site.btaOLAF Recommends Reimbursing More than EUR 30 MLN for EU-funded Projects in Bulgaria

The European Anti-Fraud Office (OLAF) recommended over EUR 30 million to be recovered to the EU budget from projects in Bulgaria, shows data from the annual report on the activities of the office, presented on Tuesday.

Last year, OLAF completed the inspections of 10 cases of suspected misuse of European funds in this country, and in six cases issued recommendations for further action. One of these concerned alleged irregularities and fraud regarding the implementation of a project to restructure and convert vineyards in Bulgaria. OLAF found that some of the local workers on the project did not have an employment contract. OLAF further uncovered that the main contractor had artificially inflated the costs of the works, part of which had actually been implemented by local workers employed by subcontractors at lower costs. OLAF subsequently discovered that an economic operator from another Member State had reverted part of the amounts invoiced to the main contractor, which possibly constituted money laundering activity, says the report. A recommendation has been issued for the recovery of nearly half a million euros.

OLAF also concluded an investigation into the construction of 377 guesthouses in Bulgaria, which had been co-financed by the European Agricultural Fund for Rural Development (EAFRD), by recommending the recovery of EUR 23 million to the European Commission (Directorate-General for Agriculture and Rural Development), says the report. The properties were not used for their intended purpose - to be provided for use by tourists for rent, but instead of for private needs.

Another inspection found that the programme for advertising wines, spirits and dairy products locally produced in Bulgaria had irregularities, and the funds for all 11 programmes were directed to a company based in Greece. Additionally, loans granted by the EU have not been repaid by the recipients. It is reported that the prices of the projects were inflated, and in some cases the amounts due were not paid to the contractors. OLAF recommended the recovery of the entire European Agricultural Guarantee Fund share in the financing for the 11 projects, which amounted to around EUR 7 million, per the report.

OLAF also found that the afforestation project in Bulgaria included lands on which there can be no plantations. At the same time, five years of monitoring showed that cultivation amounts were charged for these lands without any indication of actual activity. The European service has recommended that the entire insured amount be recovered (EUR1 80, 000), as well as that a lawsuit be filed against the suspects.

Out of a total of 85 cases submitted by OLAF to the European Prosecutor's Office, 13 were related to Bulgaria.

OLAF recommended that a total of more than half a billion euros be recovered to the European budget for projects in all EU countries. The main cases of detected fraud were related to alleged afforestation, customs abuses, illegal waste activities.