New EU system for reporting fraud goes live

06 Mar 10

Corruption and fraud can now be reported via the Internet-based Fraud Notification System (FNS), the new portal having gone live this week. Brian Sims reports.

By Brian Sims

“Citizens and business people frequently ask us how they should go about reporting to us incidences of suspected fraud involving EU funds,” commented Nicholas Ilett (acting director general of OLAF, the European Anti-Fraud Office, officially known as the Office Européen de Lutte Anti-Fraude) in conversation with SMT Online.

“From time to time we also hear from EU civil servants who, despite all the legal guarantees, are cautious about approaching us directly in relation to cases where they suspect corruption is going on.”

According to Ilett, the new Fraud Notification System (FNS) should help everybody. First, it offers informants a simple, user-friendly interface. Second, it gives people the opportunity to submit information to OLAF anonymously but nevertheless enter into dialogue with its investigators.

At least in part, OLAF has always relied on the support of citizens, businesses and EU employees in fulfilling its task of protecting the financial interests of the European Union and combating fraud, corruption and other irregularities (including official misconduct) within the EU institutions.

Internet-based fraud reporting

For several years now, OLAF has been receiving tip-offs from across Europe via freephone numbers and e-mail. Hence, OLAF is now extending this service to include the new Internet-based fraud reporting system, developed in conjunction with QinetiQ and with OLAF’s specific role very much in mind.

The FNS is specifically designed to provide informants with a structured format to help and guide them through the process of reporting offences.

In line with the applicable legislation, OLAF has always investigated anonymous reports, but until now had to subject them to stricter preliminary scrutiny in order to prevent abuse.

During that process, OLAF investigators regularly face the practical problem of being unable – and this is inevitable with anonymous informants – to ask questions in order to obtain clarification.

This problem is solved by the FNS since the latest technical safeguards both guarantee informants absolute anonymity and at the same time enable them, if they so wish, to enter into dialogue with OLAF investigators.

Totally anonymous evidence gathering procedure

No-one either inside or outside OLAF can discover the identity of anyone who has opted to remain anonymous. The system operates like a ‘blind’ letterbox where both parties can drop off messages.

For OLAF investigators, this has the advantage of helping them to assess the credibility of anonymous reports of corruption and fraud, and also makes abuse of the system much more difficult.

At the same time, the system enables potential informants who have so far not dared to contact OLAF to enter into a genuine dialogue with experienced investigators.

Although EU staff who report suspicious circumstances and provide evidence are protected against reprisals of any kind, under the current rules of service individual colleagues who are unsure about how allegations of corruption or fraud are assessed might hesitate to contact OLAF. The new system makes it easier for such colleagues to make contact.

Test phase proves successful

During a pilot phase, the FNS will be available in English, French, German and Dutch. However, reports can already be entered on the online form in any EU language.

All the information received by OLAF is carefully examined and professionally scrutinised before it is decided whether or not to initiate an investigation.

Even during a test phase, several tip-offs were communicated via the new system and some of them led to further investigation.

Pete Baynham, the head of QinetiQ’s Intelligence and Digital Security business commented: “Our experts in cyber security and encryption have made a breakthrough with the Fraud Notification System as we’ve demonstrated that secure online communications, which protect all parties and maintain confidentiality and anonymity, can be achieved.”

He added: “Secure, anonymous communications are particularly important in criminal or legal proceedings, and the complex world of fraud and corruption investigations in which OLAF operates. We have designed and delivered a system that our customer can now operate and manage locally, confident that it meets its stringent requirements.”

Liaison with the Serious Fraud Office

Working across member states, OLAF liaises with the Serious Fraud Office in the UK as well as other law enforcement agencies to investigate alleged fraud and other serious irregularities impacting the EU budget and alleged corruption and other serious misconduct by members or staff of EU institutions.

Since it was established in 1999, OLAF has received more than 7,000 individual allegations resulting in the opening of more than 3,000 cases.

Over 300 individuals have received prison sentences from criminal courts as a result of OLAF’s investigations for a combined total of 875 years, of which 208 were suspended.