Fraud and the Intervention Board

Pages225-233
DOIhttps://doi.org/10.1108/eb025624
Publication Date01 Mar 1993
AuthorAlan Doig,Mike Graham
SubjectAccounting & finance
Fraud and the Intervention Board
Alan Doig and Mike Graham
Alan Doig
is co-Director of the Unit for the Study of
White-Collar Crime, Liverpool Institute of
Public Administration and Management,
University of Liverpool.
Mike Graham
is
Head,
Anti-Fraud Unit, Intervention
Board.
ABSTRACT
The Common Agricultural Policy involves a
substantial part of the European Commun-
ity's multi-billion pound annual expenditure.
Close to the heart of many Member States
with their need to respond to demands of
the agricultural community, the policy has
often resulted in a failure to ensure that
effective and adequate means to monitor,
scrutinise and police a complex and costly
activity are in place. In the UK the Interven-
tion Board has taken the opportunity to
develop its own response of an integrated
fraud prevention, detection and investiga-
tion strategy that is now paying dividends in
the protection and policing of the expendi-
ture of public funds.
THE EEC AND THE EUROPEAN
AGRICULTURAL GUIDANCE AND
GUARANTEE FUND
In 1962 the six founder Member States
of the European Economic Community
(EEC) set up a single fund the Euro-
pean Agricultural Guidance and
Guarantee Fund (EAGGF) with two
sections, the Guarantee section relating
to the Community policy on prices and
markets and the Guidance section relat-
ing to policy on agricultural structure.
The EAGGF was intended to reflect the
three principles of its agricultural policy
(usually called the Common Agricul-
tural Policy or CAP): a single trade
market (free movement of products,
harmonisation of
prices,
rules of compe-
tition and rules on external trade and
stable exchange rates); community
pref-
erence, including protection schemes for
imports and exports (levies and customs
duties);
and jointly-shared costs to pay
for the policy.
The EAGGF began with two main
areas of expenditure. The first is refunds
(or subsidies) on exports outside the
Community to equalise the price differ-
ences,
paid by the Member States once
the product is approved for export.
Where Community producers seek to
access higher-priced markets outside the
Market, and thus threaten availability
within the Market, an export levy is
applied (the income raised is treated as
Community income and docs not go to
the Member State). Second, there is
intervention, intended to protect
farmers' income and stabilise the agri-
cultural market by instigating price
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