TIRANA, July 21, 2024 – About 112 millions of euros aimed at helping Albanian farmers prepare for being part of the European Union have been suspended indefinitely due to prior misuse of the similar funds by Albanian government agencies, parliament learned this week.
The release of European funds under the IPARD III program to support Albanian agriculture is expected to take a considerable and unknown amount of time, according to EU reports and information given to the Albanian parliament by the government.
Authorities have yet to provide a timeline for when these funds might be reopened, following their suspension due to serious misuses found in the previous IPARD II program by the European Anti-Fraud Office, OLAF.
-Agriculture minister called to parliament-
During a parliamentary session requested by opposition MP Agron Shehaj, Agriculture Minister Anila Denaj said this week that an action plan drafted by the Albanian side is still under review by EU structures.
The plan was requested after Albanian authorities responded to the European Commission in December last year regarding OLAF’s report, which had been submitted to the Albanian government in October.
The process involves the evaluation of the material sent to Brussels by Albanian authorities, followed by a “negotiation” phase to determine the amount the Albanian state may need to repay to Brussels.
The specifics of Albania’s response to OLAF’s claims, which recommended the European Commission deem part of the funding for the First and Second Calls for IPARD II applications as inappropriate, amounting to €33 million, remain unknown.
Minister Denaj stated that the summary report submitted to the Albanian government “identifies irregularities with a total value much lower than the highlighted amount and uses different terminology.”
Denaj also announced the engagement of an external auditor to conduct a comprehensive audit, ensuring independence from existing structures and authorities, based on accepted international standards.
“Only upon the completion of the audit and the generation of this report by the external audit will we discuss figures. Until then, everything is premature and political,” Minister Denaj said in parliament.
-Misuse scandal led to suspension of funds-
In its annual report, OLAF further recommended that the EU prevent 112 million euros of future funding (IPARD III) for Albania from unnecessary expenditures until corrective measures are established to protect the EU’s financial interests from “any illegal activity.”
Minister Denaj noted that the IPARD III program would continue once Albania proves it can handle European funds responsibly.
Before the Commission’s intervention, based on OLAF’s investigations, Albanian authorities had completed all key process stages and were only awaiting accreditation, expressing confidence that the green light for IPARD III funds would be given by January 2023.
Before the funds could be granted, an investigative report in 2023 by the EU found several serious irregularities during the grant award phase and implementation of several projects including requiring applicants to pay a significant portion of their grant to a local consultancy firm, contracts awarded without competition or through manipulated tenders (with false bids submitted), inflated prices and breaches of contractual rules.
-Politically-connected entities benefited-
Albanian media reports have shown that much of the funding went to ruling Socialist Party politically-connected entities, some with little to no previous ties to agriculture. Meanwhile genuine farmers were denied funds. One such farmer complained to the EU, leading to OLAF’s investigation and findings. The previous agriculture minister was sacked in the process.
“Quick corrective actions have been taken for projects that are part of OLAF’s report, for the recovery of abused funds,” the minister said. “A new organizational structure for the responsible agency has been approved.”
She added that where administrative measures were needed, they have been taken, without detailing the extent of these interventions.
The matter is now in the hands of the Special Prosecution Office, which has begun an investigation.
