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18 EN Official Journal of the European Communities 17.11.



TRADITIONAL OWN RESOURCES after a certain time has elapsed, will be called on to
account for their actions, in particular where sums have
not been recovered, by being obliged to report cases
Weaknesses in the internal control procedures for which exceed a given threshold.
accounts kept by the Member States

Regarding the reliability of the accounts presented by the

1.4. As it pointed out in its replies to the annual report
Member States, it must be emphasised that the Commis-
concerning the financial year 1995, the Commission did
sion's control activities in the area of own resources are
not object to the deduction from current established
equivalent, given the available resources, to verification
entitlements of amounts from the period before 1
of the kind which would be at the basis of any
January 1989 considered irrecoverable. The Commis-
certification procedure. Moreover, in some Member
sion is continuing to monitor this affair and has asked
States, own resources accounts may also be checked by
the Member State concerned to confirm the data on
the national audit offices. While it is true that an overall
which the facts noted by the Court are based. As soon as
appraisal of all own resources accounts kept by the
this information is received, the Member State will be
Member States cannot be made on the basis of the
asked, if necessary, to make the corrections and pay the
Commission's controls, because of their limited cover-
interest due for late payment.
age, these controls are nevertheless effective and often
result in significant financial corrections.
1.5. As soon as it had been informed of the Court's
finding in April 1997, the Commission requested that
184 876 ECU be paid as late interest; the sum was paid
in September of the same year.
Audit of the use of risk analysis techniques in
customs control and the clearance of goods

Audit of the summary annual accounts drawn up by the

Member States Introduction

1.6. The sum of 7.3 Mio ECU mentioned by the Court 1.11. While it is true that Member States have a general
concerns irregularities caused by the incorrect applica- duty to carry out controls, it is also clear that they have
tion of Community legislation by four Member States. the opportunity to assess the way in which controls are
The Commission has now contacted the Member States carried out in general and in specific cases.
concerned in order to remedy the situation and, if
necessary, it will ask for interest to be paid as a penalty
for the delays. 1.12 ± 1.13. The Customs 2000 decision defines the
institutional environment within which national customs
administrations are required to work. The decision's
objective is to find the right balance between the
Conclusion respective roles of the Community institutions and the
Member States and to maintain this balance while
accepting the concept of unity in partnership. The
1.8. The procedure for implementing the budget in Commission will shortly be presenting a first report on
respect of revenue is significantly different from the the implementation and impact of the Customs 2000
procedure in respect of expenditure since it involves programme to the European Parliament and the
millions of underlying transactions and reflects the Council.
application of particularly complex legislation. In the
third phase of the SEM 2000 initiative, the Commission
examined the possibility of introducing a system of Although in 1992 the Council (Ecofin) stressed the
clearance of accounts for revenue operations of the kind importance of risk analysis methods in financial
used for agricultural expenditure. However, it concluded controls, the framework for customs matters was set by
that it was impossible to pursue that idea any further the Customs 2000 decision in 1996. This decision covers
owing to the particular nature of procedures on the all customs legislation, so that it is no longer necessary,
revenue side. Nevertheless, it was felt that the financial although it is not ruled out, to insert references to such
interests of the European Union could better be methods into the code. Regarding modern control
defended if existing Community provisions were methods, the Customs 2000 decision leaves no doubt
strengthened, and in particular those provisions govern- as to the Commission's role: it is one of `supporting' or
ing the write-off by Member States of irrecoverable `encouraging' actions which it is the responsibility of the
debts. This led the Commission in July 1997 to propose a Member States to define and implement (first sentence of
new writing-off procedure whereby all Member States, Article 9).
17.11.98 EN Official Journal of the European Communities 19

1.14 ± 1.16. Within its scope for action as it is laid largely determined by a series of other factors (see
down, the Commission drew up guidelines for compiling paragraphs 1.14 to 1.16 above).
risk profiles in 1997.
Creating specialised units at Community level would
Drawing up these guidelines is the way to `encourage' a make sense only if they had an operational function.
process of convergence of working methods, which, as Such a function would doubtless mean the existence of a
the Court noted in the factual section of its special structure specific to a single system of customs admin-
report, is a matter for the future. The working methods istration, a concept which clearly goes beyond the
practised in the Member States are still determined to a objective of the management instrument based on
large extent by other factors, such as the way depart- partnership as recommended in Customs 2000.
ments are organised, staff training, the availability of
resources or the extent to which procedures are
computerised. However, it is conceivable that the Member States could
set up between themselves a structure responsible for this
operational function.

Conclusion 1.24. The Commission's actions take shape within the

framework set by the Customs 2000 decision, which does
not lay down a basis for general regulatory intervention
1.19. Conditions ought to be most favourable for the in the area of how controls are carried out by the
achievement of closer coordination once customs customs authorities in the Member States.
procedures are computerised. The speed at which
individual Member States are progressing on this front
differs somewhat. The development of transnational
customs procedures such as the NCTS (new com-
puterised transit system), should contribute to the
desired coordination, provided a goods identification
system based on a classification code is adopted. OWN RESOURCES DERIVING FROM VAT
1.20. The intensive and unstructured transmission of
all kinds of information to the outlying customs offices is The system of resources based on VAT and the
admittedly a problem of method which must be looked GNP
at and solved. This matter could be addressed in future
by the appropriate bodies whose task it is to implement
the Customs 2000 decision. 1.25. The Commission considers that research on the
evaluation of the quality of macroeconomic aggregates
is not entirely satisfactory, and partly in response to this
1.21 ± 1.22. The divergence of the control systems in it has launched a research project on an analysis and
the different Member States and absence of transna- evaluation of the quality of national accounts aggregates.
tional structures is explained by the fact that the customs Two studies have been commissioned by Eurostat in this
union is not administered by a single customs authority. area, one conducted by the National Statistical Office of
This situation is reflected in the approach to the problem Italy (ISTAT) and one by the UK Office of National
taken by the Customs 2000 decision of the European Statistics (ONS). The results of the former will be
Parliament and of the Council (see 1.12 and 1.13 above). available in 1998; the results of the latter will be
available in 1999.
A pilot project involving six Member States which is
currently being implemented under the above decision 1.26. The Commission fully agrees with the Court's
should eliminate some of the differences in working criticism of maintaining, for budgetary purposes, the old
methods. ESA (1979 version). GNP calculated by the new ESA
(1995 version) would give a better measurement of
Member States' contributive capacity. The Commission
1.23. The training programmes and exchanges of views the situation with regret and has already expressed
officials, such as those covered by the Matthaeus its position on this matter.
programme, promote a general openness of mind and
convergence of behaviour. Furthermore, the implemen-
tation of a Community training policy in the customs 1.27. As pointed out by the Court, VAT fraud is only
field and of common core training (see Article 14 of the one aspect of a phenomenon which affects the whole
Customs 2000 decision), and the networking of national area of taxation as well as all other kinds of statutory
customs schools in the Member States provide an contributions and charges.
instrument which will be used, among other things, to
ensure greater uniformity of national working methods.
In the long run, this should also contribute to the However, given the mechanism for paying by instalment
harmonisation of methods, even if at present they are which is part of the VAT system, this tax contains an
20 EN Official Journal of the European Communities 17.11.98

intrinsic control element, which distinguishes it from The Commission is clear, however, that the chances of
other taxes. Regarding VAT, the Commission has the Member States adopting its recommendations
already taken and will take in the future all appropriate depend entirely on their real added value. The complex-
measures in order to enable it to cooperate effectively ity of collection and control procedures in force in
with the Member States in the fight against VAT fraud. Member States, with different legal and administrative
systems, should not be underestimated. Until recently the
1.28. The Commission also considers that the correc- Commission did not have sufficient experience to make
tion mechanism currently applied to one Member State such a profound evaluation and recommendations as
only is an anomaly. It also agrees with the other proposed by the Court. The experience built up over
comments made in this paragraph by the Court. previous years now makes it possible for the Commis-
sion to assume the responsibilities the Court identifies.
1.29. The Commission has already begun to reflect on The third report under Article 12 of Regulation (EEC,
the Union's system of financing; it will be taking the Euratom) No 1553/89 already makes a number of
Court's observations into consideration. recommendations for control and anti-fraud coopera-
tion strategies.

The VAT system in intra-Community trade The Commission agrees with the Court that it is
necessary to put in place a system which continuously
1.31 ± 1.36. The Commission shares the Court's view measures the efficiency of Member States' collection and
that it has a responsibility to identify the shortcomings of control of VAT. The Commission will therefore under-
national systems in the fight against fraud and to suggest take action to analyse and evaluate the control situation
adequate remedies to the Member States. The Commis- of each Member State in order to comply with the
sion agrees that reinforcement of national control recommendations of the Court. The intention is that the
strategies with integrated risk analysis is necessary to Commission should be able to come up with more
make the fight against fraud successful and that it is incisive proposals in the framework of the fourth Article
necessary to improve the tools for administrative 12 report and of the third report under Article 14 of
cooperation, which at present are underutilised. Regulation (EEC) No 218/92.