The Role of Institutions in Preventing Fraud in EU Countries and Bosnia and Herzegovina

Abstract

The European Union is celebrating 50 years of existence, from six founding members to the 27 states that make it up today. Within the "European Family", it has been agreed that new states can be accepted into the block only if they can deal with the financial, social and institutional problems that lie ahead on their way to the EU. This also applies to Bosnia and Herzegovina, and as many European officials emphasize, following the adoption of the new European constitution which is required in order to efficiently run an extended Europe.

To this end, the battle against fraud and protection of the financial interest of the EU has gained in importance over the last years, which is the basis for the Decision of the Mission on establishing a European Anti-Fraud Office in 1999 (OLAF), as well as series of decisions for an inter-institutional agreement on the operational organization of the Office.

In accordance with the Commission's decision, OLAF has the jurisdiction to: a) carry out external administrative anti-fraud investigations (in member and non-member States with which it has contractual associations), investigations on corruption and all other illegal activities which have a negative influence on the financial interests of the EU, b) research the more serious cases of abuse of professional responsibilities of officials within EU institutions, c) carry out investigations in other areas at the request of EU institutions and bodies, d) assist in strengthening the cooperation of member states in preventing fraud, e) prepare new regulatory and legislative initiatives within the jurisdiction of the Office, f) develop infrastructure, collect and analyses information, provide technical assistance, g) maintain a direct link to police and judicial bodies.

The Parliament, Council and Commission also adopted an inter-institutional agreement in order to ensure smooth internal investigations under equal conditions, within the institutions and other bodies, offices and agencies, including the European Investment Bank (EIB) and the European Central Bank (ECB). The development of the Strategy for information and communication with the public regarding fraud prevention of stands out among the more important OLAF initiatives. A priority of this communication policy was the development of an Anti-Fraud Communicators Network (OAFCN) in 2001.

The Central Communications Office (CLO) which has been established in every member state as a part of the tax administration, has to be informed about the registration of value added tax. Of the other institutions working in the field of the fight against fraud, the following should be mentioned: European Commission, European Parliament, Council of the EU, European Court of Auditors, and EUROPOL.

In the context ofEU accession criteria, Bosnia and Herzegovina will continue to consistently implement a policy of regional cooperation, thus contributing to the strengthening of a legal and institutional infrastructure, especially with regards to anti-fraud. State institutions of Bosnia and Herzegovina (as well as their specialized sectors) work to this effect, institutions such as: Indirect Taxation Authority of B&H, Agency for Investigation and Protection in B&H (SIPA), Entity Taxation Authorities, the Financial Police, Border Police of B&H, the Ministry of Internal Affairs, inspections... Fraud is most often carried out through fictitious companies, with significant tax fraud, smuggling of goods, customs crimes... which directly influence the reduction of the state budget of Bosnia and Herzegovina and its further distribution, and the creation of general economic insecurity, of both the national economy and wider in the countries of the region and the EU.

To that end, B&H is ready to accept, not only anti-fraud reform, but also all other reforms which are implemented following the demands of the acquis communautaire, as well as the entire European integration process.