a specific aggravating circumstance for entities engaging in corruption offences; recognises that heterogeneous national systems and fragmented application of the EU anti-money laundering framework have made it difficult to prevent, detect and combat money laundering;

27. Stresses that, with regard to corruption cases, the EPPO reported 191 offences investigated at the end of 2024 (compared to 131 at the end of 2023 and 87 in 2022); notes that the 2024 PIF report revealed that 56 cases were reported to the Commission through the IMS by seven countries between 2020 and 2024; stresses that the comparison of data from different sources and an analysis based on data from 2007 to 2023 clearly indicate that Member States do not report sufficient fraudulent irregularities related to corruption in the IMS; notes that, when reported, corruption mainly concerns public procurement, with around 20 % of these corruption cases detected by a control having started following alerts by whistleblowers or information published in the media; notes that 25 % of irregularities were instead detected due to a control that started in the absence of specific allegations or suspicions, thus due to a similar chance or situation and not due to an appropriate risk analysis; concludes that reporting and detection are not optimal and calls on the Commission to step up its efforts to strengthen the use of specific analysis-based detection tools; calls also for greater transparency for the general public through wider publication on the internet of the use of European funds, the identity of final beneficiaries and the results of public procurement procedures;

28. Calls, before any further enlargement of the EU, for a thorough examination of the state of corruption in the candidate countries, especially if they become net beneficiaries of the budget after accession, in order to guard against any drift and any damage to the financial interests of the Union by a future Member State;

Main threats – conflicts of interest

29. Maintains, as indicated in the ECA’s audit work, that the main source of information on conflicts of interest is the IMS and that the quantity and quality of data recorded in the IMS varies from one Member State to another; is aware that Member States have so far failed to report cases of conflict of interest that were part of a wider fraud case; notes that by the end of 2024, 418 cases related to conflicts of interest had been reported through the IMS (92 % concerned cohesion, 3 % agriculture and 3 % pre-accession), representing around EUR 159 million;

30. Notes that in 2024, Member States focused on preventing ‘conflicts of interest’ and that the adoption of 30 measures was reported by 16 Member States (Austria, Belgium, Bulgaria, Croatia, Cyprus, Estonia, Finland, Germany, Greece, Italy, Lithuania, Poland, Portugal, Slovakia, Slovenia and Sweden); notes that these measures targeting conflicts of interest revolve around training and capacity building, management and deterrence, transparency and improved governance; notes that these measures place a strong focus on prevention and detection, suggesting a transition to comprehensive conflict of interest management systems that use both human oversight and technological innovation to reduce fraud risks;

31. Notes that the ECA has identified weaknesses in national control systems designed to ensure compliance with EU rules, in particular on public procurement and State aid, which increases the risk of undetected conflicts of interest; notes that these weaknesses concern the content, quality, timing and documentation of controls;

32. Recalls that the budgetary conditionality mechanism established by the Conditionality Regulation is a legally regulated tool to prevent risks to the Union budget; notes that its application can, however, be justified only where there is a direct, real and demonstrated link between the failures found and the harm to the financial interests of the Union; expresses its concern that any extension of its scope beyond this budgetary purpose would be contrary to the spirit of the Treaties and the principle of proportionality; recalls that the legitimacy of this mechanism is based on a strictly objective application, free from any political considerations, and respectful of equal treatment between Member States;

Revenue

33. Stresses that at a time when European institutions are regularly debating introducing new own resources, priority should instead be given to enhancing fraud detection through strengthened controls, which would enable the recovery of funds legitimately owed to the EU and currently lost;

34. Stresses that VAT remains an essential resource for the EU budget24 and reiterates its concerns about the substantial financial damage caused by cross-border fraud, including VAT fraud, due to the increasing involvement of organised crime groups; stresses that at the end of 2024, the EPPO reported 767 active investigations with a cross-border dimension, of which 573 (74 %) related to revenue, including 416 related to VAT fraud, 86 to non-VAT fraud and 71 to combined fraud; notes that the estimated total financial damage amounted to EUR 13.6 billion, representing 87 % of the financial damage related to cross-border fraud, with a significant negative impact on national budgets, tax fairness and fair competition; considers, however, that the analysis and quantification of these phenomena should be based on homogeneous data and uniform reporting standards, taking into account the system of own resources of the Union;

35. Notes that in 2024, the Commission estimated the 2022 VAT compliance gap at EUR 89.3 billion, representing 7.0 % of the total VAT liability; recalls that the VAT compliance gap measures the difference between the VAT revenue that would be collected in case of full compliance and the actual revenue collected and that it is not only the result of fraud, evasion or other misconduct, but also of insolvency, bankruptcy and administrative errors; maintains, however, that VAT fraud contributes significantly to VAT non-compliance and considers that digital tools and enhanced cooperation between national tax authorities and relevant EU investigative bodies are effective means to address this issue and should be encouraged and further developed; understands that, based on this data, the gap has been narrowing since 2018, when it was estimated at EUR 121.2 billion, representing 11.2 % of the total VAT due;

36. Notes the need to strengthen operational cooperation between the EPPO, OLAF, the customs and tax authorities of the Member States and European law enforcement authorities; stresses that the massive customs and VAT fraud uncovered reveals persistent loopholes in the chain of control, from customs clearance to the distribution of goods within the internal market; considers that stricter surveillance of high-risk imports and better exchange of data in real time are essential conditions for preventing the recurrence of systemic fraud of this magnitude; notes, in particular, that many ports in Europe are vulnerable places jeopardising the protection of the Union’s financial interests and that a major plan should be launched to make these gateways safer and better controlled, bearing in mind that, while the means put in place to monitor them cost money, they also make it possible to bring in additional, sometimes significant, revenue;

Expenditure

37. Maintains that, when assessing models for the implementation of EU spending, account should be taken of exposure to the risks of fraud and other misuse; regrets that the remarks repeatedly made by Parliament and the ECA and inspired by the design and implementation of the RRF have been neglected in the proposed design of future EU funding instruments, notably in the post-2027 MFF; stresses that shortcomings have been identified in the implementation of the RRF, including risks of fraud and double funding, lack of transparency, limited data accessibility and opaque overall management, and that they should have served as a lesson for future EU financial frameworks; reiterates its opposition to any replication of the RRF model in its current form and calls for any future performance-based funding to be provided with significantly stricter safeguards, transparency requirements and fraud prevention mechanisms in order to ensure the proper management of EU funds;

38. Reiterates its concerns about the financial impact of irregularities detected and reported in the field of agriculture, recalling that, according to the ECA, the rural development area is exposed to a higher risk of error than direct payments to farmers; notes furthermore that in 2024, Member States reported the first fraudulent irregularities related to expenditure under their new CAP Strategic Plans, with around 25 % of fraudulent irregularities reported that year related to expenditure under those plans, almost all linked to climate and environment programmes;

39. Notes that, as regards expenditure in direct management mode, in 2024, the Commission reported that it had registered 1 040 recovery posts classified as irregularities in ABAC, for a total amount of EUR 135.39 million, and that 63 of the posts were reported as fraudulent, for a total amount of EUR 62.44 million; notes that, on average, during the period 2020-2024, 43 recovery posts were classified as fraudulent irregularities per year and that the ratio between the financial amounts affected by these irregularities and the total expenditure under direct management was very low (0.05 %); notes that during the same period, 4 692 recovery posts were registered as non-fraudulent irregularities, for a total recovery amount of EUR 268.32 million, and that the ratio between the financial amounts involved in these irregularities and the total expenditure under direct management was around 0.15 %;

NextGenerationEU and the Recovery and Resilience Facility

40. Is concerned about the ECA’s findings that the stock of EU loans increased by more than 30 % in 2024, as a direct result of the use of capital markets to finance large-scale programmes such as SURE and NGEU; notes that the total outstanding debt of the Union could exceed EUR 900 billion by 2027, almost 10 times higher than the level observed in 2020 before the creation of NGEU; notes the absence of a clear, predictable and credible deleveraging strategy, even though the rapid and continuous growth of debt exposes the EU budget to increased sustainability risks, particularly in times of high interest rates; stresses that the dramatic increase in the Union’s indebtedness is automatically restricting the budgetary margins available in the MFF; calls on the Commission to present without delay a comprehensive assessment of the EU’s debt sustainability, including medium- and long-term management scenarios, and to identify the measures necessary to ensure that debt developments do not jeopardise fiscal stability or the protection of the EU’s financial interests; urges the Commission to increase transparency on emissions, borrowing costs and associated risks, in line with the recommendations of the ECA;

41. Notes that there are still inconsistencies in the reports, for example on NGEU and the RRF, thus demonstrating the limitations of the flexible instruments that the Commission intends to replicate, for which, in 2023, the EPPO reported having many ongoing investigations (233) into the recovery and resilience programmes whose estimated related financial losses were worrying (EUR 1.86 billion); notes that at the end of 2024, the EPPO was handling 311 NGEU-related active cases, including 307 from the RRF, corresponding to around 17 % of all active investigations into expenditure fraud; notes that, according to the EPPO, the estimated damage to the financial interests of the Union amounts to EUR 2.8 billion, corresponding to 30 % of the total estimated damage for expenditure fraud (compared to 25 % last year); stresses, however, that in the 2023 PIF report, EPPO cases were not included in the analysis of fraud and irregularities affecting expenditure, unlike in other expenditure items, and that in the 2024 PIF Report different data is reported on EPPO investigations related to the RRF (279 investigations instead of 307, for an estimated total damage of EUR 2.7 billion instead of EUR 2.8 billion);

42. Points out that the annual payments of grants under the RRF financed by NGEU reached only half of the amount anticipated by the Commission in June 2023 (EUR 96 billion); notes that by December 2024, 15 Member States had submitted payment requests for a total amount of EUR 58.5 billion;

43. Notes that RRF grants paid to Member States in 2024 amounted to EUR 55 896 million, which is more than the remainder of expenditure under direct management (EUR 50 172 million) and that, overall, 23 Member States received grants under the RRF, as well as loans, which in 2024 amounted to EUR 29 446 million; observes that Germany received the largest amount (EUR 13 million), followed by Spain and France (EUR 10 926 million and EUR 7 483 million, respectively) and that only a few countries (Austria, Bulgaria, Luxembourg and Sweden) received no grants;

44. Underlines that the Commission recorded 1 040 recovery items in ABAC that were classified as operating irregularities under the Commission’s direct management, amounting to EUR 135.39 million and reported as fraudulent in 63 cases, totalling EUR 62.44 million, but underlines that no RRF-related irregularities were reported in ABAC at the end of 2024; asks the Commission to report on the results of the implementation of Annex IV of the RRP Guidelines25 on the RRF reduction and recovery framework; points out that, according to data published in the EPPO’s 2024 annual report, 311 NGEU-related cases were ongoing at the end of 2024, all but four of which concerned the RRF, accounting for around 17 % of all expenditure fraud investigations; notes that the estimated damage to the financial interests of the Union amounts to EUR 2.8 billion, representing 30 % of the total financial damage related to expenditure fraud in the EU-27, compared to 25 % in 2023;

45. Stresses the need for greater transparency in the implementation of the RRF and recalls that the ‘final beneficiary’ is the ‘last entity’ that receives funds for an RRF measure, so that information on the ‘final beneficiary’ must be made available; regrets that Member States are only required to publish information on the 100 final beneficiaries receiving the highest amounts, which constitutes an arbitrary limit preventing any visibility on the actual majority of beneficiaries and on the potential risks of fraud, mismanagement or conflicts of interest; points out that the examination of national practices reveals significant discrepancies in disclosure methods because some Member States report the amounts actually disbursed, others the amounts simply allocated, while others are limited to partial data or combined with national funding, which undermines the comparability, readability and reliability of the information published;

46. Reiterates its call on the Commission to strengthen its controls on the risk of double funding resulting from the financing, by both the EU budget and the RRF, of similar measures in similar areas, such as transport and energy infrastructure, which is enabled by the standard complementarity between the RRF and other EU instruments; recalls that the RRF is not linked to the reimbursement of costs actually incurred, but rather rewards the achievement of milestones and targets that could have been fully financed by funds other than the RRF, without this being noted due to the absence of a link in the RRF with the reimbursement of costs actually incurred; considers that limited data exchanges and insufficient use of data mining tools such as ARACHNE, together with a lack of direct access to the full list of RRF final beneficiaries, increase the level of risk; welcomes the precautions taken by some Member States to avoid combining the RRF with other Union instruments in order to mitigate the risk of double funding;

External dimension of the protection of the financial interests of the Union

47. Appreciates the Union’s efforts, on the recommendation of the ECA, to ensure that anti-corruption measures are integrated into the EU’s external action instruments; maintains its recommendation to suspend budget support and withdraw funds from non-EU countries, including candidate countries, where the authorities clearly do not take any concrete action against widespread corruption, without compromising support to citizens;

48. Takes note of the conclusions of ECA special report 15/2025 on EU humanitarian aid under remote management, recognising that this management approach provides a useful framework for providing life-saving assistance in hard-to-reach areas, but that there are weaknesses in its design and implementation; observes that the Commission recognises that remote management is inherently more risky than direct implementation and that fraud and aid diversion are among the main risks, as the inability of humanitarian organisations and donors to monitor action on the ground increases the level of risk; notes that the Commission has a dedicated team, as do all donors, to deal with suspected cases of fraud and misuse of aid; stresses, however, that its risk register does not take into account the impact that remote management may have on the likelihood and impact of non-critical risks identified, such as the risk of reputational damage in the event of fraud, misuse of aid or non-compliance with ethical standards; stresses, in particular, that the insufficient integration of the risks inherent in remote management into its risk management, control and audit strategy may limit its ability to prevent, detect and adequately manage those risks, which entails a risk of damage to its reputation in the event of fraud and misuse of aid; stresses that the control strategy does not provide for any specific checks to address the inherent risks of remote management and that it does not take into account the impact of remote management on control tasks related to the fight against fraud or audits on the ground; underlines that, in fact, in the Commission’s 2021-2027 audit strategy, actions managed remotely do not automatically receive a higher risk rating in the risk-based selection of actions to be audited, despite the specific difficulties these actions face; agrees with the ECA’s recommendations, fully accepted by the Commission, on the need to improve the approach and guidance on remote management, to strengthen the certification process for non-governmental organisation partners, to verify the information provided by partners and to report on remote management to stakeholders; urges the Commission to act accordingly and to implement the ECA’s recommendation, which is fully accepted;

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49. Instructs its President to forward this resolution to the Council and the Commission.

EXPLANATORY STATEMENT

The sound management of Union’s resources, on both the expenditure and the revenue sides, as well as transparency and the protection of the EU’s financial interests, should be key elements of any EU policy, in order to ensure their efficient implementation, to guarantee that taxpayers’ money is used appropriately and effectively and to strengthen citizens’ trust in the European Institutions.

The Commission is required by the Treaty on the Functioning of the European Union to produce an Annual Report on the Protection of the EU’s Financial Interests (PIF Report). This report is based on data provided by Member States and presents the measures taken at European and national levels to combat fraud affecting the Union’s budget.

While the PIF report is an essential instrument for transparency and accountability, it does not yet provide a comprehensive overview of a rapidly evolving of increasingly complex landscape, in which the challenges and their possible negative impacts remain significant. Against this background, the European Parliament’s INI Report is based on the analysis of a wide range of information sources and reports from numerous Institutions and authorities and it aims at contributing to the protection of the Union’s financial interests by setting the direction of the anti-fraud policy and more effectively promoting targeted actions.

The INI Report identifies the main threats and weaknesses of the current framework at Union’s and Member States’ levels, including organised crime, corruption, under-reported conflict of interests and VAT fraud. The analysis highlights shortcomings in the implementation of performance-based instruments and external actions and it recommends to devote additional efforts and adequate resources to the key components of the anti-fraud cycle: not only investigations and prosecution, but in particular detection and prevention are crucial stages, too often underrated in the setting of national and European strategies. Persistent legislative fragmentation and the underfunding of national anti-fraud authorities, combined with the growing complexity of transnational fraudulent schemes and international financial flows, represent challenges that call for enhanced cooperation among the anti-fraud authorities. Greater day-to-day transparency beyond the annual reporting obligation and improved reporting practices are required, including on recovery. The development of new technologies should be further pursued, making use of strengthened IT tools, the digitalisation of processes, databases interoperability and the integration of artificial intelligence (AI) in the main controlling processes. The INI Report calls for more tangible and result-oriented efforts to ensure that the Union’s resources are correctly deployed and the financial interests are safeguarded for the benefit of all European citizens.