Fraud is a deliberate act of deception intended for personal gain or to cause a loss to another party (Article 3 of Directive (EU) 2017/1371 and Article 1 of the Convention on the protection of the European Communities’ financial interests). DG ECHO considers fraud when aid is prevented from reaching its intended beneficiaries due to the action or inaction of the International Organisation, its staff or its implementing partner.

DG ECHO may take precautionary measures following the report of a suspected fraud to protect the EU’s financial interests, including payment suspension (Art 12.1). These measures are only applied if the suspicions are very severe and/or relate to fraud schemes beyond an isolated incident or if senior management of the (implementing) partner is suspected to be involved.

Once the investigation or the audit is concluded and fraud is confirmed, DG ECHO will disallow the established amount of the fraudulent activity.

In addition, International Organisations whose staff have committed fraud (including if committed by their Implementing Partners) may be subject to provisions of the General Conditions for Humanitarian Aid Contribution Agreements, namely: reduction of EU contribution (Art. 20.3), suspension of the time-limit for payment (Art. 12.1), suspension of the agreement (Art. 12.3), or termination of the agreement (Art. 13).

These additional measures are only taken in very serious cases following a careful assessment by DG ECHO.

The following factors play a role when determining if any of the provisions above will be applied:

• The pro-active and timely communication by the International Organisation with DG ECHO and/or OLAF of the allegation and during the investigation.
• The measures in place regarding the prevention, detection and response to fraud and how they were implemented in this specific case.
• The risk of additional fraud incidents (e.g. if the scope of the investigation is very narrowly defined).