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2nd Dec 2022

Ombudsman: EU database on fraud suspects breaches rights

  • The Charter of Fundamental Rights is legally binding (Photo: Wikipedia)

The European Commission's management of a database containing the names of companies or people deemed to pose a threat to the financial interests of the European Union is trampling basic rights, according to the EU ombudsman.

Anyone found on the Early Warning System (EWS) - as it is called - risks having their EU contracts blocked or suspended.

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Numerous complaints over the EWS may force the executive to rethink its strategy, amid accusations it breaches people's fundamental rights to be informed, to confidentiality and to judicial review.

"The EWS is clearly an important tool in helping to protect EU funds. However, the Commission must introduce adequate checks and balances so as to ensure that the EWS complies with the Charter of Fundamental Rights of the European Union which is now legally binding on all EU institutions," said European ombudsman P. Nikiforos Diamandouros on Thursday (12 January).

The EWS divides names into five categories according to threat level. Only those who are already banned from contracts or grants financed by the EU's budget are automatically notified. They belong in the fifth category.

All others, including people suspected of fraud, serious administrative errors or other irregularities, are on the list for at least six months but are not informed. Guidelines to appeal against the listing are non-existent. Concerns have also been raised as to the accuracy behind the EWS data.

The European Charter of Fundamental Rights states that every person has the right to be heard, before any individual measure, which would adversely affect him or her, is taken.

They also have the right to access their files - while respecting legitimate interests of confidentiality and of professional and business secrecy - and the administration is obliged to give reasons for its decisions.

Diamandouros added that the scope of the EWS warnings is not clearly defined. A presumption of guilt is imposed on anyone on the list even if they are innocent.

An example was given of an evaluation committee revising its initial positive assessment of a company on the basis of an EWS warning.

The ombudsman asked the commission to define the legal basis behind the warnings for the first four categories and noted that the EWS might exceed EU legal competencies. EU civil servants operating the system should be properly trained and keep all data up-to-date and accurate, he also said.

Diamandouros has asked the commission to send a detailed opinion by 31 March 2012.

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