Fraud is a deliberate act of deception intended for personal gain or to cause a loss to another party. DG ECHO distinguishes between fraud and aid diversion:

Fraud relates to intentional actions or inactions by actors internal to DG ECHO’s partners or implementing partners or contractors whereas aid diversion occurs when aid is prevented from reaching its intended beneficiaries due to the action or inaction of actors external to DG ECHO’s Partner (e.g. armed groups, non-state entities, etc..).  

Building a strong culture of integrity, with clear policies and procedures, helps partners organisations prevent, detect and respond to fraud. It reduces the risk of financial, operational, and reputational harm. Your organisation should make sure all measures are effective and are implemented systematically.

INGO Partners must inform the European Commission  via echo-reportfraud@ec.europa.eu immediately of all significant fraud allegations. These are credible allegations that could:

• Significantly affect operations (e.g. lead to not meeting the agreed results or major delay); or
• Concern a minimum of € 10.000 of DG ECHO funds; or
• Be part of a larger fraud scheme or systemic fraud. This includes scenarios where the issue may concern other donors than DG ECHO, but could impact DG ECHO funds and operations; or
• Involve senior staff from partner or implementing partner organisations; or
• Involve DG ECHO staff.

In addition, partners are expected to report any allegation (even if not credible), which is likely to cause reputational harm. This includes incidents likely to attract national or international or social media attention.

All other cases, which do not fall into any of the categories listed above, will be classified as “less significant”. For those cases, INGO partners must notify DG ECHO after having concluded their investigation and only if the allegation is substantiated or partially substantiated with an impact on DG ECHO funds, regardless of the amount.

If an organisation initially classifies a case as "less significant" but later uncovers information indicating that it meets any of the criteria for a "significant case," as stipulated above, the partner is obliged to inform DG ECHO immediately.

While we are prioritizing significant cases, we expect all partners to maintain a strong control framework and a zero-tolerance approach against fraud. We expect partners to follow up all allegations and keep the relevant documentation, including those qualifying as “less significant cases”

For such reporting, partners may use the e Fraud Allegation Reporting Form (see below) or their own format, provided it includes all relevant information in line with the Fraud Allegation Reporting Form. We kindly ask partners not to include any personal data. Should the reports nevertheless include any personal data, be informed that DG ECHO handles personal data in accordance with Regulation (EU) 2018/1725. The information provided will be handled in full confidentiality to protect the rights of those involved.

Partners may also refer the matter to the European Commission Anti-fraud Office (OLAF).

Precautionary measures (allegation stage)

DG ECHO may take precautionary measures following the report of a suspected fraud. These include payment suspension (Art. 30, MGA) and the suspension of the grant agreement (Art. 31, MGA). 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 and/or if partners have not pro-actively disclosed the information or not taken adequate steps to respond to the suspected fraud.

Corrective measures (following confirmed fraud)

Once fraud is confirmed, DG ECHO disallows the established amount of the fraudulent activity in accordance with the relevant legal financial and administrative provisions.

In particular, partners whose staff have committed fraud (including if committed by their Implementing Partners) can be subject to provisions listed in Chapter 5 of the Agreement, namely: grant reduction (Art. 28, MGA), payment suspension (Art. 30, MGA), grant suspension (Art. 31.2, MGA), grant or co-Partner termination (Art. 32.2, MGA). 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 partner with DG ECHO and/or OLAF on the issueThe 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.
•  

External Informants and Whistleblowers

Any person, entity or institution, victim or witness of fraud in the framework of DG ECHO-funded activities may report to European Anti-fraud Office (OLAF) (Report fraud - European Commission)

The reporting tool allows for anonymous reporting, in any of the EU's official languages.