Anti-fraud and Anti-corruption
Measures in the European Structural and
Investment Funds
Financial Crime Investigation Service
under the Ministry of the Interior of the Republic of Lithuania
25 February, 2015
Ryga
Fields of Cooperation
The creation/implementation of national
strategies to protect EU’s
financial interests (and promoting the related administrative/legislative
changes);
Identification of possible weaknesses in national systems for
managing EU funds, including pre-accession funds;
Dissemination of information and communication;
Sufficient human resources capacity, including training fraudprevention staff;
Helping cooperation between national administrations, prosecution
authorities and OLAF;
Sharing information on irregularities and suspected fraud cases with
national administrations and OLAF.
Directions of Cooperation within AFCOS system
OLAF
Irregularity Reporting
System bodies
COOPERATION
Law
Enforcement
Institutions
Reporting
Criminal Investigation
Experts
Reporting Experts
FCIS IRD
FCIS
PAA,
IMS
1681, 1831
>10.000 €
Verification Experts
MoF, Agencies
498, 1828, 1848
Financial Crime Investigation Service (FNTT)
The goal of the Service is to elaborate methods of combating criminal
activities against the State and EU financial system.
Presently the priority attention of the Service is paid to the disclosing,
investigation and prevention of the criminal acts, related to the money
laundering, VAT embezzlement, illegal receipt and use of the funds of the
financial support from the European Union and foreign countries.
For the anti-fraud efficiency great importance has the fact that the
Service officers participate in the development of the risk management system of
administration and control of the European Union support, it closely cooperates
with the administrating institutions of the European Union financial support.
The Levels of Cooperation
The Anti-Fraud cooperation process in Lithuania takes place at:

Governmental level

Inter-institutional level

Institutional level
Inter-Institutional Level
Managing Authority (MoF) formed Irregularities officers working group.
This Group comprised of Irregularities officers and headed by the Managing
Authority.
In the Group as observers invited Coordinating, Certifying Authorities, Audit
Authorities, Ministries, and (or) other state institutions, the Public Procurement
Office and the Financial Crime Investigation Service Representatives.
(Nr.1225, 2008-11-12)
The Institutional Level of Cooperation
Each institution has its own arrangements.
Ex. FCIS for the purpose of protection of the EU financial interests
has cooperation agreements with MA and IB2 level bodies . These
agreements legitimize the exchange and usage of SFMIS
information for the criminal intelligence and criminal investigations.
With State Tax Inspectorate existed modern form of cooperation –
Risk Assessment Center (RAC).
Criminal Code of the Republic of Lithuania
Applicants
want to obtain by fraud EU’ funds resources (Art. 182 CC. Swindling
Fraud)
Falsification of documents, which to be used to get the EU's support (Article 300 CC.
Forgery of a Document or Possession of a Forged Document )
Beneficiaries of EU aid fraudulently or negligently managed accounts (Art. 222 CC.
Fraudulent Management of Accounts , Art. 223 CC. Negligent Management of
Accounts )
State civil servants abusing the service or negligent performance of their duties (Art.
228 CC. Abuse of Office , Art. 229 CC. Failure to Perform Official Duties)
Legalisation of illegally obtained EU funds money (Art. 216 CC. Money or Property
Laundering )
Illegal financial transactions, the use of not oneself electronic means of payment (Art.
215 CC. Unlawful Use of an Electronic Means of Payment or Data Thereof)
Crime characteristics (1)
The project result is not achieved (not intend to implement the project).
One type of equipment is contracted, but other equipment is installed (purchase of
used equipment).
Additional works are purchased not using public procurement procedures.
Discriminatory technical specifications (when conditions make for a single supplier or
model of techniques).
A simplified procurement procedure is used instead of an international one.
Simplified purchase procedure is used without the proper legal basis to do so.
The Law on Construction is violated (works are started without a construction permit
of state institutions).
Crime characteristics (2)
The price gap between public and private sector (in the private sector same works
price 40-60% lower);
The tender analysis missing special knowledge (documents submitted by the persons
who do not have specific knowledge of construction, land reclamation, computer
technology and so on.);
Public and private interests conflict (municipal council members are often managed
companies which take part in the contest);
Suppliers agreed in advance (after the tender unsuccessful participants shall sign the
sub-contract – “cartel”);
Part of the costs are not justified (used for the acquisition of material without
documents, illegal work, and so on.);
Falsified documents are provided to the State authorities (applications and payment
requests, bill, VAT invoice, and so on.).
Crime characteristics (3)
Unreasonably increase the construction cost estimate (no reason to include all firms
costs, business trips and so on.)
Provides not detailed estimates (and later the same form drawn up to carry out the
works acts);
After the competition work carried out not by the estimated costs;
Used to justify the expenditure actually a “ghost” companies (without carrying out
any work, without the value added) documents;
Tax evasion – companies conceals the real corporate profits, income tax;
Made financial transactions through offshore companies (spends money for luxury
goods, real estate, cars, etc.)
Problems of Investigation
Complicated administrative procedures.
Different areas of EU support and different funding periods have different rules,
legislation, administration system ( it makes PTI cases multiplex and crowded with
documents).
Administrative prevention gap.
The risk assessment and reporting of possible fraud does not guarantee the timely
detection of criminal acts (for PTI are important evidence, not assumptions).
Special qualification requirements for officers.
Necessary not only legal knowledge, usually required skills for different areas
(agriculture, agronomy, engineering, industry, IT products and so on)
PTI proceedings are necessary experts in different areas
Professionals with special training, education, skills and knowledge that can provide
detailed findings of research in specific areas (preparation of expert report takes time,
service of experts are very expensive, it’s influence court costs)
Thank you for your attention
Paldies
Tänan
Ačiū
Financial Crime Investigation Service inder MoI
Šermukšnių g. 3, Vilnius
E-mail. dokumentas@fntt.lt