Protection EU financial interest

The EU budget is financed by taxpaying citizens' money. It is adopted, on a proposal from the European Commission, by the budgetary authority (the European Parliament and the Council).

European policies, financed in this way, are intended for the realisation of projects of general interest.
Actions and projects funded by the EU budget reflect the priorities set by the EU countries at a given time. These are grouped under broad spending categories (known as ‘headings') and thirty-one different policy areas.
The EU budget finances actions and projects (Structural Funds, Common Agriculture Policy Funds, Pre-Accession Funds, Development Aid etc) in policy domains where all EU countries have agreed to act at Union level. Such decisions are taken for very practical reasons. Joining forces in these areas can yield greater results and costs less.

Evading the duties and levies which supply the Community budget, or using Community financing wrongfully, subsequently results in harm to the European taxpayer.

For this, in accordance with of Article 325 of the consolidated version of the Treaty on the Functioning of the European Union (TFEU Treaty) "The Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union through measures to be taken in accordance with this Article, which shall act as a deterrent and be such as to afford effective protection in the Member States, and in all the Union's institutions, bodies, offices and agencies".
As a beneficiary country of EU pre-accession funds, in accordance with internationally undertaken commitments in the pre-accession period, the Republic of Croatia is responsible for ensuring the legal framework for the protection of EU financial interests as well as the establishment of an effective and efficient system of managing irregularities and frauds in the framework of EU assistance funds
In Republic of Croatia, the protection of EU's financial interests is stipulated in Article 114a, of the Budget Act (Official Gazette 87/2008, 136/12 and within Government Regulation on the institutional framework of the system for combating irregularities and fraud (AFCOS) (OG 144/13).
AFCOS is a system through which the coordination of legislative, administrative and operative activities is implemented with the purpose of protecting the financial interests of the European Union and direct cooperation with the European Antifraud Office (OLAF).
In Croatia the AFCOS system includes:

1) Network of accredited bodies that are managing and using EU funds (Irregularity Reporting System);
2) Network of bodies that are involved in combating fraud, corruption and other types of illegal activities (AFCOS Network);
3) Ministry of Finance - Service for Combating Irregularities and Fraud (SCIF) which is a coordinating service and a contact point to the European Anti-Fraud Office (OLAF).

As the main coordinative body of the AFCOS system and the contact point for the European Anti-Fraud Office (OLAF) together with the partner institutions, the Ministry of Finance has been investing ongoing efforts over the past seven years towards the establishment and improvement of mechanisms for the protection of the EU financial interests via the adoption of strategic documents, acts, regulations and through its work aimed at strengthening the inter-institutional cooperation between the AFCOS network bodies.

The legal and earmarked budget spending must remain an imperative in the Republic of Croatia. There is no alternative to such a course of action, for this is the only way to achieve our country as an orderly and a modern European state and an equal partner to other member-states. Fully aware of the challenges ahead of us as a full EU member, we keep pursuing our path towards an uncompromised fight against and a zero tolerance for any form of illegalities. At the same time, we will keep employing the acquired new knowledge sets, experiences, good practice and cooperation with other member states to position the Republic of Croatia not only as a desirable strategic partner but also as a country that builds its credibility upon a successful fight against irregularities and fraud.